CBA News: Heating Up 1/19/2011

[riddel]

As a lifelong resident of a "right to work" and "at will" state here's what I say to that:

If you don't like the compensation and schedule offered by your current employer then find another job.

FYI- even if you are a resident of a "right to work" or "at will" state, you're employee handbook could save you from wrongful termination if it specifies reasons for termination. I reached a nice settlement with a company after they dismissed me, based on the employee handbook. The most important thing you can do for yourself as an employee in a "right to work" or "at will" state is ask for a contract. I do not take a job today without an employee agreement. They can still fire you, but they have to pay. Once the 2008 recession hit, my employer tried to do the 2 weeks severance pay deal and I pulled out my employee agreement that I required before I started work and showed him what I was entitled to.......ended up settling for almost a years wages.

You gotta be smart today or you will be on the streets. Employers have no loyalty and a contract is the only way to do business today.

[riddel]

Please reread my post and realize I said that the players have the option to go do something else if they don't like the compensation and work schedule. Nobody said anything about firing anybody.

I guess you were in such a hurry to write a patronizing response you didn't bother to actually read and comprehend my post.

Now you're just being silly. Why would a player walk away from a multimillion dollar contract that they worked for since they were 6 years old? You do realize that football pros start their career ambitions when they are knee high and work towards it until they are 20 years old? If you had a CBA in place, why would you walk away from that especially since it would mean they breached the contract and would be liable?

Now I'm patronizing you.

[blackcatgrowl]

Yeah....reading this thread it's apparent many of you people have no clue what the issues are.....

The owners are demanding that the players take an 18% DECREASE in pay and an 11% INCREASE in work, while each of the owners is guaranteed $125 million in TV contracts, which doesn't include tickets, conssessions and merchandise sales.

So, let's put this in perspective. You're boss walks in this AM to the weekly staff meeting and tells you all that your salaries will be DECREASED by 18% and that you will all have to start working 2 saturdays per month, while your boss has secured a mult-million dollar salary through a vendor and refuses to share any of the profits from that vendor with the company even though the vendor requires the employees to do the work. This is called a hierarchy and these types of labor-management relationships no longer exist successfully in the USA. It's why the Unions were created.

Boo-fuging-hoo.

I didn't get a raise two years in a row, which is actually about a 12% decrease in pay. In addition I worked a total of about 100 hours overtime in those two years, because of "special projects" which is about a 4% increase in my total work, almost all of which I wasn't compensated for.

I didn't like it, so I looked around for other employment. Guess what? The job market sucks so bad, I didn't even get called in for an interview, despite being qualified (or maybe a little better than qualified) at all of the places I applied.

On top of that, with increases in health premiums and deductibles, I've had to eat about $10k in medical expenses since 2008, so I've got debt up the ass now too.

These players ON AVERAGE make enough money to live off of in luxury AND set aside to live in comfort for a decade and a half, without working again, and you expect me to feel some sort of sympathy towards them?

fug em. If they don't like the deal, they can negotiate. If they don't want to do that, then they can go try and find a job at McDonalds like everyone else. JUST for the first time yesterday, did DeMaurice Smith sit down to discuss labor with Goodell. If he was serious about getting a deal done, he would have done this multiple times by now.

This sympathy for millionaires is just baffling to me. No one I know thinks NFL players are underpaid. No one I know thinks an 18% cut to an AVERAGE BASE SALARY of $990,000 is worth shutting down football. And as I said earlier, that 18% number is almost assuredly an "Ask Price". The owners know they aren't going to get that number, so they are starting high. It will probably come down to 7% at the negotiation table... IF SMITH WOULD SIT DOWN WITH THEM.

But he's being combative. He's being litigious. Why?

[replive]

not adding much here, but median base income would give a better picture of the average nfl player than the average base salary. This is, of course, because there is a salary floor but not really a salary ceiling and the numbers would be skewed upwards due to outliers and such.

[replive]

Thanks for the link, Inimicus.

Does anyone have the numbers for how much the healthcare for former NFL players costs over a lifetime? I did a quick google search but I can't find anything substantial.

[panthers55]

Yeah....reading this thread it's apparent many of you people have no clue what the issues are.....

