Quick Take
On Tuesday of this week, Dan Patrick interviewed Troy Aikman. One of their points of discussion centered around USC’s football team, and how it would fare against a NFL team. Patrick made the statement that USC would have given New England a better game Sunday than did the Jets. Aikman said that USC now is better than the first Cowboys team Troy played for in 1989. We’ll never know, but I don’t agree with either opinion. The Trojans are the class of college football, but comparing them to a NFL team, any NFL team, is way off. By record, the worst team in the NFL thus far this year is the Houston Texans. I’d put a sizeable amount of money on Houston or any NFL team beating USC or any college team. The transition from college sports to major league pro sports is a giant step up in terms of competition and talent. Don’t lose sight of the fact that each and every NFL player has to have superior talent just to make it to the NFL. Only a handful of players on the current USC squad will ever wear the uniform of a team in the National Football League.
Story of the Week
NFL OWNERS AND THEIR GREED
A most interesting article appeared in the Wall Street Journal in August. It had to do with the profitability of NFL teams. It addressed those large-market teams that have lots of fans who buy lots of tickets and souvenirs and gear, big stadiums with sky boxes worth their weight in 18-karat gold, more 18-karat corporate sponsorship revenue, and the beat goes on. Those owners keep this extra cash-cow for themselves. The teams in small and medium markets have brought forth a thought that the financial Goliaths of the NFL should share their local revenue, and not just the incredible monies paid them through the lucrative contracts the NFL has with television.
The NFL clearly has the only true sports salary cap. That is an issue only from the standpoint that teams that do not enjoy big-market revenues purportedly can’t afford to compete for high-priced executives and top-grade coaches, and they feel they need to revenue-share it all for equal opportunity as it were. And before you all laugh yourselves silly, as I did when I digested this, permit me to advise you that this whole thing has become a major problem among those 32 ultra-wealthy owners; it has simply been kept as quiet as possible while the NFL tries to work it out.
The wedge is a simple one: How much, if any, of the growing streams of income generated by teams in their own markets (about 15% of the NFL’s projected revenue of $5.7 billion this season) should the wealthiest teams share with their partners? Local revenues were not a biggie when the sharing arrangements were drawn up. It was a small portion of the pie then. No longer! The top eight teams in total revenue last season averaged $75 million more than the bottom eight. Again, the NFL is working with all teams to reach an amicable agreement regarding same.
MY OPINION AND SOLUTION:
It’s nonsense! Let the major market teams keep the money they make from all of their lucrative local deals. Let the entrepreneurial owners who wish to sell stadium naming rights to large corporations keep that money. And that list goes on. All NFL owners enjoy tremendous profits, both from operations (the NFL television contracts alone make this a huge understatement) and from the incredible appreciation of the value of their respective franchises.
And speaking of the current value of those franchises, according to the 9/19/2005 issue of Forbes:
**The most valuable NFL franchise is the Washington Redskins at $1,264 million. Daniel Snyder bought the team and the stadium in 1999 for $750 million. That’s a cool $514 million R-O-I in just six years.
**The least valuable NFL franchise is the Minnesota Vikings at $658 million. Zygmunt Wilf bought the franchise this year for $600 million. He has made a profit on that investment of $58 million in a matter of a few months.
**Due to space constraints here, I’ll not elaborate on the worth of the other 30 teams. Suffice it to state that the owners are all rolling in lots of black ink and green money.
Much revenue-sharing already exists in the NFL right now. In addition to TV fees, teams share equally a percentage of ticket sales as well as licensing contracts and national sponsorship. Last year, each team received $110.8 million in national revenue. The biggest chunk of that, namely $84 million, came from the league’s network television contracts.
I believe in capitalism. There should be a difference in the wealth and income of those 32 teams if the circumstances dictate so. Please forgive me for not feeling sorry for the Vikings of the league; all NFL teams can well afford to pay whatever they want to pay to attract whomever they wish to run their teams, both on and off the field. Greed is good; Gecko told us so in Wall Street. But some NFL owners are giving the word a whole new meaning.
Last Week’s Trivia
The legendary Babe Ruth was caught stealing in Game 7 of the 1926 World Series between his Yankees and the Cardinals. It was the bottom of the ninth inning at Yankee Stadium and ended the World Series, thus giving St. Louis the victory. It’s the only time a World Series has ended on a stolen base attempt.
Trivia Question of the Week
Four ABA teams joined the NBA in 1977. Name them. See next week’s Sports Junkie for the answer.