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Naylor: Is there enough tension to trigger an NFL lockout?

Dave Naylor
2/4/2011 10:31:37 PM
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The National Football League and its players association don't disagree on everything.

They both agree that the sport has never been more popular, been watched by more people or had stronger indicators of its overall economic health. They both see the NFL as the runaway No. 1 sport in America and the gap between it and its nearest competitors growing ever larger.

No, there are no cries of poverty or characterizations of a league on the brink in this labour war. This one is all about the division of $9 billion in revenues, what's fair and what's best for the overall growth of the sport.

The question everyone is left to ponder is whether there's enough tension in that debate to trigger a lockout when the current collective agreement expires on March 4. And if that happens, whether there will be football played next fall.

On the surface, the idea of shutting down the NFL seems preposterous.

But that's before you get to the fundamental disagreement between the two parties over whether the players' share of revenue has been climbing since the last agreement was signed in 2006 or whether it is going down.

On Thursday, NFLPA executive director DeMaurice Smith insisted the players' percentage has declined over the past five years while on Friday NFL Commissioner Roger Goodell said the exact opposite.
How could those two positions both be true, Goodell was asked.

"I think one is fact and one isn't," said Goodell.

Understanding how both sides could reach such vastly different conclusions would require an accountant and a mathematician but here's a dumbed-down explanation of where the disparity likely lies.

Up until the last collective agreement, the NFL salary cap was based almost entirely on league-generated revenues, the majority of which came from television. But as new stadiums started to come on board and teams began to generate new revenue from such things as naming rights, pouring rights and luxury suites (revenues that are not shared among the teams), the players wanted a cut.

They wound up getting that, which is why the NFL's salary camp has grown from $85.5 million during the final year of the old agreement in 2005 to $128 million in 2009, the final year with a cap. (The 2010 season has been played with no cap because of a provision in the CBA because of the absence of a new agreement).

While making no claims of poverty during his pre-Super Bowl address on Friday, Goodell said the pendulum needed to swing back in the owners' direction in order to ensure that owners can continue to invest in the game to ensure its growth. He pointed out that no new stadium deals had been completed since 2006 (although several have opened since that time, including the monstrosity that will host Sunday's Super Bowl here in Dallas) and that part of that was because the league didn't have the capital necessary to help owners finance new buildings.

But here's guessing that the league's need for greater profitability comes back to the same issue that has confronted every professional sport - and the one that was the driving force behind the 2004-05 NHL lockout: the need to generate enough profit to redistribute wealth among the teams to close the gaps between the have and the have-nots. (Or in the NFL's case, the haves and the have-mores).

The NFL's history of sharing revenue has been well documented, with former commissioner Pete Rozelle having the vision to broker a deal that saw the league's television money shared equally so that New York and Green Bay received equal slice of the pie.

But in recent years much has changed, as bigger markets have capitalized on revenue streams - suites, naming rights etc - which they are not required to share with their partners which means some teams now take in considerably more revenue (Dallas Cowboys) than others (Buffalo Bills).

In addition, the NFL has owners that have been able to exist debt free by entering the league long before it became the financial bonanza it is today (Rooney family, Pittsburgh Steelers), while others (Bob McNair, Houston) have had to invest millions to acquire their teams.

All of those dynamics create a very unlevel playing field in a league where some owners are demanding that the system isn't treating them as fairly as it should.

So how does the league come up with a pool of revenue to smooth things out, to make owners in small markets or those who carry load of debt feel as though they've addressed fairly?

It takes it from the players, that's how?

Which explains why the owners are demanding an 18 per cent rollback in player salaries, a number that equates to billions in over the course of a new agreement, which could be used to address the many issues among the owners.
No the NFL isn't going broke. No the teams aren't bleeding millions of dollars.
 
But a new pool of revenue would make in-house business a whole lot easier.

And whether it's by introducing an 18-game schedule (which the players characterize as virtually a deal-breaker) or by exacting their 18 per cent pound of flesh from the player salaries - or in their fantasies both - the NFL owners are going to find a way to get it.



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