Blog Entry

Jerry Jones: Revenue sharing is 'on it's way out'

Posted on: July 2, 2011 3:27 pm
Edited on: July 2, 2011 8:13 pm
Posted by Will Brinson

The matter of sharing revenue is a big deal for the NFL and NFLPA. In fact, most people would probably agree it's the biggest deal with respect to the current labor negotiations.

However, the issue of revenue sharing between owners is also a tremendous obstacle that the owners have to overcome before finding common ground with the players.

And if you think it's not a problem, then you haven't heard Cowboys owner Jerry Jones talk about how the rest of the owners are helping to pay for the Vikings new stadium.

"Right now, we are subsidizing this market," Jones said, via the St. Paul Pioneer Press. "It's unthinkable to think that you've got the market you got here - 3.5 million people - and have teams like Kansas City and Green Bay subsidizing the market. That will stop.

"That's going to stop. That's on its way out."

As Liz Mullen of the Sports Business Journal noted on Twitter, there's a reason why this subject has not been written about much despite being an important matter: the owners aren't going to budge off their stance.

Well, at least the rich(er) ones anyway: Jones and the rest of the owners with extraordinary deep pockets were talked into revenue sharing for the first time in the last CBA deal.

And such distribution of money, along with the revenue split given to the players, was precisely why they opted out of the deal that they agreed to back in 2006. (Ironically, Mike Brown of the Bengals and Ralph Wilson of the Bills were the only two owners to oppose the deal.)

It's also one of the unstated obstacles to a new CBA; you might hear talk from ownership of player factions during this process, but the notion that the owners are completely unified is just silly.

There are owners who want more money from other owners, and there are owners who don't want go hand out additional money simply because they're more committed to generating revenue by investing in their product.

From a negotiating standpoint, this is problematic, because the various factions of owners have differing viewpoints on splitting up the $2 billion pie of revenue.

But it's something that'll have to be bridged before the NFL and NFLPA can reach a deal; and Jones' hardline stance could be an indication that everyone's on the same page.

Or an ominous forewarning that there's some clear-cut dissonance amongst owners on the topic.

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Posted on: November 30, 2011 3:47 pm
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Since: Nov 25, 2010
Posted on: July 6, 2011 10:35 pm

Jerry Jones: Revenue sharing is 'on it's way out'

The idea of revenue sharing and salary caps is to keep the smaller market teams competetive.The big market owners still independantly own their own teams, but you have to remember that the large market owner is putting more of his own money into the pool. The small market owner depends more on the large market owner to keep his team above water more so then the other way  around.It`s easier for Jerry Jones to survive without  the Jacksonville Jaguars then for the Jacksonville Jaguars to survive without Jerry Jones.Let Jacksonville learn how to market their own team instead of making Jerry sound like the villian.

Since: Sep 6, 2006
Posted on: July 5, 2011 11:18 pm

Jerry Jones: Revenue sharing is 'on it's way out'

But you can't win consistently without spending.  And if you kill revenue sharing, the bigger markets get to be bigger spenders, which kills competition. 

That's what salary caps are for and they are a much better leveler of the playing field than revenue sharing ever was. 

Since: Sep 6, 2006
Posted on: July 5, 2011 11:15 pm

Jerry Jones: Revenue sharing is 'on it's way out'

Check out the Census, Texas is the 3rd or 4th largest state.  I'll allow you to extrapolate what extra population means to market size and therefore revenue.

2nd to be exact but what's your point? Why should Dallas be penalized for being in a larger state? It's all a moot point at any rate when you consider the Cowboys fanbase extends well beyond the Texas borders.

Because there would not have been an NFL to win in if other teams were not around for Dallas to play.  How do you not understand this?  Sports franchises are entirely different businesses than a retail store like Macy's.  Macy's doesn't need stores to compete against, NFL teams do.

I understand it perfectly well, the problem is that in no means shows that Dallas should share money made from jersey sales with other teams. I have some employees who work harder than others and they receive higher raises than the others who tend to slack off more even though they all need each other to complete the work. There is an old saying to the victor go the spoils...  please tell me you aren't one of those who believes school sports leagues shouldn't have scores and all teams are declared winners? 

Right and my point has been that they were succesful in the 60's (according to my math that's pre 90's) which would lead to support in the 80's because kids who grow up in the 60's watching the Cowboys win are probably going to become Cowboys fans (for an example see how many Yankees and Braves fans there are nationally now a days due to their dominance in the 90's).  Also read, i say "most succesful" they were "most succesful" during the 90's forwards due to winning in the 90's.

I see, so because all those other teams weren't as good they should pay them?  

Not trying to beat a dead horse here but all the merchandise they sold comes from winning.  Winning requires a team to play against.  Dallas wouldn't sell any Super Bowl T-Shirts or hats if there was no Super Bowl.  Every team in the NFL relies on every other team for its success.  Seriously, how do you not understand this if you went to school for business?

