Team thrift foils Angelo, Kirwan says

[Lucky Luciano]

For so many years, the Bears refused to dole out the bonus dollars, and the ownership claimed they simply could not afford to hand over so much up front money. At that time, we were a well known cheap team, and it was well deserved. But about 10 years ago, while Phillips took over, we began to spend more and more bonus dollars, and the cheap reputations lessened, though at a small rate. Then we got our new stadium/deal, and the teams income went up. And it was at this point the team really started to enter the picture for the big ticket players who commanded big ticket bonus dollars.

 

hmmmm... which FA big ticket players specifically are you talking about over the last 10 years compared to the past? which specific FA big ticket players since the new stadium opened compared to the past?

 

For the record, another team that has always been considered cheap in Pitt. They rarely are in the mix for big ticket FAs, and often have allowed their better/best players to walk in FA rather than re-sign them. But they have also been among the best in terms of drafting and devloping players. If there was ever the anti-Washington, it has to be Pitt. They have proven you don't have to spend w/ the bigs in order to win.

 

where have you read the steelers ownership have always been considered cheap? i don't believe i ever heard that before. please post the facts/links to substanciate your claim.

 

John Clayton - ESPN News

 

"Dan Rooney and his son, Art, run what is considered the most stable and one of the most well-operated franchises in the NFL."

 

http://sports.espn.go.com/nfl/columns/stor...&id=3478129

 

We have talked about this many times in the past, and simply have a disconnect in our conversations. My point has always been about the bonus money. I have no idea what the actual number a team gets each year is, but a team that is aggressive can spend much more by including greater portions in bonus dollars. It is in those bonus dollars you usually see the difference between frugal and free spending teams.

 

You and I have never seen eye-to-eye on this, but it is in these bonus dollars I point to as what differentiates cheap owners from the rest. It is here where an owner like Danny Snyder gets the reputation as a free spender, while others like Az and Cle (until recently) were considered so cheap.

 

again i want to qualify the following information by saying it is very easily >>>possible

 

you keep bringing this up and i keep giving you information over and over that questions it, in the least, and in my opinion can and does dispute it.

 

FACT:

1. when our head coaches are hired (with the exception of wanny) they are near, if not AT the bottom, in pay compared to other nfl *head coaches.

 

2. when we hired angelo he was near the bottom of pay scales for GM's in the nfl. same with hately no matter what his title was called.

 

3. until you can prove they have a large well paid scouting staff i will still hold the argument that the information i gathered disproved that.

 

4. you can't pay more money to any players than the salary cap dictates per year. this includes salary or **bonus's.

 

5. the chicago bear franchise has virtually no heavy expenses for new facilities. so where does the money go?

 

*it seems highly unlikely that we would pay our assistant coaches more money than our head coaches. that means they ALSO are likely near the bottom of the pay scale compared to the rest of the nfl.

 

**finally, i will REPOST old information i posted to you and LT2_3 in regards to how easily the large money for bonus's could be paid for with virtually nothing out of pocket per year (or the owners share of the profits from the NFL) whether the owner were rich or otherwise. you also need to take into account that there is a 6 year contract limit on amortizing player bonus money (unless it has changed).

 

i also think that the $10+ mil 2008 rollover money is a perfect example of how you could use the interest on this money to pay out these bonus's. so here goes yet again..................

 

07-07-2008

 

yea, i guess i am going into that “rubbish” once more for your sake. again, i also GET IT, there are times that a team actually pays out, >>TEMPORARILY

 

it is also true that every year previous amounts of this front “bonus” money are paid back and put into the pocket of the owners or used to pay off the loans they took to get it. so what that means is that at the very MOST you, as a franchise, are paying interest ONLY on the money if you had to borrow it. below is a model of how this could possibly work for the owners...

 

first and foremost i am not a statistician, a CPA, or even a math wiz for that matter, and you can take the following “useless info” and put it into perspective if you find it incorrect:

 

most banks in the world would loan you money with a secured loan and usually, if i’m not mistaken, at around a 1% return.

 

as an example i used $10 mil as an easy figure to regulate at the 1% over prime for a pro rated signing bonus over a 5 year period. at 1% loan interest the costs would be:

1st year interest $100,000 with 20% payback of borrowed money

2nd year interest $80,000 with 20% payback of borrowed money

3rd year interest $60,000 with 20% payback of borrowed money

4th year interest $40,000 with 20% payback of borrowed money

5th year interest $20,000 with final 20% payback of borrowed money

 

total actual cost of borrowing the $10 mil bonus money over this five year period - $280,000 with interest at 1%

 

let’s say the previous example is crap (which it well may be) and go with a straight loan of $10 mil at 4% interest as an example:.

 

1st year interest $400,000 with 20% payback of borrowed money

2nd year interest $320,000 with 20% payback of borrowed money

3rd year interest $240,000 with 20% payback of borrowed money

4th year interest $160,000 with 20% payback of borrowed money

5th year interest $80,000 with final payback of borrowed money

 

total actual cost of borrowing $10 mil bonus money over a five year period - $1,200,000 at straight 4%

 

you can look at these yearly amounts of interest money as being paid back from the slop that is left over YEARLY from that same years cap allowances doled out by the league that aren’t spent and used as a reserve for emergencies in case of injury etc.. usually between $.5 to $3+ million dollars, depending upon the franchise, at the end of a season and still show a profit from this.

 

so the theory it takes a well healed generous owner to pay these bonus’s out of his own pocket is nonsense. the nfl pays for 99.9+% of all player salaries at the start and nobody spends more than the cap allowed in the long run.

[DrunkBomber]

I agree with NFO about Pittsburgh. I wouldnt call it cheap, but you dont see them buying any top tier free agents. For the most part they let all their own higher priced guys leave as well. In recent years theyve let Porter, Randel El, Faneca etc leave. They just have better coaching and drafting ability then we do.

[Lucky Luciano]

I think it is far more simply about Angelo's philosophy, which you can trace back to TB and use as an example. Angelo was w/ TB for many years, right? He learned under McKay. In that model, you do not build your team through FA. You build your team through the draft, and you spend money to retain the players you develop. You use FA to add depth and take some plunges on players that get you over a hump, but you do not build your team through FA.

