A Billionaires Business … Weekend Cup O’Chiefs

Will Friday be the moment that the labor dispute between the NFL and its players leaves the hands of negotiators and is taken over by lawyers and the federal court system?

There’s a good chance that transition is about to happen. As this week’s series of mediated negotiating sessions played out, it was easy to sense the growing frustration of both sides. Federal mediator George Cohen asked from the start that those involved limit their public comments and information shared with the media.

Generally, both sides followed Cohen’s instructions. Until this week that is, when the sniping between the parties jumped back into headlines. It exposed the fact that while the two sides have made some progress in 14 negotiating sessions, there remains too much ground to cover on the basic issue – how to divide the league’s annual $9 billion revenue.

The owners want more of that annual revenue than they have been getting, supposedly so they can continue to grow the game. The players do not want to give back hard earned compensation levels that have been in place for nearly two decades now. A rookie wage scale, the 18-game regular season schedule, health care & pension improvements are all important elements, but this disagreement has been and always will be about money.

From the start these negotiations, big money has been a factor from the start largely because NFL ownership is truly a billionaires club.

Forbes magazine has done its annual calculation of America’s richest people. Through public and corporate filings, detective work and revenue and expense projections, they round up the 400 deepest bank accounts in the country and estimate their overall wealth. Nobody knows for sure how accurate the projections might be, but it’s as close as we can get to lining up the folks with money in some order.

The list of the richest people in the world and America is out right now. Many of those names are unknown to ordinary folks like your humble Internet hack. Everybody recognizes familiar names like Bill Gates and Warren Buffett. But after that, few of the big-money names are burned into the public consciousness.

The NFL is well represented on this list of the wealthiest people in America. None of the other professional sports leagues can match half of the billionaires that reside in pro football. Of the 31 ownerships in the NFL – remember the Green Bay Packers are a publicly owned team – 18 hold the title of billionaire.

At the top is Seattle Seahawks owner Paul Allen. He made his money in Microsoft with Gates and is worth $13 billion. The magazine estimates that he’s the 17th richest person in the United States.

It’s a long financial drop from Allen and his $13 billion to the second richest owner, Stephen Ross of the Miami Dolphins. His real estate holdings and the football team put his net worth in the area of $3.16 billion.

From there it’s the Tisch family that owns half of the New York Giants, along with the hotel and theater chains has $2.8 billion. The Glazer family owns the Tampa Bay Buccaneers and all sorts of real estate around the world and is worth $2.66 billion. That’s the same number that’s estimated as the wealth of St. Louis Rams owner Stan Kroenke, who initially made his money in real estate and marrying into the Walton (Walmart) family.

Many of the NFL billionaires hold that distinction because of the value of their football franchises. Last year, Forbes estimated that at least 16 NFL teams were worth over $1 billion, with another nine teams worth between $900 million and $1 billion. Any one person or family with an ownership stake of 75 percent of the league teams is going to be considered a billionaire or pretty darn close.

Here’s the complete list of NFL billionaire owners according to Forbes:

Wealth in

Billions

 

NFL Owner

 

Team

 

Other Business Income

$13

Paul Allen Seattle Seahawks Microsoft

$3.16

Stephen Ross Miami Dolphins Real estate

$2.8

Tisch Family N.Y. Giants Hotels, theaters

$2.66

Malcom Glazer Tampa Bay Buccaneers Real estate, retail

$2.66

Stan Kroenke St. Louis Rams Real estate, Walmart

$2

Jerry Jones Dallas Cowboys Football team

$1.5

Robert Kraft New England Patriots Football team

$1.5

Steve Bisciotti Baltimore Ravens Football team

$1.4

Robert McNair Houston Texans Oil, gas, football team

$1.4

Jimmy Irsay Indianapolis Colts Football team

$1.3

Arthur Blank Atlanta Falcons Home Depot, football team

$1.1

Spanos Family San Diego Chargers Real estate, football team

$1.1

Daniel Snyder Washington Redskins Football team

$1.1

Jeffrey Lurie Philadelphia Eagles Football team

$1.1

Bud Adams Tennessee Titans Oil, gas, football team

$1

William Ford Detroit Lions Autos, football team

$1

Thomas Benson New Orleans Saints Autos, football team

$1

Randy Lerner Cleveland Browns Banking, football team

Noticeably absent is the Hunt family. That’s largely because ownership in the Chiefs is broken up into five pieces. Lamar Hunt’s children – Lamar Jr., Sharron, Clark and Daniel, each own 24.5 percent of the team, with the final two percent owned by Norma Hunt. Combined, the net worth of all five would exceed the $1 billion mark. It would have to, give the fact the Chiefs franchise is estimated to be worth anywhere from $900 million to $1 billion.

Other teams with owners that are likely at the billionaire level are New York Jets (Woody Johnson of Johnson & Johnson fame) and Carolina (Jerry Richardson, fast food restaurants.)

