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Kraft, Ross have concerns about another economic downturn

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It’s widely believed, as Mike Freeman of CBSSports.com recently explained, that Patriots owner Robert Kraft has emerged as a much-needed Wellington Mara/Dan Rooney figure in the ongoing labor talks.  But that doesn’t mean Kraft is fully on board with the direction in which the process is heading.

Albert Breer of NFL Network reports that both Kraft and Dolphins owner Stephen Ross (who, from the standpoint of building bridges with players, has become the anti-Kraft) have concerns regarding the manner in which another economic downturn along with ever-rising unemployment could impact the next labor deal.

In our view, Kraft’s concerns possibly will result in what we’ll call a “true-down” — a device for reeling back the year-by-year salary cap in the event that performance comes in lower than projected.  It’s a fair goose-gander point; if the players want to share in the upside (as they should), then they should be required to share in the risk of the pie shrinking.  The current talks focus essentially on a guaranteed minimum (via a “pegged cap”) plus a share of the upside; perhaps to get a deal done, Kraft and the rest of the owners will seek, and receive, a commitment that a fully sliding scale will be used, both for better and for worse.

Breer also explains that the owners’ concerns are tied to specific issues, with some owners concerned about some points, and some owners concerned about others.  The goal as of Tuesday will be to get at least 24, and preferably all 32, behind a balanced deal that secures a win-win outcome for both parties.  If every owner loves every aspect of the deal, then it would be an agreement that the players eventually would come to hate.

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34 Responses to “Kraft, Ross have concerns about another economic downturn”
  1. jebdamone says: Jun 20, 2011 1:28 PM

    this seems absolutely reasonable. i am glad that someone like robert kraft is stepping up a little.

  2. twitter:Chapman_Jamie says: Jun 20, 2011 1:32 PM

    “It’s a fair goose-gander point; if the players want to share in the upside (as they should), then they should be required to share in the risk of the pie shrinking.”

    Smartest thing ever said on this site. But the sad thing is, the players don’t want any part of things should they get bad. They just want to take in all the rewards while risking very little. If they refuse to agree to something like this, their “partner” argument can be flushed down the toilet.

  3. oldbrowndawg says: Jun 20, 2011 1:34 PM

    Kraft is making WAY too much sense for the likes of D Smith and his vaunted genii on the players’ side to agree to. Hopefully, some modicum of common sense will, indeed, prevail, but I still shudder to think what happens when the lawyers come back into the room!

  4. eagiants says: Jun 20, 2011 1:34 PM

    Tough to argue against that I would imagine. Good point by Mr. Kraft.

  5. ironhawk says: Jun 20, 2011 1:35 PM

    The economy is bad because billionaire company owners like himself, are saving money by cutting wages, employment, and spending. The economy is bad, unemployment is up, but most companies are doing better than ever and the rich executives are richer than ever. If he’s truly worried about the economy, than he needs to spend more money and start hiring people. But he won’t, because that would reduce his own personal profits.

  6. borg30 says: Jun 20, 2011 1:36 PM

    I agree with robert kraft, the players should share the risk as well in the “Economic Times”.

  7. SpartaChris says: Jun 20, 2011 1:39 PM

    One of the reasons why states like California are having so many fiscal problems is because deals with the public worker unions are made when times are good, but there is no mechanism for a decrease should the state receive less money. Instead, that burden is made worse by increasing taxes during a recession.

    The same principle applies here, and the players should absolutely agree to a true-down formula as well. It’s all well and good to make a lot of money when things are going well, but you need to share in the sacrifices when things don’t go as planned.

  8. dumbasdirt says: Jun 20, 2011 1:42 PM

    Even though the unemployment rate in Miami-Dade County is around 13% right now, Mr. Ross needs to stop predicting his team will go to the Super Bowl to try to sell more tickets and have a team that can win more than 1 home game. (Remember last season)?

    Also in these “talks” is either side talking about what to do about high ticket prices, high concession prices, and how much it costs to park just to go to a game?

    Oh wait. The players and the owners only care about themselves and not about us. How stupid of me to even think that someone gives a damn about the fans.

  9. 1historian says: Jun 20, 2011 1:44 PM

    In order for there to be another economic DOWNturn there has to have been an UPturn.