 

this makes no sense. in another post you stated that angelo doesn't consider drafting offensive linemen as a way to build your offensive line because it takes to long for players to develop but would rather get them in free agency.

 

so in reality, isn't he "building" our offensive line through free agency?

[LT2_3]

**finally, i will REPOST old information i posted to you and LT2_3 in regards to how easily the large money for bonus's could be paid for with virtually nothing out of pocket per year (or the owners share of the profits from the NFL) whether the owner were rich or otherwise. you also need to take into account that there is a 6 year contract limit on amortizing player bonus money (unless it has changed).

 

I don't recall seeing that so let's start from scratch.

 

i also think that the $10+ mil 2008 rollover money is a perfect example of how you could use the interest on this money to pay out these bonus's. so here goes yet again..................

 

I really don't understand this because I don't think the accounting works the way you think it does. I think you're looking at it like they had cash specifically earmarked from the TV revenue sharing that they didn't spend. It doesn't really work that way because the monies aren't earmarked that way. Also, since the last CBA was signed, they changed the cap formula to 60% of ALL revenues and not just the Designated Gross Revenues (DGR) which were pretty much the TV money and licensed apparrel. So with the change to 60% of ALL revenues, the league also instituted revenue sharing between the teams on their local revenues so the teams that make the most money, have to give money to the lesser earning teams so they can pay their team salaries - because the cap is based on more than just the TV deals now.

 

I hope that clears up the recent (as of the last 3 years) changes. If it doesn't feel free to ask as many clarifying questions if it's not clear.

 

07-07-2008

 

yea, i guess i am going into that “rubbish” once more for your sake. again, i also GET IT, there are times that a team actually pays out, >>TEMPORARILY

 

I don't undrestand what this means. Sometimes teams spend more in actual dollars than what gets applied to that fiscal salary cap. That is true. Although I wouldn't make any broad statements about how often that happens because it's different for each team. I guarantee that it happens more often for the Redskins than any other team. Needless to say though, it's not an auto-balancing phenomena. It depends upon the strategy being used.

 

it is also true that every year previous amounts of this front “bonus” money are paid back and put into the pocket of the owners or used to pay off the loans they took to get it. so what that means is that at the very MOST you, as a franchise, are paying interest ONLY on the money if you had to borrow it. below is a model of how this could possibly work for the owners...

 

I'm really trying to understand this, but how is the front bonus paid back? Are you suggesting that the money is replenished from the league in the form of money for the next year's salary cap and they can then repay loans for bonuses as they are applied to the salary cap? As I've said, it doesn't work that way as in specific transactional basis.

 

first and foremost i am not a statistician, a CPA, or even a math wiz for that matter, and you can take the following “useless info” and put it into perspective if you find it incorrect:

 

and go with a straight loan of $10 mil at 4% interest as an example:.

 

1st year interest $400,000 with 20% payback of borrowed money

2nd year interest $320,000 with 20% payback of borrowed money

3rd year interest $240,000 with 20% payback of borrowed money

4th year interest $160,000 with 20% payback of borrowed money

5th year interest $80,000 with final payback of borrowed money

 

total actual cost of borrowing $10 mil bonus money over a five year period - $1,200,000 at straight 4%

 

you can look at these yearly amounts of interest money as being paid back from the slop that is left over YEARLY from that same years cap allowances doled out by the league that aren’t spent and used as a reserve for emergencies in case of injury etc.. usually between $.5 to $3+ million dollars, depending upon the franchise, at the end of a season and still show a profit from this.

 

so the theory it takes a well healed generous owner to pay these bonus’s out of his own pocket is nonsense. the nfl pays for 99.9+% of all player salaries at the start and nobody spends more than the cap allowed in the long run.

 

I can't really fault your numbers there, but you're still not recognizing that the last CBA agreement changed the formula so the salaries are NOT all covered from the TV revenue and that the teams that make more money have to share it with the teams that don't make as much. Nowhere in your considerations have you mentioned that the Bears have to pay into the fund as one of the top 10 earning teams.

[Mongo3451]

I think it is far more simply about Angelo's philosophy, which you can trace back to TB and use as an example. Angelo was w/ TB for many years, right? He learned under McKay. In that model, you do not build your team through FA. You build your team through the draft, and you spend money to retain the players you develop. You use FA to add depth and take some plunges on players that get you over a hump, but you do not build your team through FA.

I totally agree with that philosophy. Here's the rub. After we sign our draft picks, we have 15-20 mil left. I'd rather it go toward aquiring more talent than it going to the family coffers. I'd rather sign 2 difference makers than sign 5 ho hums. I'll also go with something you brought up regarding Pitt and beg the team to spend on people who can bring the right talent in via the draft. Anything but the coffers.

 

The McCaskeys owe the fan base more. Some of may be that I've seen too many talentless hacks have fortune and fame off a predessessor that had greatness.

[Lucky Luciano]

 

LT2_3

 

first: before i go into any details (right or wrong) lets discuss this 'example' using the previous nfl contract agreement as it pertains to nfo's and my discussion more-so than the one signed last year, at least at this point.

 

second: i am going to simplify the examples as much as i can. that will include probably changing percentages of money paid to the parties involved and where it came from etc. the reason to do this is to create a knowledge base of fact built upon HOW it works and not actual factual data examples. for these discussions i am also going to leave out any monies the actual NFL might take out of the revenue for any reason other than to distribute it to the franchises. ok here it goes as i understand it....

 

the NFL corp. is, in a sense, a holding company where monies come in from various sources to be distributed. this includes TV money and whatever money is made by each individual franchise that get's shared among the (simplified) franchise collective.

 

each year the NFL adds up how much money is paid in and divides it into two types of revenue (very simplified).

 

1. the amount of money paid to each franchise owner/corporation as their share of the amount of money earned that was subject to sharing including TV money etc. the NFL cuts a check to each of the 32 franchises each year for this amount. for our example we are going to take this cash and simply put it in the owners pockets and it will NOT become a discussion point any further.

 

2. the amount of money to be paid in salary to players with a minimum and maximum amount specified. the NFL cuts a check to each of the 32 franchises for this maximum determined amount every year. this equals the salary cap.

