Did you fail Econ 101?
Wikipedia can be instructive for a change.
No. You claimed owners charged what the market will bear, then said players’ salaries caused ticket prices to go up. Can you reconcile that?
Why in the world would they do that?
Did their players’ salaries go down?
Yeah. Why would they ask more than their customers will pay? This is basic supply and demand.
If the owners don’t get an agreement in writing to attest to that effect they will be accused of colluding to keep salaries down. Don’t say it hasn’t happened, either.
The owners cannot unilaterally cut salaries, even if they dearly want to, thanks to the price escalation of the players’ salary demands. If 10 teams pass on Joe Awesome’s $15 million salary demand but he gets signed by someone else, all is copacetic with the Players’ Union, never mind that the 10 teams that passed are going to suck because they can’t afford to sign anybody at that price.
If nobody bites, however, it’s not that it’s too expensive, it’s collusion. Welcome to professional sports circa 2011.
No, I didn’t fail Econ 101 because I know the difference between the price point in competitive markets and monopolistic markets.
What part of my argument, that I have repeated several times, do you not understand? Do you not agree that NFL teams set ticket prices to maximize revenue?
The Packers are a bad example. They are owned by the community,. They charge about half as much for food and drinks. They give away over half that money to charities.
We had the same thing with baseball - owners complaining salaries were out of control, yet with their other hands signing free agents to the salaries.
Of course there’s collusion. Hell a salary cap itself is collusion.
Here’s the money line history for the Packers/Patriots game in Week 15 that Aaron Rodgers sat out (from here). Seven books out of ten listed at one time or another offered odds on New England that are equal to or greater than the 10-1 you claimed to be mythical (10-1 odds = -1000), four got to 11-1, and one juice-heavy book even got up to 12-1. Now, the true odds for that game (factoring out the vigorish) were more like 8.5-1 at their highest point, but you do see true odds of 10-1 or higher when the point spread gets up around 20 once every 3 or 4 seasons. You see at least a couple of games like this one every NFL season, however.
I scanned the MLB lines for the month of August 2010. Over the course of the entire month (~425 games), the highest line was -360 (Phillies/Nationals), and only three games in total got to -300. Maybe 1 game in 12 got as high as -200.
Sorry, but it’s just undeniable that there’s less parity in the NFL than in MLB.
No, they won’t. For the sake of argument, imagine that, instead of expanding to 18-game seasons, the NFL was expanding to 1,800-game seasons (assuming such a thing was possible, yada yada). It should be intuitively obvious, I hope, that the results of Week 1,800 would change the playoff picture not at all in the vast majority of seasons; most teams will have known exactly what they’re playoff seeding was with 50 games to go. Or, if you’d dispute that number, say 20 games, whatever. That’s a lot more than the 0-1 faced by NFL teams in a 16-game schedule.
In expanding to an 18-game schedule, the same exact process leads to the same exact result, only on a much smaller scale.
That’s a much more interesting question: not only whether there would be *proportionally *fewer tanked games, but whether that would more than make up for there being more tanked games in total.
As to the first, I’m not sure. On the one hand, as you point out, the longer schedule does mean more opportunities for regression to the mean, lower win percentages at the top, etc. On the other hand (although I previously rejected the notion), it could be that for a time, on average, leads might not only grow, but accelerate.
For instance, after 8 games, a lot of the times the best team in a division won’t be in 1st place (due to bad luck, variance, etc.); so, we spend Weeks 9-16 watching leads not only expand in divisions led by their best teams, but also shrinking, vanishing, and/or reversing in divisions where the best team is trying to make up ground against inferior competition. That drags down the average lead-expansion rate. If the season kept getting longer and longer, at some point (Week X) all the divisions would be led by their best teams, and the division leads would be very unlikely to change hands or shrink more than briefly; as we approached and then reached Week X, that drag on lead-expansion rate would gradually vanish, and it might be possible for there to be, at that point, proportionally *more *tanked games.
Of course, how the math would work out on that is just a guess for me, and whenever Week X would actually tend to fall in a longer NFL season, it sure as hell isn’t near Week 16. So yes, my assumption is that you’re correct, and there would be proportionally fewer tanked games with an 18-game schedule.
Is the ratio *more *important than the literal tally of tanked games, however? Again, I don’t know. Sounds like it would at first, but final-week lead changes are disproportionately exciting and would be less common. There’s also the issue of already-clinched teams tanking against playoff contenders and thus affecting the rest of the playoff bracket – this doesn’t bother me, but it certainly seems to piss some people off. It would depend on the psychology of fandom and what people find exciting or annoying to varying degrees, all very nebulous stuff. I don’t know, I’d have to see how it actually shakes out before I had an opinion on that question. I do know, however, that I’m in favor of 18 games not because any ratio one way or the other, but because of “Hey, more football – cool!”
Anyway, I’ve till now only been talking about leads and tanked games in terms of absolute numbers because, well, that was the issue I was addressing. Someone pointed out that, though we’d get more meaningful games at the start of the season, we’d also get more crap games at the end of the season. I said that was true and a fair point to make. You disagreed, and we were off to the races.
