TheShiznit Posted May 22, 2008 Share Posted May 22, 2008 Not really sure if it's your inability to read or form a rational thought, but... oh never mind. Like I said, there's a huge, huge difference between being on the hook for an amount of money and actually putting that money up. Say two guys are going to go into business. They need 400K to start it. One guy puts up 200K, the other signs his name to be the soul guarantor on a 200K loan that the business will be paying off. Should these guys be equal partners? Detlef....I guess you two are not going to realize it but you are both right. Your measure to determine the total return on an actual investment(ROI) is determined when you sell it. ROE is a measure of NET INCOME/SHAREHOLDER or INVESTOR EQUITY. Therefore, interest would be considered Shareholder Equity in this equation and net income would either be reduced by it or shareholder/investor equity increased. Methinks you and BB are trying to describe the same thing using two very distinctly different measurements...both correct....but they expalin different things involved...one involves the sale...one involves ongoing operation. Quote Link to comment Share on other sites More sharing options...
Seahawks21 Posted May 22, 2008 Share Posted May 22, 2008 (edited) There is only one reason why this has not happened yet. The players are scared that they could not get enough support from their peers, and they would be blacklisted by the NFL, which is what happened when the baseball players tried it. A group of them went for it, quit major league baseball, and were hung out to dry, not being allowed to return when their new league never came to fruition. A unified front would solve this problem. In six pages, I have yet to see a good reason why this wouldn't work. I am the first to admit that I am rather idealistic, which is really only a bad thing when I have bad ideas. I believe this one has some legs. Obviously there have to be cons and reasons that it won't work, but through six pages, we haven't yet come across any, at least as far as I can tell. We have had plenty of opinions as to why it shouldn't happen, but not really any as to why it can't. I'm afraid there isn't much left of this horse to beat. Thanks to all for the banter, I know this is a bit of an odd topic and really doesn't have a whole lot, if anything, to do with the recent news about the labor talks. I certainly don't suspect anything will change anytime soon, this is just something to keep in the back of your head as we watch labor talks for the years to come. Believe me, I don't try to glorify playing golf with professional athletes. I'm just a big kid having some fun, playing golf with some of my idols. I am simply lucky enough to have a very good friend I grew up with that happens to play on my local NFL team. As a fan, of course I want to play golf with these guys when I get the chance. I hope that I have only brought up my personal experiences when I feel they bring something to the conversation. I only bring this up because I think it would be interesting to get their take on the situation. Maybe their eyes see this thing in a totally different way than has been addressed here thus far. It isn't like I think that playing golf with a backup DB makes me important, but in this specific circumstance, it could be a worthwhile tool. Edited May 22, 2008 by Seahawks21 Quote Link to comment Share on other sites More sharing options...
detlef Posted May 22, 2008 Share Posted May 22, 2008 (edited) Detlef....I guess you two are not going to realize it but you are both right. Your measure to determine the total return on an actual investment(ROI) is determined when you sell it. ROE is a measure of NET INCOME/SHAREHOLDER or INVESTOR EQUITY. Therefore, interest would be considered Shareholder Equity in this equation and net income would either be reduced by it or shareholder/investor equity increased. Methinks you and BB are trying to describe the same thing using two very distinctly different measurements...both correct....but they expalin different things involved...one involves the sale...one involves ongoing operation. I suppose my point is this: Much has been made about how little money is returned to the investor compared to the value of the team. I mean, ~$20 mil return on a $900 mil investment is pretty small, right? I mean, you could stick that 900 mil in a money market and get the same thing back, right? Thing is, nobody's scratching a check for $900 mil, they're scratching a check for some amount much, much less than that and financing the rest. I'm assuming that when they report their earnings, especially when they're making a case to the court of public opinion that the players are raping them, they're certainly including the cost of this loan as a cost. Thus, that ~$20 million profit already reflects that. Now, I have no idea what the loan to value ratio works on one of these things, so I'm just going to pretend that it's like buying a house and they want you to have 20% down. So, dude's got a bit less than $200 million down that is generating about $20 million a year after the annual cost of paying for the other $700 million that is financed. So, he's getting 10% on his money. Now, of course, he's on the hook for the whole amount of money and, if the team truly goes belly up, he's hosed. However, that's where the risk factor (or, in this case, lack thereof) comes into account. Unlike any number of other businesses that this guy could purchase, this one is plugged into a TV contract that assures him of a nice return each year. That's why the percentage returned is relatively low. If the team cost $500 mil and spit out $20 mil, it would be much more attractive. So much more, that somebody else would have snapped it up before him. Then, he'd have to offer that guy more than $500 mil, say $600 mil. Then, apparently, the numbers would still be so nice that somebody else would offer to buy it off him for, say $700 mil. And so on, until, somehow magically, the market sets the price at as much, but no more than somebody is prepared to pay. It appears, in this case, that number is about $900 mil. Smells a whole lot like how pretty much every single investment works. See, I'm not trying to prove anything other than the fact that owning an NFL franchise must be worth the money or guys wouldn't do it. Edited May 22, 2008 by detlef Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted May 22, 2008 Share Posted May 22, 2008 I suppose my point is this: Much has been made about how little money is returned to the investor compared to the value of the team. I mean, ~$20 mil return on a $900 mil investment is pretty small, right? I mean, you could stick that 900 mil in a money market and get the same thing back, right? Thing is, nobody's scratching a check for $900 mil, they're scratching a check for some amount much, much less than that and financing the rest. I'm assuming that when they report their earnings, especially when they're making a case to the court of public opinion that the players are raping them, they're certainly including the cost of this loan as a cost. Thus, that ~$20 million profit already reflects that. Now, I have no idea what the loan to value ratio works on one of these things, so I'm just going to pretend that it's like buying a house and they want you to have 20% down. So, dude's got a bit less than $200 million down that is generating about $20 million a year after the annual cost of paying for the other $700 million that is financed. So, he's getting 10% on his money. Now, of course, he's on the hook for the whole amount of money and, if the team truly goes belly up, he's hosed. However, that's where the risk factor (or, in this case, lack thereof) comes into account. Unlike any number of other businesses that this guy could purchase, this one is plugged into a TV contract that assures him of a nice return each year. That's why the percentage returned is relatively low. If the team cost $500 mil and spit out $20 mil, it would be much more attractive. So much more, that somebody else would have snapped it up before him. Then, he'd have to offer that guy more than $500 mil, say $600 mil. Then, apparently, the numbers would still be so nice that somebody else would offer to buy it off him for, say $700 mil. And so on, until, somehow magically, the market sets the price at as much, but no more than somebody is prepared to pay. It appears, in this case, that number is about $900 mil. Smells a whole lot like how pretty much every single investment works. See, I'm not trying to prove anything other than the fact that owning an NFL franchise must be worth the money or guys wouldn't do it. You have two sets or parameters at work here....you have Return On Equity at work...the 20 mil being net income after expenses/200million in net investment. If this stays, then the investor can get his/their principle back in ten years and then work purely off profit. Retrun on Investment happens in the latter part of your scenario when the sale of the franchise occurs. You add up all the money the investor paid for the business(with interest) and subtract from the sale price.....that is the return on the investment. So, as you have explained...it is possible to have ROE in every year that is positive...and have a negative ROI at the end of the deal. Both can be positive. ROI is market driven....ROE is management/structural driven. At least this is how I understand how these two terms effect money and business. Quote Link to comment Share on other sites More sharing options...
Jrick35 Posted May 22, 2008 Share Posted May 22, 2008 This whole thing boils down to one big philosophical debate but at the end of the day the owners know how much they need the players or the players would not already be getting 60% of the pie. The owners also know that it is in everyones best interest to get a deal done sooner rather than later and opting out now is the best opportunity they have to make that happen. As to the whole risk/reward thing you guys are comparing apples to oranges. The players are risking severe injury for riches. The owners are risking their already substantial financial standing for more riches. The risk to the players is physical harm. The risk to the owners is financial harm. How can you possibly compare the two? They are not the same thing. The only thing they do have in common is that they are both going after riches. Which brings me back to the CBA. The owners are obligated, as businessmen to re-visit this agreement in an effort to increase their piece of the pie and the players are obligated, as employees, to re-visit this agreement for the same reason. Now here's an interesting scenario for you. Over the last few years the players union has been wanting more money for the "older generation" players. I ahve an idea on how that can happen. I challenge anyone to tell me that they feel that current players are under-paid. Based on the fact that todays players are grossly over-paid and based on the fact that the players already get a larger share than the owners, and based on the "urgency" of the players union to get more money for the old guys, why don't the players put their money where their mouths are and propose something like this. We the players will reduce our piece of the pie from 60% to 50% and you owners can keep your share of the pie at 40% if you will give the remaining 10% to the old guys. This still gives most of the money to the players, leaves the owners where they are and puts a substantial amout of money into the pension fund to be distributed to the old guys. It's simplistic but wouldn't that be a hard offer for the owners to turn down? Quote Link to comment Share on other sites More sharing options...