 

the owners now have X amount of salary money to pay the players in any way they see fit as long as it does not exceed the maximum or go below the minimum percentage of that particular year's cap.

 

the NFL agreement also let's the owners sign players with guaranteed bonus money that they can amortize over the length of the players contract (six years). this CAN exceed the maximum amount they have to spend in an individual year but is counted against the following year's cap expenses for player salaries until the full amount is amortized over the length of the contract.

 

EXAMPLE 1: player 1 signs a contract with a $12 M signing bonus and he is paid this amount in cash immediately (simplified) out of the owners own pockets. next year a $2 M amount (amortized bonus money paid in advance) counts against the salary cap the team is allowed to spend. if the team received $100 M the following year in salary cap allowance from the NFL they can only spend $98 M in paid salaries. they HAVE to put the remaining $2 M in their own account as a payback of the amortized amount they paid in advance out of their own pockets.

 

EXAMPLE 2: if say the cap money allotted by the NFL for one seasons salary cap was $100 M and an individual team only paid out $90 M in salaries to it's players that season, the remaining $10 M can be kept by the owners to buy an island or whatever. it can't be used in any consecutive years as added cap money.

 

is this not how it all basically works?

 

if so i will continue with another more detailed post.

[LT2_3]

LT2_3

 

first: before i go into any details (right or wrong) lets discuss this 'example' using the previous nfl contract agreement as it pertains to nfo's and my discussion more-so than the one signed last year, at least at this point.

 

second: i am going to simplify the examples as much as i can. that will include probably changing percentages of money paid to the parties involved and where it came from etc. the reason to do this is to create a knowledge base of fact built upon HOW it works and not actual factual data examples. for these discussions i am also going to leave out any monies the actual NFL might take out of the revenue for any reason other than to distribute it to the franchises. ok here it goes as i understand it....

 

the NFL corp. is, in a sense, a holding company where monies come in from various sources to be distributed. this includes TV money and whatever money is made by each individual franchise that get's shared among the (simplified) franchise collective.

 

That's close to how it works. I realized that you're simplifying things, but if we're talking about the previous CBA, we should really make a few clarifications. Sure the league gets a bunch of money from TV deals and league sponsors, but not all of it gets split up to the teams. I don't know how much they keep, but it's more than just their office operating expenses.

 

each year the NFL adds up how much money is paid in and divides it into two types of revenue (very simplified).

 

Nope the money sent to the teams comes in one check (as it were) and there is no delineation or earmarking to it whatsoever.

 

1. the amount of money paid to each franchise owner/corporation as their share of the amount of money earned that was subject to sharing including TV money etc. the NFL cuts a check to each of the 32 franchises each year for this amount. for our example we are going to take this cash and simply put it in the owners pockets and it will NOT become a discussion point any further.

 

2. the amount of money to be paid in salary to players with a minimum and maximum amount specified. the NFL cuts a check to each of the 32 franchises for this maximum determined amount every year. this equals the salary cap.

 

Teams all get a check from the league and then the salary cap was (before the most recent CBA) determined as 60% of those revenues. You appear to be saying that the other 40% goes straight in the owners pockets as profit. It really goes into their bank account and gets used for office staff, coaches salaries, scout salaries, repayment of any incurred debt, property upkeep, property maintenance, property upgrades, property taxes, paper, ink, pens, pencils, paperclips, and any other cost involved in running a multimillion dollar enterprise.

 

Now there are additional streams of revenue too from ticket sales, beer sales, and whatnot, but those numbers vary from team to team. For instance, the Redskins own their own stadium and have the additional expenses of running, maintaining, and paying taxes on it, but their profit margins are higher because they don't have to pay rent or split profits of concessions like the Bears do with the Chicago Park district.

 

the owners now have X amount of salary money to pay the players in any way they see fit as long as it does not exceed the maximum or go below the minimum percentage of that particular year's cap.

 

That's not technically true because of what I explained above. However, that's a quibble.

 

the NFL agreement also let's the owners sign players with guaranteed bonus money that they can amortize over the length of the players contract (six years). this CAN exceed the maximum amount they have to spend in an individual year but is counted against the following year's cap expenses for player salaries until the full amount is amortized over the length of the contract.

 

Signing bonuses DO work that way.

 

EXAMPLE 1: player 1 signs a contract with a $12 M signing bonus and he is paid this amount in cash immediately (simplified) out of the owners own pockets. next year a $2 M amount (amortized bonus money paid in advance) counts against the salary cap the team is allowed to spend. if the team received $100 M the following year in salary cap allowance from the NFL they can only spend $98 M in paid salaries. they HAVE to put the remaining $2 M in their own account as a payback of the amortized amount they paid in advance out of their own pockets.

 

EXAMPLE 2: if say the cap money allotted by the NFL for one seasons salary cap was $100 M and an individual team only paid out $90 M in salaries to it's players that season, the remaining $10 M can be kept by the owners to buy an island or whatever. it can't be used in any consecutive years as added cap money.

 

is this not how it all basically works?

 

if so i will continue with another more detailed post.

 

Or they can pay off debts, give players more signing bonuses, buy new computers for their employees, or invest in gold plated paper clips.

 

The thing is that the salary cap has little to do with the actual money spent.

[Lucky Luciano]

That's close to how it works. I realized that you're simplifying things, but if we're talking about the previous CBA, we should really make a few clarifications. Sure the league gets a bunch of money from TV deals and league sponsors, but not all of it gets split up to the teams. I don't know how much they keep, but it's more than just their office operating expenses.

 

thank you for your input.

 

i understand this that there are items that each team does or does not share revenue in but this is not important in my discussion. i also realized that the NFL probably did not cut 2 checks, one for the player salary and one for the owners. i just used that to simplify how the money is split up between player salary and owner income which i also know they spend on non player items like coaching salary and any expenses needed to run the franchise. that also is unimportant to my discussion. the amount of percentages is also not important, only that there is X amount of dollars allotted to each team by the NFL for player salaries which in itself determines how much the salary cap is and it's limitations.

 

it is then accurate in my model on how an owner can pay large signing bonus money with no or very, very little cash out of their own pockets. it all is paid by the money delegated by the salary cap. this then has no determination on whether an owner is cheap or not by how much money he spends in player signing bonuses.

