Broncos, NFL walk financial tightrope

Owners blaming current labor deal, sagging economy

By Jeff Legwold, Rocky Mountain News (Contact)

Monday, March 31, 2008

Only moments after announcing the approval of Wayne Huizenga's sale of half his stake in the Miami Dolphins for a reported $550 million, NFL commissioner Roger Goodell stood at the same podium Monday and said the league's franchise owners are operating under "extremely thin margins."

And he offered the Broncos as an example.

The Broncos, who have not added staff to replace two departed assistant head coaches or a fired general manager, also have let eight front-office employees go in what Broncos chief operating officer Joe Ellis has called a "required" move in the team's current economy.

"I think that's exactly the point I was trying to make earlier," Goodell said. "When you have rising costs, the economics of owning and operating a team are extremely thin margins, extremely thin margins, and when you have an environment like we have right now with the economy and costs rising in certain areas, it has an impact."

Layoffs and downsizing, while usually not equal to what one free-agent signee might earn in a season, are uncommon in the NFL.

And when the Broncos, with decades of sellouts in their history, cut staff - the reductions including media relations director Paul Kirk and DenverBroncos.com managing editor Andrew Mason - it draws the attention of other franchises.

NFL Films, which long has chronicled every game for the league, laid off 21 people last month. Some in the league expect other franchises to take similar measures in the coming months.

Goodell and Broncos owner Pat Bowlen have explained away such downsizing, in part, because of a sagging economy on all fronts and the league's current labor deal, signed two years ago, which gives players about 60 percent of NFL revenues, an all-time high.

Owners will have a chance to opt out of the current agreement in November, which would make 2010 the final year of the deal.

"The problem really is the players are getting too big a slice of the pie, so we're having to cut back in some other areas . . . ," Bowlen said. "But the decisions that were made with the staff were made for varying reasons, not all necessarily just economic."

NFL Players Association executive director Gene Upshaw answered with his own strong words earlier this year, saying: "I just don't want the owners to believe that somehow there is a Santa Claus. We're getting 60 percent of the revenues when it's all said and done, and we're not giving any of it back. . . . I think they have to learn to survive on their 40 percent."

Upshaw consistently has maintained the owners could alleviate some of their own difficulties by sharing more revenues between big- and small-market teams.

"They don't like paying (the players), but they really hate paying each other," Upshaw said.

Said Goodell: "I think we knew the economics would change significantly in this deal, that the pendulum would swing very much in favor of the players. I don't think anyone would say that they knew it would swing as significantly as it has. I'm also not sure anyone could have anticipated the current environment that we have right now with the economy."

The Broncos cited rising costs earlier this year when they raised ticket prices 3-10 percent, the seventh time the team has raised prices on at least some of their tickets since winning the Super Bowl to close the 1998 season.

"Certainly, none of us are as healthy as we want to be because player costs are so high," Bowlen said. "Ask any owner right now and they would give you the same answer. The salary cap, the amount of money going to the players in the current system is significantly higher than it was."

The league's salary cap was $85.5 million per team in 2005 compared with $116 million for the upcoming season. In the first year of the salary cap, in 1994, it was just less than $35 million per team.

Goodell also has been pushing for teams to eliminate some of their debt in the coming years.

• March 31, 2008

  6:07 p.m.

  Suggest removal

  joeblow writes:

  Pat Bowlen has a way of saying things in such a way as to gather the least amount of sympathy. As a result, he gets none of mine.
  He got a damn free stadium from taxpayers! He gets all the revenue from it, too! Not too bad for a 'man of the people.'
  Prior to sticking his foot in his mouth at the owner's meeting, he lays off eight schmoes from his Broncos payroll, staffers who didn't make a combined salary that would pay for a practice squad player.
  Screw Pat Bowlen! Let him know the joy of getting screwed. He's certainly well schooled in doing it to taxpayers---and anyone else who gets in his way.
  Remember the guy who stood on the sidelines in a fur coat? Yeah, that was ol' Pat. It was his way of telling the great unwashed that he wasn't one.
  Bronco fans, don't kid yourself. Pat Bowlen has no use for you, though he loves your money. Remember how much he loved Al Wilson? He loved him so much that he sold his contract to the New York Giants knowing Wilson had a neck injury, was damaged goods and would only be costing him money. He didn't care about Wilson, either.
  Let Bowlen stew in his own ill-got juices, along with his man-crush, Weasle Face Shanahan.

• March 31, 2008

  6:28 p.m.

  Suggest removal

  areader writes:

  I belive that Pat is responsible to the bed he now lays in. I wasn;t the one offering multi-million $ deals to players for all of these years. So Sorry Pat. Cry somewhere else.

• March 31, 2008

  7:43 p.m.