    January 20, 2009:

    Gasoline – $1.83 per gallon. Today – $3.75 per gallon. Up 104% – more than double.

    Unemployment 1/20/09 – 7.3%. Today 9.1% – +25%

    National Debt – 1/20/09 – $10.3 trillion. Today – $14.1 trillion. Up 35%.
    Let’s write that out – $14,100,000,000,000.
    That’s a lot of money.
    What UPturn were they talking about?

    Source – Meet The Press June 12, 2011.

    FYI – I used to be a semi-fan of Robert Kraft owing to the fact that he financed the stadium where the Patriots play. Then I was multidudinous pictures of him with his very special Donald Trump partying in RK’s suite. Turned me off BIG time.

    Yes – it’s his money and he can do whatever he pleases with it. It is also MY TV and I can either turn to another channel or turn it off or turn to another channel or walk the dog.

  10. jeffro33 says: Jun 20, 2011 1:46 PM

    Without actually knowing, I have to believe that the NFL is near recession-proof…

    I mean, how did the NFL do after the 2008 downturn??

    Pretty well from everything I’ve seen, even in Detroit where it hit the hardest…

  11. bunjy96 says: Jun 20, 2011 1:48 PM

    Had something like that been in the present CBA, (along with a rookie cap), don’t think we would be in this mess today.

    How could anyone ever expect there never would be a turn down in the economy.

    It has always happened and always will.

  12. joetoronto says: Jun 20, 2011 1:52 PM

    They have every right to be concerned, the American economy is poised for a face plant.

    I sincerely hope it doesn’t happen, but it looks brutal.

  13. TurdSandwich says: Jun 20, 2011 1:59 PM

    New headline: Billionaires who will always be billionaires worried about economic downturn, turn to extending fan misery to assure eternal fat pockets.

  14. twitter:Chapman_Jamie says: Jun 20, 2011 2:04 PM

    @1historian

    I love how you simply present facts and still someone gives you the thumbs down.

  15. 4gone says: Jun 20, 2011 2:06 PM

    If the players balk at sharing the bad with the good they have to realize that they are going to take an irreparable hit in public opinion.
    How could they expect a fan to relate to that stance?

  16. CKL says: Jun 20, 2011 2:09 PM

    ironhawk says: Jun 20, 2011 1:35 PM

    The economy is bad because billionaire company owners like himself, are saving money by cutting wages, employment, and spending. The economy is bad, unemployment is up, but most companies are doing better than ever and the rich executives are richer than ever. If he’s truly worried about the economy, than he needs to spend more money and start hiring people. But he won’t, because that would reduce his own personal profits.
    ____________________________________
    ?????????????????????????????????????
    Kraft hasn’t cut salary of a single staff person associated with the Pats AFAIK.
    The paper and packaging co he also runs, I have no idea…but I bet you don’t either.
    Most companies are doing better than ever huh? What company do you run that is?
    I don’t know of many private companies that are doing better now (profit margin wise) than they were 5 years ago but I will stand corrected if you run one/can give NFL owner run example.

  17. irchs1963 says: Jun 20, 2011 2:09 PM

    Pleased to see both Wellington Mara and Robert Kraft taking an active role in the ‘process’ of obtaining an agreement. I respect both Owners.

  18. thephantomstranger says: Jun 20, 2011 2:14 PM

    ironhawk says:
    Jun 20, 2011 1:35 PM
    The economy is bad because billionaire company owners like himself, are saving money by cutting wages, employment, and spending. The economy is bad, unemployment is up, but most companies are doing better than ever and the rich executives are richer than ever. If he’s truly worried about the economy, than he needs to spend more money and start hiring people. But he won’t, because that would reduce his own personal profits.
    _________________

    Did you write this just to get sane people going? You can’t possibly believe that the economy is bad because all the businesses decided to fire people and cut wages so they can make more money. Businesses make money by growing, not by shrinking. So the economy would be better if businesses just spent more money? If they had the money, they’d spend it! But guess where the money is? It’s being taxed at the highest corporate tax rate in the world to pay for your buddy’s $14.6 trillion dollar deficit! Cut taxes and make the tax rates permanent so companies can make long-term investments without fear that they won’t be able to afford them in the near future! That’s how they’re going to start spending money and hiring people!

