The 2010 football season are upon us, as we dust off the tailgate and get ready for another exciting year of competition, there is something ugly on the horizon. The NFL is on the edge of a lockout. Make no mistake, the owners are digging in, and if there is one thing millionaires and billionaires do well its worry about money. Yeah I worry about money too, but when I feel the need to cutback, only the small convinence store down the road suffers, it does not potentially effect millions of people. Lets take a look at the NFL, and try and make some sense from the madness.
The National Football League last struck a deal between owners and players in 2006, they agreed a six year extension, that they then promtly opted out of the next year. The agreement expanded revenue sharing among owners and gave players the right to 59.5% of football revenue, which annoyed the hell out of the owners. Jerry Jones said,“The proposal from the union was a mean mother.”, while the NFLPA was “delighted”, guess who came out on top of that one. You can read all the legalese here, its quite an impressive document perfect for curing insomnia. If you don’t understand it, no worries, Bills owner Ralph Wilson didn’t either. The owners more or less said to the NFLPA, “OK, we will do it your way for four more years to keep the product on the field, but after that, its on”.
So what is all the hubub about? With record TV deals, new stadiums stuffed with luxury boxes, isn’t there enough money to go around? There is one problem that both the NFLPA and the owners can agree on, the rookie salary scale. As it stands a first round pick can and often does make more money in that rookie deal that a five year vet with multitiple pro bowl appearances. Jamarcus Russel comes to mind, a top overall pick who pocketed more money than most of us will see in our lifetimes for doing exactly jack squat. Every year the top overall pick gets a larger contract than the one before him, some teams that fail to escape from the bottom, cough Detroit cough, keep getting great draft picks to the point where they owe so much to unproven talent, they can’t afford players are actually good. Point one in the new CBA will be a restructuring of these rookie deals so that they make more sense economically, and at the same time free up money for proven players with years of service. That’s great for everyone.
The owners biggest beef is that the current system takes into account total revenue, but does not include total cost. While the NFL as a whole reportedly brought in around 9 Billion dollars in 2009, owners are seeing their profits dwindle to rising player salaries at a rate none of them are comfortable with. Since 31 of the NFL teams are privately owned they have no obligation to make their finances public. Thankfully there is the publicly owned Green Bay Packers so we can look at a small window into how league finances work. In 2009 general revenue rose by 10 million, while player salaries rose by 22 million. With meager profits going from 35 million in 2007 to 20 million in 2009, with a projected 10 million in 2010 its does not take a math genius to see that business model is unsustainable for the NFL’s smallest market.
The other 31 teams books remain closed, but looking at Green Bay we can assume they are all at least making some money. Problem is these guys didn’t invest hundreds of millions of dollars to break even, they did it to make that money back and more. The value of a team is directly tied into how much profit they can mass, so less profit turns directly into lowered team value if they should choose to sell. So along with a restructured rookie pay scale count on the owners also asking for an entire revamp of the salary structure as a whole so it can make the bottom line start to go up again. The most obvious way to do this is a reclassification of what is and is not “football revenue”. While things like TV contracts and ticket sales will remain fair game, expect the owners to fight to get everything from parking money to concessions out of the salary pool.
The worst kept secret is the owners nuclear option. If they don’t see major concessions from the NFLPA they can shut down the 2011 season, and still make a killing. For you see in the last television contract, the owners managed to get a clause in that they get paid regardless if the games are played at all! Meanwhile the players are SOL. The average NFL salary is $770,000, while a fantastic chunk of change that averages Albert Haynesworths 14.3 million with Mr Minimums $325,000. Add the average NFL carrer is 3.5 years, and most of them at the level of Mr. Minimum, to the fact that many of those with higher contracts also lead lifestyles that can only continue if the cash keeps coming in, it all equals the players running out of money first.
The NFLPA most assuredly knows this, but it remains to be seen if they are willing to take a cut after their spectacular victory in 2006. I see two choices, one, cave now and hope that the owners don’t bend them over too much, or two, cave later while the owners get everything they ever dreamed of and more. The NFLPA is in between a rock and a giant bolder covered in poisoned knives, and the only hope is to choose rock.
In the end, who cares? I’m still going to my job every day that doesn’t pay anywhere in the ballpark of the league minimum, the sun will still rise in the east and set in the west. What may happen in the event of a lockout is the greatest college football season ever. Think about it, while NFL rules prohibit anyone from being in the draft until 3 years after their high school class graduates, it still means we see a great number of redshirt sophomore and true juniors enter the draft each year. While there will still be a draft in April this coming year, if there is no new CBA on the horizon it may cause many players to return to college rather than opt for the pros. For me that is a huge win, it may not soften the blow of losing a fantasy football season, but Thursday to Saturday night would be pure insanity.
I may seem on the owners side, but I’m not on anyone’s side. I focus on the owners because its all in their hands, the NFLPA has no power in this situation. They rode the hog for a few years and its over. Personally, I think everyone makes too much money off of the game. I would like to see a 50% reduction in ticket prices, salaries, commercials, licensed clothing, parking, hot dogs, beer, and programs. I want to see every NFL game without having a special dish. I want people to watch the Super Bowl for the game, not the spectacle. I want a perfect world that just ain’t happening.