  Suggest removal

  broncofanatic1987 writes:

  The owners never should have given the players more than 40%. That was just stupid on their part. Now they're going to have to force a strike by the players after the 2010 season to correct the problem, either that or lock the players out. Whoever heard of a business where the employees get 60% of the revenue? That makes no sense. They should have known that they were doomed for failure the moment the deal was even proposed.

• March 31, 2008

  7:57 p.m.

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  r8rh8r writes:

  "Said Goodell: 'I think we knew the economics would change significantly in this deal, that the pendulum would swing very much in favor of the players.'"

  Then why did you put your John Hancock on the agreement, smart guys??

• March 31, 2008

  8 p.m.

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  Jaeks75 writes:

  I agree. If this was 1997 Pat would have kept Al Wilson. But the new agreement has forced him to be more business savy and cut throat. It is not his personality.We all know how concusions and neck injuries pan out. He was the heart of the team but Pat looked at it from a money vs. production standpoint. Personally, I think it is Shanahan's blunders in free agency and the draft that put them in this position. Mike always takes the position he needs in the draft and therefore winds up overpaying a guy that should not have gone so high. There are so many better players in the draft then the O.Ts we are looking at, but Mike needs a lineman. When will Pat step in and force him to take the best talent on the board? It always works out better. Example- Adrian Pederson!!!

• March 31, 2008

  9:04 p.m.

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  myerda00 writes:

  First off, Goodell did not sign the last agreement.
  Now we know why the Broncos are trimming payroll and not signing big payday players (they did not work out anyway). Broncos look like they will be financially OK by the lockout time.
  After 2010, the cap should be $95 mil and the sharing will be 50%
  OR the players will be locked out. Upshaw will have his hands full this time. BTW, will Upshaw trim his $1.4 mil salary, I do not think so.

• March 31, 2008

  9:41 p.m.

  Suggest removal

  OpenYourEyes writes:

  Anyone remember my prediction last week when I said they would blame it on the economy? It's the most infuriating point with the idiot voters who chose to donate their money to a rich guy and his overpriced kids playing a child's game- "but what about us being entertained on Sunday's for 16 weeks?" Idiocy, plain and simple. Now, the rich guy isn't making enough, and everyone cries foul because he let's a good citizen like Elam go, then says player's are making too much. Don't forget people, it's a business you are so attached to. And there is no business in the world that is interested in anything other than making money - your money.

• March 31, 2008

  11:07 p.m.

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  bxwatso writes:

  Of all the stupid wasteful government boondoggles, a taxpayer funded football stadium is absolutely the most shameful. It gets used a small handful of times per year and benefits multi-millionaire playboys and miscreants.

  Worst of all, the Broncos have absolutely stunk up the league since getting the stadium. It's like they are thumbing their noses at the million people who pay for this shrine for a few thousand people to worship a bunch of under achieving jocks.

  I bet Mr. Shannahan didn't have the nerve to build a $18MM mansion until a few years after he conned Denver into forking over a $200MM subsidy to a private, for profit corporation.

• March 31, 2008

  11:34 p.m.

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  DenverGold writes:

  I used to go to the stadium to watch the NFL games now I just sit in front of the TV and watch in my own comfort. After the games are over I can do other things. If things get so bad that there is a STRIKE or LOCKOUT...I've got other things I can do...pro football will not get one more dollar out of me any time soon. Gone are the fun days of playing the game for sport...it should now be the NBFL as "B" for Business. Maybe it's a good thing that the question may soon be..."do I buy football tickets or save my money for the real essentials...gas and food.

• April 1, 2008

  5:23 a.m.

  Suggest removal

  Bronco6 writes:

  B_ _ _ _, B _ _ _ _, B_ _ _ _, thats all you guys do, you could live in Cleveland, and not have a team for 8 years... I'm sick of hearing you all B _ _ _ _ ing.. Enjoy the Team you have, for next year, it might not be here! ;-) A true Bronco Fan ! Gooooo Broncos!

• April 1, 2008

  6:10 a.m.

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  danglybanging writes:

  Amen!! Brother Amen!!

  Go BRONCOS!

• April 1, 2008

  6:50 a.m.

  Suggest removal

  rockiefan888 writes:

  Bowlen is going to have to explain this economy thing a bit better to me. It seems that the stadium is still sold out every weekend. There seems to be no shortage of lines for the $8 beer. So where exactly is the ecomonic downturn hurting him. They signed a HUGE record breaking broadcast rights package a couple of years ago. I'm just confused what exactly has changed in the financial picture. It is too easy to just blame the "economy" as a whole. I don't buy it. What has changed Mr. Bowlen???

• April 1, 2008

  7:36 a.m.