[LT2_3]

i understand this that there are items that each team does or does not share revenue in but this is not important in my discussion.

 

Why not? Actually, with the most recent CBA, teams indirectly DO share revenues between the top earning and least earning teams.

 

i also realized that the NFL probably did not cut 2 checks, one for the player salary and one for the owners. i just used that to simplify how the money is split up between player salary and owner income which i also know they spend on non player items like coaching salary and any expenses needed to run the franchise.

 

Then why did you say they did, and what was your point in misrepresenting how the system worked? Say there's a team like the Bills that had difficulty paying their operating expenses AND player salaries out of the league money sent to them. If there is ONE exception to the rule, then your hypothesis is blown to crap.

 

that also is unimportant to my discussion. the amount of percentages is also not important, only that there is X amount of dollars allotted to each team by the NFL for player salaries which in itself determines how much the salary cap is and it's limitations.

 

So if the money the league sends to teams is 100 mil, the cap is at 60 mil, a team has additional income of only $10 mil, but additional operating expenses of $60 mil. That leaves them with a $10 mil deficit. While a team in that situation might be able to squeak by, wouldn't it put them in a situation where they wouldn't want to borrow money for signing bonuses?

 

it is then accurate in my model on how an owner can pay large signing bonus money with no or very, very little cash out of their own pockets. it all is paid by the money delegated by the salary cap. this then has no determination on whether an owner is cheap or not by how much money he spends in player signing bonuses.

 

Dude - you haven't presented a model, you've presented a 1 dimentional sketch that doesn't address the details that would either prove of disprove your theory.

 

What your explanation is lacking are either a concrete example of what kind of non-player expenses teams have, or some suggestion that you understand how those expenses relate proportionally to the player salaries.

 

You argument would have held a bit of water in theory with the last CBA, but with the new one and the salary cap being based on revenues that not even all the teams get, makes your suggestions way off base.

[azbearsfan]

Another message board all star bites the dust.

 

Nice job LT

[LT2_3]

Another message board all star bites the dust.

 

Nice job LT

 

I get what he's saying though. It's like he's saying he's hiring someone to cook him dinner, he gives them $10 for the food, and figures they should never be short of money because he only requires them to spend $8 on the groceries. The problem lies in that he's completely ignoring that to put on the dinner, the additional costs might often exceed the $2 additional money for stuff like the cost of gas to get to the market, the cost of depreciation on the car used to get to the market, and the cost of insurance for doing business along with any other business expenses there may be.

 

I hope he understands a bit better now although we probably won't hear from him again until he wants to push the same argument and will have failed to read these final posts once he got frustrated on March 7th 2009 at 6:03pm.

[azbearsfan]

I get what he's saying though. It's like he's saying he's hiring someone to cook him dinner, he gives them $10 for the food, and figures they should never be short of money because he only requires them to spend $8 on the groceries. The problem lies in that he's completely ignoring that to put on the dinner, the additional costs might often exceed the $2 additional money for stuff like the cost of gas to get to the market, the cost of depreciation on the car used to get to the market, and the cost of insurance for doing business along with any other business expenses there may be.

 

I hope he understands a bit better now although we probably won't hear from him again until he wants to push the same argument and will have failed to read these final posts once he got frustrated on March 7th 2009 at 6:03pm.

 

 

And that analogy about the dinner should sum it up for everybody else. Nice work.

[Lucky Luciano]

(Lucky Luciano @ Mar 7 2009, 06:03 PM) *

i understand this that there are items that each team does or does not share revenue in but this is not important in my discussion.

 

Why not? Actually, with the most recent CBA, teams indirectly DO share revenues between the top earning and least earning teams.

 

why not? the only thing that matters is that there is X amount of money that the teams have to use to pay player salaries and that is given/doled out to them BY the nfl which is how the salary cap is determined. it doesn't mean jack for the purposes of my original point where ANY of the money comes from that the nfl uses to pay out the cash. why would it?

 

i also realized that the NFL probably did not cut 2 checks, one for the player salary and one for the owners. i just used that to simplify how the money is split up between player salary and owner income which i also know they spend on non player items like coaching salary and any expenses needed to run the franchise.

 

Then why did you say they did, and what was your point in misrepresenting how the system worked? Say there's a team like the Bills that had difficulty paying their operating expenses AND player salaries out of the league money sent to them. If there is ONE exception to the rule, then your hypothesis is blown to crap.

 

misrepresenting how the system works? all i was doing was simplifying the split between owner revenue and player salary revenue so it would be easy to distinguish the difference. is it that big of a deal?

 

sorry but there is no exception to the rule. the bills pay at the very least the minimum amount of dollars the nfl has allotted to player salary (salary cap), period. if they are running in the red with franchise expenses they can't meet with what their share of the owners revenue it's too bad for them. which incidently i find it nearly impossible to believe that any franchise pays more out to expenses per year than what their revenue share income is.

 

that also is unimportant to my discussion. the amount of percentages is also not important, only that there is X amount of dollars allotted to each team by the NFL for player salaries which in itself determines how much the salary cap is and it's limitations.

 

So if the money the league sends to teams is 100 mil, the cap is at 60 mil, a team has additional income of only $10 mil, but additional operating expenses of $60 mil. That leaves them with a $10 mil deficit. While a team in that situation might be able to squeak by, wouldn't it put them in a situation where they wouldn't want to borrow money for signing bonuses?

 

yes it probably would, as highly unlikely as that is. but when did i ever say teams wouldn't have to or couldn't borrow money for signing bonuses? it's my contention that they could pay off these loans strictly using the salary cap income and none out of their own pockets. this is the whole POINT of my posts in this thread.

 

it is then accurate in my model on how an owner can pay large signing bonus money with no or very, very little cash out of their own pockets. it all is paid by the money delegated by the salary cap. this then has no determination on whether an owner is cheap or not by how much money he spends in player signing bonuses.

 

Dude - you haven't presented a model, you've presented a 1 dimentional sketch that doesn't address the details that would either prove of disprove your theory.

 

What your explanation is lacking are either a concrete example of what kind of non-player expenses teams have, or some suggestion that you understand how those expenses relate proportionally to the player salaries.

