Quote:
Originally Posted by Extra Point
I'd like to see them ask for a portion of net profit of each team, in lieu of a a hug chunk of revenue. Revenue less profit equals cost. Profit is return on risk. No risk, no profit.
Like, no players understand that./sarcasm
I'm for the fans, and neither party is for them, at this point.
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The problem is, it's pretty easy to hide "profit" and make the books look like you are barely clearing anything. That's why almost any such contracts are now based on gross revenue instead of profit. It's a more honest number to use.
For a retail operation you'd shoot for 25% of gross sales to be your payroll. Big chains have smaller numbers and small mom and pop shops are more likely to be in the 30-35% range. Over 50% is usually considered a danger zone for a business, but once again you have to take into account the type of business. If you're running a consulting company or a professional services firm you can bet your sweet ass that payroll is going to be a bigger piece of the pie.