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2021 CBA

Discussion in 'Green Bay Packers Fan Forum' started by HardRightEdge, Feb 26, 2020.

  1. HardRightEdge

    HardRightEdge Cheesehead

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    This would be a good place to post CBA progress and terms as things develop. However, I don't think we need another endless debate over the pros and cons of a 17 game season. There's a separate thread for that fait accompli.

    The negotiated CBA has been approved by the player reps, albeit by a narrow margin, 17 for, 14 against, 1 abstain, evidently against the 6-5 no vote by the union executive committee. Approval requires only a simple majority of the rank and file.

    The package includes a 17 game schedule beginning in 2021, 3 preseason games, and lighter player requirements in OTAs and camp. Additional provisions, including roster expansion, are highlighted in the link below.

    Given the player rep recommendation odds are this deal will pass. According to the following article it will take some weeks to finalize the legalese with the player vote butting up against the opening of the free agent negotiating period on March 16.

    https://www.espn.com/nfl/story/_/id...te-send-proposed-cba-full-membership-approval

    Teams have been slow to move on their own free agents, not just the Packers, given the uncertainties of how the final deal will affect the cap beginning in 2021. If the "yes" vote comes through on time, the free agent period (or maybe beginning in the week or days prior) should be faster and more furious than usual.

    That article notes that Aaron Rodgers, the Packers player rep, was a "force" in the meetings getting to this point. That would suggest he was on the "yes" side. Ironically, Sherman, who is on the executive committee, had been against the terms in an earlier report and may have been the deciding no vote of the committee.
     
    Last edited: Feb 26, 2020
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  2. rmontro

    rmontro Cheesehead

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    Actually, Rodgers voted against the proposal. He and Sherman make strange bedfellows lol.
     
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  3. swhitset

    swhitset Cheesehead

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    Yep I heard that Rodgers was quite vociferous in his opposition to the proposal. Apparently, he wanted to see more concessions made by the league regarding OTAs and other required time because of the 17 game season.
     
  4. Sky King

    Sky King 158.3

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    It’s probably wisest to counter any initial proposal that’s been made regardless of which side made the first offer. It’s usually expected in negotiations.
     
  5. ARPackFan

    ARPackFan Cheesehead

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    The new CBA definitely narrows (slightly) the class divide between the bottom and top paid. I vote for the deal if I am a league minimum player with an average career of 3.3 years. An extra game is going to be extra pay. These guys are going to get at least $90K more for the upcoming year and more with a 17th game.
     
  6. XPack

    XPack Cheesehead

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  7. Pokerbrat2000

    Pokerbrat2000 Opinions are like A-holes, we all have one.

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    I actually think THIS is the biggest news in the NFL right now, especially with the Traditional Free Agency period a mere few weeks away. Teams are on hold to sign current players that might become Free Agents and guys that have been recently cut, aren't being signed. Basically, anything which requires a new contract, is on hold. Given what time of year it is, this would be like the Toy Workshop closing down at the North Pole on 12/15.

    Executive Director of the NFLPA, DeMaurice Smith admits any kind of informal free agent conversations/decisions from players and teams are kind of on hold as this CBA lingers.
     
  8. Pokerbrat2000

    Pokerbrat2000 Opinions are like A-holes, we all have one.

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    Here is a new component being presented in the CBA that I really like...

    "Practice squad players elevated to the active roster may be returned to the p-squad twice *without* having to go through waivers. Two p-squad players may be elevated each week, increasing the active/inactive roster to 54 or 55."

    Always thought it was a joke and unfair that you couldn't bring a guy up, play him and then safely return him to your PS if he just wasn't ready or the player, whose spot he was taking, became healthy enough to play again. I would even take it one step further and say that at the 53 man cut down, you can safely slide players to your PS without the fear of them getting grabbed by another team.
     
    Last edited: Feb 27, 2020
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  9. Pokerbrat2000

    Pokerbrat2000 Opinions are like A-holes, we all have one.

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    For lack of a better place to post this, I figured since the proposed new CBA is going to lesson the penalties of marijuana, I would post the video here. I wonder if someday, we will ever see one of these machines in the locker rooms?

     
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  10. rmontro

    rmontro Cheesehead

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    Wouldn't surprise me.

    Also, it reminds me of the old days when us kids used to follow the mosquito spray truck.
     
