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Sharing is caring

I'm in the midst of a discussion over at Big Cat Country that is part and parcel of a whole series of SBN Hosted Small Market Roundtable, the schedule of which I'm not too proud to pilfer from Bleeding Green Nation:

Wednesday 5/23 - Relocation; Big Cat Country hosts
Wednesday 5/30 - Big, Shiny New Stadiums; Pride of Detroit hosts
Wednesday 6/6 - Free Agent Attraction; Cincy Jungle hosts
Wednesday 6/13 - Media Coverage; Music City Miracles hosts
Wednesday 6/20 - Prime-Time Scheduling; Daily Norseman hosts
Wednesday 6/27 - Revenue Sharing; Buffalo Rumblings hosts
Wednesday 7/11 - The Green Bay Anomaly; Acme Packing Company hosts
Anyways, Big Cat Country is covering relocation and does so extremely admirably, dispelling some popular notions about why Jacksonville is covering seats at their stadium. I had always purchased the popular narrative that the Jaguars were doomed which, as River City Rage convincingly points out, is not the case.

Fortunately, as the Redskins are a big market team, we're not at risk of relocation any time in the forseeable future. What will inevitably affect this team is revenue sharing, as the Washington Redskins are currently (and forever!) the most valuable NFL franchise. Forgive your humble host for heading into unfamiliar territory, as I'm an admitted buffoon when it comes to revenue sharing and tangentially related issues, though I'll do my best to hash out the situation. Players' salaries are rising every year per the CBA and, as others have noted here, cannot go down per rules. Those player salaries are outpacing the revenue increase of smaller market teams so that, should things continue as they are, at some point the salary cap (total amount a team may spend on players) will be higher than some particular team actually can spend on players.

Some teams are already pretty close. As you can see from the link above, the Arizona Cardinals made 158M through 2006. The 2005 salary cap allowed teams to spend ~100M on players, meaning the Cardinals spent ~75% of their total revenue on players. The Redskins, by comparison, spent just ~33%.

Teams need to make a profit (and all did in 2006 except New Orleans) thus as player salaries outpace revenues, something has to give. Small market teams could conceivably be forced to pay their players less than they are allowed to by rule, thus putting them at a comparative disadvantage with the rest of the league. That this is currently not the case is one of many things that distinguishes the NFL (and its attendant parity) from MLB.

Full disclosure: And I want to sustain that indefinitely. I support parity and the salary cap as I believe it is partially responsible for why the NFL has become the most popular sport in America relative to MLB and the NBA, among others. The "any given year" mentality where a pretender can quickly become a contender (New Orleans in 2006, for instance) adds a level of intrigue to the NFL that is entertaining. Also, winning under the parity system provides an additional layer of validation that I would find enjoyable if/when the Redskins win a Super Bowl under the current rules.

To the extent that I want that parity, I support revenue sharing. I want teams to be able to compete with the full salary cap if only so they cannot make excuses when we beat them. The Redskins make enough money where sharing with other teams is not going to bankrupt us.

All that said there is a logical limit to my altruism towards smaller market teams (or, alternatively, poorly managed ones). The point I raised in that discussion was that I would not be happy to subsidize poorly managed franchises that don't do everything they're capable of to increase revenue. It doesn't bother me to subsidize a small market team if I know that team is maximizing profits (or is making a good-faith effort to do so). We know the Redskins do, as they were willing to sacrifice naming the stadium after your favorite Redskins icon to the frustratingly corporate FedEx Field. And that earned us a more-than-trivial 7.6M per year through 2025 to add to our coffers. I know that the Arizona Cardinals play at the University of Pheonix stadium and are paid by the University of Pheonix for that. That's an appreciable effort by the Arizona Cardinals to increase their revenue bad circumstance -- much of it their own making.

The CBA was amended in March of 2006 on a 30-2 vote, with the two dissenting parties being Cincinnati's Mike Brown and Buffalo's Ralph Wilson. Wilson's excuse was that he "didn't understand it" while Brown didn't think it was enough:

"It's a stop-gap solution," Brown said after emerging from a meeting. "We have deeper problems than qualifiers. We have problems with subsidies in the league."...

"The qualifiers are a reduction in the subsidy," Brown said.

I have no problem subsidizing both the Bengals and the Bills, so long as I know those two teams, and their management, are going to do everything within their power to maximize profits and thus reduce the amount of financial assistance they require. It occurs to me that maybe those two men haven't done everything they could to increase revenue. Mike Brown's Bengals play in a stadium named after his father whereas Ralph Wilson's Bills play in a stadium named after... Ralph Wilson. I would happily subsidize their ability to compete financially with the other 31 teams in the league. However, I would reluctantly throw financial support behind their efforts to honor themselves or near-kin; that's simply not the Redskin's problem. If those teams need our money so bad, they should prove it by taking advantage of all revenue streams available, which Wilson in particular is familiar with as Ralph Wilson Stadium was formerly Rich Stadium as in Rich Products (who paid 1M a year for 25 years to have their name attached to the Bills' stadium). Why should we pay teams to play in stadiums named after their heroes (or founders, or whomever) while we have to play in one named after a courier company?

Is that so much to ask, or am I just being selfish?

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If you look at the MLB model...
some of the most financially viable teams are the ones who never really make any strides towards the playoffs.  I know Pittsburgh is a perennial loser but they also happen to be one of the most profitable.  Because of revenue sharing, the Yankees routinely lose money.  Look at 2005 according to Forbes...  The rankings at the left are the values of the franchises and the highlighted values at the right are the profits in 2005.  The top 4 "valuable" teams lost money.  And this chart shows the top 3 revenue teams lost money.

Tell me how a small market team (in this example, PIT) can bring in only $107 mil and make $12.2 while the Yankees can bring in $264 million and lose $37.1 million?

And then look at last year's Forbes numbers.  The only team to lose money was the Yankess.  They brought in more money than the Pirates and Marlins combined (who are #3 and #1 on the operating income list respecively) and lost $25.2 million while the Marlins made $43.3 million and the Pirates made $25.3 million.  Oh, and the Pirates lost 2 less games (95) than the Yankess won (97) and the Marlins made a late season run to pull to only 6 games under .500 for the year.

And here's an article about revenue sharing in 2001, the year it started.  The author (Doug Pappas) does a great job comparing similar cities with how much they made locally with how much they either paid or collected because of sharing.  As he points out, in 2001 the Cardinals (STL) and the Phillies (PHI) were both playing in similar 30 year old stadiums and the Cardinals made $50 million more locally "despite playing in a market less than half the size of Philadelphia."  And all that meant was that the Cards paid over $8 mil into the sharing pool while the Phillies collected just shy of $12 mil that year, despite the fact the teams were both about the same in the standings (the Cards won 93 while the Phillies won 86.)

I'm just saying... teams don't have to attempt to win games in order to make money.

by TexSkins on May 23, 2007 5:26 PM EDT   0 recs

Wow...
that's some pretty damning stuff.

Fortunately some of that cannot happen to us, as the Yankees lose money because their operating budget on players is so much higher than anyone else's; cannot happen under a salary cap.

That the Redskins are so profitable and the Yankees are not is perhaps a strong argument for   a salary cap is a good thing for the financially invested crowd.

by Skin Patrol on May 23, 2007 5:45 PM EDT to parent up   0 recs

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