Question about the NFL’s economics
February 4th, 2010 by Tank
To what extent (if any) do new stadia represent an end-run by NFL owners around the players’ negotiated share of revenues? That is, by taking on lots of debt to build a new stadium, does an owner simultaneously a) generate big up-front costs, allowing him to cry poverty during collective bargaining, while b) generate a gusher of incremental revenue in categories that are excluded from the revenues in which players share?
My conjecture is that the answer is “A lot,” but I really have no idea. Does anyone else?
February 8th, 2010 at 9:00 am
I disagree - to an extent. Now, I do agree with part (b) - as my understanding is those revenues are outside the purview of the CBA’s revenue-sharing formula. However, I don’t see why or how the owners cries of poverty (due to stadia investment) would impact CBA discussions - as I would hope the players would focus on the revenues, regardless of the debt obligations of individual owners/franchises. Indeed, if the players (or more accurately, their reps) are smart, they will insist (or have insisted) that the owners start including those “incremental” revenues in the “formula”.
As we’ve discussed separately, I’m in the camp that firmly believes we have two battles being waged in the current “CBA unrest” situation in the NFL. The first is obvious, and ubiquitous: owners vs. players. The second may be less obvious, but is quite prevalent: owners vs. owners. Regardless of how you look at it, on whole or take the two dynamics separately, you have billionaires arguing with millionaires (or other billionaires)… and it’s annoying, as a fan.