The owners are demanding that the players take an 18% DECREASE in pay and an 11% INCREASE in work, while each of the owners is guaranteed $125 million in TV contracts, which doesn't include tickets, conssessions and merchandise sales.

So, let's put this in perspective. You're boss walks in this AM to the weekly staff meeting and tells you all that your salaries will be DECREASED by 18% and that you will all have to start working 2 saturdays per month, while your boss has secured a mult-million dollar salary through a vendor and refuses to share any of the profits from that vendor with the company even though the vendor requires the employees to do the work. This is called a hierarchy and these types of labor-management relationships no longer exist successfully in the USA. It's why the Unions were created.

While I agree with your general premise, there are a few issues I would clarify. Owners want players to take a cut in the share of the revenue as a percentage of total revenue. They have seen revenue increase which increased the players share of the revenue but it is gross revenue not net revenue. So what isn't factored is the cost of doing buisness which is totally on the shoulders of the owners.

Using your example, the owners have to pay the players 60% of the gross revenue regardless of what it costs to run the business. So it would be your boss saying that the costs of doing business has gone up and the union saying we are getting our 60% regardless of how much it costs. The real issue is whether or not the owners are making more money or less compared to what they were making before they raised the player's percentage in the last CBA. Obviously there is a wide discrepancy between what a Jerry Jones makes versus the Glazier's down in Tampa. But any agreement has to be profitable for both ends of the spectrum.

Secondly if the player's go from 60% back to 55% of gross revenue but the league makes 40 billion more this year, the player's cut of the revenue would go up, just not as much as it would if they still received 60%. By going to an 18 game season, the goal is to raise revenue for everyone not just raise it for the owners. So it isn't that owners want to cut salaries and make more money they want to cut the rate at which things are increasing and give the players closer to what they got in the last CBA, before the increase.

[riddel]

Please read. The owners are the bad guys and full of greed.

http://fourthandgoalunites.com/2011/01/11/%EF%BB%BFnumbers-show-nfl%E2%80%99s-%E2%80%98economic-realities%E2%80%99-for-lockout-unwarranted/

Numbers Show NFL’s ‘Economic Realities’ for Lockout Unwarranted

Posted on January 11, 2011 by Jeff Nixon

Forbes Sportsmoney Jan. 10 2011 – Posted by Maury Brown

As fans settle in for the stretch run of playoff games in the NFL, the most important date on their calendar shouldn’t be Super Bowl XLV on Feb 6, but less than a month after on March 3. That is when the current collective bargaining agreement in the NFL expires. Yes, fans could be looking at the league locking out the players in just over 7 weeks creating a work stoppage that, depending on how long it is, could possibly mean the cancellation of preseason games, at best and regular season games at worst.

The claim by the NFL is that if the players don’t reduce salaries and increase the amount they are providing in “expense credits” for expenditures such as stadium development, the league could see rocky times.

“Yes, NFL players deserve to be paid well,” said Commissioner Goodell in a January letter to fans. “Unfortunately, economic realities are forcing everyone to make tough choices and the NFL is no different.”

But, do the economic realities really point to the NFL needing to make “tough choices”? Here’s how it all breaks down.

What is Goodell basing his “economic realities” on?

The league has pointed to the only financial info made available to the public, the Green Bay Packers. The “economic realities” are that in the worst economy since The Great Depression, the Packers saw reduced profits last year. The club pulled in $9.8 million in profits for the fiscal year that ended March 31. That was a decrease from $20.1 million from the year prior.

That’s the Packers, is the league offering up other financial information?

The answer shouldn’t be surprising, but it’s no. In prior labor battles, namely MLB’s 1994-95 strike the players said, “If you’re asking for salary cuts, show us your books.” The NFLPA is asking the same, and was the case in the past with baseball, the NFL has rejected the request.

Is the NFL profitable by other measures?

According to Kurt Badenhausen of Forbes SportsMoney, “The NFL has never been more profitable by our count with the average team earning $33 million in 2009 in operating profit (earnings before interest, taxes, depreciation and amortization) thanks to huge incomes for teams like the Cowboys, Patriots and Redskins.”

