Just last week at the owner's meetings in Phoenix, the NFL approved a new revenue-sharing plan that will last through the year 2009. In short, the revenue sharing plan consists of the top 15 grossing teams assisting the teams in the bottom 17 by funding a pool of money to help with the increasing player costs, which not only include the ever-rising salary cap, but the players' medical benefits and possible G-3 funding for new stadiums. On paper this plan seems helpful to the smaller markets, but there are a few stipulations.
For a smaller market team to get a full share from the pool, that team has to reach 90% of the league's average for ticket revenue. Where that isn't an issue for large market teams in large cities such as the Washington's, New York's, and Dallas's of the world, this is a legitimate issue for the smaller market folks such as Jacksonville, Cincinnati, Buffalo and a few others. There is a balance that must be reached between offering a good value for the NFL ticket paying consumer, and still making enough money to fund the entire operation. That is the balance that some of the small markets are struggling with, and if they don't get it figured out, the NFL could more closely resemble major league baseball in a few years with the haves and have nots.
Getting back to the title, a phrase in the past known as "league-think" existed not so long ago, and the shortened version of that reads as "one major corporation, with each franchise being a member of that corporation, and each decision that's made is made for the good of the entire corporation (league)." This "league-think" involved issues such as revenue sharing, which can keep each team in the league competitive with one another, regardless of their market size, by good talent evaluation and wise spending. This league-think philosophy helped make the NFL the cash cow that it is today. So although the new agreement helps the smaller markets somewhat, what happens in 2010 and 2011 when it is time for our big market brethren to build their new palaces? Well, that's when the cost sharing part of the formula kicks in. When a team like the Cowboys or the Giants and Jets build their new billion dollar stadiums, each of the 32 franchises get to share in the cost thanks to G-3 funding. G-3 funding extends financing well below market rate - at last estimate, the interest rate was just above 4.7 percent - and comes from a share of each NFL team's media revenue as well as the visiting team's share of club-seat money that will be generated by the new stadium. So if it isn't tough enough on the small market teams to just make the now minimum spending on the cap of $92.9 million, they have to help pay for the big market teams' new toys. And guess what? Bidding for the naming rights of the Cowboys new stadium is rumored to start at around $20 million per year, and they don't have to share that with anyone.
The 2008 NFL salary cap is expected to be $116 million. When the Jaguars started playing football in 1995, the salary cap then was $35.6 million. That's nearly a 300% increase in just 13 years. I'm not saying that players are getting paid too much, because in comparison to the other two major team sports in this country, NFL athletes are on the welfare line. However, if something isn't done to at least slow down the increase on the cap, the competitive balance of football will resemble that of baseball sooner than later, and the loyal ticket paying customer will be the ones trying to fund this inbalance.
Goodell Days: Where is "League-Think"?
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