  11. AKCheese

    AKCheese Cheesehead

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    Skeeter spray is child’s play (poetry right there folks) I remember when we looked up at the choppers spraying DDT to stop dutch elm disease (didn’t work BTW, elm trees all died).... next day all sorts of dead robins in the gutter and if you poked em the worms they ate day before got to go free.... and nowdays kids just have games on their phones....

    Oh yeah.... CBA... player safety?.... three words let you know it’s bull-sauce.... “Thursday Night Football”
     
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  12. ARPackFan

    ARPackFan Cheesehead

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    I see alot of "vote no" comments by high paid players that have had fairly long carers but very few from the low end of the scale. It's amazing that only now are the big contract players preaching brotherhood, we are all equal, and in this together when they grabbed a bigger slice of the player cap pie for themselves. I am all for capitalism but I think the new CBA should have created an individual cap at 10% of the team cap, or about $20M and increased the minimum 0.5% of the total cap (~$1M). Some of the most dangerous plays in football are on special teams and these are typically the lower end of the scale.
     
  13. thequick12

    thequick12 Cheesehead

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    The players should accept no less than a 50/50 split of revenue.
     
  14. Pokerbrat2000

    Pokerbrat2000 Opinions are like A-holes, we all have one.

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    Why? That isn't how most businesses are typically run. I suppose when the pie is THAT big, the fact that the NFL is just a business gets lost with some. Not defending the owners, especially given just how much money that both sides make, but the Owners are the ones that have the most skin in the game financially.

    Still reminds me of 2 spoiled kids fighting over who gets the Lamborghini and who gets the Maserati.
     
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  15. Mondio

    Mondio Cheesehead

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    nvrm
     
  16. thequick12

    thequick12 Cheesehead

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    Because even at 50/50 the owners are making billions of dollars collectively. Without the players, who are the product the owners are selling, the owners make zero. So the question is to the owners, would you rather make slightly less or zero? As you said the owners not the players have the most to lose. If there is no nfl the players lose millions but the owners lose billions. So the players should use that leverage and secure a 50/50 split. The mlb owners have a 50/50 split as does the NBA roughly. Both of those buisness' aren't as successful as the nfl clearly. So why shouldn't the NFL players get 50/50?
     
  17. swhitset

    swhitset Cheesehead

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    I don’t believe that to be true. Without the NFL those owners would simply make their billions elsewhere. The players, in most cases, would have to get regular jobs like the rest of us.
     
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  18. HardRightEdge

    HardRightEdge Cheesehead

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    None of the estimates available suggest the owners are "making billions", far from it.

    The one professional sports team for which we have actual numbers is the Packers. Forbes estimates from Sept. 2019 have the Packers ranked as the 13th. most valuable franchise with a valuation of $2.85 billion with annual operating income of $39 million, 4th. lowest in the league. This suggests that Forbes may be overstating the profitability of other franchises.

    https://www.forbes.com/sites/mikeoz...wboys-lead-league-at-55-billion/#ba302e62f1bb

    In point of fact, the Packers reported operating income of $8.4 mil and net profit of $724,000 for fiscal 2019. The prior year showed a profit of $34.1 mil and $75 mil in 2017. Forbes profit figure for the Packers appears to be an averaging over multiple years. What they put down for the other teams is guess work.

    The Packers reported that the near zero net for 2019 was the result of unusual expenses. Rodgers 2018 signing bonus payouts along with 2019's free agent signing bonus splurge, which evidently fell in part or in whole in the same fiscal year, have been reported as one cause. I suspect that's the primary cause. McCarthy's and other coaching staff contract guarantee hangovers are also mentioned.

    https://www.packers.com/news/packers-profits-fall-due-to-unusual-set-of-expenses

    For 2019, national revenue went up 7.2%; Packer local revenue was up around 2.3% which in total comes in a little under the 6% bump in the salary cap.

    Now, is there something about the Packers expenses, with profit averaging under a 10% net margin which ain't all that great compared to $90 billion market cap companies in the S&P 500 (if that's what the NFL franchises in the aggregate are really worth according to Forbes)?

    Not really. The only thing in particular I would point to is that given cap rollover has been in place since 2011, and the cap rollover this season is about $5 mil, over the 9 years the Packers have underspent the cap by only about $500,000 per year. Some teams, like Oakland and Cleveland, chronically spent under the cap. I did read in passing some consideration of raising the minimum cap spend in the new CBA but I don't know if that was in fact included in the agreement the players reps voted through. That would be an enhancement over the cap bump from 47% to 48% of revenue.

