NFL to re-examine successful revenue-sharing plan

[Kirkendall]

The Washington Times

By Eric Fisher

Pete Rozelle made the NFL the envy of the sports world in the early 1960s by leading a disparate band of team owners to pool key revenues such as broadcasting rights and merchandising and share them equally. From that concept emerged a multibillion-dollar colossus beloved worldwide and year after year of strong competitive balance.

Four decades later, the late commissioner's most important legacy is now receiving perhaps its sternest test.

NFL owners next month will vote on the future of the NFL Trust, the master business agreement that maintains that shared national revenue structure. It is unlikely the entire agreement will be scrapped in favor of the more chaotic market-based system prevalent in baseball and particularly hockey. But several owners -- including Dan Snyder in Washington, Jerry Jones in Dallas and Al Davis in Oakland -- want several key tweaks to the system that will give them more financial control over their own marketplaces.

Consensus among league and industry sources is clear that change in some form is coming.

"There are strong feelings among the owners about this, no question," said Marc Ganis, a Chicago-based sports industry consultant who works frequently with NFL teams. "What is being asked is a fundamental question: Are the owners going to still work together as partners or, in effect, become 32 free agents?"

Driving that key question is another just as important, and since it pertains to money, goes to the root of the issue: Can more revenue be generated by splitting parts of the NFL business into 32 pieces rather than keeping it as a national, league-controlled entity?

Jones seems to think so and wants freedom from the Trust to control the Cowboys' licensing, sideline sponsorships and local merchandise distribution -- lucrative revenue sources now under league control. The basic rationale of Jones, who has openly looked forward to the end of the current Trust since 1995, is that no one in the NFL's New York headquarters knows the Dallas market better than he, and that knowledge should be turned into revenue.

Snyder is in a similar position philosophically. After turning what was already a healthy, well-supported team into the most valuable franchise in pro sports, Snyder wants to take another key step and be far more aggressive in licensing the Redskins' popular logo.

Redskins officials declined to comment, but an NFL source familiar with Snyder's position said, "He thinks the Trust is outdated, that it needs to be reworked from the bottom on up. He won't vote for it in its current form."

Meanwhile, small-market clubs such as Green Bay, Indianapolis and Jacksonville are fretting over the debate, wondering why the NFL would give up a structure that is the envy of the entire sports world. After all, anybody with a rudimentary knowledge of pro sports knows the Packers would have left tiny Green Bay years ago without the league's robust revenue sharing.

Part of the answer to this question lies in the rapidly changing nature of how the NFL sells itself. Unlike a decade ago, many teams, including the Redskins, play in privately owned stadiums with vast amounts of space to sell sponsorships and merchandise. Several clubs, again including Washington, also operate their own chains of retail shops to sell team gear and have been successful.

And all that local action is butting directly against the nationally focused nature of the NFL sales model. Exacerbating that inherent tension are the hefty debt loads carried by many newer owners, particularly Snyder.

The players' union also has weighed in strongly, fearing that large, uncontrolled revenue disparities between NFL clubs would create the type of labor friction that has crippled baseball and hockey.

"We will fight [a revision to the Trust] tooth and nail, because every team does not have a level playing field," said union chief Gene Upshaw before this month's Super Bowl. "I have always liked to use the analogy that all of our players can't go play for the New York Yankees. Someone has to go to some of the other teams. We are only interested in [receiving] a fair share among all the teams, and if any owner thinks he is going to go off on his own, that could be a real big problem."

Several changes in the NFL's sponsorship sales already have been made to grant owners more fiscal autonomy. For example, a recent renewal of the NFL's national deal with Visa no longer comes with restrictions that prohibit individual owners from striking agreements with rival credit card companies. Sixteen teams are now aligned with MasterCard on a local level.

But for owners such as Jones and Snyder, such relaxed provisions are not enough.

"I think in the final analysis that the owners will not turn their backs on such a track record of enormous growth. They're all aware of the history," Ganis said. "But we're in for some very hard bargaining before we get to that point."

[BengalszoneBilly]

What do you bet that pure greed among a couple foolish owners will tear asunder the very thing that keeps this league apart from all the others.

Phuck Jerry Jones, Al Davis, and Dan Snyder.

Kudos to Gene Upshaw and the Players Union for recognizing a good thing when you got one!