The most recent Forbes NFL franchise valuations show 19 of 32 clubs being worth at least $1 billion. In Major League Baseball, where talk of a labor stoppage at the end of 2011 is nearly non-existent, only the Yankees have a valuation of over $1 billion, as ranked by Forbes.

What are the owners looking for?

In terms of economics, a rookie wage scale and increased “expense credits”, both of which would reduce total revenues (the amount of revenues after the owners take their cut off the top before it gets to the players) by approx. 18 percent.

How much do the players currently take in?

Players receive approximately 50 percent of all revenues in the NFL. Looking at it another way, the players receive less than 60 percent of “Total Revenue” – the amount of revenues after the owners take expense credits off the top. (see a listing of All and “Total Revenue” in the NFL since 2000)

Have rookie wages grown?

Actually, the amount of rookie share of the salary cap has decreased since 1994:

· 1994 (first capped year) – 6.86%

· 1999 – 5.41%

· 2003 – 4.94%

· 2009 (last capped year) – 3.71%.

How much revenue is the NFL pulling in?

From 2005, the year before current CBA was reached, to 2009, revenues in the NFL have grown dramatically. From 2008 to 2009, during the chilly economy, revenues grew 9%. Going back to the key “All” and “Total” revenues, which is the revenues after the owners take their expense credit cut that is used to determine the salary cap, revenues for the salary cap, the numbers are as follows:

Year (All) Rev (Billions) % of increase (Total) Rev (Billions) % of increase

2005 $6.5 $6.0

2006 $7.7 18% $7.0 17%

2007 $8.0 4% $7.1 1%

2008 $8.5 6% $7.5 6%

* 2009 $9.3 9% $8.2 9%

* Calculated

All revenue increase from 2005 to 2009, 43%. Total revenue increase over same period37%

The owners are asking for increased expense credits, what do they pull in now?

Approx. $1 billion off the top before the calculations for the salary cap are made. The logic of expense credits is that in doing business activities such as building new stadiums, the increased revenues will trickle down to the players. The players have concerns about loopholes such as the league using the funds for travel expenses, which does not grow revenues. In terms of recent stadium construction, those expense credits have included $800 million to the new Meadowlands Stadium for the Jets and Giants, and $350 million to the new Cowboys Stadium.

Did Free Agent spending dramatically increase in the uncapped season?

In an uncapped season, there was concern that spending would go spinning wildly out of control. But, clubs in the NFL did the opposite, with spending on FAs growing at less than half the pace that it did in the last year of the capped season. Based on data as of Week 10, spending on free agents had grown 4.8 percent from the year prior. The following is a breakdown of free agent spending in the NFL as of Week 10 over the last three seasons:

YEAR Total Players (UFA, RFA, OFA) Signed TOTAL FIRST YR $ % Increase AVG FIRST YR $

2008 374 $708,878,082 – $1,895,396

2009 385 $784,674,108 10.70% $2,038,115

2010 425 $822,227,925 4.80% $1,934,654

Has the economy impacted attendance?

Over the same number of home games (254), the NFL drew a total of 17,007,172 for the 2010 regular season. That was down 139,232 in paid attendance from 2009, less than one percent (-0.81%).

Have television blackouts increased or decreased over the current CBA?

There were just 7 blackouts in 2006, compared to 26 this year. The blackouts are tied to whether games are sold out. In an interview with Mike Florio of Pro Football Talk, Commissioner Goodell said, “The quality of what people are seeing on television sets with high-definition television and super-slow replays, all of those things make the experience at home terrific. We don’t want to discourage that. We want to encourage that, but what we have to do is make sure that the experience in our stadiums is equally as great. There is nothing like being in a stadium with 75,000 passionate fans enjoying NFL football.”

How does television play into any lockout?

The largest factor in a possible lockout stems from how the NFL’s agreements with their network partners are worded. The NFL would get still get paid for the TV rights, regardless if games are played.

Annually, the NFL pulls in more than $4 billion in television network rights fees (see table below). For all of the network partners, they have agreements in place with the league in which the NFL would be paid these fees, even if games are not played. Roger Goodell has said that the league will have to rebate the networks, with interest, when play resumes, but that’s only half true. The DirecTV fees for NFL Sunday Ticket, which are now almost $1 billion, would not have to be returned.

