Sunday slant: Money talks on day of love

The NFL and the players union are debating their labor unrest in public, but the players are the ones that are going to have to give at least a little if they want to play in 2011. We continue a financial Sunday with a look at some Vikings stadium issues and end with a couple of impressive numbers for Hall of Famer John Randle.

On a day that is supposed to symbolize love, we hate to talk money, but you might as well get used to it. It's going to be an offseason full of financial figures.

First and foremost is the ongoing labor dispute between the NFL and its players union, the NFL Players Association. In some ways, they are like an old married couple – they can prosper together, but this relationship isn't always smooth. In fact, it could be headed for contentious waters ahead.

This isn't a favorite offseason subject, but it's sure to receive plenty of play. Here is the saga in a nutshell: The extension to the Collective Bargaining Agreement signed between the NFL and the NFLPA is no longer working for the owners. That's why they opted out of the agreement two years ago and that's why there almost surely will be no salary cap in 2010 … and why there could be a potential lockout of the players (read: work stoppage) in 2011.

When the owners rushed to save football when free agency was supposed to start in 2006, they signed a deal in which they gave the players a lot and many players have seen the benefits of the new market. But since delaying free agency for a few days and signing that agreement, that new market has turned sour. The economy has turned, the sponsorship opportunities aren't as prevalent and owners are finding it harder to support their payments for more expensive stadiums.

And the NFLPA doesn't seem to buy it, saying the NFL wants players to take an 18 percent pay cut. The NFL says that deep of a cut isn't what the owners are asking. Meanwhile, NFLPA executive director DeMaurice Smith repeatedly talks about the non-profit nature of the NFL, which appears to have very little to with the real issues.

"The National Football League, the wildly successful television ratings that we have had until now, the incredible rise in team values, I keep coming to an economic model in America that is unparalleled," Smith said.

He also cites the balance sheet of the only publicly owned team, the Green Bay Packers, and almost mocks the fact that owners are asking for player concessions when the Packers still claimed a $20 million profit a year ago.

"I did see an article in the paper a little while ago where I think it was somebody from the NFL talking about the decrease in $34 million to $20 million in profit for the Green Bay Packers," Smith said. "Well, I have to imagine that only in the National Football League can you move from $30 million to $20 million and it's a crisis."

Really? A one-third decrease in profit isn't a concern? America is bent out of shape (for good reason) with an unemployment rate around 10 percent, but NFL teams aren't supposed to be worried about a decrease in revenue by more than 30 percent? A profit of $20 million is just one expensive player and one mid-range player away from a deficit in the NFL.

The other issue is who is putting up all the risk? The players run the risk of getting injured, but the owners run the risk of a financial collapse. They have the right to try to protect their investment for the long term. It's true that they were the ones that opted out of the agreement, but I doubt they would run the risk of putting their businesses on hold by potentially delaying the 2011 season if they weren't seriously concerned about the long-term viability of their league.

Smith wants to cite figures from Forbes magazine talking about the profitability of NFL teams over the last 15 years, saying they have increased in value by 500 percent. If Forbes' numbers from last fall are accurate, as a study commissioned by the NFLPA study seemed to endorse, then the union will have to accept that things have dramatically changed since that last Forbes study.

Last fall, Forbes valued the St. Louis Rams at $913 million, but the Globe-Democrat in St. Louis estimated the value of the team between $725 million and $750 million based on the proposed sale of 60 percent of the Rams. That would mean that the value of the team has dropped about 19 percent in the last year.

Eventually, the union is going to have to give more than the owners, and the players and NFLPA better be ready to go without pay in 2011 if their union isn't willing to talk about the real issue.

  • OK, eyes are glazing over on a financial topic that might not have wide-ranging ramifications to the fans until next year. But, there is a financial topic that is hitting close to home more immediately – the Vikings stadium issue.

    The news last week was that Minnesota Gov. Tim Pawlenty didn't include the Vikings stadium in his budget. Frankly, how could he? In his State of the State address Thursday, it was all about cuts and a constitutional directive to balance the budget.

    I've never believed Pawlenty would direct any budgetary money toward support of a Vikings stadium. Throughout the last several years, his stance has been that he supports the Vikings but that the state wouldn't offer budgetary funding for it. That's fine, but his unwillingness to even listen to other proposals was frustrating for the administration of the Vikings and its fans.

    Now, however, it seems that Pawlenty is open to suggestions for alternative funding methods. Racino – the act of putting slot machines in the state's two horse-racing tracks – is one option, but it's also an option Pawlenty seems to dismiss.

    The more likely path to funding would be a lottery game of some sort that was dedicated to at least partially funding a stadium. This, in essence, is giving the gambling public a way to decide where they want their "fun money" to be directed. User fees might also have to be enacted in order to help pay the public part of the freight on a stadium, whether that's through a tax on hotels and rental cars in the area surrounding the stadium or through an extra tax on Vikings merchandise.

    Those are just a couple of funding methods that make all the sense in the world. If stadium opponents don't want to contribute, fine, absolutely don't. But let those who actually use the stadium and support the Vikings help be part of the solution instead of forcing the team into a slow decay from NFC Champions to an also-ran that can't afford to acquire some of the best players in the league.

  • One final figure – one that is all football and no finances. Hall of Famer John Randle became known for his sacks, where he is ranked sixth in NFL history (and first among defensive tackles) with 137 ½, but also forced 28 fumbles and recovered 11 of them in his 14-year NFL career.

    Tim Yotter is the publisher of Viking Update. Follow Viking Update on Twitter and discuss this story on our subscriber message board.

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