Meaning no disrespect to past and present bosses, but for the first time in, oh, ever, I just read a memo from beginning to end.
The author of this rare keeper was NFL commissioner Roger Goodell. The subject was how our national recession has infiltrated what had been considered the world’s most impenetrable economic model.
“I would like to be able to report that we are immune to the troubles around us,” Goodell wrote. “But we are not.”
The NFL will be cutting at least 10 to 15 percent of its employees from its offices in New York, Mount Laurel, N.J., and Los Angeles, or 110 to 165 people. Salaries are frozen through 2009. Projected expenses for next year will be slashed 20 percent.
No wonder the league is saying aloha to Hawaii as host of the Pro Bowl.
I didn’t know we were officially in a recession until Goodell said so in the memo. A mortgage crisis for those who weren’t locked in on a 30-year fix, yes. Rising unemployment rates, sure. Infuriating 401(k) statements, no doubt. But weren’t economists still debating the relative severity of the recession, if indeed the term “recession” applied at all?
Goodell ended all argument. Just two years ago, sports economist John Vrooman said, “the NFL is a perfect portfolio.” If the economy has brought woe to the NFL, then we’re all doomed. Doomed, I say!
“I don’t know about the league office, but the teams themselves are still in pretty good shape,” Vrooman said Friday.
Vrooman’s base is Vanderbilt University, where he might never have met quarterback Jay Cutler if not for the seriousness of finals week.
“Tell him ‘hi,’ ” Vrooman said. “And tell him I’m still waiting for him to show up at class.”
As for the NFL’s “perfect portfolio,” the league gets approximately 60 percent of its revenue from its TV contracts that don’t expire until 2011. These revenues are shared evenly among the 32 teams. Another 20 percent comes from the gate, again equally shared. The final 20 percent comes from venue revenues, which most significantly comes from premium seating, which is acquired through long-term leases.
“The league is so well-structured financially,” Vrooman said. “They don’t have any cost uncertainty because they have the salary cap. They don’t have any revenue uncertainty because they have a TV agreement that expires in three years. They have luxury suites and club suites leased for 10 years.
“In this case, the league is protected through time. By the time the TV contract comes up again, we’ll be out of this. That’s why I said they’re recession proof.”
Only the venue revenues are not shared, which is why eight teams playing in outdated stadiums — Buffalo, Minnesota, Atlanta, Jacksonville, San Francisco, Oakland, San Diego and New Orleans (Kansas City is renovating Arrowhead to add premium seating) — squawk about how Dallas, New England and the Broncos have built-in advantages.
The economy may be squeezing Pat Bowlen on a personal level, no thanks to his investment in the Arena League’s Colorado Crush. But one look at the aging stadiums in Oakland, San Diego and Kansas City suggests the Broncos are leading the AFC West in no small part to taxpayer-approved funding of Invesco Field at Mile High.
It’s true the 20 percent revenue from gate receipts is vulnerable in a sagging economy. There have been more no-shows at Invesco. But Vrooman said even in the Great Depression, the entertainment industry held up.
“In times like these when everybody is uncertain and afraid, I think you’ll see Bronco fans hold on to those season tickets,” he said.
NFL offices operate without a cap, or floor on salaries and expenses. They can be controlled as the league sees fit. The NFL Network and its virtual pay-per-view concept may have started at a bad time. But it’s a stretch to equate Goodell’s doomsday memo on office cutbacks to the overall state of the game.
“When you see the percentages of 60-20-20 and only 20 percent is really volatile, I think you can see that the nature of the NFL ‘recession’ is not as deep as somebody who has an entire portfolio on the line,” Vrooman said.
Maybe I should have given this memo the same respect as the others.
Mike Klis: 303-954-1055 or mklis@denverpost.com
At issue
Smith gets nod over Sparano
What. NFL coach of the year
Background. The award voted on by The Associated Press generally goes to coaches of teams that weren’t necessarily the best in a particular year, but the most improved. Vince Lombardi, perhaps the greatest coach ever, was only honored once, in 1959, when he turned the 1-10-1 Packers he inherited into 7-5. Occasionally, excellence is rewarded. In 1972 and 2007, Don Shula and Bill Belichick, respectively, could not be denied for guiding their teams to undefeated regular seasons.
Klis’ take. Most years, Baltimore’s John Harbaugh would be a slam dunk for turning the 5-11 Ravens into 9-4. But Harbaugh’s challenge was minor compared to the disasters awaiting Mike Smith in Atlanta and Tony Sparano in Miami. Smith took over a team decimated by the legal troubles of franchise quarterback Michael Vick and abrupt departure of coach Bobby Petrino. Yet the Falcons have gone from 4-12 to 8-5. Sparano has transformed the 1-15 Dolphins to 8-5. Belichick will also get some votes for losing Tom Brady, and Mike Shanahan, who has never won the award, will get consideration for losing everybody. But Smith is my pick, at least with three weeks remaining. Fair or not, I tend to give Bill Parcells, who is heading the Dolphins’ football operations, more credit than Sparano for Miami’s turnaround.
On the hot seat
Romo better put up
Who. Tony Romo, QB, Dallas Cowboys
When. 6:15 tonight vs. New York Giants
Why. Romo has never been a late-season quarterback. He is 0-2 in the playoffs. In regular-season games leading into December, his career totals are 67 TDs and 27 INTs. In December, he has 10 TDs and 16 picks. If he is to make a correction, he will have to do it against three of the league’s best defenses as the Cowboys finish against the Giants, Ravens and at the Eagles. Lose tonight and the Cowboys would be in group of four to six teams competing for the final NFC wild-card playoff spot with two games remaining.
Rise and fall
Vikings making move upward
ON THE RISE
1. Minnesota Vikings. Won six games by seven points or fewer. Bernard Berrian averaging 20.1 yards per catch.
2. Indianapolis Colts. Peyton Manning is gaining momentum for his third league MVP Award.
3. Carolina Panthers. In addition to Smash and Dash, Steve Smith averaging 130 receiving yards last three games.
LOSING MOMENTUM
1. New York Giants. Not only lost to Eagles, but lost RB Brandon Jacobs (knee), CB Aaron Ross (ankle) and Plaxico Burress (gunshot wound) in past few weeks.
2. St. Louis Rams. Worst Show on Turf: Rams have scored league-low 14 TDs in 13 games.
3. New York Jets. Brett Favre has 60.9 and 60.8 passer rating in back-to-back losses.
Rookie watch
Filling the Bills
Who. Leodis McKelvin, CB-KR, Bills
When. 11 a.m. today at the New York Jets
Why. Just before the Broncos took LT Ryan Clady with the No. 12 overall pick in this year’s draft, the Bills took McKelvin at No. 11. The former Troy University star was the first cornerback/returner taken, and he’s had a nice year. In back-to-back games in late November, he had a 98-yard touchdown kickoff return against Cleveland and returned one of his two interceptions against Kansas City for a touchdown. He will be facing Jets QB Brett Favre and his AFC-high 15 interceptions today.
