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SBJ/November 10 - 16, 2003/Finance
NFL owners face OT sessions as deadline looms on Trust
Published November 10, 2003
For only the second time in league history, NFL owners next month will formally gather outside their normal rotation of meetings in order to discuss the looming expiration of the league's commercial business model.
The 32 team owners can attend meetings Dec. 4 in Denver and/or Dec. 11 in Atlanta. No votes will occur at these regional congregations, which are instead designed to begin to build a consensus for how the league's commercial businesses will operate after March.
The only other time the team owners met outside their regularly scheduled sequence of meetings was two years ago, to debate divisional realignment.
Now the commercial and merchandise business, or NFL Trust, as it is called, is the new spark for the extraordinary assemblies.
"Unlike all the other decisions the NFL makes, this does not lend itself to a committee, where a committee gets together, makes a recommendation and the other owners vote on it," said sports consultant Marc Ganis, who is close to several teams.
At the Chicago meetings last month, the owners made slim progress on reaching a consensus on how the 40-year-old Trust should be continued. With the next owners meetings scheduled for late March, when the Trust expires, the owners essentially needed more time together.
The NFL's success has been in part a result of selling sponsorship and media commercial rights on a collective basis and dividing the proceeds evenly.
But over the last few years the league has allowed teams to sell once off-limit sponsorship categories, and now the question is whether that trend will continue with the Trust renewal.
Some clubs are worried that the growing revenue disparity between teams in new and older stadiums could be exacerbated if additional sponsorship rights, particularly sideline deals, are granted to the individual clubs.
Also, clubs in low-density markets would like to lift the prohibition against teams promoting outside a 75-mile radius.
The league expects to vote to continue the Trust in some form in late March and early April at its annual meeting in Palm Beach, Fla.
Ganis pointed out that the NFL requires a unanimous vote to renew the Trust, though individual teams theoretically could opt out. It also is unclear if the Trust would be renewed for another 20-year term, or for a different period of time.