  19. destructicus says: Jun 20, 2011 2:16 PM

    It’s funny how the theme of comments seem to be “Kraft is a genius for this” while simultaneously being “Ross is an idiot”.

    Keep in mind the following points related to Ross as an owner:

    -It’s not his fault that the team only won a single home game last year. He isn’t coach, GM, or Parcels. Likewise he trusted “football minds” to get the job done, and the team is on the upswing.

    -The whole Sparano fiasco happened because he wanted to improve his team’s chance of winning more home games, ignorant as his efforts were.

    -Since buying the majority shares of the Dolphins he has lost money because of the bad economy. It’s easy to imagine any one of us acting similarly when that is taken into account.

    I miss Wayne Huizenga too. But trust me… things could be much much worse in terms of ownership. Try being a Toronto Maple Leafs fan.

  20. comeonnowguys says: Jun 20, 2011 2:18 PM

    Sorry to burst your bubble there’s no such thing as “simply stating facts.” Especially if there’s even a hint of political slant (in this case, the reference date)

    But hey, what could be more fun than countless stories on the NFL lockout? Yet another political debate, only this time on a website spotlighting professional football!

    I imagine *that* is where there thumbs down are coming from. Take that junk back to the cable news sites.

  21. usmutts says: Jun 20, 2011 2:23 PM

    Well, 1historian didn’t get the thumbs-down because he quoted statistics. He got it because he said he was disgusted to see Kraft partying with Donald Trump, the idol of many who post on this site.

  22. micronin127 says: Jun 20, 2011 2:29 PM

    If they come to an agreement in short order, the point will become moot.

    They will give us football back. Not have to cancel any games. Compress an entire offseason into 2-3 weeks. And get the players into training camps.

    Then, they will be able to secure some very lucrative TV rights deals, and we’ll never worry about a ‘true down’ again.

    If on the other hand, they drag this out and start cancelling games, ‘true down’ or not the pie will shrink.

  23. tombrookshire says: Jun 20, 2011 2:35 PM

    So I guess the players will have to hire their own economists to predict economic ups and downs? I expect the owners to take a page out of Hollywood’s book and rig their books to show that successful films were actually financial flops. Players would be hard pressed to know whether or not owners were keeping two sets of books like Hollywood studios do to make profits look like loses. Jeff Lurie is a Hollywood producer and an owner, so he is well-positioned to show other owners how it’s done. The Eagles are among the the league’s most profitable teams because they pinch every penny.

  24. dolphinsrule65 says: Jun 20, 2011 2:55 PM

    It’s funny how the theme of comments seem to be “Kraft is a genius for this” while simultaneously being “Ross is an idiot”.

    As a season tix holder to the Phins, i agree completely; It is funny how EVERONE wanted HWH gone, well he is gone,kinda..owns 5%.
    Forbes projects the Dolphins lose over 10,000,000.00 per year. Ross paid 1.1 BILLION for the team and he is on the job,learning what it takes to be an owner of a team and he has had a few misteps on the way.EVER ONE one of you would have bitched he if did not chase the so called hottest coach of the month prospect! I personaly like Sparano and giving time, it will all come together.

  25. dolphinsrule65 says: Jun 20, 2011 2:56 PM

    I stand corrected: 7.7 million loss per year
    1-Yr Value Chg. 0%
    Ann. Value Chg.2 NA
    Debt/Value3 40%
    Revenue4 $247 mil
    Operating Income5 $-7.7 mil
    Player Expenses6 $164 mil
    Gate Receipts7 $62 mil

  26. bluestree says: Jun 20, 2011 3:26 PM

    “the players don’t want any part of things should they get bad. They just want to take in all the rewards while risking very little.”
    You mean besides brain damage or paralysis?
    Which players told you they don’t want any part of the risk? You seem to be a mindreader.

    ” I expect the owners to take a page out of Hollywood’s book and rig their books to show that successful films were actually financial flops.”

    Exactly. Kraft and Ross are pandering. Why else would they go straight to the media with this? The old CBA was based on splitting a percentage of revenue. So why are they concerned about sharing revenue that doesn’t come in? They don’t have to split what they don’t have.
    If revenue goes down so far that the clubs can’t make their operating budgets, then who cares? The league would be done.
    The owners want to do as much of this on pecentages as possible, because they keep the books. And they also have a track record of screwing the players (see lockout insurance).

