by Andrew Brandt
February 10, 02010
First, hearty congratulations to our colleague Matt Bowen and his wife Shawn on the birth of Grant Thomas Bowen, weighing in at 8 pounds, 11 ounces. It’s expected that a scholarship offer from USC’s Lane Kiffin will be coming as soon as he’s done recruiting one-year-old Baylen Brees.
On to Wednesday Whys…
Why do Super Bowl ratings show the enormous power of the NFL?
The most watched event in the history of television featured teams from the 25th- and 51st-ranked TV markets in the country, Indianapolis and New Orleans. That fact in itself is astonishing.
Everyone associated with the NFL – from players to coaches to officials to media to sponsors to all the ancillary businesses surrounding the league -- should thank his or her lucky stars that football has become the ideal television property in this increasingly-fractionalized media landscape we live in. The staggering ratings for the NFL throughout the year, culminating with the record-breaker Sunday, continue to bode well for league revenues despite an uncertain labor future.
Market sizes don't seem to matter; we’ve known that since two teams from Los Angeles moved to St. Louis and Oakland, since a team from Houston moved to Nashville, since, well, a team from Baltimore moved to Indianapolis. Football is that powerful. In an age of declining rights fees for broadcast properties across the board, the NFL remains resistant to ratings declines and fractionalization by cable and the Internet. It’s a truly amazing television property, one of only a handful left.
So much for the need of a team in Los Angeles.
Why are the Saints an example of a low- to mid-revenue team that may also be a high-profit team?
At a time when the Saints were one of the teams rumored to be a possible tenant in a new stadium in L.A., the city of New Orleans stepped forward to insure that would not happen. Last May, a new deal between the state of Louisiana and the Saints eliminated fixed payments that the state was making and instead called for an $85-million public investment to add seats and create improvements in the facility to provide the team continued revenue streams.
As part of the same deal, the Benson family purchased three major pieces of downtown real estate: an office tower that was then rented by state agencies and a mall and parking garage that would be leased back to the Superdome Commission to operate a sports and entertainment district.
Although certainly no one would dispute what the Saints have done for the psychological and emotional spirit of one of the most unique cities in the world (I’m on my way there tomorrow), the deal provided a nice revenue stream for the Bensons, who face some financial challenges ahead, starting with a revision of Drew Brees’ contract to bring him in line with the top-echelon quarterbacks.
The other team in the Super Bowl just finished its second season in its gleaming new home, Lucas Oil Stadium. With Lucas Oil Products paying $122M over 20 years and stadium financing from a one-percent tax on prepared food in nine counties surrounding Indianapolis (with Marion County paying an additional one percent tax), the Colts represent another team in a small market but high in profit due to the lack of debt on their stadium.
Why then are the Saints and Colts examples of misplaced priorities with the Supplemental Revenue Sharing (SRS) system?
Last week’s arbitrator decision to continue SRS may not be the victory that the NFL Players Association and its lawyers proclaim, with the Saints being an example why that’s the case.
Though it’s not known whether the Saints and Colts have received SRS funds, the favorable deals described above provide them the wherewithal to compete prior to SRS funds. Thus, SRS funding may be going to teams that actually don’t even need the revenue to remain competitive, while money is diverted away from teams that do need revenue sharing despite high revenues, due to enormous debt.
The NFL and NFLPA have to figure out this revenue sharing model. As for the NFL, it needs to sift through what the real numbers are in revenue, profit and debt for the teams. Some teams have high revenue but high debt. Others, like the Super Bowl participant Colts and Saints, have low to middle revenue but perhaps little debt. That equation makes the SRS discussion, which focuses only on revenue, misguided.
Once these numbers are flushed out, the NFLPA needs to focus on the need for these shared revenues to be spent on players and not pocketed as windfalls by owners to use however they please. That, my friends, is a key issue that should be addressed behind all the rhetoric about revenue sharing.
Why is Julius Peppers scratching two teams off his list of potential teams?
Peppers wants out. He knows the Panthers can place the franchise tag on him again, but the cash number would be prohibitive. Peppers wanted to make a preemptive strike against the Panthers to dissuade them from trying to retain him in case they had an interest.
I don’t think Peppers has anything to worry about. With $13M guaranteed coming to Jake Delhomme, the Panthers have some cash issues to deal with. Peppers will be set free.
We can also scratch Green Bay as a potential home for Peppers. The Packers’ defensive line coach is Peppers’ former coach with the Panthers, Mike Trgovac. To put it conservatively, Trgovac is highly disliked by Peppers. I worked with Mike in 1999 with the Packers and found him to be a good person and coach, but Peppers feels differently. He’ll steer clear of Trgovac at all costs.
And for my pet peeve Why of the Week…
Why did it seem like there were so many Super Bowl commercials with doughy guys in their underwear?
As 100 million people gathered to watch some of the fittest people in the country compete, we were interrupted by a bunch of “before” pictures of guys in their tighty-whiteys standing around. Not the image you want, and I can’t even remember what the ads were about. Kudos to Google for its minimalist yet powerful message. They sure do get it there, don’t they?
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