NFL is 9 billion in debt - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

GirlySports · 03-19-2008, 11:56 AM

http://www.profootballtalk.com/2008/...wes-9-billion/

Too many new stadiums being built and bonuses being paid out.
Could this bite the NFL when it dips in popularity?

Tyler · 03-19-2008, 12:00 PM

Really nice quote about the NHL at the bottom...

Bobblehead · 03-19-2008, 12:01 PM

This sounds like creative accounting. I'm sure this is the first shot over the bow in the upcoming contract negotiations.

GirlySports · 03-19-2008, 12:03 PM

Quote:

Originally Posted by Tyler

Really nice quote about the NHL at the bottom...

I heard that the NHL were very un-cooperative in this study (surprise surprise) so they are subject to those types of jokes.

Locke · 03-19-2008, 02:11 PM

Quote:

Originally Posted by Bobblehead

This sounds like the result of creative accounting. I'm sure this is the first shot over the bow in the upcoming contract negotiations.

Fixed.

Considering the state of the economy in the states at the moment I'd wager that NFL fans are seriously hoping that these arent demand loans.

Quote:

Originally Posted by GirlySports

I heard that the NHL were very un-cooperative in this study (surprise surprise) so they are subject to those types of jokes.

Who cares? Its the smart thing to do. Ideally I'd bet that the NFL would like to have been less forthcoming with their debt figures, but they're probably desperate and dont have a choice.

They have to tell people what the situation is like so that everynone makes a concerted decision to start doing something about it.

I doubt the NHL is in that position, or if they are, they're not at the point where they're desperate yet.

Bring_Back_Shantz · 03-19-2008, 04:57 PM

Sure they are probably $9 billion in debt, but look at the revenues of the league and the value of the franchises. That works out to about $300 million/team.

Each franchise is worth somewhere around $1 billion, so the 9 billion in debt isn't that much compared to the value of the teams themselves.

Or compare it to the revenue of the league.
They take in over a billion/year just on TV.
Add to that the tickets, merchandise, and other revenue streams, and they are probaly in better shape than a lot of businesses.

Displaced Flames fan · 03-19-2008, 05:34 PM

Quote:

Originally Posted by GirlySports

Could this bite the NFL when it dips in popularity?

When it dips in popularity? When is that coming?

Flames in 07 · 03-19-2008, 05:46 PM

I'm not sure this makes any sense at all. The NFL doesn't own all these stadiums and even if they did, they have tons of assets (ie the stadiums) to place against this debt. Knowing someone or somethings debt in isolation of understanding its assets is a useless number that you can draw any conclusions on?

Locke · 03-19-2008, 10:28 PM

Quote:

Originally Posted by Bring_Back_Shantz

Sure they are probably $9 billion in debt, but look at the revenues of the league and the value of the franchises. That works out to about $300 million/team.

Each franchise is worth somewhere around $1 billion, so the 9 billion in debt isn't that much compared to the value of the teams themselves.

Or compare it to the revenue of the league.
They take in over a billion/year just on TV.
Add to that the tickets, merchandise, and other revenue streams, and they are probaly in better shape than a lot of businesses.

I think you're really overestimating the value of an NFL franshise. $1B each? There are probably a couple worth that, and probably more worth less than half that.

And $1B on TV rights divided among all the teams who have shareholders as well as interest in debts to pay isnt as nice as it may sound.

Quote:

Originally Posted by Flames in 07

I'm not sure this makes any sense at all. The NFL doesn't own all these stadiums and even if they did, they have tons of assets (ie the stadiums) to place against this debt. Knowing someone or somethings debt in isolation of understanding its assets is a useless number that you can draw any conclusions on?

I'm confused about this post.

If they dont own the stadiums they cannot put them up as assets to borrow money against the equity.

Aside from physical buildings which they dont have, the biggest assets any team has is Franchise rights (including merchandising) and player contracts (if they're any good).

corporatejay · 03-19-2008, 10:49 PM

According to Wikipedia it's actually 3.1 billion, I'm pretty sure that's accurate because i've heard that number before.

http://en.wikipedia.org/wiki/NFL_on_television

4X4 · 03-19-2008, 10:52 PM

I think he means that if they did own the stadiums (and therefore the debt) they would have assets (the stadiums) to put up as collateral for the debt.

But yeah, this article sounds like positioning from the league. They're priming. Reminiscent of Bettman's "we need cost certainty" and Goodenow's "we will never accept a salary cap".

Locke · 03-19-2008, 10:56 PM

Quote:

Originally Posted by corporatejay

According to Wikipedia it's actually 3.1 billion, I'm pretty sure that's accurate because i've heard that number before.

http://en.wikipedia.org/wiki/NFL_on_television

That seems like a more reasonable number, but even with posturing being considered, tripling the owing estimate has to be for a reason.

Quote:

Originally Posted by 4X4

I think he means that if they did own the stadiums (and therefore the debt) they would have assets (the stadiums) to put up as collateral for the debt.

