Defending The NFL's Ownership

It’s looking increasingly like the 2011 NFL season may not happen. The NFL ownership and the NFL Player’s Association have made no progress in their negotiations for a new collective bargaining agreement, opening the door for the possibility that fans won’t have any football to watch next year. And by this point, it’s gotten pretty tiring. But amidst all of the rhetoric being tossed around, who’s right? Which side has the better argument?

The core issue goes something like this: The NFLPA believes that the owners are planning to prevent the players from playing (i.e. lock them out) in 2011 if they don’t agree to take a reduced portion of overall revenue. The owners counter by claiming that team revenues are down across the board and that the largest part of team spending—player salaries—needs to be adjusted down accordingly. Rock, meet hard place.

So who’s got the upper hand? For me, it’s the owners. And before anyone might disagree, let me make a case:

• The owners may have a legitimate economic case to make. Just look at the recent evidence out of Green Bay. Being the NFL’s only publicly-traded franchise, the Pack is required to issue financial statements to the public. What have these statements shown? Per the Green Bay Press Gazette, the statements show that spending on player salary has grown by $22 million since the 2008-2009 fiscal year, while team revenues have only grown $10 million in that span. Add in the fact that the Packers posted an operating profit of 9.8 million last year, when the year before they had an operating profit of $20.1 million, and those are some hard numbers to argue with. In business, it’s not about increasing revenue; it’s about increasing profit. If Green Bay is becoming less profitable, it’s plausible that the rest of the league is, too.
• Player salary has gotten out of control. Look, I’ve always been an advocate of teams spending the money they need to in order to get the players for their teams. Owners can’t build championship teams without spending some dough. But that doesn’t mean that player salaries haven’t gotten out of control. The amounts of money being guaranteed in modern NFL contracts are ridiculous (two examples: Albert Haynesworth’s “highest-paid defensive player” contract with the Redskins in 2009 and the guarantees that are included in top rookie contracts). Add to that the fact that some players that get those guarantees often miss time for injuries (i.e. Brian Westbrook), leaving teams with unproductive salary on their books. That’s not a good financial situation for any team.
• The ownership’s proposal could benefit everyone in the long run. Currently, the owners are rumored to be proposing a decrease in the percent of shared revenue (revenue shared between teams and players) that goes to salary. The percent would be decreased 18 points, from 59% to 41% (The league claims that the actual decrease would be more around 9 points, to 50%). They also have a proposal on the table that would increase the NFL’s regular season to 18 games by converting two preseason games to the regular season. It’s a decision that could benefit teams and players alike. How? By increasing overall revenues. Jeff Pash, a member of the NFL’s CBA-negotiation team, explains it with the use of simple math. He asserts that instead of making 59% of every $100 ($59), players might instead make 50% of every $150 ($75). Sounds like everyone benefits to me.

“It’s all about money. That’s what drives our league.”

That’s a quote from Pittsburgh safety Ryan Clark’s interview on Mike & Mike In The Morning today. It’s a true statement, because as much as fans idolize the game on the field, if the business agreements and the contract agreements don’t work, then the game never gets to the field. And, at least in my view, it’s easier to empathize with owners that need to run a profitable organization—one that employs many more people than just NFL players—than with individual players who think they deserve a few more millions for two more games of football.

But what do you guys think? Am I wrong? Would locking out the players be unfair? Let me know what you think.