Men and families with the types of bank accounts that NFL owners hold are used to getting their way. That’s why their personal worth registers in the 10-digit range to begin with. They are not business types that allow their employees to become partners, or to see the financial ledgers.

But that’s happened in the NFL, and it’s left many of the owners upset and angry that the players have become their partners without having to carry any of the risk involved with a billion-dollar business. The players say they risk their bodies in the playing of the game and how much financial risk is there in a business where incoming revenue averages somewhere in the neighborhood of $245 million per team.

A good example of distance between the league and players is the demand for more financial data by the union from the owners. The NFL says they’ve given the NFL Players Association more information than in the past. The union however, wants to see the real books and what type of expenses are having an effect on teams’ level of profit.

For instance, they want to see the type of information that would show whether the private jet used by Clark Hunt to travel from his home in Dallas to Kansas City is something the Chiefs are paying for, or is coming out of his personal account. They want to see what kind of salaries that owners and family members are receiving from the clubs. For instance does Clark Hunt pay himself a salary in his role as Chiefs chairman.

The league says teams had trouble in recent years keeping the profit-level high. The players want to see the numbers that would show why the profit margin has dropped when revenues have been going up each season.

The owners and players have, are and will continue to have problems getting together; that’s part and parcel to the sport’s economic battles.

Without the help of the federal court system and Judge David Doty in Minneapolis almost 20 years ago, the NFL players wouldn’t have had a chance to reach partner status with the owners. As the current situation heads to another deadline Friday evening, it’s becoming more apparent that the only hope the players have in 2011 is the same as they had in 1992-93 – the legal system and a sympathetic judge that will level the playing field against the billionaires club of NFL owners

Sadly, for the fans interested in seeing football in 2011, the players’ legal game-plan of decertification may be the fastest way of playing ball in the fall.

LABOR UPDATE FROM THURSDAY – IT’S GETTING HOT IN THERE

Jeff Pash is the NFL’s lead negotiator in the labor situation with the players. On Thursday evening, as he walked out of the building in Washington that has become home for the negotiations, Pash lit a verbal fuse that eventually exploded.

“If both sides have an equal commitment to getting this deal done, it will get done,” Pash told reporters. “I don’t know if both sides have an equal commitment. You’ve heard plenty of what I’ve heard as well. If that’s the case, if both sides have that commitment, there’s a deal to be made.”

NFL Players Association head DeMaurice Smith has already left the building, but returned upon hearing Pash’s words challenging the union’s commitment to an agreement.

“Obviously, we saw Jeff Pash’s comments a few moments ago and instead of driving home, we made a short detour to come back, because I think it’s important that everyone and all of our fans understand and know the commitment of our players to this process,” Smith said. “Today we got here at 9 o’clock. We had a meeting with non-owners of the National Football League. Our players stood around and waited until 6 o’clock. The owners left and we were told to come back at 10.

“We have been committed to this process. But for anyone to stand and turn to the American people and say that they question that … Uh look, I understand that there’s probably some things that Jeff Pash has to say. But this is the truth.”

Both sides had a lot of bodies involved Thursday, including Chiefs chairman Clark Hunt and LG Brian Waters.

Coming Friday, both sides were told to report back at 8 a.m. CST. Smith has already told his membership that he will update them by e-mail at 1 p.m. CST.

If the union plans to decertify, they’ll have until 4 p.m. CST to file the necessary paperwork with the U.S. District Court in Minneapolis.

The extended agreement between the league and players will expire at 11 p.m. CST on Friday.


3 Responses to “A Billionaires Business … Weekend Cup O’Chiefs”

  • March 11, 2011  - bhive01 says:

    Sucks sitting here waiting for both sides to come together on something while they both sit on wads of cash the likes of which I’ll never see without winning the lottery… A horrible time to be a fan of an NFL team.


  • March 11, 2011  - Tracy says:

    There is a lot of financial disparity among owners. The Hunt family and Ralph Wilson of the Buffalo Bills had a franchise fee of $25K 50 years ago when the league was founded while the new guard has had to cough up several hundreds of millions, most often borrowed; so a lack of complete cohesion in their ranks is understandable, particularly when the influence of the likes of Jerry Jones comes into play.

    But who can really side with the owners after they have, for the most part, been commiting highway robbery with the rights fees they charge the networks and then holding taxpayers hostage with threats of moving so they can have new or upgraded stadiums?

    These old jokers seem to care not that the men who have put millions into the owners’ pockets have a generally shorter than average life span, suffer early onset dementia and end up in wheel chairs at age fifty.


  • March 11, 2011  - Jim says:

    If a deal doesn’t get done soon, they should fire DeMorris Smith and Roger Goodell. Bring back Tag, who enjoyed labor peace throughout his entire career as NFL commisioner and hire a skilled former NFL player to replace Smith as head of the NFLPA.

    Jim




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