Monday Money Matters

The Economic Fallout

Cost control is everywhere these days. Unemployment stands at 9%.  Housing prices are plummeting (something I am personally very aware of).  The stock market is, well, you know the rest.  These facts are not new to us; we have been living in this downturn/recession/meltdown/depression for a few months now.

The interesting issue from this column’s vantage point is whether this recession is truly affecting the sport of football.  Below the NFL threshold a couple things are happening.  The Arena Football League, which turned down a potential 100M cash infusion from Platinum Equity in the fall, has shuttered for 2009 with plans to re-emerge with a more streamlined business plan and lower Salary Cap in 2010. 

At least one of their franchises, the Los Angeles Avengers, remains unconvinced, having dropped out of the picture completely.

The United Football League, run by a former fellow general manager of the NFL’s World League, Michael Huygue (Huygue was in Birmingham, I was in Barcelona), is set to open for business in the fall, although with a much less ambitious version than first presented. 

The league will feature a barnstorming type of schedule among four teams, with some name value coaches running the squads – Jim Haslett, Denny Green, Jim Fassel and Ted Cottrell.  Some are skeptical of the league – as always the case with a league not named the National Football League – but the money behind it is substantial (although less substantial than it was a year ago).

As to the NFL, they have certainly not been immune to the economy.  Over the preceding months they have offered voluntary buyouts to all of their employees with more than five years experience.  When the number of people accepting such buyouts did not reach their desired number of 150, there were dozens who were forced to take involuntary buyouts. 

At the team level, layoffs or furloughs have come for the 49ers, Colts, Jets, Panthers, Redskins and others.  Interestingly, teams have not skimped on player payroll during this time, with the usual spending frenzy at the start of free agency.

Case in point, while the Redskins and Jets were laying off or furloughing employees, they were inking Albert Haynesworth and Bart Scott, respectively, to record-setting deals for their positions.

Coaching in the Current Economy

Now comes another group of employees affected by the downturn:  the coaches.  As it turns out, there was a decision made at the annual league meetings in March allowing teams to opt out of the pension plan for these employees, and nine teams have done so.  These teams have found another way to cut costs in this declining economy, and that way affects this other tier of employees that are not players. 

With this news, there are coaches – most notably in Indianapolis – making retirement decisions based on this new piece of bad news that was sprung on them following the decision from the annual meetings.  Communication could probably have been better on this matter.

This story points to the fact that in the labor-management relations of the NFL, I have always felt that coaches are in no man’s land.  There are clearly sides to be taken when there are player-management disputes, primarily over contract and conduct issues.  However, it is always interesting to see where coaches stand on these positions.  In most cases, the coach has to support management in its position yet, at the same time, not lose the loyalty, trust and motivation from the player. 

Coaches do not necessarily need players to like them; they do need players to respect and trust them.  Thus, the tricky road a coach must navigate in a player contract dispute.

The above reason is why it is so difficult for a coach to be both a coach and a general manager.  Once that person is making financial and management decisions, the players perceive him differently.  He is now someone not only controlling their playing time and on-field success; he is controlling their purse strings and career longevity. 

The Dual Role Coaches

I worked several years for a head coach/general manager and understood that I would have to play the role of the “bad guy” due to the clear necessity to have the player continue to trust, respect and be motivated by the coach.  There appear to be two people in the NFL doing the job very capably – Bill Belichick and Andy Reid – but this is a tough model to perfect.

With the decision to allow teams to opt out of these pension plans, the coaches role in the labor-management continuum becomes more defined.  They are labor, and a labor group without representation.  True, there is an NFL Coaches Association, led by Larry Kennan, a very capable and honest man I know well from my World League days (I interviewed Larry to be our head coach in Barcelona; he ended up coaching for the team in London).  They are, however, an “association” and not a union with certification by the NLRB.  The coaches enjoy none of the benefits bestowed by a union as the players do.  In light of the above, that status needs to be examined.

Most teams, as of this time, are continuing the pension plan.  However, as uncertainty in the economy continues or even worsens, as suite and sponsorship sales flatten, reactions by NFL teams will also continue.  Again, the teams will be loath to affect the product that moves the meter:  the players. 

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