NFL Owners, Amid Posh Setting, Warned to Hold That Bottom Line

In this desert enclave of zillionaires and their playmates, flawless palms accent broad avenues bearing the names of Hope and Ford and Sinatra.

It’s an ideal spot for contemplating the number of zeroes in a figure like $1 billion, a task that momentarily distracted one of pro football’s heavy thinkers Wednesday.

Jack Donlan, one of the National Football League’s ace bargainers, was musing about television money, of which more than $2 billion flowed onto league ledger books under the terms of the current deal with the three networks.

Somehow, despite all those zeroes, Donlan said the money may not be sufficient to keep more than half the NFL owners on the profit side with their teams in 1986.

At first blush, it is mind-boggling that the NFL could be having problems with its cash flow. At a time when the national economy is flourishing, how is it that pro football is worried about paying the bills?

To puzzle over such matters, more than 200 NFL executives have repaired to a luxury hotel not far from the fabled estate of publishing magnate Walter Annenberg, who entertains presidents in spare moments.

The atmosphere is unhurried as pro football’s elite move from meeting to meeting down tiled hallways cooled by ceiling fans.

While the NFL ponders revenue shortages, instant replays and radio-equipped helmets, the tab for a week of brainstorming in the desert should come to about $300,000, counting rooms, meals and transportation.

Caution was the byword as the NFL toyed with checkbook and calculator.

Seven teams lost money in 1985 and as many as 14 may be in the red this year, according to Donlan, executive director of the NFL Management Council.

“I don’t want to be a prophet of gloom and doom,” Donlan said, “and I’m not suggesting that we’re at a crisis stage. But we must get a better handle on costs, because I don’t see any important new sources of revenue.”

It should be remembered that the NFL is in the early stages of negotiating a new contract with the TV networks that would take effect in 1987. The league is in the final year of a TV package worth $2.1 billion over five years and, because of what Donlan admitted was poor negotiating with players, finds itself strapped with high costs and relatively fixed income.

The average team spent $15.3 million on player salaries and bonuses last year and another $10 million in other expenses, including training camp, transportation and hotels, Donlan said.

Player costs are expected to increase to an average of $17.5 million a team this year, he said.

The NFL’s television package will reward each team with enough money to pay salaries and bonuses this year.

But some teams are losing money, Donlan said, because ticket revenue is not adequate to meet other expenses.

And the problem may be aggravated if the TV networks succeed in their avowed goal of holding down the size of the next contract.

Assuming that player salaries increase at an annual rate of 15% begining in 1987, the 28 NFL teams would need $3.5 billion in the next five years to meet player expenses, Donlan said.

Will the new TV deal be worth $3.5 billion?

Art Modell of the Cleveland Browns, who will negotiate the new TV deal along with Commissioner Pete Rozelle, declined to speculate.

“I don’t want to engage in saber-rattling,” Modell said. “This is not a time of crisis. But we do have to pay attention to costs so that we don’t develop a crisis.”

Of course, the NFL wouldn’t be in a pinch if teams had done a better job of holding down salaries, as even Donlan acknowledged.

Effective bargaining by agents and competition from the United States Football League have driven up salaries, he said.

Donlan then cited an actual, though extreme, example of a performance incentive in which a quality running back received a bonus of $10,000 for each game in which he rushed for at least three yards.

To protect the general manager who agreed to that clause, Donlan declined to name the runner in question. “But you know what he says in the huddle before the first play--this is going to be a run,” Donlan said.

A run worth a lot of zeroes.