by Mike Sharkey
Staff Writer
Jacksonville Jaguars owner Wayne Weaver continues to beat the drum that would require the National Football League to revamp the way its 32 teams share a portion of the revenue each team generates during the 16-game NFL season.
“The NFL is faced with two big initiatives it has to address very soon,” Weaver told the South Council of the Chamber of Commerce at a meeting Tuesday, “the collective bargaining agreement and revenue sharing.”
Weaver believes the CBA will get done sooner and with much less hassle than the revenue sharing issue for one reason: the CBA is good for the entire league and doesn’t penalize anyone while the new revenue sharing proposal will take money from the teams that generate the most money on game day.
Two other major sports, pro basketball and hockey, both have dealt with CBAs recently with very different results. The National Hockey League still hasn’t resolved its CBA and it has cost the league at least the entire 2004-05 season. The National Basketball Association reached a new CBA last week in what seemed like about a half-day’s worth of meetings.
According to Weaver, the NFL is a $5.6 billion a year business and the players want a bigger piece of the pie, regardless where it comes from.
“The (players) union wants 60 percent of our gross,” said Weaver, who is working closely with the Pittsburgh Steelers ownership to push the new agreement.
Under the current revenue sharing plan, the bigger television market teams in the league get about $270 million annually from the pool of game-day revenue (tickets, concessions, parking, etc.) while the smaller market teams get about $120 million. After the players union gets its cut, Weaver said the big market teams are left with about $157 million while the small market teams net about $17 million. It’s that disparity that Weaver says will cause teams to ultimately have to move, or even fold.
“We have a system that if we don’t rectify soon, the small markets won’t be able to survive,” said Weaver, adding that a revenue sharing plan adopted in 2001 where the league divided into eight, four-team divisions was a good first step towards a totally equitable plan. “It was a landmark decision and a great precedent for a future revenue sharing model.”
Weaver says the Jaguars are a great example of how the league has changed in the past decade and why all 32 owners need to adopt the plan. In 1995, the Jaguars were an expansion franchise playing in front of a packed house in the league’s newest (renovated) stadium.
“In 1995, we were the number one gate in the NFL,” said Weaver.
Since then, 20 new stadiums have been built — the most expensive of which cost over $700 million — and there are three to five new stadiums being planned in the next five years. Despite a five-year playoff drought and declining attendance that caused several home games to be blacked out last season and prompted team officials to cover about 10,000 seats for the upcoming season, Weaver says the team is in good financial shape thanks to sponsorships deals.
“We have done some interesting things with the Bud Zone and we are in the top 25 percent in the league in beer sponsorship. And, we have one of the largest soda (Pepsi) deals in the league and one of the largest banking (Wachovia) deals in the league,” he said. “We used to have one of the best grocery deals Winn-Dixie in the league, too.”
Still, Weaver said the other 30 teams he and the Steelers ownership are lobbying have to buy into the plan in order for the league as a whole to survive. He also said there is a misconception that NFL teams rake in the profits at astounding rates.
“The NFL is a five percent margin business, which isn’t bad, but it all resides at the top. Jacksonville is in the bottom third of the league in profit margin,” said Weaver who attributes that to a combination of things: being the 57th TV market, low ticket prices and a lack of luxury suites. “We can’t build a new stadium and don’t need to. We’ve got one of the nicest stadiums in the NFL. There has been a lot of deflation the last 10 years regarding tickets and we have reached a point where there is more supply than demand. When we balance that, we will be able to bring ticket prices back up the NFL average. We are not trying to see how much money we can make, we are trying to stay competitive.”
Weaver said failing to reach a new revenue sharing or collective bargaining agreement could be disastrous for the league.
“It’s not an option,” said Weaver. “If we do not reach an agreement, we will have an uncapped (team salary) year in 2007. The definition of insanity in the NFL is an uncapped year.”