  Suggest removal

  DeimosJB writes:

  What's with the complaining? Denver just passed Referendums A-I, which means at least 50% of you have no problem providing subsidies for private entities. If you're willing to subsidize entities such as Boettcher Concert Hall (because the average Denverite attends symphonies?) the Bottanical Garden (again, is this something all Denverites really need to be paying for?) and the Denver Museum of Nature and Science, which are used by only a portion of the population, why then do you have problems subsidizing Bowlen, who provides a product used by many more people?

  Granted, it would be a lot better if the people who used these facilities were the ones paying for them, but based on the latest voting results, that's not the way Denver works. I find it strange that people would now complain about subsidizing, when they just voted in the same principle 4 months ago.

• April 1, 2008

  7:53 a.m.

  Suggest removal

  rogerramjet writes:

  I have to laugh when Pat Bowlen talks about thin margins. His margins are thin because Shanny has been a poor talent evaluator. They have to overpay for veterans that don't always pan out, and they have not always given wisely to their own players.

  Giving millions to Griese and Plummer only to cut them--and eat the remaining signing bonuses costs money. How much is Javon Walker's cap number this year? Last year he was our savior this year he's a $6 million dollar cap hit.

  I wish Bowlen and Shanny would wise up and bring in a solid draft guy like Ruskell in Seattle, when Holmy found out he was going to be fired or give up his GM duty. Since then Seattle has been a very good team and had awesome drafts... Shanny step aside and coach, because that is what you are good at!

• April 1, 2008

  8:57 a.m.

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  not2serious writes:

  Go Nuggets!

• April 1, 2008

  9:06 a.m.

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  MikeaLoeb writes:

  There sure is a lot of anger towards Pat Bowlen and the Broncos. There's a lot of things that my taxes go to that I don't agree with. The stadium, however, is something that a majority of us did agree with. Maybe your animosity should be aimed at the voters, i.e. I'm not mad at Ken Salazar, I'm mad at the dummies who voted for him.

  Pat Bowlen has a responsibility to do what is necessary to cut costs while still putting a competitive product on the field. Apparently, the lay offs of the front office executives will help achieve both goals. I don't think Mr. Bowlen has to apologize to anyone for trying to make his business profitable. Nor does he have to apologize for retaining a valuable, loyal, proven employee in Mike Shanahan. I am a business executive who also has to make difficult decisions.

  You want to know what has changed in the economy that has negatively affected the Broncos profit margins? There is more to business than accumulated revenues. AGP is only a snapshot. Before you second guess Mr. Bowlen's business savy maybe you should take a look at the Broncos EBITDA. Please get back to after you have "wikipedia'd" that term.

• April 1, 2008

  9:34 a.m.

  Suggest removal

  dabumster writes:

  rockiefan888 is right. When has this economic squeeze occurred for the Broncos? Their season has been over for a few months and every game was a sell out. I'm sure they have received and cashed all their mega network TV checks. Maybe they haven't sold as many T-shirts and jersey's this winter but that has more to do with their horrible performance on the field than the slowing economy.

  Personally, I like Bowlen. I think he is one of the better owners in sports. However, I'm not into listening to anyone connected with pro sports whining about economics.

• April 1, 2008

  9:52 a.m.

  Suggest removal

  RickyLee writes:

  Thin margins...I wonder why?
  Could it be the players are ridiculously overpaid....for
  playing a GAME?!?

• April 1, 2008

  10:23 a.m.

  Suggest removal

  SheikYurBooty writes:

  Is there anytihng we can do to help? Can we put a toll on I-25 and I-70 with the proceeds going to the team? How about an entry/departure tax on DIA passengers? Or we could raise the state income tax - it's withheld automatically so that would be totally painless - definitely worth it.

  GO BRONCOS!!!!!

• April 1, 2008

  11:27 a.m.

  Suggest removal

  Contempt_for_Texas writes:

  Funny that just last week there was an article about Shannahan building a $30 million dollar house. Maybe the coaches need to give up a little too.

• April 1, 2008

  11:31 a.m.

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  kmeissner writes:

  DenverGold... you are still giving money to the Broncos, even if you are just watching them on TV. It's called ratings and you better believe they get a chunk of that.

  If you so called "fans" don't like our team, stop watching them. It's as easy as that.

  Bronco6 and danglybanging.... right on!!! The Broncos need real fans who know that there will be ups and downs. No team in HISTORY has been on the top their whole existence. I'm pretty sure our winning % is higher than most teams. Just because we haven't won a Super Bowl in a while doesn't mean they aren't entertaining to watch.

• April 1, 2008

  11:35 a.m.

  Suggest removal

  cbbuff writes:

  The Broncos EBITA was $15.9M in 2007. Most importantly, The Broncos are worth $1B, $920M more than Bowlen paid for the club in 1984 ($78M). So complaining about finances is not going sit well with many fans.

