The NFL CBA (Quick Breakdown)

I write this with a perspective from both sides of the fence.  I am a business owner and a football fan, so taking sides is a little difficult.  Especially when neither side is acting rationally.  I am going to do a quick breakdown, where as a total analysis would put everyone to sleep.

The current CBA agreement has been in place since 1993, but has been extended on several occasions, the most recent was 2006.  This could have extended through 2012, but the owners opted out 3 years ago.  The owners believe the players get too much of the revenue, and thought the rookie wages were getting out of control (amongst several other issues, but this could be 10 pages long if we go into everything).  The NFL earns very substantial revenues, but, the clubs are obligated by the CBA to spend substantially more than half their revenues, over $4.5 billion this year alone, on player costs (4.3 is on actual paychecks, there is an additional 365 mil for medical insurance). The clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of the fans. The owners believe the current labor agreement does not adequately recognize the costs of generating the revenues of which the players receive the largest share; nor does the agreement recognize that those costs have increased.  The breakdown is, the CBA doesn't take into consideration the rising cost to the owners in our economy.

The owners have a few other points that are worth mentioning as well.  The owners are set on increasing the NFL season to 18 games.  According the Jerry Jones, it's a done deal, and they can increase it to 20 or 22 games if they want.  With this comes a whole host of other issues need to be included in the deal, like insurance, injury prevention, and expanded rosters.  They believe it is within their rights, and they need the extra revenue from the expanded season to keep the league growing.  The owners also want the ability to recoup bonuses paid out to players that do not live up to their contracts, or breach their contracts.  Right now the courts protect the players, and the owners can attempt to sue, but it is usually a waste of time.  We saw this first hand with JaMarcus, Al attempted to recoup money advanced to him claiming it was an advance for a 6 year contract.  Since he did not play the full duration of time,a portion of the advance should be returned.  JaMarcus gets to keep it all, thanks to the current deal and the protection backed from the courts.

Currently, the top revenue producing teams are required to share the wealth with some of the lower revenue producing teams.  This helps keep everyone on an even playing field.  Well, these top teams no longer want to do this, and some have been very outspoken about it.  Jerry Jones and Dan Snyder have been the loudest when it comes to this.  The revenue sharing expired with the CBA yesterday, and 10-12 teams (both bay area teams) rely on this to exist.  The total amount of shared revenue was $220 million.  It will be interesting to see how they package a new agreement with the new deal.  One has to be in place, or the NFL will start to look like the MLB as the years go on.  Teams will have to relocate, and in some cases possibly file bankruptcy. 

The players were content with the deal that was in place.  They were set to receive 4.3 billion of the 9 billion total in payroll, plus 365 million for medical (not nearly enough).  The owners want to knock it down to 3.9 claiming their rising costs are making hard to do business, and there has been no mention from the owners side regarding an increase in medical coverage.  Now, the players take the risk, and entertain the fans, they should be taken care of.  Past, present, and future players need to know they have insurance to rely on.  Not all of these guys make tens of millions of dollars over their career.  Past players should not be living below the poverty line, more money should be allocated for them.  The NFL is largest sport in our country, it produces the most revenue, yet the players make less then baseball and basketball players(an argument for roster size vs cap space can be made, but that's another article). 

The players also want to get rid of the franchise tag, as well as make rookie contracts a maximum of 4 years instead of 5 or 6.  This of course goes with the rookie pay scale that was reportedly agreed on, but no numbers have been released.  They are against the idea of making the season 18 games.  They have many health and safety concerns that need to be addressed, but we do not know if anything has been put in place yet.  This will also be a serious point if the season does expand.  There will need to be more money for medical, expanded rosters, and research done when it comes to player health over an expanded season.

The players union has a hard line stance at the moment.  They have some legitimate concerns.  What puzzles me is, if the owners thought 4.3 billion was too much, why does the union believe 4.5 is realistic?  The union wants to see all teams financial reports for the last ten years, but the owners do not want to share this information.  I have never seen an industry where the employees demand to see the books, and then demand 50% of the profit.  They are being way to unrealistic in this current situation, and there has to be a middle ground.

According to ESPN, the two side are currently 600 million apart.  They were this far apart weeks and months ago.  There has been little progress when it comes to the finance.  This shows the owners are still at 3.9, and the union is still at 4.5, no one has flexed.

Yesterday, 10 players filed anti trust lawsuits against the NFL.  These players include Tom Brady, Peyton Manning, and Drew Brees, the other 7 names were not mentioned.  Expect to see many more as time goes on.

What does this mean for us, the fans?

Well, we get to watch the rich battle the wealthy while we are deprived of our entertainment.  Instead of watching free agency we are watching bickering and finger pointing.  The draft will still happen, but can they negotiate contracts with the players?  We can throw out tenders and franchise tags, but will any of it matter?  Will there be a tag, will the tenders even be in place?  This is info that one can only speculate on right now.  It is all included in the cluster#$% that is the collective bargaining agreement. 

Now, which side do we choose?  Should we even take sides?  Neither seems to be willing to give in, and this has been going on for 3 years.  It has just come to our attention recently with all of the increased media coverage.  The owners welcomed the lockout since they had the $4 billion in TV revenue locked up and in their pockets.  This was until a Judge stepped in and deemed the 4 billion was not available to the owners in the event of a lockout.  Now everyone looks to lose here.  Not just the owners, players, and fans, but all of the employees that rely on football across the nation to survive.  I just hope cooler heads prevail.

If I missed anything you feel is notable, please add it in below.

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