I’m not sure what to do with this story because it’s so sketchily reported, but it’s also so damn weird that I can’t let it pass unremarked: Dan Patrick has said on his nationally syndicated radio show that with the cost of Los Angeles Rams owner Stan Kroenke’s new stadium having soared from $2.5 billion to $5 billion, the NFL is trying to use collective bargaining talks with the union to find a way to make the players help pay for it, sorta:
“The league is proposing that maybe they give players 49 percent of the revenue, but they want to use the extra money they get—a percentage [point] is about $150 million I was told—they want the players to then help finance the Los Angeles stadium. We’ll give you 49 percent of the revenue, but we want to use 2 percent of that revenue—so $300 million for the next couple years—to help finance the stadium.”
If you want to watch video of the relevant section of the radio show, as one does, it’s here:
DP heard from a source that old school owners don't want 17 games and they're having problems with LA stadium pic.twitter.com/LDK3PIBezj
— Dan Patrick Show (@dpshow) October 16, 2019
The backdrop to all this is that NFL player payrolls are currently set at 47% of league revenues, and the players’ union wants to bump that up to perhaps 50%, but in exchange the owners want to play a longer regular season. If Patrick’s source is to be believed, though, there’s a proposal on the table to require that for the first couple of years, the players’ additional cut would be diverted to pay for Kroenke’s Folly, or at least a $300 million sliver of it.
This isn’t quite “getting players to pay for the Rams stadium,” but more like “okay, we’ll give you an additional couple percent of revenues like you’re asking for, but we want to keep it the first couple of years because man, that stadium sure is turning out to be expensive.” Which is effectively the same as giving the players a slightly smaller cut, or giving them a 49% cut but delaying its start for a couple of years, or any of a number of other asks that then reduce their ability to demand other things, like a longer season schedule.
Why would the other 31 NFL owners want to take a hard-won collective bargaining concession and use it to subsidize the Rams’ new stadium? It’s almost certainly not because it’s their only way of raising cash: Both the NFL and Kroenke have so much money flowing through their hands that skimming off $300 million (or using the revenue as collateral to borrow $300 million) would be trivially easy. Besides, even if the L.A. stadium is wildly over budget and in danger of never earning back its cost, that just hurts Kroenke, not the rest of the league — other owners will still get the same cut of any stadium revenue even if the construction debt hits $5 trillion — so what the hell?
Right now all we have to go on is Patrick’s statement, attributed to an unnamed source, so it’s pretty much at the wild rumor stage of verification. But if there’s actually been any attempt to insert L.A. stadium funding into league-wide collective bargaining talks, something very, very odd is going on, so it’s worth keeping an eye on.
UPDATE: A sharp-eyed reader (see comments below) points out that an NFL.com article from earlier this month noted: “Sources say one important issue within a complicated economic discussion is how to divide revenue from the new SoFi Stadium in Inglewood, California, which will be home to the Rams and the Chargers. The roughly $5 billion price tag for the L.A. stadium project is much higher than others; by owners’ calculations, it also will bring in much more revenue than other stadiums and they want the new CBA to reflect that investment, while players have pushed back at the idea of altering the revenue-sharing calculation based on one project they had no role in approving.”
That would imply that the league is trying to argue that L.A. revenues shouldn’t really count toward the league salary cap, because they’re already committed to paying off that exorbitant price tag. Which I can see why they’d want to do that, but I can also see why the union would be responding: Hey, you’re the ones who set the cap based on gross revenues, if you’re not turning enough profit on your crazy-expensive stadium that’s not our problem.
It would also explain why the NFL labor negotiators are pushing this angle: It’s not that they’re really trying to help pay off Kroenke’s stadium debt, so much as they’re trying to carve out a bunch of Kroenke revenues and say “These don’t count.” You could actually make a decent case that all revenue sharing should be based on net revenues, not gross, but then you get into questions of net of what (owners’ failed real estate investments? Caribbean island getaways? massage parlor bills?), which would make for some tricky negotiations, as well as tricky audits down the line.