DeMaurice Smith lays out the stakes. Now it’s Goodell’s turn. Andrew Brandt
The public battle for hearts and minds has begun. Starting with Thursday’s press conference by NFL Players Association head DeMaurice Smith, the gauntlet was laid down by the union that this internal debate over the splitting of over $8 billion of revenues will be public and will be uncomfortable, at least from the players’ side.
Smith has been accommodating to Commissioner Roger Goodell during their brief interactions and will certainly be respectful and polite to the gathering of owners he’ll address Saturday, but his message is clear: The owners mean business, and so do the players.
Smith used his bully pulpit to get a few messages across to the media – most of who were just looking for a couple quick sound bites – and through them to the public. The themes were the same he’s been preaching – Smith is the son of a preacher and it shows in his oratory and inflections – for some time:
• The NFL is asking for an 18-percent reduction from the present status quo.
• The NFL is asking for the players’ current share of 59 percent of revenues to go to an “applied revenue” number of 41 percent.
• The NFL is a business that has seen its teams’ values rise almost 500 percent since 1994.
• The NFL says it has financial problems but refuses to “show us the books.”
• The NFL is preparing in all ways for a 2011 lockout of its players in several ways:
Its teams are adjusting coaching and front office contracts to reflect a possible lockout with reductions in pay and notice to terminate.
It has negotiated contracts with broadcast partners such as DirecTV that insure payment even in the event of a lockout – although with later credits back to the broadcaster – to insure steady payments without football.
It has hired Bob Batterman, the attorney who guided the NHL through its recent lockout.
Smith also brought out the mantra of the late Gene Upshaw in his comments, remarking that if the salary cap goes away, which looks to be a near-certainty in 2010, it won’t be back. Smith should be careful making broad-based statements like that, as the union may want a salary cap should it negotiate other favorable terms. It’s important that Smith leave some wiggle room there.
Is Smith correct with these numbers and assertions? Depends whom you ask. He certainly can trot out economists to show some accuracy.
The league has a much different view of its proposals and its rise in team values, but it will have its chance for spin in Commissioner Goodell’s media conference today.
Goodell will likely point to a couple of other numbers central to the case of the NFL:
• NFL players have received $2.6 billion in salary and benefits from incremental revenue growth since 2006.
• NFL owners received $1 billion in new revenue during the same period, with operating costs of $1.2B.
• NFL player costs are up 9 percent since the start of the new CBA in 2006.
• NFL owner cash flow is down 8 percent during the same period, a 17-percent net difference.
Goodell may best be served by not engaging in a back and forth with Smith on a public stage but rather continuing with vague language about trying to get a deal done that works for both sides.
The bottom line is that football will continue in 2010, but perhaps differently than we’ve known it. The bigger question is whether we’re going to be having these dueling press conferences at the Super Bowl in Dallas next year.
After both press conferences, the majority of the football public will yawn and say to wake them up when the millionaires stop bickering. However, the negotiation is as important as any in the modern era of football as the league looks to roll back player costs to get them in line with its version of the economic realities of the day.
Stay tuned, sign up for the Webinar and welcome to a new NFL in 2010 and beyond.
Follow me on Twitter: adbrandt
If you want the union shill side,go to PFT and Florio, besides the Roonie Rule,
he loves crying for the poor rich players vs the mean rich owers.
This still is a rift between the old guard and new guard of owners. The cut being asked is high as a starting offer, the most they can expect it to floor at is 51 per cent, or 53 per cent value adjusted in working numbers.
Go ahead, open up the books. Let people who don't play or watch football see their tax dollars tied into local bonding ordinances. Really, go there, I'm sure you'll find extra fans that way....
Two issues I'd like some insight on please:
1. It's been reported that players who overachieve (or outperform their contracts), such as Chris Johnson and DeSean Jackson, can only renegogiate for better deals to a maximum of a 30% raise, keeping both players very cheap at under $1M per season. Yet with players like LT, who renegogiated in the favor of ownership last season, is there a minimum pay cut to which the team can sign him? Or is ownership free to downgrade a player's worth to any low and/or percentage they want (without going below the player minimum and without waiving/cutting the player of course)?
2. Also, with owners having the ability to waive/cut a player without financial implications at any point during which he's under "contract," surely this will be an issue the NFLPA wants changed in the next CBA, right? Why haven't we heard more about it though? And assuming it is changed, won't it result in fewer long-term contracts even for marquee players such as RBs who have such a short shelf life?
""""According to Smith, the NFL's opening offer called for an 18% rollback in total football revenue.
