HemiEd
02-16-2007, 04:31 PM
http://www.buffalonews.com/editorial/20070211/7003599.asp
As revenue-sharing talks drag, no one's paying Bills
By MARK GAUGHAN
2/11/2007
Click to view larger picture
James P. McCoy/Buffalo News
Ralph Wilson's Buffalo Bills and other smaller-market teams were supposed to get an average of roughly $6 million in revenue sharing this year but so far have received nothing.
Almost a year after the adoption of a new collective bargaining agreement, NFL owners still are haggling over how to funnel expanded revenue-sharing money from the high-revenue teams to the low-revenue teams.
Nuclear-arms treaties have been struck more quickly.
The enhanced revenue-sharing plan was trumpeted by retired Commissioner Paul Tagliabue as a key part of the new deal with the NFL Players Association. The Buffalo Bills and other smaller-market teams were supposed to get an average of roughly $6 million in revenue sharing this year from the big-market teams, with that total doubling by 2011.
Bills owner Ralph C. Wilson Jr. sees that money as critical to the team's ability to compete with New England, Dallas, Washington, Denver and the other big-money clubs.
So far, they have received nada. The payments for 2006 are in arrears while negotiations slog forward.
There has been one face-to-face meeting of the committee named by Tagliabue to sort out the details of the payment plan. (The Bills are one of the eight teams on the panel.) There have been conference calls, including one Monday. There is another conference call and another face-to-face meeting planned at some point in the near future.
There has been a lot of dialogue but no deal. It seems obvious the big-market teams are dragging their heels.
The details being negotiated center on how the small-market teams qualify for aid. The tougher the standards for qualifying, the less the big-money teams have to share.
One of the initial proposals from the big-market clubs would penalize teams whose annual ticket revenue falls short of 80 percent of the league average. This would be bad for Buffalo, which just raised ticket prices $13 a game on the sidelines for season-ticket holders but still has the lowest-priced tickets in the league. Even if the Bills sold out all eight games, they probably wouldn't make that 80 percent level. So basically, big-market owners are saying to Bills fans: We think you should be paying $80 a game for tickets. This is the kind of pressure Wilson, who is sensitive to the limited pricing power he has in Buffalo, faces from his NFL partners.
Another proposal that has been on the table would count the money teams get from local governments for stadium maintenance as revenue, thus cutting into big-market aid. The Bills are against this one, too.
The concern of the big-market teams is that low-revenue clubs have incentive to maximize their revenue and that they don't sit back, do nothing and reap benefits from innovative people like Dallas' Jerry Jones, who is doing a great job marketing the Cowboys all over the country.
That's a fair concern. The question is: how to judge how well smaller teams are working to push the bottom line? The Bills have been praised by NFL marketing types in the past for making the franchise more regional. They're doing the best they can.
Some teams think the league should use the "McKinsey model" to assess each team's marketing success. The model, made by a leading management consulting firm, calculates what a team's expected revenue is in its market. If the team doesn't reach it, money would be deducted from the revenue-sharing it would get. The small-market teams don't seem to be thrilled with this suggestion.
So the negotiations continue.
Meanwhile, most of the teams in the bottom half of the revenue pool went into 2006 with the expectation that they would be getting a slice of the money. The Bills have been estimated at ranking between 23rd and 26th out of 32 in recent years in revenue. An $8 million check is a big deal to the small-market teams.
With negotiations dragging, now the small-market teams will have to enter the free-agency cycle without knowing exactly what their economic model is, without knowing how much they're getting in supplemental revenue sharing.
We'll see how that affects free-agent spending.
The revenue sharing model figures to be the main subject of the owners meetings in March. The guessing is the qualifiers committee is not going to be able to reach a consensus and will have to throw the issue into the lap of new Commissioner Roger Goodell. That will be a big test for Goodell and the first mess left over from Tagliabue that he will have to clean up.
The growing dissatisfaction among owners with the terms of the collective bargaining agreement - giving the players 59 percent of all revenue - is making a deal even harder to reach. The backdrop of this debate is the issue of extending the current collective bargaining agreement. On Nov. 8, 2008, the owners have to decide whether to opt out of the current CBA. It takes only nine no votes to opt out. The big-market clubs, for whom the CBA is more palatable, need to appease the smaller teams to the extent that they can't cobble together nine votes.
Even players union president Troy Vincent thinks that the owners need to strike a deal that gives the smaller clubs significant aid.
"If they don't do it, I think they're now starting to see with the extension that was signed, that [competitive balance] could be lopsided here in a few years," Vincent said. "You could very easily be seeing baseball."