 

You argument would have held a bit of water in theory with the last CBA, but with the new one and the salary cap being based on revenues that not even all the teams get, makes your suggestions way off base.

 

this discussion is like some kind of shell game. you keep moving the whole point of this discussion off of the original intent. the truth is i don't care at all what expenses a team has. it's meaningless to this discussion. it also doesn't matter one iota 'where' the money comes from. ALL that matters in this instance is that the league gives each nfl franchise X amount of money to pay for player salaries and i can show how using that X amount of salary cap money they can pay for large signing bonuses.

 

as far as using the last CBA? didn't i qualify that to you at the very start by saying that the discussion between myself and nfo WAS over the period that the old CBA was in effect? not that it would make any difference if you used the new CBA that i know of anyway.

 

all i wanted you to confirm was that my understanding of the separate monies involved was correct and you did. in other words there was X dollars assigned to pay player salaries with restrictions and X dollars paid to the franchise to do whatever they wanted. that they were not interchangeable.

 

I get what he's saying though. It's like he's saying he's hiring someone to cook him dinner, he gives them $10 for the food, and figures they should never be short of money because he only requires them to spend $8 on the groceries. The problem lies in that he's completely ignoring that to put on the dinner, the additional costs might often exceed the $2 additional money for stuff like the cost of gas to get to the market, the cost of depreciation on the car used to get to the market, and the cost of insurance for doing business along with any other business expenses there may be.

 

this makes absolutely no sense in regards to this entire discussion.

 

let me ask you....

1. isn't the CBA in effect to see that all parties get paid the correct percentage of the total money allotted to them that both parties agreed upon?

 

2. do you believe any CBA the owners would sign would pay them less money than it costs to operate?

 

3. do you think that the nfl expects the teams to pay it's players salaries with the money that comes from them (allotted salary cap) for this purpose?

 

4. do you think that portions of the players salaries should be used for franchise expenses and owner profit or paid to the players as it is intended to be?

 

I hope he understands a bit better now although we probably won't hear from him again until he wants to push the same argument and will have failed to read these final posts once he got frustrated on March 7th 2009 at 6:03pm.

 

you know, i have been civil with you trying to have a civil discussion and then you write crap like this. so thanks for nothing. if i need some arrogant prick to talk down to me i'll put an ad in the paper and take applications.

[LT2_3]

why not? the only thing that matters is that there is X amount of money that the teams have to use to pay player salaries and that is given/doled out to them BY the nfl which is how the salary cap is determined. it doesn't mean jack for the purposes of my original point where ANY of the money comes from that the nfl uses to pay out the cash. why would it?

 

Actually, what you are saying there is wrong. As you've pointed out, there is a mechanism for prorating signing bomuses over the length of the contract. It's a way to fudge with the bookkeeping. There is also a mechanism called an LTBE bonus where teams can apply false money against the cap that never gets paid - and the cap space that was used by the LTBE bonus gets rolled over to the following year's cap. You are probably pooh poohing this because it gets added to both the team's cap ceiling and floor the following year, but THIS year you will see some teams using this mechanism in the final capped year to reach the league floor without actually spending the money. Tampa and KC come to mind.

 

misrepresenting how the system works? all i was doing was simplifying the split between owner revenue and player salary revenue so it would be easy to distinguish the difference. is it that big of a deal?

 

I think so anyway. I would say that you are oversimplifying the concepts.

 

sorry but there is no exception to the rule. the bills pay at the very least the minimum amount of dollars the nfl has allotted to player salary (salary cap), period. if they are running in the red with franchise expenses they can't meet with what their share of the owners revenue it's too bad for them. which incidently i find it nearly impossible to believe that any franchise pays more out to expenses per year than what their revenue share income is.

 

It depends on their profit margin and their expenses. So say the cap ceiling is $100 million and the cap floor is $90 million. If a team uses an LTBE bonus to roll $10 million of that into the following year, it means that they only have to pay out $80 in that year. Say the next year the cap goes up to $105 million. That makes their adjusted cap the following year $115 - and their new cap floor is $103.5 million. Then they can roll more into the future and continue to spend less than the cap, rinse and repeat.

 

It's just the opposite of teams renegotiating a player's contract by turning their large salary into an amortizable bonus. So if a player gets $4 mil bonus spread out over 4 years instead of $4 mil in salary in year 2 of their deal, their cap number drops from $4 mil to $1 mil, that adds $3 more mil in cap space that year. Teams like the Redskins do that again and again and again.

 

The salary cap isn't nearly as hard and fast as you make it out to be.

 

yes it probably would, as highly unlikely as that is. but when did i ever say teams wouldn't have to or couldn't borrow money for signing bonuses? it's my contention that they could pay off these loans strictly using the salary cap income and none out of their own pockets. this is the whole POINT of my posts in this thread.

 

I'm just sugggesting that it's not as simple or nearly as attractive as you make it out to be. One thing I can guarantee you is that the Bears were NOT a very profitable organization until they they got their new stadium to give them a much greater cash flow over merely the money given by the league. BTW - do you have any idea what the property taxes are like in Lake Forest?

 

this discussion is like some kind of shell game. you keep moving the whole point of this discussion off of the original intent. the truth is i don't care at all what expenses a team has. it's meaningless to this discussion. it also doesn't matter one iota 'where' the money comes from. ALL that matters in this instance is that the league gives each nfl franchise X amount of money to pay for player salaries and i can show how using that X amount of salary cap money they can pay for large signing bonuses.

 

Let me rephase your points for you so they more closely resemble reality:

 

The league gives teams money

The league requires for them to account for a percentage of that money on their salary cap - even though they can spend beneath the minimum or above the maximum in any or all given years.

 

The reason why this is an important stipulation is because if teams can't make their expenses, they have to move to a new city with a better stadium or sell the team. I'm guessing that all of your postulations about what a team can or can't do regarding signing bonuses is under the presumption that they intend to stay in business.

 

as far as using the last CBA? didn't i qualify that to you at the very start by saying that the discussion between myself and nfo WAS over the period that the old CBA was in effect? not that it would make any difference if you used the new CBA that i know of anyway.

 

The old CBA is really irrelevant and there is no point it going on about it. I only held to that originally because the new CBA is MUCH more complicated.

