With a new world in the NFL set to begin in a matter of days, my mailbag has been filling up with dozens of questions about how we got to this point and where we’re going in this uncertain world of football. Let’s start to sift through the fact and fiction in answering readers’ questions:
How did we get to this uncapped year? It seems like it just snuck up on us.
Not really. This has been in the works since soon after the ink was dry on the Collective Bargaining Agreement (CBA) negotiated in early March of 2006. Although that agreement was passed 30-2 by owners, they quickly realized the folly of their decision.
At that time, team owners desperately feared an uncapped year. Now they don’t.
What is the NFL’s problem with the deal?
Follow the money. The NFL says the players are getting too much. According to its numbers, of the $3.6 billion in incremental revenue since the 2006 CBA, players have received $2.6 billion while owners have received $1B and spent approximately $1.2B to operate their franchises.
What is the NFL Players Association’s response to that data?
Show us your books!
Why won’t the NFL do so?
It believes the union has more than enough financial information without taking that step. It believes the “open books” process used in labor disputes in the NHL and NBA didn’t prevent work stoppages.
Do owners really want the players to take an 18-percent pay cut?
Of course not. This is a negotiation; that’s their “let’s throw this out there and see what happens” opening offer.
Would the average salary go down 18 percent?
No, the offer is based on a collective number.
Is there any chance a deal could be done before March 5?
Chances are slim to none, and slim is booked on the next flight out of town.
What percentage of revenues do the players now receive?
Fifty-nine percent of TFR (Total Football Revenues, all revenue except some NFL Properties revenue and a carve-out for G-3 stadium funding). Prior to this agreement, the players received 64 percent of DGR (Designated Gross Revenues) that only included gate receipts and broadcast income. The change from DGR to TFR was a giant win for the players.
What is the advantage of an uncapped year for NFL teams?
Three things: One, there’s no floor on spending, allowing teams to spend far less than they have in the past. Two, the number and quality of free agents is way down due to free agency requiring six instead of four years. Three, teams are not required to fund active player benefits, resulting in an average savings of $10M per team, a direct savings to ownership.
Did the NFLPA misplay this; it sounds like ownership has a lot of leverage?
Executive director DeMaurice Smith joined the fight only one year ago; he has a tough job. There’s no way he could have anticipated that the poison pill to ownership of an uncapped year would be no poison pill at all.
What can the NFLPA do in the face of this?
Two things: One, play goalie. Just try to protect what it has as best as it can. And two, ensure that whatever percentage of money ends up being allocated to players is real money, not funny money through salary cap accounting. This gets complicated, but having managed an NFL cap for nine years, I know there are myriad ways to show a team is spending without really spending. The union needs to be on top of that.
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Check out the NFP's 2010 Draft Central for in-depth coverage leading up to the draft.
DP-
Expanding the season to 18 games is another subject teed up for the bargaining table. Player contracts would be reflective in the sense that the Cap reflects all football revenue and football revenue would go up considerably with two more games. Obviously, this will get resistance from the union in what is an increasingly difficult negotiation for them.
One of the big differences between the NBA and NFL salary caps is guaranteed money. The NBA owners are currently fighting to decrease max contract years. Obviously, the NFL does not have the same problem. However, I know the NFL has used what amount ot extra years to prorate bonuses and, thus, make a contract more cap friendly.
From a NFLPA perspective, big bonuses are good in some respects, However, when teams have a lot o dead money, it restricts the potential bidders in FA - does the NFLPA believe the big bonuses to a few players outweighs that problem?
From an owners perspective, the emphasis on big bonuses seems to keep the small market, ie low cashflow teams, out of the bidding for the big FAs. Is the collective good of prorating signing bonuses better for the owners?
Overall, I don't think these are major issues in the negotiation, which is too bad because the issues of signing bonuses, with regard to cash flow and dead money, seem to me to influence how teams compete in FA and on the field. Of course, a stock response would be "teams should be more responsible in FA", which is true. However, less activity in FA should be bad for both sides, with teams being less able to improve quickly and less bidding for players. Then again, maybe I'm way off base on the importance of these issues.
thanks for the insightful column.
you will be very happy if the players get cheated. if you think the nfl is hurting for money, you are a bigger liar than they. i repeat a bigger LIAR than they are.
Andrew-
Thanks for answering my question. One caveat that still perplexes me is accounting for contracts already completed. For one, with an 18 game season, a lot of the escalator clauses would have to be adjusted. Second, if my contract that I negotiated was based on a 16 game season and my signing bonus reflected this expectation, if the league moves to an 18 game format is it possible to get a larger bonus that accounts for this change after the fact? These questions seem to get neglected in the labor discussion but deserve greater consideration as it appears an 18 game season is inevitable. Only argument really is that the league would want to keep the same amount of preseason games where as the union would want to replace the preseason games with an extended regular season. Interested in getting your thoughts. Great insight as always.
Thanks!
@ jerry lane:
Jesus, you must be on the rag. Andrew works as an advisor/consultant for the Eagles. The outcome of these negotiations do not affect him one way or the other so what's his motivation for lying? Obviously you're on the player's side. I hope you don't think the players are hurting for money. I would love to hear your argument on why the players should get more than half of all revenue when they have no expenses. The 59% percent they currently get is pure profit. The owners pay all salaries and operating costs and currently they only get 41% of the revenue, how is that fair? Personally, I'm not on one side or the other. I think this situation shows that the NFL can only be successful if there's a fair and even distribution of money. Right now that is not the case and it needs to be fixed. Your post shows how little you know about the current situation on the NFL and business in general.
what economic crap. they invest a lot more than money and more important than money too.
Jerry lane - All industries have rising costs. Name one that does not.
So they invest money. So does everyone else. Tell me, how is your 401K performing in the last 18 months? This doesn't even take into account debt that individual teams carry. How much credit do you think they are getting now? They still have to service the debt they have and the way to decrease that is to pare down costs - all costs - administrative, operational , PP&E and yes inventory (player) expenditures.
Lets see, Andrew is a liar and the professor speaks crap, wait, not just crap but.....
ECONOMIC CRAP
Well, that crap is what is driving all this. The higher the costs, the less funding is available.
Lets see what happens in the next TV contract as to who is a player and who isn't. It will surprise you.
Jerry lane - All industries have rising costs. Name one that does not.
So they invest money. So does everyone else. Tell me, how is your 401K performing in the last 18 months? This doesn't even take into account debt that individual teams carry. How much credit do you think they are getting now? They still have to service the debt they have and the way to decrease that is to pare down costs - all costs - administrative, operational , PP&E and yes inventory (player) expenditures.
Lets see, Andrew is a liar and the professor speaks crap, wait, not just crap but.....
ECONOMIC CRAP
Well, that crap is what is driving all this. The higher the costs, the less funding is available.
Lets see what happens in the next TV contract as to who is a player and who isn't. It will surprise you.
Jeremy - I believe the rules state that if a RFA player is offered a contract, the originating team must match the deal. It's sort of out of the hands of the player. From what I understand, the RFA procedure is a lot more public than with UFAs.
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Feb 25, 2010
03:13 PM
Andrew-
One area that hasn't been focused on as much is whether both sides will agree to increasing the number of games in the regular season. If both parties move to an 18 or 19 week schedule, what would happen to the current players' contracts? In theory, wouldn't they all have to be either renegotiated or altered through an arbitrator? If you could please explain how this scenario would work out I'd appreciate it.
Thanks.