When the NFL approved a labor deal to which the NFLPA* hadn’t, and still hasn’t, agreed, the league surprisingly announced a new supplemental revenue sharing plan.
In hindsight, it shouldn’t be much of a surprise. With the salary floor rising to unprecedented heights, supplemental revenue sharing becomes more important than ever, given that all revenue — including unshared revenue — drives up the per-team salary cap. This necessarily forces low-revenue teams to devote a larger piece of their already lower earnings to player costs.
Per a source with knowledge of the details of the arrangement, the new supplemental revenue sharing plan includes a 10-percent tax on the “local revenue” of the highest-revenue teams. The money will be distributed to the lowest-revenue teams.
We haven’t yet gotten our eyeballs on the formula that determines the teams who’ll pay the tax — or the teams who’ll get the second half of the Robin Hood treatment.
We also haven’t seen the definition of “local revenue,” but it likely includes luxury suites, parking, and pretty much anything and everything other than ticket sales, TV money, all national sponsorships and media deals, and any sources of shared revenue.
The previous supplemental revenue sharing plan was funded by taking 40 percent of each team’s club seat sales and putting the money into a fund that serviced league-incurred stadium debt. The excess was distributed to low-revenue teams based on need.
The NFLPA* has objected, sort of, to the decision of the NFL to include revenue sharing in the approved deal. However, the NFLPA* had every opportunity to focus on this issue during negotiations, and the NFLPA* chose not to do so.