As revenue-sharing talks drag, no one's paying Bills
By MARK GAUGHAN
2/11/2007
Click to view larger picture
James P. McCoy/Buffalo News
Ralph Wilson's Buffalo Bills and other smaller-market teams were supposed to get an average of roughly $6 million in revenue sharing this year but so far have received nothing.
Almost a year after the adoption of a new collective bargaining agreement, NFL owners still are haggling over how to funnel expanded revenue-sharing money from the high-revenue teams to the low-revenue teams.
Nuclear-arms treaties have been struck more quickly.
The enhanced revenue-sharing plan was trumpeted by retired Commissioner Paul Tagliabue as a key part of the new deal with the NFL Players Association. The Buffalo Bills and other smaller-market teams were supposed to get an average of roughly $6 million in revenue sharing this year from the big-market teams, with that total doubling by 2011.
Bills owner Ralph C. Wilson Jr. sees that money as critical to the team's ability to compete with New England, Dallas, Washington, Denver and the other big-money clubs.
So far, they have received nada. The payments for 2006 are in arrears while negotiations slog forward.
There has been one face-to-face meeting of the committee named by Tagliabue to sort out the details of the payment plan. (The Bills are one of the eight teams on the panel.) There have been conference calls, including one Monday. There is another conference call and another face-to-face meeting planned at some point in the near future.
There has been a lot of dialogue but no deal. It seems obvious the big-market teams are dragging their heels.
The details being negotiated center on how the small-market teams qualify for aid. The tougher the standards for qualifying, the less the big-money teams have to share.
One of the initial proposals from the big-market clubs would penalize teams whose annual ticket revenue falls short of 80 percent of the league average. This would be bad for Buffalo, which just raised ticket prices $13 a game on the sidelines for season-ticket holders but still has the lowest-priced tickets in the league. Even if the Bills sold out all eight games, they probably wouldn't make that 80 percent level. So basically, big-market owners are saying to Bills fans: We think you should be paying $80 a game for tickets. This is the kind of pressure Wilson, who is sensitive to the limited pricing power he has in Buffalo, faces from his NFL partners.
Another proposal that has been on the table would count the money teams get from local governments for stadium maintenance as revenue, thus cutting into big-market aid. The Bills are against this one, too.
The concern of the big-market teams is that low-revenue clubs have incentive to maximize their revenue and that they don't sit back, do nothing and reap benefits from innovative people like Dallas' Jerry Jones, who is doing a great job marketing the Cowboys all over the country.
That's a fair concern. The question is: how to judge how well smaller teams are working to push the bottom line? The Bills have been praised by NFL marketing types in the past for making the franchise more regional. They're doing the best they can.
Some teams think the league should use the "McKinsey model" to assess each team's marketing success. The model, made by a leading management consulting firm, calculates what a team's expected revenue is in its market. If the team doesn't reach it, money would be deducted from the revenue-sharing it would get. The small-market teams don't seem to be thrilled with this suggestion.
So the negotiations continue.
Meanwhile, most of the teams in the bottom half of the revenue pool went into 2006 with the expectation that they would be getting a slice of the money. The Bills have been estimated at ranking between 23rd and 26th out of 32 in recent years in revenue. An $8 million check is a big deal to the small-market teams.
With negotiations dragging, now the small-market teams will have to enter the free-agency cycle without knowing exactly what their economic model is, without knowing how much they're getting in supplemental revenue sharing.
We'll see how that affects free-agent spending.
The revenue sharing model figures to be the main subject of the owners meetings in March. The guessing is the qualifiers committee is not going to be able to reach a consensus and will have to throw the issue into the lap of new Commissioner Roger Goodell. That will be a big test for Goodell and the first mess left over from Tagliabue that he will have to clean up.
The growing dissatisfaction among owners with the terms of the collective bargaining agreement - giving the players 59 percent of all revenue - is making a deal even harder to reach. The backdrop of this debate is the issue of extending the current collective bargaining agreement. On Nov. 8, 2008, the owners have to decide whether to opt out of the current CBA. It takes only nine no votes to opt out. The big-market clubs, for whom the CBA is more palatable, need to appease the smaller teams to the extent that they can't cobble together nine votes.
Even players union president Troy Vincent thinks that the owners need to strike a deal that gives the smaller clubs significant aid.
"If they don't do it, I think they're now starting to see with the extension that was signed, that [competitive balance] could be lopsided here in a few years," Vincent said. "You could very easily be seeing baseball."