 

all i wanted you to confirm was that my understanding of the separate monies involved was correct and you did. in other words there was X dollars assigned to pay player salaries with restrictions and X dollars paid to the franchise to do whatever they wanted. that they were not interchangeable.

 

There are no separate monies. The cap is only a balance sheet that can be fudged up or down depending on what a team needs.

 

I didn't really mean to talk down to you, but you just aren't getting it.

 

I could go on, but I'm seriously losing interest.

[nfoligno]

Lt2, Question,

 

In all this discussion, the money each NFL team is given is discussed in theoretical terms. Do you, or does anyone in public, know what the dollar amount is? Is the money each team is given by the league what the salary cap number is, or is it different?

 

Also, most know what the salary cap it, how do you figure the floor. Is it a % of the cap, or what?

 

Finally, and I become confused on this only after readying your discussions. Just using a number out of the air here. Each NFL team is given $100m. Is there are specific amount of money from that which must be used on player salaries, or is the salary cap floor meant to serve that purpose.

 

Thanks in advance.

[LT2_3]

Lt2, Question,

 

In all this discussion, the money each NFL team is given is discussed in theoretical terms. Do you, or does anyone in public, know what the dollar amount is? Is the money each team is given by the league what the salary cap number is, or is it different?

 

Also, most know what the salary cap it, how do you figure the floor. Is it a % of the cap, or what?

 

Finally, and I become confused on this only after readying your discussions. Just using a number out of the air here. Each NFL team is given $100m. Is there are specific amount of money from that which must be used on player salaries, or is the salary cap floor meant to serve that purpose.

 

Thanks in advance.

 

It used to be easy to determine how much money was given to each team because the salary cap was 60% (some years less) of the money given to teams. Now the cap is set at 60% of ALL revenues. They don't publish the leaguewide numbers specifically anywhere.

 

The floor is 90% of the cap.

 

The salary cap floor serves that purpose.

 

For a more in depth read, here's an article about the financial status of the Packers after the 2007 season. The Packers are the only team that you can get detailed numbers about because they are a publically held corporation.

 

http://www.nfl.com/news/story?id=09000d5d8...mp;confirm=true

[nfoligno]

Follow-up,

 

First off, thanks. The article was quite interesting. Have to be honest. After reading that article, I am actually a bit worried about the new CBA. I really have not been concerns about it, figuring things are just too good, everyone would realize that, and both sides would work it out. But while things are good, it doesn't sound like they are as good as they appear. Packers made a $21m profit in a year that found an extra $10m due to a couple home playoff games and some other things, but what I take away from that is, they would otherwise have only make a $11m profit. That is pretty dang low for a major company, which an NFL team is. And w/ the way player salaries and bonuses are rising, it may not be long before those profits disappear all-together. So the owners may have more reason to fight than I realized.

 

Back to the cap. So before, if the salary cap was, for example, $100m, the amount the teams received was about $166. Just curious. Do you have any idea what-so-ever what sort of money we are talking about when we say, "all revenues". How great of a difference is there. I guess I am just curious if teams are not getting double the cap, or if factoring all revenues only adds a little bit when spread out between 32 teams. One other thing. The Packer article you provided (again, thanks) discussed past season revenue. Was that under the new or old CBA (not sure when it changed). If made a $21m profit under the new CBA, w/ all revenue factored, that doesn't look good moving forward.

 

Final question. While Chicago is a major market, we do not own our stadium, though we do receive more revenue under the new terms. But do you know if GB owns their stadium. I guess what I am getting at is, if GB only made a $21m profit, I just wonder what sort of profit we made.

 

It used to be easy to determine how much money was given to each team because the salary cap was 60% (some years less) of the money given to teams. Now the cap is set at 60% of ALL revenues. They don't publish the leaguewide numbers specifically anywhere.

 

The floor is 90% of the cap.

 

The salary cap floor serves that purpose.

 

For a more in depth read, here's an article about the financial status of the Packers after the 2007 season. The Packers are the only team that you can get detailed numbers about because they are a publically held corporation.

 

http://www.nfl.com/news/story?id=09000d5d8...mp;confirm=true

[Lucky Luciano]

Actually, what you are saying there is wrong. As you've pointed out, there is a mechanism for prorating signing bomuses over the length of the contract. It's a way to fudge with the bookkeeping. There is also a mechanism called an LTBE bonus where teams can apply false money against the cap that never gets paid - and the cap space that was used by the LTBE bonus gets rolled over to the following year's cap. You are probably pooh poohing this because it gets added to both the team's cap ceiling and floor the following year, but THIS year you will see some teams using this mechanism in the final capped year to reach the league floor without actually spending the money. Tampa and KC come to mind.

 

actually i am not wrong in regards to the intent of my argument. this entire portion of the thread with nfo was that he stated that by paying large bonus money to resign players proves that the bear franchise is not cheap. for the record, do you believe this is the case? if you do you are wrong.

 

i have NOT stated that it makes them cheap or not or that the bear organization is or is not cheap. just that this is a 'useless' marker to determine the validity of that statement because every penny paid out in these bonuses can be accounted for with money the team receives from the nfl to pay player salaries. the salary cap!

 

sorry but there is no exception to the rule. the bills pay at the very least the minimum amount of dollars the nfl has allotted to player salary (salary cap), period. if they are running in the red with franchise expenses they can't meet with what their share of the owners revenue it's too bad for them. which incidently i find it nearly impossible to believe that any franchise pays more out to expenses per year than what their revenue share income is.

 

It depends on their profit margin and their expenses. So say the cap ceiling is $100 million and the cap floor is $90 million. If a team uses an LTBE bonus to roll $10 million of that into the following year, it means that they only have to pay out $80 in that year. Say the next year the cap goes up to $105 million. That makes their adjusted cap the following year $115 - and their new cap floor is $103.5 million. Then they can roll more into the future and continue to spend less than the cap, rinse and repeat.

 

It's just the opposite of teams renegotiating a player's contract by turning their large salary into an amortizable bonus. So if a player gets $4 mil bonus spread out over 4 years instead of $4 mil in salary in year 2 of their deal, their cap number drops from $4 mil to $1 mil, that adds $3 more mil in cap space that year. Teams like the Redskins do that again and again and again.

