Teicher: Proposed NFL deal is good news for Chiefs

[Tribal Warfare]

Analyst: Proposed NFL deal is good news for Chiefs
By ADAM TEICHER
The Kansas City Star

The good news for the Chiefs regarding the NFL’s proposed new collective-bargaining agreement is that it contains nothing sinister that would cripple their ability to compete with the league’s wealthier teams.

But the new labor deal, which could be voted on by players and owners as soon as today, also wouldn’t change a simple fact of life for the Chiefs as one of the NFL’s lower-revenue teams: Their margin for error is still going to be considerably smaller than that of more affluent teams, such as Dallas or Washington.

“This (proposed) deal is good news for Kansas City and the Chiefs versus the way things were before,” said Marc Ganis, a sports business analyst in Chicago. “The league as a whole is going to be retaining more revenue. The league will have more means to expand their ways to generate additional revenue. So the Chiefs are better off as a business than they were in the 2006 deal, for instance.”

The NFL Players Association’s executive committee and player representatives from all 32 teams met Wednesday in Washington. A person familiar with the negotiations told The Associated Press on condition of anonymity that the players were going to relay information to their teammates.

If the four-month lockout — the NFL’s first work stoppage since 1987 — is going to end in time to keep the preseason completely intact, the players and owners almost certainly must ratify the deal today. The St. Louis Rams and Chicago Bears are scheduled to open the preseason Aug. 7 in the Hall of Fame game.

NFL Commissioner Roger Goodell and nine of the 10 members of the owners’ labor committee arrived at a hotel near the Atlanta airport on Wednesday so they could decide whether to recommend a finalized proposal to all club owners, who are due to arrive today.

If owners do vote today, at least 24 of the 32 owners would need to OK the deal. If it’s passed by both sides (the players just need a simple majority), team executives would be schooled later today and Friday in Atlanta on the guidelines and how to apply them; topics would include the 2011 NFL calendar, rookie salary system and new free agency rules.

“On the competitive-balance issue, it’s unknown how this deal will affect teams like Kansas City,” Ganis said. “But I can see that this deal is going to make managing a roster more challenging for a small-market club. They will be able to make fewer mistakes.”

They’ll also probably reap the benefits of a solid signing — or pay for their mistakes — over a longer period of time.

“With the 90 percent annual salary floor that’s in place on an annual basis, teams will be signing players to longer-term deals,” Ganis said. “Making mistakes in judgment about players will hurt even more in the long run.

“But it does not mean they cannot be successful. As a matter of fact, with good management, a small-market club will able to compete as well as a large-market club.”

Despite operating in one of the league’s smallest markets, the Chiefs haven’t been at the bottom of the NFL’s financial heap. According to Forbes Magazine’s financial projections from last year, the most recent for which data is available, the Chiefs were 22nd among the 32 teams in revenue at $235 million.

The Chiefs were sixth in operating income at almost $48 million, according to Forbes. That put them well ahead of bigger-city teams like the Giants and Jets.

That lofty standing won’t last. The Chiefs were high in operating income because they spent relatively little in player salaries. The proposed new deal would reportedly require the Chiefs and all other NFL teams to spend at least 90 percent of the league-wide maximum on player salaries.

Though the Chiefs weren’t near the NFL cellar in revenue, they lagged far behind the richest of teams (Dallas brought in $420 million, according to Forbes, and Washington made $353 million) and weren’t far ahead of the lowest-revenue team (Detroit, at $210 million).

“The Chiefs are never going to be like Washington and Dallas and the New York teams, so it’s unfair to compare them to those teams,” said David Carter, the executive director of the Sports Business Institute at the University of Southern California. “But the Chiefs have done pretty well outperforming their market, and they should be in good shape if they can keep doing that.

“What should concern the Chiefs and every small-market team in the NFL going forward is the need to generate non-shared revenue through your stadium. The salary cap is bound to go up. A lot of stadiums are doing really well, and those teams can afford to pay their players. As the cap goes up, those teams are going to be able to literally and figuratively keep up with the Joneses and spend on players. Some teams won’t be able to do that because they don’t have those non-shared revenues coming in.”

Ganis said about 75 percent of the league’s revenue is shared among the teams. He said he sees that number increasing in coming years, if only in small percentages.

“It’s not unreasonable to expect there will be a supplemental revenue-sharing program for those teams that are in the bottom quartile of the league in revenue,” Ganis said. “The league doesn’t have to increase revenue sharing a lot in order to provide help to teams that need a boost. If you target that money to a handful of clubs, it can make a big difference in their ability to compete.”

That wouldn’t necessarily help the Chiefs if they continue to over-perform in their market. It is something they could fall back on if their ticket sales lag, as they did as recently as 2009.

[Hog's Gone Fishin]

This is great news! But I don't understand what it has to do with collecting semen from pigs ?

[BigRock]

It would be pretty embarrassing if the new deal was bad for the Chiefs, since Clark was one of the five owners at the negotiating table the whole time.

[Saul Good]

I disagree with the conclusions from this article. We may lock up our proven vets to longer term deals, but we are more likely to sign some high-dollar stopgaps in order to reach the floor. If they bust, they're off the books in a year, so no big deal.

[Rausch]

Originally Posted by Saul Good

I disagree with the conclusions from this article. We may lock up our proven vets to longer term deals, but we are more likely to sign some high-dollar stopgaps in order to reach the floor. If they bust, they're off the books in a year, so no big deal.

Follow the Steelers lead.

Overpay while resigning quality, low-risk, productive players and spend the scraps under the cap on free agents.

DON'T splurge on the the big FA signing of the year...

[Valiant]

Is the new deal bad for any team? Kind the point of the lockout I thought.

[Rausch]

Originally Posted by Valiant

Is the new deal bad for any team? Kind the point of the lockout I thought.

Seems like the consensus was that they could fight it out for a year or so the player's way or take a small hit and end this.

And the players start getting paid again...