Schumer Goes To Bat for Bills and Small-Town Owners
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From the here-we-go-again department comes word Congress is getting involved in the pro sports business.This time it’s the Senate. Legislators have zeroed in on the National Football League and just how the 32 owners handle the league’s financial ledger. Senator Schumer, a Democrat of New York, has decided to “help” NFL owners break their logjam over how to redistribute revenues so comparatively smaller market teams — like Ralph Wilson’s Buffalo Bills and Mike Brown’s Cincinnati Bengals — have a chance to keep up with the big boys; among them Washington’s Daniel Snyder, Dallas’s Jerry Jones, Philadelphia’s Jeffrey Lurie, Houston’s Robert McNair, and New England’s Robert Kraft. Schumer is hoping the weight of his office, along with his effort to gather the bipartisan support of colleagues from several states that NFL teams call home, will pressure NFL owners into coming up with a revenue-sharing formula that satisfies owners from both the highand low-revenue end.
Exactly what Schumer and his fellow Senators — who may include Senator McCain, a Republican of Arizona, and others from Florida, Georgia, Indiana, Louisiana, Maryland, Minnesota, Missouri, Ohio, Pennsylvania, Tennessee, Washington, and Wisconsin — can do to put the heat on the league’s owners is unclear. In the absolute extreme, the Senate could attempt to undo the 1966 AFL–NFL merger which combined the leagues by 1970 (retaining the name of the latter). Or they could unravel the 1961 Sports Broadcasting Act, which made legal a team’s sale of television and broadcasting rights packages to the networks. Both measures helped fuel the NFL’s popularity and owner profitability; a move to disrupt them would be the equivalent of throwing a Hail Mary pass with seconds left on the clock.
But it’s very unlikely that any senator, particularly one from a state with a small-market NFL team, would even consider proposing any breakup of the NFL. So Schumer is probably using the bully pulpit of the Senate just to remind NFL owners they should come up with an equalization plan that will ensure the Buffalo Bills and other small market teams that lack a competitive corporate base can stay in business.
This is not going to be an easy task for Senator Schumer or the owners who meet in New Orleans next Tuesday (October 24) to tackle revenue-sharing concerns. The problem is this: The biggest revenue producers — Snyder, Jones, Lurie, Kraft, and McNair — need virtually every penny that can get their hands on. In 1999, Snyder paid a king’s ransom of $800 million when he bought the Redskins from the estate of Jack Kent Cooke, the same year Mc-Nair paid a whopping $700 million for the Texans franchise. Jones will be putting up money for a new Arlington, Texas, football facility; Kraft funded his Patriots’ Gillette stadium, and
Lurie also put up money for his new stadium.Wilson, on the other hand should have no debt service on the team he purchased in 1959 for $25,000 or on the home facility, Ralph Wilson Stadium, which opened in 1973 in suburban Orchard Park and was upgraded with public monies in 1998.
But should Wilson or his estate sell the team down the line, the new owners may face an uncertain financial future in Buffalo.With limited revenues and a western New York economy that is, to be kind, sluggish at best, Buffalo is not the same market it was in 1960. The steel, grain, and flour industries are nearly non-existent, the city’s port lost much of its business when the opening of the St. Lawrence Seaway allowed ships to bypass Buffalo, and the city’s population today is half of what it was when Wilson opened up for business.
Wilson does benefit from having a secondary market in southern Ontario, Canada, but if Buffalo city leaders wanted a pro football team today it’s unlikely the area would land a franchise. The TV market is too small and the corporate community is limited — two key factors in landing an NFL franchise.
Ironically, while the owners try to come up with a formula to satisfy both the big money guys and the two owners who voted against the recently negotiated collective bargaining agreement (Buffalo’s Wilson and Cincinnati’s Brown), at the New Orleans sessions, they will also be discussing how to place a revenue-challenged small market franchise like Wilson’s Bills in Los Angeles.
NFL owners would like to return to the Los Angeles market at some point, but securing funding to renovate the Los Angeles Coliseum or to build a stadium in Anaheim, Calif., remains a major obstacle.
Wilson will meet with the NFL Commissioner, Roger Goodell, on November 2 to discuss the problems Wilson has with the March 2006 agreement. Wilson feels the new CBA is too costly and player-friendly. Wilson fears the Bills might not survive financially under its terms — despite the league’s salary cap — without an increase in league-generated revenue sharing. Goodell recently sent a memo to all 32 owners outlining his view of a revenuesharing formula. The owners will review the Goodell plan and then pass it along to an eight-member committee of owners, which includes Wilson.
The Goodell memo is positive news for the Bills and other small market teams, according to Senator Schumer.
“When the new CBA came into effect, we were really worried that either revenue sharing would go by the boards, or it would be done in such a half-baked way that small-market teams couldn’t survive,” Schumer, in Buffalo last week, said. “The commissioner, in his statements and the initial readings we get, understands … there needs to be real revenue sharing and not just crumbs.”
In a league in which 32 teams share television monies equally — and the TV monies are substantial — and in a league where each team has fixed players costs, how can any owner claim that they face survival issues?
The answer, at least according to Schumer, lies in the fact that small market cities are being asked to pay New York prices for tickets.
“The ability of small market teams to generate revenue and compete for talented players is largely dictated by their ability to price tickets, merchandise, naming rights, etc., in a scale their local economy can afford, and yet, at the same time, their expenses such as player salaries are dictated by the national market,” Schumer explained.
Small markets don’t have the wherewithal to generate the same amount of revenue that can be had in New York, Chicago, Philadelphia, Washington, Boston, Dallas, and Houston.The small market owners want the big guys to set aside some of the dollars generated locally from sources such as radio rights and other in-market sponsorships, and share those dollars with them. This is not necessarily something the big-market owners want to do. NFL owners have been bickering over the issue now for a number of years, but they have never had any Senate member urging them to settle the problem. Senator Schumer has no real leverage in getting NFL owners to work out a deal, but that doesn’t matter.
The owners have gotten the message: Take care of the problem or the Senate might come up with a solution that may not be to your liking.