detlef Posted May 22, 2008 Share Posted May 22, 2008 This whole thing boils down to one big philosophical debate but at the end of the day the owners know how much they need the players or the players would not already be getting 60% of the pie. The owners also know that it is in everyones best interest to get a deal done sooner rather than later and opting out now is the best opportunity they have to make that happen. As to the whole risk/reward thing you guys are comparing apples to oranges. The players are risking severe injury for riches. The owners are risking their already substantial financial standing for more riches. The risk to the players is physical harm. The risk to the owners is financial harm. How can you possibly compare the two? They are not the same thing. The only thing they do have in common is that they are both going after riches. Which brings me back to the CBA. The owners are obligated, as businessmen to re-visit this agreement in an effort to increase their piece of the pie and the players are obligated, as employees, to re-visit this agreement for the same reason. Now here's an interesting scenario for you. Over the last few years the players union has been wanting more money for the "older generation" players. I ahve an idea on how that can happen. I challenge anyone to tell me that they feel that current players are under-paid. Based on the fact that todays players are grossly over-paid and based on the fact that the players already get a larger share than the owners, and based on the "urgency" of the players union to get more money for the old guys, why don't the players put their money where their mouths are and propose something like this. We the players will reduce our piece of the pie from 60% to 50% and you owners can keep your share of the pie at 40% if you will give the remaining 10% to the old guys. This still gives most of the money to the players, leaves the owners where they are and puts a substantial amout of money into the pension fund to be distributed to the old guys. It's simplistic but wouldn't that be a hard offer for the owners to turn down? One thing that should me mentioned is the owner's share is not 40% but, it appears, somewhere around 10%. Just for the record. Quote Link to comment Share on other sites More sharing options...
Seahawks21 Posted May 22, 2008 Share Posted May 22, 2008 One thing that should me mentioned is the owner's share is not 40% but, it appears, somewhere around 10%. Just for the record. Don't forget the millions upon milliions that they pocket when they sell the franchise. Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted May 22, 2008 Share Posted May 22, 2008 Don't forget the millions upon milliions that they pocket when they sell the franchise. Oh, you mean the return an investor makes for taking some amount of risk? Glad you think capitalism is a bad thing. Quote Link to comment Share on other sites More sharing options...
detlef Posted May 22, 2008 Share Posted May 22, 2008 Yes that is an easy way to avoid the issues. Sorry, I'm bored. So how is realizing that players collectively owning the teams being barely different than shareholders like who own the Packers, "avoiding the issues"? I mean, all the guys who manage the day to days could be the exact same people that do it now. Every team would have GM, Coach, and every other salaried position that they currently have. So, what is the massive difference that you're pointing to? You do realize that these same idiots who wouldn't be able to get out of each other's way enough to get a game played just punked the owners the last time they sat at the bargaining table, which is exactly why the owners opted out of the CBA. Can't see how this "avoids the issues" any more than just saying the equivalent of "'cause I said so" over and over again. Quote Link to comment Share on other sites More sharing options...
Grits and Shins Posted May 22, 2008 Share Posted May 22, 2008 Sorry, I'm bored. So how is realizing that players collectively owning the teams being barely different than shareholders like who own the Packers, "avoiding the issues"? I mean, all the guys who manage the day to days could be the exact same people that do it now. Every team would have GM, Coach, and every other salaried position that they currently have. So, what is the massive difference that you're pointing to? You do realize that these same idiots who wouldn't be able to get out of each other's way enough to get a game played just punked the owners the last time they sat at the bargaining table, which is exactly why the owners opted out of the CBA. Can't see how this "avoids the issues" any more than just saying the equivalent of "'cause I said so" over and over again. Let me ask you a couple of questions about your business model. I presume you aren't advocating that the teams be publicly traded as that is not ownership by the players. 1) Do you think players should own shares in the team they play for? If so how are shares allocated? Surely it isn't 1 share per player? When players change teams are they required to relinquish ownership in their previous team? When players are drafted or hired from the street are they awarded shares, if so how do you decide how many? If players are cut are they required to give up their shares? 2) If all players own shares in all teams then again how are the shares allocated? Surely not 1 per player? When players are cut or retire are they required to relinquish their shares? When players are drafted or hired do the get shares, if so how many? 3) Do players that go on IR retain full ownership? I'm interested in hearing how you think this would work. Unless you require players to relinquish their shares when the leave the NFL (something I suspect can not be legally required) and award shares to players entering the NFL it won't be long before you basically have publicly traded teams and not teams owned by the players. Quote Link to comment Share on other sites More sharing options...
