If you, like me, live in fear of the fall of 2011 having no NFL football, but don’t understand all of the legal mumbo-jumbo associated with the labor dispute, I’m hear to put things in terms we all can understand.
First things first, and that is that the owners unanimously opted out of the current CBA (Collective Bargaining Agreement) in 2008, one that they had signed off on in 2006. Since I’m making this as easy as possible to understand, let me tell you that a CBA is the agreement two sides, usually labor and management, come to on various topics, most of which include how money will be divided. And in this case, the owners realized that player salaries were escalating out of control and that their profits were being squeezed more each year. Yes, part of the problem is they are agreeing to these salaries, and player agents are a huge part of that. In the bigger picture, the real problem is revenue sharing, a.k.a. how to split the financial pie. And while the NFL is bringing in a ridiculous amount of money ($7.6 billion in 2008), about 62% of that goes to player salaries, a number that keeps climbing due to increases in the overall salary cap. To make matters worse, there is also revenue sharing among teams, meaning the big market teams have to help the small market teams to help them compete with each other on the field.
So the owners want something like 18% of the pie back, in the form of salary cuts to the players. Naturally, the players do not want to give them this money back, and that is why head of the players’ union DeMaurice Smith announced during the Super Bowl’s hype week that the chance of a lockout were a 14 on a scale of 1 to 10. For his part, NFL commissioner Roger Goodell denounced that, saying he hoped it wouldn’t come to a work stoppage, but he also knows that it’s a very real possibility. The players aren’t necessarily saying they won’t give part of the pie back, either. Smith wants the owners to show the players that they are struggling to run their businesses, meaning he wants them to open up their books. And the owners won’t do it. So are the numbers being reported not what they say? It’s hard to say the owners aren’t lying about these numbers, when they keep agreeing to player contracts and they keep building huge state-of-the-art stadiums, but they also have the right to not open their books if they don’t want to. And the bottom line is that the owners are not happy about doling out more and more of their profits.
Then, of course, there is the issue of an uncapped 2010 season. The current structure calls for a salary cap through the 2009 season, with 2010 being an uncapped year if the owners opt out of the CBA, which they did. Last time this happened, in 1993, player salaries rose to 69% of NFL revenue, and that is expected to happen again. But of course, nothing is guaranteed in 2011, so the players have to be careful of what they wish for.
If organized sports have taught us anything, it’s that the possibility of no games being played can and will happen. You might remember the NFL had a similar situation in 1987, and the owners used replacement players for a few games before the dispute was resolved and the regular players went back to work. MLB cancelled the last two months of the 1994 season as well as the playoffs and World Series, a black mark they have not recovered from. The NBA had a similar situation in 1998-99, with almost half a season being wiped out. And of course, the freshest in our memories is the NHL’s 2004-05 season that was not played due to a labor dispute.
So as fans, we have to hope a few things happen between now and the summer of 2011, which is spewing a black cloud that keeps getting darker and more imposing by the day. We have to hope the owners agree to open up their books, and we have to hope the players agree to give back part of the pie for the health and financial well being of the NFL. Sure, we want the players we love to watch get the money they deserve, but within reason. Certainly it’s not worth much to anyone to have no NFL games being played, but it may very well come to that.
Of course, the NFL is not the only business that would be affected by a lockout. Besides the local businesses near stadiums that thrive during the season, fantasy football and all of the money (reported as upwards of $3 billion in 2007) associated with that is threatened here. Think about that for a second. The folks that make their livelihood in that world will be flattened financially. Well, maybe that’s going to be the subject of my next piece on this, but for the moment I wanted to do my part to help everyone understand the dispute between owners and players, and what it all really means.
Many think that a lockout won’t really happen, and I’m optimistic myself that it won’t. But history surely does make us all nervous, doesn’t it?
Posted in: NFL
Tags: CBA, collective bargaining agreement, DeMaurice Smith, Fantasy Football, football, free agency, labor dispute, Lockout, MLB, National Football League, NBA, NFL, NFL free agency, NFL labor dispute, NFL owners, NHL, Roger Goodell, Salary Cap, Super Bowl, uncapped season, work stoppage