On average, each of you needs to take a $340,000 pay cut to save the National Football League' Tough sell -""""
It is may be a tough sell to tell NFL players that instead of making $1,888,888 on average you will be making $1,548,888 - But tell me why they are screaming at the bankers for their bonuses. That is the starting point for negotiations isnt it??
Fans need to unite and form the football fans version of the Tea Party and fight ridiculous salaries and dumb owners who overpay - why do you have to make first Ely Manning and then Rivers and now Peyton Manning and Drew Brees successively the highest paid players ? and then it is no wonder the owners are looking to ding the fans anyway they can like seat licenses and $10 hotdogs - Things need to get back to some form of reason.
Just keep on with the rhetoric and the fans will leave - there are improvements to be made - most owners know that a salary cap needs to stay or you will have baseball - they know that small markets need help and they know that governments will be hard pressed to help fund stadiums and upgrades for the next decade ( how many trillion dollar is the national deficit ??) - Now is the time for a rationale decision - play politics and you will kill the sport just like baseball did.
If the NFL doesn't play in 2011, I'm going on strike forever against the owners and the ploayers. Both parties are spoiled.
It's all Ted Thompson's Fault.
Very good article.
Thanks
In 1994, MLB lost me as a fan forever when the greedy owners and players both overplayed their hands and even the World Series was lost. Since then, I have remained a baseball fan, but have given no passion (or money) to the game or any of its teams. Couldn't care less who wins or loses (well, I love it when the Yankees lose!).
If the players and owners of the NFL mess this up and take away the game we all love for even one week, or mess up the system that allows small markets like Green Bay to not only compete but have a realistic chance to win, the same thing will happen. I am a die hard GB Packers fan, but I will cancel my Sunday Ticket, and not invest one second of passion or one cent of money to the NFL ever again.
If these billionaires and millionaires can't see how good they have it, then they can all pound sand.
i was wondering how is free agency going to work with the final 8 teams not aloud to sign a free agent till the lose one does that include resigning there own? also how does that work with cuts
What prevents the players from striking at the end of next season? They will have collected their salaries in full and will have the most leverage to hurt the owners if they skip out on the playoffs. Granted this is a nightmare from a public relations standpoint.
As I am sure you know, there are several battles being fought. One is the battle of the sound bites, which can be overlooked as mere cocktail conversation. Interesting to a point, and more interesting as the alcohol flows; a precursor to nothing.
The hottest battle is being fought within the two camps who are trying to finalize their platforms. This is where the juice is, but access to this juice is being squeezed too tight. What control do the owner's really want? Will the player's egos cause them to set their demands too high? Who will bluff and who will call?
The owner's position is based on a model that is in its old age. I compare the NFL owners (besides the Green Bay Packers) to old Hollywood moguls who owned studios and the contracts of the movie stars. The stars were allowed to perform only when and where the owners decreed, almost exclusively within the mogul's studio. Nowadays that seems to be an absurdity, but at the time it made perfect sense. Nowadays actors such as Robert Di Nero and Clint Eastwood own production companies and they decide what work they will tackle. There are still powerful Hollywood studios, but they no longer control the film genre.
Lastly, the NFL is foremost an entertainment industry. High school football is a sport. As in all entertainment industry squabbles, it is about power and money. Squabbles in sport are about rules.
As I am sure you know, there are several battles being fought. One is the battle of the sound bites, which can be overlooked as mere cocktail conversation. Interesting to a point, and more interesting as the alcohol flows; a precursor to nothing.
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Feb 05, 2010
11:54 AM
First, which is it? An 18% reduction in salary or a reduction from 59% of revenues to 41% of revenues? The difference is sort of critical because the later (from 59% to 41%) results in a 30% reduction in salaries.
Second, I'm a little confused about your use of the words "incremental" and "new". You say that players received $2.6 billion from incremental revenue growth while the owners received $1 billion. That suggests at 70/30 split, not a 59/41 split. Wouldn't it be more accurate to say that some of what the players received was due to incremental revenue and some pay increases were tied to the base revenue.
Third, you stated that owners incurred $1.2 billion of operating expense. Is that incremental operating expense (tied to the incremental revenue) or is the total operating expense for the league. It's extremely important if it's the former and irrelevant if it's the later.
Fourth, as a journalist, isn't this one of those times when you should explicitly reveal that you work as a consultant to the Eagles and are therefore, potentially at least, biased toward the management position?
I am always amazed at the management of any pro sport who demand that the relevant union make concessions because the league is under financial duress but refuse to open their books to union representatives.