I understand this perfectly well so don't try and throw the business card out there. The problem is not in your theory that teams need other teams to be successfull, the problem lies in your theory that the successful ones somehow owe money to the non-successful ones. Your argument is best suited in defense of parity, not in defense of failing markets. Your claim that teams like GB and Pitt would fail without revenue sharing is really reaching. They needed revenue sharing in the beginning to be competetive but the salary cap can take care of that and put everyone on equal footing without the need for RS as well. There is absolutely no reason to have both. If you run a successful franchise and are smart enough to buy it in a thriving market than you deserve to reap the benefits. If you choose a smaller market with a history than you deserve equal opportunity to create a competetive team but in no way do you deserve equal profits if the market doesn't provide it. 

One more time...  You need to have NFL teams in markets that are smaller than the top 10 or else there would only be 10-15 NFL teams.  I'm not going to rehash all my comments again but let's say there are only 15 NFL teams.  You can only half the games ie half the revenue teams have now.  Less teams in less places also means a vast reduction in the available television audience and thus revenue.  

You're changing the topic, what does any of that have to do with a Neiman Marcus in Podunk, Iowa? I get what you're saying here but it's a different topic than what you were addressing. I've said before I'm not opposed to some sort of revenue sharing on a much smaller scale and we definitely need a salary cap but revenue sharing needs a serious overhaul to keep up with a changing NFL. Teams in smaller markets can be just as competetive as teams in larger markets as long as salary caps are in place. 

Really, do you work for the Cowboys?  In their marketing or merchandise department?  The NFL is the most profitable and popular American sports league.  Why would you want to change a system that has worked so well?  Owners are not hurting financially.  they are already millionaires if not billionaires.  All Jerry Jones wants is more money to put into his pocket, not his franchise. 

Everything changes, the NFL is not the same beast as it was when revenue sharing was required to the extent it's in place today. Everything needs to update with the times and this is no different.  

Since: Jun 13, 2007
Posted on: July 5, 2011 7:55 pm

Jerry Jones: Revenue sharing is 'on it's way out'

Big mistake.  Revenue sharing is one of the best tools in keeping competitive balance, which has been great for keeping the NFL exciting.  You want the MLB model, where the Yanks and Red Sox can outspend everyone else, while other teams (Pittsburgh, KC, etc.) will never really be a factor?  Kill revenue sharing.

Before anybody squaks - no, outspending other teams does not guarantee winning.  You still have to spend it wisely.  But you can't win consistently without spending.  And if you kill revenue sharing, the bigger markets get to be bigger spenders, which kills competition.

Since: Sep 17, 2006
Posted on: July 5, 2011 5:20 pm

Jerry Jones: Revenue sharing is 'on it's way out'

I think Jerry Jones would be happy if there were no salary cap too because he's all about the Cowboys first not the overall health of the NFL. Might work for Dallas but not the other 31 teams in the NFL. I wouldn't call revenue sharing "subsidies" anyway because many of the smaller markets who benefit would remain profitable without it.

It's interesting that Jerry Jones mentioned Kansas City since they were originally the Dallas Texans. Thankfully they did not have the revenue sharing that they do now back then or there might never have been the Kansas City Chiefs. Thanks Lamar hunt for moving your team from a failed market to a city that has supported the team enough to compete with the bigger markets.

Since: May 18, 2011
Posted on: July 5, 2011 4:39 pm

Jerry Jones: Revenue sharing is 'on it's way out'

You do not understand the economics of the sport.  Read the previous comments.  If the idea was insane how come the NFL is the most popular and profitable league in American sports?  I like the idea of welfare and you will too if you ever get fired or your family members need it to survive.  Survival of the fittest is a social darwinism term and has no place in a discussion about capitalism.  Especially since NFL teams are not competeing against the other teams with the goal of driving them out of business (capitalism).  That would leave the league with 1 team.  Who would they play against?  Teams need other teams in order for there to be a league in the first place smart guy.  The NFL relies on TV revenue to finance the teams themselves.  If there are less teams there is a smaller audience ie a smaller TV contract ie smaller revenue for the league ie smaller profits for the individual teams.  Don't just spout out what you hear on the news or from your friends without educating yourself on the subject.

Since: Oct 30, 2007
Posted on: July 5, 2011 4:28 pm

Jerry Jones: Revenue sharing is 'on it's way out'

Revenue sharing is a joke. The idea of it was insane. If you own a football team in Buffalo, Jacksonville, or even New York and cant make enough cash to keep your team afloat, move to LA. How do you feel about your tax dollars going to welfare? because this is the same thing. teams that market well and generate cash flow are subsidising those that dont. And it's not just about big market/ small market. It's about proper managment. I don't like Jerry Jones but he is right on. This crap has to stop. Survival of the fittest.

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