In his 12th conference call with NFL team season ticket holders, Commissioner Roger Goodell was asked several questions by Cincinnati Bengals fans about the league’s economics. He emphasized how rising costs have changed the NFL’s economics despite growing revenue.
One Bengals fan said, “My question has to do with the funds that the players are getting now from the profits. Other than an economic turndown for the league and reduced profits and all of that, do the players in accepting a percentage, a high percentage I might add, of the profits, do they take any of the other economic risks that the owners face?”
A: No, they do not take the economic risk. The way the system works right now is it’s not a high percentage of profits – it’s a high percentage of revenues. That’s one of the issues that the clubs are raising. While those revenues continue to increase, unfortunately, they’re not increasing as fast as our costs, including player costs. But there are costs in building new stadiums, maintaining those stadiums, making capital improvements to those stadiums, continuing to have great facilities for the clubs – all of those things come with higher costs and that is something that we want to have recognized in the system. With those higher costs, instead of taking it completely as a percentage of revenue, there should be recognition of those costs before the sharing of revenue, and that’s one of the systems that was proposed and part of the discussion that we’re having with the Players Association. It’s something that we’ve got to get addressed.
On what the NFLPA is seeking financially:
They are looking for a share of the overall revenue and they don’t want to change their share in revenue despite the fact they acknowledged costs have continued to escalate, not just player costs but the costs of operations, which they have acknowledged and we have demonstrated to them in financial disclosures. Clearly, they understand that the economics of the NFL have changed over the past 10 or 15 years but they do not want their percentage shared to change.
It is unrealistic in this kind of an environment where it takes a significant investment to create revenue, whether it is a new stadium or other new business opportunities. You have to invest to do that. You have to encourage owners or clubs to make those investments because that is how the game is going to continue to grow. That is how we have been able to grow the game, particularly over the past five or six years, by making smart investments. Hopefully, we can get back to that.
On how the NFL plans to prevent the lockout from affecting season ticket holders and pricing them out of seeing games:
It’s a great question, and it is one of the things that we’re obviously trying to address here. By controlling our costs, that gives us a better ability to manage our business and I think we have to recognize what our fans are going through, either season ticket holders or other fans that want to attend our event or participate in our event in some fashion. The economy has taken an impact on people and it continues to have that impact. The uncertainty out there and the rising cost of gasoline – all the things that you are dealing with and every other fan are dealing with are realities and we cannot continue to shift the cost, our increased costs, to the fans, to the season ticket holders. That’s something we’re trying to address here. By controlling our costs, by getting a better control over the way we manage our business, we hopefully can do a better job of making sure that we continue to make our game affordable for all fans.
Following is a transcript of the Commissioner’s conference call with Bengals fans: