The Looming Labor Deal
Something we haven’t spent a lot of time on, but will be focusing on over the next few months is the NFL’s current issues with the labor deal. The NFL has told the players union that the revenue sharing program that helps some of the lower revenue teams in the league will cease after this year should the league go into uncapped status, in keeping with the CBA signed in 2006.
The NFL has told the players’ union it will cut a $100 million annual supplemental revenue-sharing program that subsidizes lower-revenue teams.
That plan, which is a small portion of the $6.5 billion shared in full by all 32 teams, will be cut because the 2010 season will not have a salary cap. “We are simply going forward on the terms the union approved in March of 2006,” NFL spokesman Greg Aiello said.
Those terms pertain to only years with salary caps, the league says.
The NFL Players Association will challenge the league’s move this week … [u]nion officials believe the owners can’t terminate the program without the union’s approval. The NFLPA also is concerned that some teams will not spend competitively because there is no minimum for spending under a non-salary cap system.
This would make some teams less competitive, but for the Jets, this isn’t really a big concern as they’re considered higher-end in the revenue generation spectrum The NFL seems to have 11th hour deals all the time when it comes to the CBA, but seeing an uncapped year could cause less competition for large contracts, so it’s hard to say how this all ends. Obviously, nothing will be decided before the regular season ends, but watch for all the fallout of an uncapped year and discussions around it in the lead up to, and aftermath of the SuperBowl. March isn’t that far away anymore.
15 Responses to The Looming Labor Deal
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dmazz says:
I believe the revenue sharing is what makes the NFL so great. The fact that any team any given season can win it all is what lures people to the NFL. If they go uncapped I can foresee the league changing slightly for the worse. If the Jets win a Superbowl post uncapped agreement, we may hear things like you needed to buy your championship A’la Yankees.
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Chris says:
2010 will be an uncapped season. Whoever wins the Super Bowl the following Feb, it won’t have a ‘Yankee’ feel because in football, it’s not about how much rather than who it was spent on. Even the Yankees couldn’t create the necessary chemistry, depth, etc. and the Redskins have failed at the money spending within the cap rules (as have the Jets to be honest).
The 2011 season will experience a lockout, it’s not even a question at this point. The elimination of revenue sharing is only one of the many steps the owner’s have taken, inlcuding hiring the same group that represented the NHL in their work stoppage. The biggest ‘pre-emptive’ move is the fact that the owner’s have effectively insured the majority of their tv revenue so when it comes to it, they have very little to no motivation in bringing the league back at terms they are unhappy with. They can continue to earn the bulk of their revenue for the remaining years regardless of the product, if any at all.
With the brutality of the sport and the nature of the contracts, it can be argued that the NFL’ers are the ‘worst’ compensated athletes of the 4 major sports. They, under the direction of D Smith, who I believe will try to make a Donald Fehr type of name, will be out to get what they feel is appropriate for their risks. The owners however, have taken much harder and to be honest more shrewd actions in advance that will mitigate the amount of progress the players can make.
If the MLBPA is the most powerful and cohesiveness group in sports, the NFL owners are a very close 2nd…it’ll be interesting to watch for sure but I don’t think the landscape will change much in terms of what we see until the beginning of the 2011 season…when in fact there may be nothing to see at all.
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Brendan says:
Chris good post.
One of the other major issues will be a rookie salary scale. The fact that players are getting $50million contracts before setting foot in an NFL facility while veterans are playing for under $1million per season is just wrong. It will also help teams with the salary cap (assuming there is one).
One thing that I think the owners and players are both aware of is that a work stoppage is a short-term death sentence. Each of the other 3 major sports have had one within the past 15 years. Each of the other 3 major sports have/has struggled to get back on track.
Hockey signed the single most damaging TV contract in the history of sports. They’ve just now started to generate some main stream interest in the sport again, but it took years for that to happen.
The NBA locked out and when play resumed they dealt with the “thug era” and had huge image problems. It wasn’t until the Lebron/Wade/Chris Paul type generation of good guys came into the league that they recovered.
The MLB locked out and if not for a steroid-fueled HR chase, the league would not have had a quick recovery. Even with their recovery they’ve been suffering image problems since play resumed.
Basically, the public is not interested in rich athletes and even richer owners fighting over how rich the other gets to be. It’s irritating, and if the NFL loses a season to a strike because of it, the league will have some serious image therapy to do.
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brian311 says:
it seems as though this would only help the jets – but im not even sure that $100M revenue sharing between 32 teams is even worth talking about. that’s peanuts in the grand scheme of things.
i think that the salary cap is one of the things that makes the NFL great. i do think that certain aspects of the CBA could be improved. the rookie salary scale being one of them
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Brendan, agreed with all.
Couple things. The NFL has more popularity and ad revenue than the other sports combined. The NBA has always been a ‘players’ league where the popularity has cycled around superstars…there will always be ups and downs and era’s of legends. MLB is a long and boring TV sport and season, therefore the HR is the only thrill for the common fan. No coincidence the league had a blind eye in regards to the performance enhancers. As for the NHL, almost everything was bad about that deal, the owners abused the players, too many guys crossed the line and it’s a canadian sport at the end of the day…where it is still tremendously succesful.
The biggest negative in terms of the lockout is how short the NFL season is. You figure, if it isn’t settled by 11/1, the season is effectively over. So, they are working with 7-8 weeks of actual play. Now granted, they have the late spring and entire summer to try to resolve beforehand but I can’t see too much happening in terms of progression during that time.