 

The salary cap isn't nearly as hard and fast as you make it out to be.

 

i know this and i completely understand the how and why of it. in the real world one reason the players signed this agreement is because they are guaranteed a fair percent of the money each year from the league/franchise to be paid as salary to them, the minimum. the owners signed this agreement because it limits the amount one franchise can pay out in player salary each year limiting their expenses, the maximum. it also keeps one rich owner from spending a lot more than another poorer franchise gaining an advantage and keeping league parity. both sides get something.

 

i also know that amortizing bonus money is getting around the intent of the cap and i know that you can roll money over in bogus incentive expectations to the following year to hide cap money because we DID it last season for $10 M (although in my opinion this is not always acting in good faith according to the CBA). but... this 'rollover' money from the previous year has raised the 'minimum' the following year by the same amount so the team actually has to pay it out one way or another whether they then roll more over in another contract or not.

 

just to note... this is exactly one of the points i am arguing, which is one reason how you can pay large bonus money and completely pay for it out of what is given to the franchises to pay player salaries.

 

yes it probably would, as highly unlikely as that is. but when did i ever say teams wouldn't have to or couldn't borrow money for signing bonuses? it's my contention that they could pay off these loans strictly using the salary cap income and none out of their own pockets. this is the whole POINT of my posts in this thread.

 

I'm just sugggesting that it's not as simple or nearly as attractive as you make it out to be. One thing I can guarantee you is that the Bears were NOT a very profitable organization until they they got their new stadium to give them a much greater cash flow over merely the money given by the league. BTW - do you have any idea what the property taxes are like in Lake Forest?

 

1. to borrow against a near billion dollar corporation with guaranteed income from a multi billion dollar corporation to get a fixed 6 year maximum loan to pay player bonus money should be easy even in these times.

 

2. where have you gotten this information that the chicago bear franchise was not very profitable in the near past? i guess i would have to ask, not very profitable compared to what? multi million dollar profits from other owners? what are the shareholders bottom line at the end of a year? i'd like to see the figures for comparison.

 

3. you mean the exclusive lake forest area, where they pay a tax deductable property tax for multi million dollars worth of commercial property they have owned for years? whew, at least they don't pay any taxes on the lake front property.

 

Let me rephase your points for you so they more closely resemble reality:

 

The league gives teams money

The league requires for them to account for a percentage of that money on their salary cap - even though they can spend beneath the minimum or above the maximum in any or all given years.

 

The reason why this is an important stipulation is because if teams can't make their expenses, they have to move to a new city with a better stadium or sell the team. I'm guessing that all of your postulations about what a team can or can't do regarding signing bonuses is under the presumption that they intend to stay in business.

 

have you really seen or read that teams in the nfl can't make their payrolls because of the lack of revenues paid out by the nfl to the owners? are you suggesting the only way these teams can stay in business is to take money out of the players allotted salary or go broke??

 

which owners have sold their teams or moved to another city with a better stadium because they were financially strapped with a bankrupt system in which they didn’t generate enough revenue from the NFL under the CBA?

 

the reality of it is in my opinion that these franchises can pad their profit margins at the expense of the players each and every year. that is why they manipulate some of these loopholes, because it’s free money.

 

all i wanted you to confirm was that my understanding of the separate monies involved was correct and you did. in other words there was X dollars assigned to pay player salaries with restrictions and X dollars paid to the franchise to do whatever they wanted. that they were not interchangeable.

 

There are no separate monies. The cap is only a balance sheet that can be fudged up or down depending on what a team needs.

 

I didn't really mean to talk down to you, but you just aren't getting it.

 

I could go on, but I'm seriously losing interest.

 

oh i get it all right. for whatever reason you want to have a micro discussion for each individual nuance of the CBA line by line while i only need a general point of reference for a discussion with another poster in regards to X amount of money allotted by the nfl to pay player salary.

 

so REGARDLESS of the loopholes (which i fully understand how they work), regardless if it comes in the form of one check or a thousand, regardless of where each individual instance of the money to be divided up comes in from, and regardless if the poor millionaire owners need to drain money out of player salary to fend off the wolves, there is X amount of money allotted and given by the nfl to each franchise to pay player salaries per written contract. that is not ‘postulation’, that is FACT.

[Lucky Luciano]

I guess what I am getting at is, if GB only made a $21m profit, I just wonder what sort of profit we made.

 

wow, we must really be getting jaded hearing about oil company profit figures.

 

only a $21 M profit sounds pretty good to me especially when i could put it into my 127 million dollar bank account LOL!!

[nfoligno]

Sorry, but $21m profit, and what would be considered a near record year, is not that great for a major corporation. Sure, if you own a small store or something, you would be doing back flips day and night, but for a major corp, I am just not sure that is as great as you think, especially when compared to other teams.

 

Also, a key point here was the $21m coming in a year after GB made changes to increase revenue, as well as having two home playoff games, which also is going to jack up team revenue (outside of shared revenue). If not for the added success, their profit would have been more like $10 or $11m. Now I am sure you are going to laugh and talk about how much money that is, but sorry, it just isn't as much when talking about total profit for a major company.

 

Finally, I think a key issue here is the concern about players salaries rising at the rate they are. As salaries are climbing so fast, can owner's revenue keep up?

 

wow, we must really be getting jaded hearing about oil company profit figures.

 

only a $21 M profit sounds pretty good to me especially when i could put it into my 127 million dollar bank account LOL!!

[Lucky Luciano]

Sorry, but $21m profit, and what would be considered a near record year, is not that great for a major corporation. Sure, if you own a small store or something, you would be doing back flips day and night, but for a major corp, I am just not sure that is as great as you think, especially when compared to other teams.

 

Also, a key point here was the $21m coming in a year after GB made changes to increase revenue, as well as having two home playoff games, which also is going to jack up team revenue (outside of shared revenue). If not for the added success, their profit would have been more like $10 or $11m. Now I am sure you are going to laugh and talk about how much money that is, but sorry, it just isn't as much when talking about total profit for a major company.

 

Finally, I think a key issue here is the concern about players salaries rising at the rate they are. As salaries are climbing so fast, can owner's revenue keep up?