  That said, Mr. Bowlen is running a business, and does not have to apologize for trying to make money. But it does change a bit when the public has given him an asset worth $400M. Selling out the stadium since 1970 is also a consideration.

  At the end of the day he needs to run his business however he sees fit, but he needs to understand that griping about thin margins will not garner sympathy any more than Latrell Spreewell complaining about having to feed his children.

• April 1, 2008

  12:22 p.m.

  Suggest removal

  SheikYurBooty writes:

  Contempt - good point! Why should Shanahan have to suffer the indignity of a mere $30,000,000 house? Surely he deserves better. As Bronco fans, we should all be embarrassed for him. Perhaps we can pass the hat at the next home game so that Mike can live in the style he deserves.

• April 1, 2008

  12:26 p.m.

  Suggest removal

  Dan2 writes:

  Statistically speaking, the Broncos are middle of the pack when it comes to winning and losing. They have a winning percentage of .529, good for 11th all time. This is over-all including playoffs. The teams ahead of the Bronco's in winning tradition are:

  01. Dallas Cowboys
  02. Miami Dolphins
  03. Chicago Bears
  04. Oakland Raiders
  05. Green Bay Packers
  06. Cleveland Browns
  07. San Francisco 49ers
  08. Minnesota Vikings
  09. New York Giants
  10. Jacksonville Jaguars

• April 1, 2008

  12:40 p.m.

  Suggest removal

  ShowMe writes:

  2010 lock out? Maybe we can get replacement players and be competitive. Is Keanu Reeves available?

• April 1, 2008

  2:15 p.m.

  Suggest removal

  RickyLee writes:

  The NFL can drop off the face of the earth for all I care.

• April 1, 2008

  4:51 p.m.

  Suggest removal

  Shaupeen writes:

  How can anyone in broncoland sleep now that the dreaded raiders are well above them in all-time winning percentage?!@!?

• April 1, 2008

  8:56 p.m.

  Suggest removal

  DenverGold writes:

  Hey kmiessner...first off, I NEVER said I watch the Broncos on TV..I said I watched NFL football on TV. I used to go to the stadium and watch the games when the stadium was known as solely as Mile High Stadium and before that Bears Stadium. I am not paying a dime for "ratings". I am more inclined to be a booster of the CU Buffalos now than the Denver Broncos...only because college football is still more intune with the fans who support it.
  When Pro Football gets back to the mentality of college football then perhaps I'll consider paying for a ticket again.

• April 2, 2008

  1:34 a.m.

  Suggest removal

  vonnie68 writes:

  MikeaLoeb...

  "Pat Bowlen has a responsibility to do what is necessary to cut costs while still putting a competitive product on the field. Apparently, the lay offs of the front office executives will help achieve both goals. I don't think Mr. Bowlen has to apologize to anyone for trying to make his business profitable. Nor does he have to apologize for retaining a valuable, loyal, proven employee in Mike Shanahan."

  So...let me see if I understand correctly. Laying off 8 people, who's salaries don't amount to the pay for a practice team player, continuing to pay off guarantees for players who "just don't fit here", and then letting go of "valuable, loyal, proven employees" such as Jason Elam (who, while not always as accurate as he was STILL put 50% of the W's in our column last year) is going to make this team more profitable? Last time I checked replacing proven parts for cheap ones, in ANY product, only led to the overall product being cheapened....not more profitable.

  I don't pretend to understand all of the ins and outs of the NFL ownership business, but I do understand hard business decisions that lead to layoffs. I also understand personality differences that can't be overcome and sometimes lead to people being fired. I even understand weighing the money that would be spent on a player against the likelihood of that player staying healthy and beneficial to the team. But there is nothing that I understand about the way that Mr. Bowlen so callously ignores where all of his money comes from. Without the fans, this franchise would be nothing but a high school team supported by the parents of the kids....and a few people who just like watching football. We buy the goods. We pay for the tickets. We eat and drink the crap at the field. We also pay for the stadium (which I did NOT support), the salaries (which are inflated, but they agreed to it) AND his "golden boy"'s multimillion dollar mansion (which most of us can only dream about); all the while listening to him whine about "the economy". That $1B dollar commodity that he owns is his, yes...and he can do whatever he sees fit with it. But to ignore that it was built on the backs of the every day joe schmo who has gas prices, increased food costs and their OWN mortgage to worry about...but still loves this team...is not going to entice cartwheels or crocodile tears from any of them.

  I, for one, will ALWAYS support the Broncos in whatever way possible. But I cannot and WILL NOT support a man who makes his living taking my hard earned dollars in one hand, callously waving me off with the other, pocketing enough money to pay for my kids AND grandkids to go to college, while whining that he still needs more.