Revenue-sharing among teams is causing a squabble. The Pats' Robert Kraft is open to helping franchises working hard in their markets, but not those who aren't.

01:00 AM EST on Sunday, March 20, 2005

BY TOM E. CURRAN
Journal Sports Writer

The 2004-05 NHL season is on ice. Major League Baseball didn't bounce back from its damaging 1994 work stoppage until a chemically enhanced, late '90s resurgence. The desperation to reclaim the fanbase played a role in MLB ignoring the issues that the league and its players are currently answering for in front of Congress. And the scar from the 1998 NBA lockout is still visible.

Meanwhile, the good ship NFL just keeps sailing along. But rougher seas loom. The league's collective bargaining agreement with the player's union expires in 2008. If it is not extended, the 2007 season won't have a salary cap in effect, which would cause salary chaos.

Getting an agreement on the CBA isn't just a matter of getting the players and the league to reach an accord. Before that can happen, the owners have to hammer out what they will propose.

Work on that will continue this week at the NFL's Owner's Meetings in Maui, Hawaii.

"It's been a partnership," Patriots owner Robert Kraft said of the relationship with the players and their union. "People like

myself go out and take on a lot of debt because we believe in that partnership. If one side gets too greedy then it destroys the partnership. And I believe that in any business transaction."

The sticking points in negotiations aren't very complex. Currently, players receive about 65 percent of the league's designated gross revenues (DGR) which includes gate receipts, television, merchandise, etc. But players receive no slice of the league's excluded designated gross revenues (EDGR), which include things like luxury boxes, parking and local television deals.

The players want all revenues to be included in the pot. Not all of the owners do. The players also want a greater share of the pot than they currently have. Few, if any, owners want that.

"With new stadiums, that growth of EDGR has been rapid," Kraft said. "The union would like an equal piece of all the revenues and I think that's sound because it makes accounting clear and simpler. If we do it in a way where we take the percentage (the union receives) down . . . if they get total revenues . . . they'll get 64, 65 percent, then they'll get total revenue included."

Some franchises, such as the Patriots, Cowboys and Redskins, are extremely profitable in the EDGR categories. They have lucrative stadiums, good local TV deals, and work their markets well. As a result, the overall percentage they pay to the players association is smaller than a team like, say, Indianapolis or Arizona. For teams like that, the $85.5-million salary cap is about 70 percent of the money they gross. For more profitable teams, the percentage is closer to 40 percent.

And this is where the owners are having a squabble among themselves.

"I believe in revenue sharing and helping those teams who work hard in their markets," said Kraft. "There is discussion about whether higher-revenue teams should be taxed and that that money should be shared with lower-revenue teams. I don't believe that will fly. We have a lot of debt. We built a stadium on our own. I didn't take that risk to take a hunk off the top and give it to people who aren't working their markets hard.

"Every team has the ability to field a competitive team. Green Bay and Kansas City get the same revenue pool as the Patriots. Television represents 70 percent of all revenue. (Gate receipts) are shared. If people want to get their gates up, they need to work their market hard. In 1994, we were 28th out of 28 teams in total revenue. In four years we were in the first quartile. Anyone privileged to have an NFL team can have the same thing. There's $40 million (in TV money) distributed between them and some (franchises) sit back and don't work their market hard. I don't care about making them more profitable. I want them to field competitive teams."

Meanwhile, impact from the CBA uncertainty is already being felt this offseason. Currently, clubs can't spread guaranteed bonus money over more than five contract years because the CBA's expiration is near. As a result, big-money, six-year deals, such as the one Pats quarterback Tom Brady will soon get, are being hung up because when a $25-million bonus is spread over five years, for instance, it's a lot more expensive each year than if it were spread over six.

This hasn't been a big issue yet, but it will become more discussed after the draft when first-round picks see their guaranteed money making little if any jump from what players made last year.

"It's very unlikely that a first-round pick this year is going to get as much (guaranteed money) as last year," said agent Joe Linta. "That's a nightmare between management and the union. If you're a guy who represents a first-round pick, now you'll have to explain to the guy why he's making less than last year's player drafted in the same spot got."

NFL spokesman Greg Aiello said earlier this week that there's no meeting scheduled between the players and owners.

"The union has adopted a very aggressive economic position," said Aiello. "We've moved toward one key structural demand that player shares be based on total revenues as opposed to designated revenues, but we're still far apart on percentage. We're not optimistic. We're not pessimistic, but we know there's a long way to go and to date progress has been slow."

Asked if the NHL situation serves as a cautionary tale for the NFL, Aiello said: "It could. It's something that the owners are discussing and taking very seriously. This is our toughest negotiation we've had since 1992 but our goal is to continue the labor peace."