Network Annual Rights Fee

ESPN $1,100,000,000

FOX $720,000,000

CBS $620,000,000

NBC $603,000,000

* DirecTV $1,000,000,000

TOTAL $4,043,000,000

* Approximate

[riddel]

Is ESPN looking to extend their agreement for Monday Night Football?

John Ourand of the SportsBusiness Journal reported last week that, even on the edge of a work stoppage in the NFL, ESPN, the ABC-owned network, is willing to pay considerably more than they already do for the rights to keep Monday Night Football. According to the SBJ:

ESPN and the NFL have agreed to broad terms on a new media rights deal that will be worth nearly $2 billion per year. Specific numbers still are difficult to confirm, but multiple sources say ESPN has told the NFL that it will increase its annual rights fee by 65% to 70%%, which means it will pay the league a record fee, between $1.8 billion and $1.9 billion a year.

How have television ratings been?

Extraordinary. Nothing comes close to the league’s popularity on television. The NFL have 18 of the 20 highest rated shows during the NFL season. According to a Dec. 19 article in The New York Times, “Of the 50 highest-rated programs during the calendar year, 27 have been N.F.L. games, including 8 of the top 10.” And looking at this New York Times graphic, Sunday Night Football ratings have skyrocketed since 2008.

Are any other business partners reaching lucrative deals with the NFL?

In May of last year, Anheuser-Busch knocked Coors out as the Official Beer of the NFL in a six-year, $1.2 billion deal that begins in 2011, the year there could be a lockout.

What are the players looking for?

Nothing. Technically, they are seeking an extension of the current CBA reached in 2006. To date, the owners have rejected the proposal 5 times.

Are the players willing to bend on any issues?

Yes. The NFLPA proposed changes to the rookie wage scale that has been in the works for over a year. The union for the players offered up what they call a “Proven Performance Plan”. The proposal would reduce rookie contract lengths to a max of 3 years. According to the NFLPA, that would reduce spending on rookie salary by approx. $200 million. The proposal would then take those savings and divert $150 million to players who signed relatively low contracts either as rookies or veterans, but whose performance has been much greater. The rest of the balance (approx. $50 million) would be devoted to a fund for new retired player benefits. The proposal is also seeking the league to match those funds creating a $100 million pool for retired player benefits.

Did the league accept the “Proven Performance Plan”?

Since the Players’ proposal does not reflect the savings on the reduced length of player contracts coming back to the owners, unsurprisingly, the owners rejected the proposal.

Would the players have benefits in the event of a lockout?

No. Medical insurance and other benefits would not be provided to the players as they are tied to CBA. In fact, each of the NFL’s 32 clubs is saving millions in this uncapped year. According to a Q&A released by the NFL in 2010, “The union agreed that in the Final League Year, clubs would be relieved of their obligation to fund numerous benefit programs. Examples include second career savings (401K), player annuity, severance pay and performance-based pay. The total league-wide contributions to such plans in 2009, the last capped year, were in excess of $325 million or more than $10 million per club.”

Do the players have any weapons to try and fight back?

They do, but it’s certainly not full-proof, and fraught with risk. The NFLPA has said that they are considering decertification. That would mean the union for the players would dissolve becoming, ostensibly, a trade organization. Based upon anti-trust law if the NFL clubs, acting as 32 individual businesses, were to attempt to do so, it would be a group boycott of the workers which is illegal.

The NFLPA did this 1989 only to reform as a union in 1993. The NFL would claim through the courts that the new move to decertify is a sham based upon the actions that the NFLPA did prior. It also could mean that a new union could be formed while the current one is dissolved setting up a possible power struggle with the players.

If decertification were to be used, it would likely be a trump card – something that would be acted upon very close to the March 3 deadline

Most of this looks like it shows the NFL doing better, rather than worse, why are the owners looking to a possible lockout?

The NFL could make a compelling case that they are in need of cutting salaries for the players, but as mentioned, they are not releasing financial information, so what is provided paints the picture. If the picture is indeed correct (and unless the NFL is willing to show otherwise, it is as it is), then one could suggest that opportunity is at the center of it. With the television money being so lucrative, the fact that they get paid those rights fees, even if games aren’t played, on top of keeping approx. $1 billion in DirecTV money, then clawing back to where the owners were before the 2006 agreement was reached is a tempting proposition. After all, with the economy just now starting to thaw, it’s easy to say that the NFL is hurting like everyone else, even if they league isn’t presenting compelling figures.

