by Andrew Brandt
February 05, 02010
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.
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