No, a salary cap is an agreed-to condition of the collective bargaining agreement. You don’t get to redefine terms at your leisure.
Oh, and the baseball collusion thing? The owners paid the players $12 million in compensation on the basis of an allegation in 2003, small change compared to the $280 million they paid in 1990 at the hands of arbitrators. If ever there were a vivid demonstration of how the owners cannot unilaterally reduce player salaries, there it is.
That’s how much power the owners have, they have no choice but to sign players for exorbitant salaries or else face the consequences of a union that sues them for NOT signing players at exorbitant salaries. Who has the power, again?
Two more games from this season that broke the -1000 barrier (Cle@Pit, and Buf@NE), lest **Omni **thinks the one I referenced was some crazy fluke.
To be thorough, however, I admit that I should have said “When the best team in the NFL plays at home against the worst team in the NFL, the best team might be a 10-1 favorite.”
This is absurd. Teams set prices to accomplish 2 things. 1) To cover their expenses. 2) Maximize revenue. In a perfect world doing #2 will take care of #1, but occasionally #1 exceeds #2. When the latter happens you need to lower costs, in the case of the NFL that means lowering labor costs.
Are you just being antagonistic with me? This is the simplest concept in the world, yet you seem incapable of understanding this.
I’d never seen money lines that high. I browsed other games from that week and didn’t see a single one that was even -400. In fact I only find one other that’s -250. I suppose it’s not as far fetched as I implied but it seems to be quite an exceptional circumstance. That 90% of the games are -250 or less, and most are around -120, still makes me feel that the difference is much closer than you implied.
Just 2 is necessary. Even if you are losing money, you still want to maximize revenue to limit losses.
I think players, in general, should be paid what the market will bear. There are exceptions, it was pretty clear the NHL needed to drastic changes to survive, but absent a specific reason players should make what teams are willing to pay them. Most attempts at limiting player salaries, like salary caps, cause more problems than they solve. I don’t see the nfl, where the team in the smallest market still makes 5 million dollar in the middle of a recession (along with any appreciation of assets and outside revenue) as being in crisis. You keep talking about how teams are losing money, but thus far all we have is one team not making quite as much money as they would like.
I’m even more opposed to a tightening of a salary cap on rookies who had absolutely no say in the cba. It is one of things that I have trouble seeing as legally viable.
I don’t think I implied anything about the size of the difference; I only pointed out that there was one. Anyway, it’s tangential, but you exaggerate here. A money line of -120 for the favorite is roughly equivalent to a point spread of 1.5, and obviously a large majority of NFL games are above that. A line of -250 is roughly equivalent to a point spread of -7; in the final 8 weeks of this season, about 35 games (27.7%) had lines of 7 or more.
When you’re talking about a multi-billion dollar business, $5 million is breaking even. It’s a small business owner making $150,000 in revenues and pocketing a fiver.
They do not have to cover expenses. The revenue from TV covers all their expenses before they have to bring a product to the stadium.
It’s too bad no pro sports franchise owner has any capital gains to show for his investment then.
No, the NFL get’s 3.085 Billion/year from TV revenue. The salary cap was last $127 million per team. That leaves a shortfall of around $30 million per team on TV revenue alone. And that is assuming there are no other costs besides player salaries, which is, of course, ridiculous.
The average nfl team is worth about a billion. They aren’t small, but we aren’t talking about apple or coke here. Certainly half a percent return during this year isn’t great, but lots of companies have been doing a lot worse and luxury items are particularly well hit. Plus, revenue can fluctuate fairly widely in the nfl so lets take a look at more years than one.
Thisl is the Forbes valuation of the packers. Forbes isn’t perfect, but they do give a strong unbiased account of the numbers. Before 2010, which they had the packers as making 10 million, the packers were between 20 million and 30 million profit every year going back to 2003. That seems like an entirely reasonable yearly dividend. But of course that isn’t all the owners get. We can also see the value of the franchise has gone from $337 million to over a billion in the last decade. So even if the team really did break even on operating income every year, the owners still would have tripled their money in ten years, a wildly successful investment. That increase in franchise value by the way is one of those things produced mostly by players, and something they get no cut of.
We can also look at the nfl as a whole. The packers revenue was just 26th in the league. The cowboys made $143 million, the red skins $103 million, and the patriots $66 million. 23 teams made over 20 million, while only one lost money. Just because the packers are having mediocre returns, doesn’t mean the nfl isn’t doing exceptionally well.
Indeed. But the floor, which is far more relevant to this calculation, was $112million I believe. Which would wipe a full 50% off that shortfall you mention.
This seems like as good a place as any to discuss valuation. What are the factors in these numbers? Inflation? Assets? Presumed income?
It seems to me that valuations are absurd in the sense that they are very abstract. I could try to sell one of my handguns, retail value around $500 used, for a million dollars. Is it worth that much? Sure, if I can find someone to pay it. Does that in turn mean that all guns of the same type are worth that much? Certainly not.
The point is that until someone buys the Cowboys for $1 billion, that number is meaningless without elaborating on why it should be so.