    You have to consider all the other expenses that go into running an NFL franchise. Start with non-player payroll and benefits. There are the coaches salaries and then all of these people where the list goes on and on:

    https://www.packers.com/team/front-office-roster/

    You have player benefits not included in the cap, stadium and facilities maintenance and improvements, staduim lease payments, debt service, utilities, and on and on, all common to pro sports franchises. While the Packers are a not-for-profit corporation, they are not tax exempt. So add income taxes into the mix as with any franchise.

    I have no doubt that Dallas, New England, Washington and probabaly the LA teams and maybe Vegas with their new pleasure palace coming on line, are or will be quite profitable. The middle 3rd. are probably decent if not exceptional investments. The bottom 3rd. are probably poor investments.

    So if most of these teams are not terrific investments (it's worse in MLB), why the clamor among billionaires to own them? Well, I wouldn't underestimate the hobby factor. Once they have all the houses and cars and jets and private schools and designer clothes and jewelry, owning a sports franchise would be the next thing on the list for some to gain some "marginal happiness". They can entertain friends and business associates in the skybox and lord over them their ownership of a centerpeice of American culture. Some of these guys might be ex-jocks who enjoy the vicarious thrill, like they are part of the team. Others prefer fine art or they collect more estates or buy ever bigger jets. That of course does not mean they have outsized profits to share with their employees. It's still a business venture despite all that. Jimmy and Bob might be making outsized profits, but the bulk of the league is not.
     
    Last edited: Mar 2, 2020
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  19. thequick12

    thequick12 Cheesehead

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    Over the 10 years the agreement is rumored to be for the owners collectively will profit billions of dollars.

    Now if you're talking revenue the owners split billions every year.
     
  20. HardRightEdge

    HardRightEdge Cheesehead

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    Sports franchises remind me somewhat of investment banks where the chief expense is high priced talent. They don't have the cost of inputs and capital intensive spending of a manufacturing company, nor are they like retailers where the cost of goods to be sold is a very high portion of revenue.

    Lets compare the NFL to Goldman Sachs.

    According to Forbes franchise valuations, the 32 franchises are valued at about $90 billion. Goldman Sachs market capitalization is about $70 billion, the value of all common stock.

    The NFL generated about $16 billion in revenue last year. Goldman Sachs generated more than double that, $36.6 billion, with return on equity of 13% and book value increasing 15%.

    GS's operating expenses were $23.5 billion with a hefty chunk of that, $12.3 billion going to compensation and benefits. They have a lucrative lending business, but 75% of revenue comes from fee based services, not unlike the NFL as a service business. I don't think those investment bankers and traders are crying in their soup even though they have a habit of being summarily canned if they underperform or if there is an economic downturn.

    Last fiscal year Goldman Sachs' net earnings attributable to shareholders after taxes and preferred share dividends totaled $9.9 billion. The NFL comes nowhere near that. GS returned $4.5 billion to shareholders in the form of stock buybacks and common stock dividends. The common stock dividends alone of $1.2 billion was not much less than all of the NFL's net profit if the Packers historical numbers are indicative of an average team in the league.

    The numbers say that given the choice between owning all of the NFL or half of Goldman Sachs at about 1/3 of the price, GS would be the better investment. The only argument one could make to the contrary is that the NFL is recession proof whereas GS clearly is not. But is the NFL really that? It has not been tested in over a decade with the costs of everything at the ballparks (almost 1/2 the Packer revenue being local) going higher and higher. And to what degree would it be recession proof if that is the case?

    It all goes to show that owning an NFL franchise is a lot more about the intangibles of being in that exclusive club of owners than it is about being an optimal money making opportunity. Unless, of course, you are Jerry or Bob or one of the handful of quite profitable franchises which do not constitute the majority.

    The NFL's cultural footprint is much larger than its financial impact or profitability. It's huge in both respects in Green Bay from the outside looking in, which might distort one's perspective. That is not the world at large.
     
    Last edited: Mar 2, 2020
  21. HardRightEdge

    HardRightEdge Cheesehead

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    Over ten years they better profit billions of dollars or it's a very bad business to be in, not a mediocre one. $1 billion per year in profit on $16+ billion in revenue is not a good return at all relative to the bulk of publicly traded companies under better than recessionary conditions.

