Labor questions: Part 1
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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