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SUPER BOWL XXII : A Game Most Everyone Lost : Strike and Lawsuits Leave Only Seven NFL Teams Making Money

January 25, 1988|JOHN CHERWA | Times Assistant Sports Editor

The National Football League players' strike of 1987, soon to be forgotten amid a week of Super Bowl hype, had a staggering impact on the league's financial picture.

Data obtained by The Times indicate that the strike cost the owners more than $104 million in potential income. The players' losses, all from unpaid salaries, total $84 million.

In addition, the strike, coupled with two costly lawsuits, left only 7 of 28 NFL teams as moneymakers. Every NFL team made less money in 1987 than in 1986.

The financial records of NFL teams are private, with the exception of the publicly held Green Bay Packers. Even team owners don't have access to each other's financial records. The information used by The Times is a compilation of published financial facts and internal reports of the NFL Management Council and the NFL Players Assn. When representatives from both the owners and players were asked about the findings, neither group disputed them.

Several other revealing facts emerged in the study:

--The four most profitable teams (Indianapolis, Miami, Minnesota and the Rams) have all changed stadiums in recent times. All the teams greatly improved their financial outlook by negotiating better deals at their new location.

--The two least profitable teams (New York Jets and the Raiders) have the two highest payrolls in the NFL. The third least profitable team (San Francisco) has the fourth-highest payroll, and the fourth least profitable team (Seattle) has the sixth-highest payroll.

--There are only eight teams with a better financial picture than the St. Louis Cardinals, a team awaiting league approval for a move to Phoenix. The Cardinals showed a loss of $1.2 million and, were it not for payments on two NFL lawsuits, would have turned a profit.

--Only 11 teams would have lost money were the NFL not responsible for a $30-million debt ($20 million in damages, $10 million in legal fees) from losing a lawsuit to the L.A. Coliseum Commission and $26 million in legal fees directly tied to the United States Football League lawsuit. The USFL was awarded $3 for its trouble in its suit against the NFL. The Raiders were the only team not aligned with the NFL in either suit and did not pay any of the $56 million. Instead, the costs were split 27 ways.

--Only 6 of the 28 teams would have lost money if, in addition to the lawsuits, the television networks had not requested a $40 million ($1.4 million per team) rebate for the strike games. The NFL must also give back $20 million next season toward meeting the total $60-million rebate.

--Los Angeles' two teams have a strikingly different financial picture. The Rams turned a profit of $1.2 million, while the Raiders lost almost $5.5 million. This can mostly be attributed to the lack of luxury boxes and a cut of concessions for the Raiders. Of course, poor on-field performances kept each team's attendance down.

Al LoCasale, executive assistant of the Raiders, when asked about his team's grim finances this season said: "We are not a public corporation. Our financial dealings are our own." John Shaw, vice president of finance for the Rams, does not talk to the media.

These projected losses league-wide are strictly on paper and do not take tax incentives into consideration. Most of the team owners have other businesses and large financial bases. These losses are not an indication that any individual team or the league is in any financial trouble.

In fact, seven owners were listed in Forbes magazine in 1987 as among the richest individuals in America. Jack Kent Cooke, owner of the Washington Redskins, and W.C. Ford of the Detroit Lions have a net worth of more than $1 billion.

However, one doesn't own an NFL team by misjudging potential losses. But, the immediate financial impact caused by the strike was greater than either the owners or players anticipated. The money the owners saved by not paying salaries of union players was almost equal to the amount of money the strike teams and expanded post-strike rosters cost.

The strike teams had added transportation and housing costs that regular teams would not have received. When the 24-day strike was over, the NFL teams expanded from 45- to 50-player rosters, adding significant costs.

The $104-million loss by the owners from the strike was based on their estimated 1986 gate earnings ($306 million) and a projected increase of 8% to $330 million. Their actual gate in 1987 was $286 million, resulting in a $44-million loss. The television rebate of $60 million pushed their losses to $104 million.

The $84 million lost by the players was simply their collective salaries for four games.

"Both the owners and players are going to feel the financial impact for several more years," said Gene Upshaw, executive director of the NFLPA.

"The long-range effect is what we have to judge. They (the owners) turned off more people (to pro football) than in the past. It will take several years to determine how much this hurt us."

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