 

well i'm certainly not a wall street analyst so i can't give you comparisons to other type corporations but didn't they state that the packers were just outside of the top ten teams in NFL profits? don't sound like dog food to me. just for curiosities sake how do these franchises break up their seasons for tax purposes? hmmmmm

 

also the comparisons between 2006-07 player salaries is pretty laughable. they act like they haven't had an increase in the amount of money they were paid or the increases to the salary cap over that period. in my opinion that is a pretty slanted article in favor of management.

[nfoligno]

I think a key point is the two home playoff games, which is going to raise the team's revenue for that year. How many teams get two home playoff games? The article said they received about $10m more that year, due to the playoffs and other increases, more than in the past, but how much of that can be counted on every year?

 

So they were just outside the top ten, but it took one of their best seasons to get that sort of a payday. What is the revenue for a team that (a) doesn't own their own stadium and ( doesn't even make the playoffs.

 

I think many/most fans believe the teams are getting massive revenues, but this article puts that into question, at least in my mind.

 

And here is the kicker, at least for us. GB is an exception to most rules, as the only publically owned team, but are we not the only team who's ownership relies soley on the team as it source of revenue. That was at least the case a few years ago, and I think is still today. The point here is, while most owners can accept no profit, minimal profit or even a bad season because they can offset team weak profit/losses w/ other areas of revenue, our ownership relies on the teams revenue as their sole source of income.

 

I would love to know how much we made (profit/revenue) of late, and how we stack up against the league. I would doubt we are very high on the list as (a) we do not own our own stadium, and thus profits are lower and ( we have not had many home playoff games to increase that profit stream.

 

well i'm certainly not a wall street analyst so i can't give you comparisons to other type corporations but didn't they state that the packers were just outside of the top ten teams in NFL profits? don't sound like dog food to me. just for curiosities sake how do these franchises break up their seasons for tax purposes? hmmmmm

 

also the comparisons between 2006-07 player salaries is pretty laughable. they act like they haven't had an increase in the amount of money they were paid or the increases to the salary cap over that period. in my opinion that is a pretty slanted article in favor of management.

[Lucky Luciano]

I think many/most fans believe the teams are getting massive revenues, but this article puts that into question, at least in my mind.

 

for X's sake what do you consider getting massive revenues? a billion + a quarter? these are sporting franchises not oil cartels.

 

that's >>$21 million dollars

[nfoligno]

Still missing the point. $21m, per the report, put them amont the top revenue teams in the NFL.

 

First, I would argue $21m is less than what i think many fans would expect.

 

Second, I would point out that $21m ranks among the top tier revenue teams. What do the lower teams profit? If $21m is aroung top 10, what does the bottom 10 look like? $1m? $5M?

 

Third, as the article points out, that $21m was a huge year for GB, and around $10m higher than the previous season, meaning something more like $11m would have been a more usual profit.

 

Fourth, take away the top tier teams, if the rest profit more along the lines of $5 or $10m, that doesn't leave a ton of "extra cash" or "cash on hand". For example, the article also pointed out how teams are trying to put back money in case of emergency, like if there is a strike or lockout. Further, and I do not know how much GB spent in FA or on extensions, but how would that profit margin look if they, as we have of late, shelled out massive contracts on player extensions.

 

Fifth, what does the future look like? If a team is making around $10m in profit today, what happens in another couple years as players salaries continues to rise exponentially?

 

You harp on $21m, but the article even says that is likley around top 10 tier. You do not seem to give thought to what the lower half of the league profits.

 

Yea, $1 or $5m is a huge deal for you and I. Hey, I would take it. But how many major companys do you know of that would agree? And enough of the big oil companies who are getting $500 BILLION profits per year. Comparing and NFL team w/ them is like trying to compare an NFL team w/ a mom and pop plumbing company that has a 1/2 dozen clients.

 

for X's sake what do you consider getting massive revenues? a billion + a quarter? these are sporting franchises not oil cartels.

 

that's >>$21 million dollars

[madlithuanian]

It took 6 days later...

 

IS BEARS’ INACTIVITY DUE TO ECONOMICS?

Posted by Aaron Wilson on March 11, 2009, 10:32 a.m.

The Chicago Bears have been nearly dormant in free agency, and former NFL executive Pat Kirwan hinted that Bears General Manager Jerry Angelo is operating under tough financial restrictions.

 

According to Brad Biggs of the Chicago Sun-Times, Kirwan said on Sirius NFL Radio that the Bears’ lack of free agent activity is due to ecomomic constraints.

 

“This is not exactly the most generous spending team in the history of football,” Kirwan said. ”So he’s got restrictions and restraints, and he’s not going to [say], ‘Hey, I’m trying to sign this guy, but my owners won’t let me.’ So he is a little bit bound to his draft picks, where you’ve got to exhaust every opportunity to make that guy work before you surrender and try something else.

 

”He’s got too many issues where he can’t expose what he wants to do. And I’m not going to cite the one that we had a conversation with him about, but he was absolutely sick to his stomach that something might be going on that he couldn’t control because he didn’t have the cash to do it.”

 

Angelo declined to comment, and a team source told the Sun-Times that restrictions on spending haven’t stopped the Bears from participating in free agency.

 

During a recent interview with the Bears’ official Web site, Angelo explained why the Bears didn’t go after wide receiver T.J. Houshmandzadeh.

 

”Would we have entertained him?” he said. ”Yes, but we wanted to see what his marketplace was. In this case, we felt like [the $40 million contract with $15 million guaranteed that Houshmandzadeh received from Seattle] was an exorbitant amount of money. Remember, he was a No.2 in Cincinnati.

 

”He’s going to be 32 in ‘09, and the price that you’re paying for that receiver we felt was very high. You have to look at economics when you look at players. Who doesn’t want Houshmandzadeh? But you have to look at the economics: What are the implications to the cap going forward, and what does that prevent us from doing in other areas within our team or free agency?”

 

 

 

 

Give PFT time. They rely on others to feed them info as much as anything else. On Sirus, it was less heard and thus PFT likely never got wind of the story. Now that it is in the Sun times, I would bet you we see something about it on PFT.

 

My point is simply this though, and it happens so dang often. One person says something, which may or may not be true, but it is then repeated by bigger sources and suddenly becomes fact. The info didn't change, just the outlet.