piratesownninjas Posted May 22, 2008 Share Posted May 22, 2008 Let me ask you a couple of questions about your business model. I presume you aren't advocating that the teams be publicly traded as that is not ownership by the players. 1) Do you think players should own shares in the team they play for? If so how are shares allocated? Surely it isn't 1 share per player? When players change teams are they required to relinquish ownership in their previous team? When players are drafted or hired from the street are they awarded shares, if so how do you decide how many? If players are cut are they required to give up their shares? 2) If all players own shares in all teams then again how are the shares allocated? Surely not 1 per player? When players are cut or retire are they required to relinquish their shares? When players are drafted or hired do the get shares, if so how many? 3) Do players that go on IR retain full ownership? I'm interested in hearing how you think this would work. Unless you require players to relinquish their shares when the leave the NFL (something I suspect can not be legally required) and award shares to players entering the NFL it won't be long before you basically have publicly traded teams and not teams owned by the players. Congrats... This thread has gone to absolute crap. Quote Link to comment Share on other sites More sharing options...
Grits and Shins Posted May 22, 2008 Share Posted May 22, 2008 Congrats... This thread has gone to absolute crap. In otherwords you can't answer the questions. Quote Link to comment Share on other sites More sharing options...
Seahawks21 Posted May 22, 2008 Share Posted May 22, 2008 Just as an idea......how bout this.....shares are awarded based on tenure and performance? Obviously this is a very vague statement and will get ripped apart by some idiotic retort, but I'm sure smarter people than you or I could figure a way to make this acceptable by most parties involved. Heck if they really wanted to, they could come very close to mirroring the salary structure the way it is now. The only difference is they are paid out of a collective team fund, rather than by the rich guy that counts.....one for you...one for me......one for you..... If a player leaves a team, he would get a share of his new team. If he leaves the league, he draws a pension just like he would in the NFL. I have obviously not thought this part out yet, just coming up with ideas off the top of my head, so rip away as you will, hopefully I can think of some better answers, but then again, I am not exactly an economics scholar, so take what I say with a grain of salt. I honestly just can't figure out why this wouldn't work. I was hoping I would get concrete answers as to why it wouldn't, and so far nobody has come up with any, at least as far as I can tell. Feel free to poke holes, that is exactly what I want you to do. Quote Link to comment Share on other sites More sharing options...
WaterMan Posted May 22, 2008 Share Posted May 22, 2008 I can't believe there are NFL fans out there who don't support the players... Quote Link to comment Share on other sites More sharing options...
piratesownninjas Posted May 22, 2008 Share Posted May 22, 2008 In otherwords you can't answer the questions. You're talking about what percentage an owner/player gets when they go on I.R. Get over yourself, the conversation has eroded into non-sense. You're so far in left field at this point there is no point. Quote Link to comment Share on other sites More sharing options...
piratesownninjas Posted May 22, 2008 Share Posted May 22, 2008 In otherwords you can't answer the questions. Since we're in Candyland... 1) Do you think players should own shares in the team they play for? If so how are shares allocated? Surely it isn't 1 share per player? When players change teams are they required to relinquish ownership in their previous team? When players are drafted or hired from the street are they awarded shares, if so how do you decide how many? If players are cut are they required to give up their shares? Every player gives their share to me. Except Chris Cooley because he wears short shorts and that's weird. 2) If all players own shares in all teams then again how are the shares allocated? Surely not 1 per player? When players are cut or retire are they required to relinquish their shares? When players are drafted or hired do the get shares, if so how many? The players have already relinquished their shares to me, as per the Terminator act... Since we're just pulling stuff out of our asses, I built the T-1000. He's my enforcer to intimidate players into giving me their crap. While we're at it, I also want their shoe laces. 3) Do players that go on IR retain full ownership? Bodey from Point Break actually handles all of the IR stuff, so you'll have to ask him that one... Quote Link to comment Share on other sites More sharing options...
Chief Posted May 22, 2008 Share Posted May 22, 2008 I can't believe there are NFL fans out there who don't support the players... Not all of us are hanging on one players nutsack. Quote Link to comment Share on other sites More sharing options...
Big Country Posted May 22, 2008 Share Posted May 22, 2008 Congrats... This thread has gone to absolute crap. The points Grits make are very valid. If the players formed thei own league and were all equal owners, it obviously only encompasses current players. So how are new players to the league given "ownership". Surely over time the value of these shares will rise or fall, thus new players coming in would be getting in at a different base level, and who would be giving up their portion of ownership for these new players. You force the retiring players to give up their share of a potentially appreciating asset. The reasons it won't work are countless. What could work in theory is for a current group of players to try to form their own league that they feel better compensates the players, but then they (the players starting it) would simply be the owners in this new model. No matter what people think or mindlessly hope for, the players need the owners and the owners need the players. It is a symbiotic relationship. Quote Link to comment Share on other sites More sharing options...
