NFL Labor pains, part six

In my ongoing series about the NFL labor dispute, here is part one.

Here is part two.
Here is part three.
Here is part four.

Here is part five.

Although yesterday was the weekly mailbag, I’ve had so many questions about the labor situation that I will continue the Q & A format on what will soon be “the issue” in the NFL, the CBA negotiations and pending lockout.

What, in your opinion, is the biggest issue to be decided in this negotiation?

The splitting of $8.5 billion of gross revenues coming into the NFL. There are two parts to the division: (1) what percentage goes to the players, and (2) what overall revenue number is the percentage coming from.

A major issue in this debate has been pegging the revenue number with an “apples-to-apples” comparison. The most recent players' percentage -- from the 2009 Salary Cap -- was 59.5% of TFR (Total Football Revenues), but the percentage came after a $1 billion setoff from the gross revenue number was taken by the NFL for its risk in operating the business. The NFL initially proposed setting off a further $1 billion, although they have come off that number in more recent proposals to the union.

The players' percentage before 2006 was 64% of DGR (Designated Gross Revenues), a much smaller number that TFR. I would expect the next CBA to have percentages pegged to a “net-net” number, a net revenue number after the NFL deduction. The players' percentage will then be lower, perhaps barely over 50%, but it will be pegged to an identifiable revenue number post-offset.

As we see, regarding the players' percentage, the key issue is not so much what percentage, but percentage of what number.

What do you make of Dan Rooney’s comments about not wanting the 18 game schedule and his pessimism about reaching a labor agreement?

Rooney’s comments certainly caused some pained looks at 280 Park Avenue (the NFL offices) and among various NFL owners who’ve been pushing the issue.

Rooney, though, is an equal opportunity kvetcher. He also had some choice words for the NFLPA leadership, suggesting the lack of trust (or even “dislike”) that I’ve commented on for a while.

Although Rooney has been a key player in past CBA negotiations and a longtime confidante of former NFLPA Executive Director Gene Upshaw, he has not been active in these negotiations, busy as Ambassador to Ireland and removed from the inner circle of the talks.

Is the 18-game schedule still a key issue?

Absolutely. Rooney’s comments notwithstanding, the 18-game schedule is not coming off the table. It has long been the game-changing issue in this CBA negotiation as it answers the two key needs for ownership:

(1) A new and important revenue source that will produce new income from television, sponsors, tickets and suite sales, licensing, event activation, etc.; and (2) An answer the problem with the meaningless preseason (by slicing its length in half).

What about the apparent contradiction of an 18-game schedule and the concern for player safety?

My strong expectation is that those concerns will be addressed and answered by ownership. Among the concessions will be:

  • Increases in size of roster and practice squad
  • Increases in number of game day active players
  • An in-season injured reserve list
  • Increases in post-career medical coverage
  • Adjusted vesting requirements for pension
  • Reduced contact in offseason and preseason
  • Later training camp start dates.

What do you make of DeMaurice Smith's comments about being "at war" with the NFL?

Smith is trying to distance himself from the image of Upshaw as chummy with his adversaries (Upshaw was close with former Commissioner Tagliabue and owners such as Rooney and Jerry Richardson). In securing the job he now holds, Smith presented a more hawkish style to the player representatives and is presenting himself in that role.

As to the strong language, pay little attention to the vitriol. Dramatic words and phrases like that are often used for effect and to elicit a reaction. They mean little to the goal in the end.

What do you think of Commissioner Goodell taking a salary of $1 in the event of a lockout?

It seems like a well-meant gesture, and it will mean he is making $1 more than NFL players will make if they are locked out of work.

You really think they’ll get something done despite the recent comments?

Posturing and lack of trust have been hallmarks of this negotiation and probably will continue. However, I choose not to believe the gloom and doom nor be worried about the language. That is all part of the process and this is a negotiation that will have twists and turns in optimism, pessimism and deep pessimism.

So you think there is a deal to be made here?

$128 million ($123 million with a $5 million adjustment due to the uncapped year). And I think the deal will include the following:

  • Small year-to-year increases from that $128 million 2009 Cap number and the continuation of the Cap
  • An18 game season to be implemented in 2012.
  • Upgraded health benefits, injury protection and post-career medical coverage.
  • An independent appeals process for drug testing but not for personal conduct.
  • Greater recovery rights of bonus money paid to players who get into trouble.
  • The continued application of the Franchise tag.
  • A rookie salary scale dramatically reducing pay for top picks with savings directed to benefits and salary for active and retired players.
  • Incentives for owners who maximize marketing and ancillary income for their franchises.
  • Increased funding to retired player programs from both sides.

There is a deal to be made here. And I think it will be made. The better question is when.

Follow me on Twitter at adbrandt.

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