Major league sports are big business! When two sides disagree on several issues, after trying hard to agree, the only way to get rid of the stalemate comes in the form of a lockout or strike. Both sides have been posturing and positioning themselves for years, the battle between the Billionaires (Ownership Group) and the Millionaires (the Players). Each side as representation, for the owners it is NFL Commissioner Roger Goodell, and for the Players it is DeMaurice Smith – the Executive Director of the NFL Players Association (NFLPA).
As the 2010 season hits the halfway mark, the real concern isn’t who will win this year’s Lombardi trophy, but whether or not there be a lockout. With franchises values jumping tenfold in the last ten to 15 years (with a rumored 8 billion dollars shared between the Owners and Players in 2009), legit questions is being asked. Will there be a lockout and why?
Mr. Smith – the leader of the NFLPA – replied in early 2010 when asked, if there would be no football in 2011, on a scale of 1 to 10, with no hesitation “it’s a 14.” “I keep coming back to an economic model in America that is unparalleled,” said Smith, “and that makes it incredibly difficult to then come to players and say, on average, each of you needs to take a $340,000 pay cut to save the National Football League. Tough sell. Tough sell.”
According to the NFLPA, the Billionaires will receive 5-6 billion dollars from network television contracts payable despite no football, and that one of the main reasons that ownership is moving to a lockout is because their money is safe. Mr. Smith said, “Prior CBA’s included 5 billion deal to not play football?” Mr. Smith asked when referring to previous contracts that were extended or redone. “The answer was no.”
“You don’t make money by shutting down your business,” Goodell said on Sirius NFL Radio, according to USA Today. “The idea that the owners want to lock out and not play football is absolutely not the case. That’s just not good for anybody.”
The owners made statements that they were losing money, so the union requested that the owners (all thirty-two of them) open up their books. The union wanted and directed the ownership group to open and show the players their loss. To date, Green Bay is the only team that displayed its books, showing a 40% loss.
The players have seen this day coming, and coming fast. Smith encouraged teams to contribute millions into an account called the “Legacy Fund.” This fund would help players through the hard times of a lockout or strike while helping retired players as well. The union has increased dues to aid in return income for the striking players during a lockout.
In several publications, Mr. Smith said that the players are facing a reduction in share to 41% of the applied revenues from 59%. Also, the teams or owners take one billion off the top of the 8 billion the league generates. The NFL League office states that is true, that the one billion reflects cost incurred to offset cost of NFL Network, NFL.com, and other overseas interests, in which 50% come back to the players, in which the union audits.
As Gordon Gekko said “Greed is good.” In some cases I might agree. In this case if both sides are unable to come to an agreement, it will be a shame. Greed will help destroy this empire, the greatest sport on the plant. It will take a hit. Both sides have a great business model that is working, making money with a fan base that stretches around the world. If the future is a direct reflection of the past, wake up!
History tells me it’s not good for either side. A lesson should be learned from the MLB (Major League Baseball) strike of 1994, which resulted in a cancelled World Series (the first in 90 years). There was the NBA (National Basketball League) lockout in 1998-1999, which reduced games from 88 to 50 that season, including the playoffs. But the most recent sport to have labor strife was the NHL (National Hockey League) 2004-2005 season were the Stanley Cup was put on the shelf and was not awarded to too a team. You have to go all the way back to 1919 to find the last time that happened. (It was not because of labor dispute, but the national influenza outbreak.)
The last time the NFL players went on strike was 1987, and that resulted in the use of replacement players. I remember it like it was yesterday. I was the Defensive Coordinator for a Semi-Professional football team called Eastside Express, located in Bellevue, Washington. With just three days before our next game, I was contacted by a Seattle Seahawk official about tryouts for the replacement players. My players saw it as an opportunity, a shot at the NFL. Others saw it as crossing the picket line. Needless to say our games were cancelled for a few weeks while the complete Northwest Semi Pro football league was cancelled because of the inability to field a complete team. My team went from forty-seven strong to 21 players remaining, and that included the kicker, punter, and snapper.
The strike got everyone’s attention, Fans, owners and sponsors alike. These replacement players were used to break the union. It was a brilliant move by the owners, and it worked. The replacements had their one game in the national spotlight, and soon several players crossed the picket line ending the strike.
The 1993 Collective Bargaining Agreement was created with free agency and a salary cap included. At the end of the 2010 season, and the conclusion of 2011 Super Bowl, the current CBA will expire. This means that the salary cap will expire as well, leaving the richest more lucrative teams to control the market of the top players. They can out bid the small market teams.
The New York Yankees philosophy with over a 200 million payroll strategy will leak into the NFL, leaving Buffalo, Green Bay, and Jacksonville in trouble. Today an NFL player could not sign with another team without the former team being compensated with a top round draft pick. There are only a few NFL players, if any, that have guaranteed contracts. Players get their money upfront in signing bonuses, and even a percentage must be paid back if the player doesn’t fulfill most if not all the contract.
NFL owners and players were happy with the current CBA until now. The owners are now saying it’s not working for them, and that too much of the revenues are going to the players. It will be interesting to see how the parties work this one out.
The late Gene Upshaw was quoted as saying that “Once the cap expires, it’s hard to see it ever coming back.” Several people question the strength or power of the NFLPA and have for years. MLB got free agency in 1975, football followed several years later and implemented it in 1993.
In my opinion there will be a lockout, despite eleventh hour negotiations. It is inevitable. The only ones that lose in this situation are the fans, who lack the knowledge and couldn’t care less about the labor troubles of professional millionaires in leagues that are owned by billionaires.