But yeah, this article sounds like positioning from the league. They're priming. Reminiscent of Bettman's "we need cost certainty" and Goodenow's "we will never accept a salary cap".

Agreed, but I still dont get the hypothetical stadium ownership position.

If I owned every NFL stadium I'd be a billionaire. But I dont, so who cares?

Sylvanfan · 03-19-2008, 10:57 PM

Yeah, I was floored when ESPN paid 1.1 billion a year for Monday Night Football rights alone. The NFL needs to do a better job of selling itself on the Internet though. Their downfall is going to be that they may stay a bit too loyal to traditional T.V. broadcasting which has been their bread and butter. It's been mentioned before that MLB and MLBTV with it's internet sales has been a huge boon for MLB in terms of revenue. The NFL could really do well with a NFL T.V. type setup for the weekend fantasy poolie who will sit at his computer for 6 hours on a Sunday with dual monitors wanting to watch 4 games at once and follow his fantasy teams at the same time.

Locke · 03-19-2008, 11:04 PM

Quote:

Originally Posted by Sylvanfan

Yeah, I was floored when ESPN paid 1.1 billion a year for Monday Night Football rights alone. The NFL needs to do a better job of selling itself on the Internet though. Their downfall is going to be that they may stay a bit too loyal to traditional T.V. broadcasting which has been their bread and butter. It's been mentioned before that MLB and MLBTV with it's internet sales has been a huge boon for MLB in terms of revenue. The NFL could really do well with a NFL T.V. type setup for the weekend fantasy poolie who will sit at his computer for 6 hours on a Sunday with dual monitors wanting to watch 4 games at once and follow his fantasy teams at the same time.

Are you looking in through my windows? Dont make me get a restraining order against you.

seriously though, I dont actually follow football that closely, I'm a marginal Steelers fan at best. But I find the business of professional sports interesting and the NFL is a prime example.

GirlySports · 03-19-2008, 11:15 PM

Quote:

Originally Posted by Displaced Flames fan

When it dips in popularity? When is that coming?

Everything goes in cycles.

A rough estimate would be when Manning and Brady retire!

Montana Moe · 03-19-2008, 11:24 PM

This may lead to the NFL opening up Sunday Ticket to other media companies than DirecTV. (If the Govt. doesn't do it first) That revenue stream would help quite a bit.

Locke · 03-19-2008, 11:28 PM

Quote:

Originally Posted by Displaced Flames fan

When it dips in popularity? When is that coming?

Quote:

Originally Posted by GirlySports

Everything goes in cycles.

A rough estimate would be when Manning and Brady retire!

An even rougher estimate would be:

When the majority of the US economy stalls.

If "Factory Worker X's" house is worth less than his remaining debt outstanding he doesnt exactly have the cake for NFL tickets.

Flames in 07 · 03-20-2008, 06:32 AM

Quote:

Originally Posted by Locke

That seems like a more reasonable number, but even with posturing being considered, tripling the owing estimate has to be for a reason.

Agreed, but I still dont get the hypothetical stadium ownership position.

If I owned every NFL stadium I'd be a billionaire. But I dont, so who cares?

Locke, all I'm saying is that an absolute figure of how much debt I have doesn't mean anything and nobody can draw any conclusions from it.

Someone who has 1000 in debt could be in more trouble than someone who has a million in debt.

Bring_Back_Shantz · 03-20-2008, 10:24 AM

Quote:

Originally Posted by Locke

I think you're really overestimating the value of an NFL franshise. $1B each? There are probably a couple worth that, and probably more worth less than half that.

And $1B on TV rights divided among all the teams who have shareholders as well as interest in debts to pay isnt as nice as it may sound.

Well $9 billion divided among the teams doesn't seem so bad.
You can't use the argument the revenue isn't that huge if split among all the teams and ignore that the debt is as well.

I mean seriously, the NFL salary cap is done as a % of league wide revenues, ie, TV, Radio, and Merchandising. I think this year it is at something like 60% of revenue, and the Salary Cap is like $120 million dollars. Which means their revenue is somewhere close to $200 million/year, and this doesn't include ticket sales either.

So $9 billion divided by 30 teams is $300 million in debt for each team, but their revenues are OVER $200 million each per team.
So yeah, they have a lot of debt, but their revenue is also huge.

Just because a business carries debt doesn't mean they can't make a profit, and I'm fairly certain every team in the NFL is turning a profit right now.

The whole point of this article is that the NFL is reducing the ammount of debt each team is allowed to carry, and is doing it as a means of reducing the ammount of signing bonuses a team can give out, and this is all to do with the upcomming CBA expiring. The $9 billion in debt, is a throw in number that really says nothing about the financial stability of the NFL.

Bring_Back_Shantz · 03-20-2008, 10:27 AM

Quote:

Originally Posted by Locke

That seems like a more reasonable number, but even with posturing being considered, tripling the owing estimate has to be for a reason.

They're not trippling the owing estimate, the $3.1 billion number is TV revenue, not the debt. He was refering to my post where I said TV revenue was something like $1 billion, but I think I was just thinking of the MNF number.