Seahawks21 Posted May 23, 2008 Share Posted May 23, 2008 The points Grits make are very valid. If the players formed thei own league and were all equal owners, it obviously only encompasses current players. So how are new players to the league given "ownership". Surely over time the value of these shares will rise or fall, thus new players coming in would be getting in at a different base level, and who would be giving up their portion of ownership for these new players. You force the retiring players to give up their share of a potentially appreciating asset. The reasons it won't work are countless. What could work in theory is for a current group of players to try to form their own league that they feel better compensates the players, but then they (the players starting it) would simply be the owners in this new model. No matter what people think or mindlessly hope for, the players need the owners and the owners need the players. It is a symbiotic relationship. All your points are valid, although I think most of them can be talked through. I still just don't get why the players need the owners. Your new model where the owners are the players I think is pretty much exactly what we're talking about. Quote Link to comment Share on other sites More sharing options...
Big Country Posted May 23, 2008 Share Posted May 23, 2008 Your new model where the owners are the players I think is pretty much exactly what we're talking about. But i don't think it works, as it would have to just be current players, and likely just a select few of them. Any incoming player would not get apiece of the pie, and any outgoing player wouldn't be forced to give up their piece of the pie. Quote Link to comment Share on other sites More sharing options...
detlef Posted May 23, 2008 Share Posted May 23, 2008 Let me ask you a couple of questions about your business model. I presume you aren't advocating that the teams be publicly traded as that is not ownership by the players. 1) Do you think players should own shares in the team they play for? If so how are shares allocated? Surely it isn't 1 share per player? When players change teams are they required to relinquish ownership in their previous team? When players are drafted or hired from the street are they awarded shares, if so how do you decide how many? If players are cut are they required to give up their shares? 2) If all players own shares in all teams then again how are the shares allocated? Surely not 1 per player? When players are cut or retire are they required to relinquish their shares? When players are drafted or hired do the get shares, if so how many? 3) Do players that go on IR retain full ownership? I'm interested in hearing how you think this would work. Unless you require players to relinquish their shares when the leave the NFL (something I suspect can not be legally required) and award shares to players entering the NFL it won't be long before you basically have publicly traded teams and not teams owned by the players. Well, keep in mind that it is not my model. From the first time I even mentioned the whole players thing, I made a point of saying that I wasn't actually saying that I thought it was the way to go. Rather, the fact that you and BB just assuming that total chaos would ensue and that the players were completely ill-equipped to handle running a league was baseless and not reason enough to write off the notion. To be honest, I haven't even thought the concept through beyond simply understanding that, in terms of the day to days, the players could simply hire the exact same people the owners do. That seemed to be your guys' biggest issues that a bunch of players would never be able to agree on anything and they'd be lucky to get a game played, right? Well, my point is that simply wouldn't be the problem. Obviously there'd be plenty to figure out in terms of how the league is owned and like I said, I have no idea how that would go down. Again, I'm not even saying this is the way it should go. So, carry on. Quote Link to comment Share on other sites More sharing options...
detlef Posted May 23, 2008 Share Posted May 23, 2008 Since we're in Candyland... Every player gives their share to me. Except Chris Cooley because he wears short shorts and that's weird. The players have already relinquished their shares to me, as per the Terminator act... Since we're just pulling stuff out of our asses, I built the T-1000. He's my enforcer to intimidate players into giving me their crap. While we're at it, I also want their shoe laces. Bodey from Point Break actually handles all of the IR stuff, so you'll have to ask him that one... Sage. Quote Link to comment Share on other sites More sharing options...
WaterMan Posted May 23, 2008 Share Posted May 23, 2008 Not all of us are hanging on one players nutsack. Just whole teams instead? Quote Link to comment Share on other sites More sharing options...
Grits and Shins Posted May 23, 2008 Share Posted May 23, 2008 Just whole teams instead? Said by the leader of the all the guys still hanging on Vicks nutsack ... Quote Link to comment Share on other sites More sharing options...
Grits and Shins Posted May 23, 2008 Share Posted May 23, 2008 detlef ... do you believe the busboys in your restraunt could quit and set up their own restraunt and run it as well as you do yours? Quote Link to comment Share on other sites More sharing options...
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