    At close to 50% of revenue the players will be profiting $8+ billion per year. What are their expenses in earning that money? Other than taxes, negligible.

    And what's the point of evaluating the profitability of a business if you don't look at the expense side of the P&L where "billions are spilt", more than half on the players when you factor in benefits including pensions and retirement medical? You talk like that's frivolous waste and not the cost of doing business.

    We heard the same kinds of arguments with the last CBA. Revenues increased substantially, profits evidently did not except for the handful of highly profitable franchises with a lot of local revenue. Future profit growth will be dependent on revenue growth, and the players will be taking their percentage of growing revenue, increased by 1% in fact in the cap. More money is being kicked into benefits according to reports. If they hold poor teams to spending up closer to the cap as has been reported as a possibility, that's more money to the players.

    You mentioned MLB earlier with 50% going to the players. It was actually 48.5% last year, but 54% if you include the minor leagues while the average franchise revenue is much lower than the NFL, with all of the other expenses involved in running a franchise on par with the NFL. MLB spend is variable with the soft cap and the luxury tax, and it's been inching down under profit pressure.

    Most NFL franchises would be a mediocre investment from a profit standpoint and I doubt that will change significantly. MLB is worse.
     
    Last edited: Mar 2, 2020
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  22. El Guapo

    El Guapo Cheesehead

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    I think that you hit the nail on the head, as that's the view from an operating profit standpoint.

    However, for some of these folks such as Red McCombs, the annual NOI was just a bonus. The real money is in the appreciation of the asset. McCombs bought an average Vikings franchise in 1998 for $250M and sold it seven years later in 2005 for $600M. That $350M profit was an average of $50M a year on top of the team's operating profits.

    Wayne Weaver sold the least profitable NFL team (the Jacksonville Jaquars) to Shad Khan in 2011 for $770M. He had purchased the expansion rights for the team in 1993 for $208M. That's still a respectable $31M per year in appreciation.

    I wonder what the appreciation is for a team like the Patriots or Cowboys. Then again, those owners seem to be in it for the long-haul. Even though they aren't realizing profits from the sale of their franchises, it is a calculated part of their wealth.
     
  23. HardRightEdge

    HardRightEdge Cheesehead

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    And if Forbes valuations are to be believed, since 2005 the value has increased 5 fold to $2.7 billion. But you have to ask what underpins that valuation increase. It is not profitability. It is cache. Like paying $100 million for a painting or $30,000 for a purse, neither of which spin off operating profit.

    The argument was that the players are underpaid relative to the profits generated. I see no evidence of that. If one wants to make the asset appreciation argument, then it starts to sound like an argument akin to Warren's asset tax.

    Consider that the Packers net profit over the last 3 reported fiscal years has totaled about $110 million. Rodgers cash pay with signing bonus over the 2018 - 2020 is $103.45 mil. Rodgers "net profit" is equal to the team's over a 3 year period. That's one player, a player who ironically bought a piece of the Bucks franchise.

    I think one can argue that pay disparity between the top and the bottom has become overly extreme, but on average the players are extracting far more profit from the league than the owners.
     
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  24. captainWIMM

    captainWIMM Cheesehead

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    Actually teams had to spend 89% of the total cap from 2013-17 and 2018-21 in the current CBA. Therefore no franchise was allowed to make a profit by going cheap on players.
     
  25. thequick12

    thequick12 Cheesehead

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    So the estimated total nfl revenue was about 4 billion in 2001 and by 2019 it had reportedly grown to over 16 billion. Under the current cba the players recieve 48 % of total revenue after owner expenses are duducted.

    The owners were paid out 8.78 billion in revenue for 2019 which means the players received .34 billion less for a total of 8.44 billion. Meaning the NFL actually made 17.22 billion in total revenue in 2019 after expenses not including player contracts.

    The formula for total revenue excludes money used by owners to pay operating "expenses." Coaches salaries, stadium maitnence, security, concession operation.,etc

    So, essentially since that 8.44 billion is used to pay their other employees, the 32 owners split that 8.78 billion which is closer to profit than revenue in true definition. That's over 274 million per team in 2019 if the money is divided evenly.

    And Aaron Rodgers bought like 1% of the bucks. He's no where close to being on the same financial level as an NFL, NBA, mlb majority owner
     

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