Personally, I think the best pay system is the NBA. Whether or not the NFL can adapt and even want a similar structure is unknown- each side will be pulling from so many different angles that it’ll be interesting to see where the chips falls once it’s over…
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Chris,
Agree with the NBA having the best pay scale. The players would love to get guaranteed contracts like in baseball, but there is no chance of that happening. The NFL should move to an NBA-like pay scale if they’re smart. You don’t hear NBA players complaining about not making enough $.
And the NFL is clearly the most powerful of all the major sports, but even it has had to tighten it’s belt due to the recession, so no one can be really sure how they’ll come out of a work stoppage. In times like these, where money isn’t as easy to come by, all parties would be better served to come to an agreement prior to the 2011 season.
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TJBfan (twitter @infresco4) says:
Well the current labor deal is what makes the NFL great on the outside, but I have mixed feelings.
Under the current deal, bad teams get to pick the best players coming in from college but are basically forced into spending a TON of money or giving up their pick. Now if that great college player doesnt transition to a great NFL player a bad team is being held financially hostage by a bad player (Jamarcus Russell one of many examples).
Meanwhile, the teams which do good are rewarded with great talent at a much lower risk situation. A few examples from very recent drafts include Hakeem Nicks to NYG, Beanie Wells to Cards, Rashard Mendenhall to Steelers, Chris Johnson to Titans.
So yes the draft and labor deals do keep the NFL competitive but I personally believe the biggest reason any team has a chance any year is due to injuries and the emergence of players who step up during those injuries.
The lowly raiders just beat the steelers and you didn’t see Russell, McFadden, or HeywardBay in any of the highlights. It was due to a banged up steelers defense and a no name Raiders QB who stepped up to bring his team to victory.
The combination of a salary cap and a rookie draft slot cap could make this game much more competitive in my opinion. You still have guys like Al Davis and Snyder in the business though so it can only help so much.
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Harris52ChampionshipDefense says:
This is all because of the greedy nature of owners like Jerry Jones, Dan Snyder, and Lard @ss in New England (to name a few). I would think that owners like Woody and the Tisch Family are not at all interested in a lockout as they are leveraged to their eyeballs for the new stadium, and half a season, perhaps even a full season, of no games would be very bad to their bottom lines. In the end, the only people who truly suffer, as always, are us, the fans. I’m behind the players union 100 percent in this dispute. On Real Sports, Kraft said in between guzzles of cheese whiz that the owners take all the financial risk. Well, what about a guy on his rookie salary who hasn’t signed a big extension yet? He doesn’t take a financial risk every time he takes the field?
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Bent says: Kyle – Rhodes cannot be trade until the official end of the season at the end of February. He has bonuses due on March 11th, so if he is moved, it will be before that.
Note that, in this economic climate, not many team are expected to spend much more money on players if there’s an uncapped year than they would in a normal year. Cowboys and Redskins might be the only two that really go crazy.
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subwayfare says:
The NBA has a pretty good model but they’re dealing with much smaller rosters than the NFL, which makes things a little easier. Also, the guaranteed contracts and hard cap can cripple teams that invest in the wrong players for years. See: NY Knicks. It wouldn’t surprise me if they’re still paying Larry Johnson.
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subway,
If the Knicks are still paying LJ, I’m ok with that. 4 Point Play! Cmon.
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Bent says:
Yeah, players getting big money deals and then not playing as hard needs to be made impossible, not even easier.
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The real reason the NFL wants a rookie cap has very little to do with the outlandish money they invest in players who bust. Sure it stinks to pay a guy like Gholston that much money, but its rare than 1 bad draft pick totally murders your cap and in the case of big market teams the actual cash budget. For the most part the instances are rare where a player just steals the money (J. Russell being the most prominent) and that can happen in any sport once they “earn” top dollar (Shawn Kemp and Bryant Reeves in basketball; Someone like Larry Johnson with the Chiefs and to a far lesser extent Kerry Rhodes right now) .
The problem is that the rookie money becomes the new negotiating point for the superstars. Matt Stafford drives up the price for Peyton Manning and Tom Brady so high that it does affect the teams bottom line both from a cap and cash perspective. The Lions virtually guaranteed Stafford 41 million of a potential 72 million dollar contract. That is what set the wheels in motion for Eli Manning and Philip Rivers to get virtual guarantees of 50 million. Now when Manning and Brady come up they will end up with 60 million in guarantees. It just drives salaries so high and so fast it gets to a point where it is screwing up the business models of these teams.
If there was a rookie wagescale in place there is no way Eli Manning would make more money than his brother. Maybe being that he signed a deal 5 years later they might give him equal money(and that is stretching it, IMO), but no way does he get more money than Peyton. Manning would have been the gold standard until he or Brady renegotiated a new deal. Instead they are surpassed by the likes of Eli, Aaron Rodgers, Big Ben, and Phillip Rivers. That throws it all off balance.
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StvDoe says:
It’s funny that Kraft would talk about the financial risks taken by the owners. There are no financial risks in owning an NFL team. It’s a liscence to print money. Regardless of the year to year bottom line, the franchise value expands dramatically every decade.
Nobody in more than 60 years has lost money by owning an NFL franchise. In fact, they’ve all gotten very rich, or considerably richer.
There seems to be little doubt that greed on both sides of the equation have the NFL on a collision course with a labor/ownership breakdown.
One only need look as far as a fairy tale to see that it’s human nature to kill the golden goose.
When can we start shopping Kerry Rhodes?