  27. bluestree says: Jun 20, 2011 3:31 PM

    thephantomstranger and ironhawk:
    You are both wrong, and to a lesser extent both right, but both of you make statements that are factually innacurate.

  28. tombrookshire says: Jun 20, 2011 3:40 PM

    @thephantomstranger – your view of the economy is overly simplistic. The precipitating event was that banks and mortgage companies were fooling people into signing up for mortgages they couldn’t afford to pay. Then they bet that those mortgagees would eventually fail to pay their mortgages, called Credit Default Swaps. The inability to pay the mortgage caused the inevitable (and planned) institutional failures that led to the depression, that we have yet to emerge from, I don’t care what any economist says. Many of us who aren’t CEOs are living it everyday.

  29. thephantomstranger says: Jun 20, 2011 4:35 PM

    tombrookshire says:
    Jun 20, 2011 3:40 PM
    @thephantomstranger – your view of the economy is overly simplistic. The precipitating event was that banks and mortgage companies were fooling people into signing up for mortgages they couldn’t afford to pay. Then they bet that those mortgagees would eventually fail to pay their mortgages, called Credit Default Swaps. The inability to pay the mortgage caused the inevitable (and planned) institutional failures that led to the depression, that we have yet to emerge from, I don’t care what any economist says. Many of us who aren’t CEOs are living it everyday.
    _______________

    I was not delivering a treatise on how the economy got to where it is, I was only pointing out how wrong ironhawk is about the cause of it being businesses just trying to be greedy. It would help the economy for businesses to invest more and hire people, but they aren’t going to do it if it doesn’t make sense. With the uncertain tax rates, they won’t take the risk.

    My only disagreement with what you say is that the government pressured banks and mortgage lenders to lend money to people who were very bad risks so that more people could own homes.

  30. tombrookshire says: Jun 20, 2011 4:54 PM

    @thephantomstranger – no my friend, it was just the opposite. Government is the instrument of Wall Street, not the other way around. AT the beginning of the Bush administration, investment bankers entered government as cabinet ministers and quickly began the deconstruction of regulations that were designed to safeguard us from free-wheeling gamblers who were bent on crashing the economy and then scooping up what remained for pennies on a dollar. Read about the central bank-related economic crashes, recesssions and depressions, all coming from the same two sources: Wall Street private bankers and the Federal Reserve working in partnership.

  31. pocketsstraight says: Jun 20, 2011 5:01 PM

    This is real easy.

    Why don’t they split the pot 50/50. That way the players share in the upside, the owners get to spread the pain on the downside….

    Well that might be too simple, why don’t the owners take $1 Billion off the top for operating expenses and paying their children. Then split the remaining pie 60/40 in favor of the players.

  32. thephantomstranger says: Jun 20, 2011 5:08 PM

    That’s right, big business is our enemy and big government is the only thing that can protect us from it. Bill Clinton, Jamie Gorelick, Fannie Mae, Freddie Mac, Barney Frank, and Chris Dodd had nothing to do with it.

  33. bunjy96 says: Jun 20, 2011 5:17 PM

    twitter:Chapman_Jamie says: Jun 20, 2011 2:04 PM

    @1historian

    I love how you simply present facts and still someone gives you the thumbs down.

    ****

    My thumbs down was because he obviously was putting down the Patriots, with no real reason explained.

    Who can possibly fault Kraft for paying for his own stadium. All owners should do it, not the taxpayers!

  34. nepatsfan83 says: Jun 20, 2011 6:27 PM

    This is the first time in 90+ days of the lockout that I have finally heard a “true down”. All I have been hearing is the players want a true up, but if the money doesn’t project and comes in less, will the players be willing to take a cut. I am so happy to hear this, because without it, if the #’s don’t come in, guess where the owners will have to make up for it, from the fans!! I don’t think the owners are being unrealistic with this. As a Pats fan I am happy to see Mr. Kraft leading the way here. He is a true business person that understands how things work. He is a self made man unlike a lot of these other owners who inherited their fortunes.

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