The 2010 NFL Football season kicked off with the Super Bowl Champion New Orleans Saints narrowly defeating their NFC title game opponents, the Minnesota Vikings. At the conclusion of this season, there will be a Super Bowl XLV Champion crowned in Dallas. This may be the last Super Bowl Champion crowned in some time – the good people of Indianapolis, the host for February 2012’s Super Bowl XLVI may not have the chance to host the game, depending on the labor situation in the 2011 NFL season.
In May, 2008, the owners of the NFL franchises exercised the option contained within their March, 2006 collective bargaining agreement with the NFL Players Association to terminate the agreement early. One of the consequences of this move was to lift the salary cap for the 2010 season. Since no negotiated settlement has been reached, we begin this season without a salary cap in place, and face the prospect of a lock-out for the 2011 season.
What is at issue is the percentage of “qualified revenue” earned by the league’s teams that are paid to the NFLPA. These revenues are such things as broadcasting rights and ticket sales, but not such things as stadium naming rights. Under the current contract, 60% of the league’s qualified revenues are paid to the union. Also, one of the potential bargaining chips on the table is the potential for expanding the 16-game league season to an 18-game league season.
“Lock-Out” vs. “Strike”
In either case, what happens is a work stoppage. A strike is a union’s ultimate weapon in negotiations, as is the lock-out for the employer. It is a subtle difference, but an important one: a lock-out is ownership saying “You’re not allowed to work;” a strike is the union saying “We’re not going to work.” Should there be a work stoppage in the 2011 football season, it is anticipated it would be a lock-out – the ownership telling the players not to work.
The players will say that it’s not their fault, they want to play, but under the structure for which they have collectively bargained. The owners, however, may make the calculation that they could better tolerate a lock-out than to continue to pay the union as much as they would be contractually obligated to. Much like any situation, there’s not bad-guy, no good-guy: either side could stop a work stoppage: the union could knuckle under and accept a lower percentage; the owners could drop their demands. Neither is likely to happen – negotiations, much like a goal line stand, are a game of leverage and power.
In the end game, we the fans are being leveraged whether its a walk out or a lock out. There’s plenty of room to be angry with those involved.
Show Me The Money
One side of the issue will make the case that the average NFL player plays for 3-years and earns about $700,000 a year; contrasted with the 6-years and $3-million for a baseball player; and 5-years and $5-million for an NBA player. Add to this that both an MLB and an NBA contract is guaranteed, and NFL contract is not.
The important distinction here is the idea that at any given point, there are 11-players on the football field; 5 basketball players and 9 baseball players. The success of a basketball team is dependent upon a small roster and 5-players at a time. The success of a baseball team is dependent upon 9-players on defense, and only 1-at-a-time on offense. One player on a football team can more often than not be removed and substituted in without the success of a given drive being dramatically changed. Responsibility for success or failure is distributed across a great many on a football field, with the notable exception of players such as Peyton Manning, Tom Brady, and Drew Brees. Curiously enough, these players are compensated at a level commensurate with their on-field impact.
There is a smaller window in which that average player makes that average salary than in the other major sports. This is true. However, it is also true that there are a great many players who come through the league – in other words, the average salary and average length of career is heavily skewed such that it is not representative of what is actually occurring with player compensation.
Also, the baseball season is 162 games; basketball is 82. Football is 16. Per game, and per minutes played per game, football players are not under compensated. Okay, yes, mini-camps, weekly practice included there could be some debate, but their compensation is based on games.
At the end of the day, there is a finite value to the cost of a ticket – in order to support a roster of 53 players plus a small practice squad, present a competitive product, and make a profit there is a limit to the amount a team can actually pay. In other words, there is a limit to the value of the work of any given player.
During the introductions of the teams during the aforementioned Saints/Vikings tilt, the players entered the field holding their pointer fingers in the air – a union message of solidarity. Whether or not the union can maintain a level of solidarity is up for debate however. Historically, because while they all play the same game, the positions are quite specialized. The job of quarterback is substantially different from that of Wide Receiver, from that of nose tackle or place kicker. Because of these differences, their interests are vastly different. This has caused some constituencies within the players’ association to be less inclined as to stay as unified.
There is a definite rift between smaller revenue teams – such as the Buffalo Bills – and larger revenue teams – such as the New England Patriots and Dallas Cowboys. In fact, the agreement of March 2006 passed, but over the objections of the Bills and the Cincinnati Bengals. By the time the vote to opt out of the agreement, the rest of the owners came around to the point of view of the Bills. This is hardly a philosophical shift – it was a calculated decision – but one the Bills and Bengals were willing to hold out on when the others were not.
Issues at hand
The players want to keep what they have financially, and presumably gain better retirement health benefits. The owners want a reduction in how much of their “qualified” revenues are shared with the union, and likely will leverage the 18-game season to make that happen. Players earn no money for their preseason efforts – just the option to make the team, and this is unlikely to change – so an additional two games likely means a de-facto raise, with an accompanying increase in the number of players carried on a roster. Without a salary cap, there is no floor. So as much as the NFLPA argued that they would never accept another cap at the time the agreement was terminated, given the rather unique revenue sharing of the NFL, it seems quite likely that there will be one at the end of the day.
So we’re at the start of another NFL season. Let’s enjoy this one. The labor issues at hand are complex – we may not be enjoying an opening weekend again for a while.