NFL Projecting Record Profits For 2011

[YourPalChrisMal]

http://www.bleedinggreennation.com/2...ofits-for-2011

NFL Projecting Record Profits For 2011

I know the lockout is long gone and everyone has quickly forgiven the NFL, but this story really made me raise an eyebrow. I'm on the subway yesterday, thumbing through the Wall Street Journal (because that's how I roll) and I see this story about how the NFL signed a new 10 year $2.3 billion deal with Pepsi, which is one of the largest sponsorship deals in sports history. It encompasses a number of Pepsi brands (Pepsi, Frito-Lay, Tropicana, Quaker Oats and of course Gatorade) all of which will be the official something or other of the NFL.

This deal, combined with a number of other new sponsorships, ticket sales projections & TV ratings mean that the NFL is projecting record revenues of over $9.5 billion this season. In fact, analysts have had to revise their projections up $100 million from earlier this year.

Remember, this is the league who said their situation was so untenable that they needed to lockout their players this summer and put the fans through months of angst and misery. And when you look on the horizon, with things like the rumored Thursday game package likely to be sold, the revenue is set to go up exponentially from here on out. In fact, the NFL is even looking into sponsorship deals with tablet companies to allow coaches to use computers on the sideline. Let's just hope they're laminated. o did the lockout ever really have to happen and should we really be forgiving it so soon? In the end, the NFL is more like a cigarette maker than any other business. It doesn't matter how wrong we thought they were this summer, we can't quit them. I know I can't... but I also can't deny that stories like this me really annoyed at what we were put through this summer.

[FairOaks]

I don't think the NFL ever claimed they were losing money. They explicitly said they were not, many times. They just said that the structure was squeezing them, and teams really should be making more profit than they were given the revenues.

Really, I think the big issue was the "stadium money", where the owners got $1 billion off the top, then the players/owners split a percentage of the rest. It was designed to let the players have a certain percentage. But the revenue started increasing more than expected, meaning that $1 billion became a lesser percentage than anticipated, meaning the players got a larger share of the the pie than originally planned. The faster revenues increased, the more that overall percentage got squeezed higher and higher. I'm sure stadium costs went up as well (particularly given Jerry Jones' little playground), but the stadium exception level stayed the same. To the owners, that structure was only going to get worse long-term. I think that's why the owners were first asking to bump that to $2 billion.

Of course, I think the owners first offer to the players was to basically reverse the situation, i.e. give the players a fixed amount which looked like a nice percentage now but would decrease as revenues went up. That was obviously a no-go.

The end solution was to (mostly) do away with that slice off the top, and just make it a straight percentage (I think there is still a slice for documented stadium costs). Makes sense, in hindsight. Shame they had to bicker for so long.

But the writer has amnesia if the profits are a surprise to him. ESPN signed a megadeal paying an extra $1 billion a year before the lockout even started, so everyone knew revenue was going up even more.