And while the NFL will say that they have to pay the television money back, in the battle of attrition, the owners can clearly outlast the players. If so, the owners will make back part of what they have to pay back through savings on player payroll.

And all of this doesn’t account for other issues the owners are asking for including an 18 game schedule, and possible hGH testing as part of the drug policy. On the 18 game schedule, the players would incur more injuries, which, unless the league is willing to add more money in the way of benefits, is a key concern for the players.

Lastly, there are the fans, who are stuck in the neutral zone of this goal line stance. The owners appear to be willing to sacrifice games while seeing incredible revenues, ratings, and sponsorship deals reached over the life of the current CBA. The players have been asked to take a cut. As you look back over the numbers above, ask yourself if your company was thriving in this economy, and then asked you to take an 18 percent pay cut, how would you react? What the NFLPA is asking seems reasonable in light of what the owners are asking: show us your books and prove it.

When will there be a new CBA?

This is the $64,000 question. What seems clear is no agreement will be reached in time for the Super Bowl. The sides have had discussions, but they have not been of the “meaningful” variety. Real movement in labor negotiations occur the closer one gets to the deadline. The period from after the Super Bowl to the expiration date on the CBA will be telling, especially the week beginning Feb. 28 leading up to March 3rd on a Thursday.

[Lords0fPain]

hmm, just like any other business, the owners of the company are in charge and takes all the financial risks. I don't see where it is the employees (in this case the players) business what the owners are making, as long as they are getting their paychecks on time and the money is there.

Yes, players take a physical risk, but it is football and when they choose to play the game for pay, they have accepted the risks. The league is in the process of implementing rules (which may or may not be good for the game) to help alleviate some of those risks.

Reminds me of public service workers, who know (or should know) when they went to college their profession, that the profession does not pay a lot. Then these same people whine and cry they don't get paid a lot, once employed in said profession.

The owners signed a bad agreement to start with and they are exercising their right to opt out, until a better agreement is reached. If anything, I believe the players are the ones not at least trying to compromise.

My take on it so far,

1. The cost of doing business (everyone else's salary from the guy tearing your ticket to the police directing traffic for a game, payment for the loans on stadiums, insurance premiums, etc) should NOT be included in what the owners make. Then I would support the owners having to open their books for the employees (the players), which isn't their business to start with.

2. There does need to be a rookie wage cap. Maybe escalators, if they play the first year (or whenever they do play in their first contract) and actually produce for the team.

3. The health insurance should go 10 years (instead of the 5 it is now). Since that will raise insurance premiums on owners, this cuts into wages of players (if we go by #1).

4. 18 game schedule, Since they are taking 2 preseason games away, it is a wash. Just usually vets don't have to play a lot during preseason, however, they could be if a coach so choose to do so (and sometimes they do). So, more games for less money is weak argument. They are under contract to be prepared to play in those preseason games, if so directed.

Of course the players could start their own league with their own money and we'll see how long that last.

Just my 2 cents..."f" the players (sick of unions in general, pricing the US consumer out of products and services anyway, talk about greedy??).

[Urrymonster]

When some players on the team are taking home more money in season than the teams are making in profit, then something is wrong.

[TheRealDeal]

2. There does need to be a rookie wage cap. Maybe escalators, if they play the first year (or whenever they do play in their first contract) and actually produce for the team.

There are plenty of escalators already. I know that they get a 10 k appearance bonus just for getting 1 play in a game and depending on where they were drafted they get a per play bonus.

If you are first round it's something small like $50 per play but if you are undrafted it's something like $400 per play. Some of the undrafted guys making league min make more in per play and appearance bonus' than they do in their contract.

[DR_DIGH]

So, the owners are locking all of us out. Players will not get paid, but the owners will still get the TV money that they negotiated regardless of the fact if there is a game or not. And the UNION is a bad guy here?

And newsflash, Goodell works for the owners, not players.

Unions nowadays do more harm than good. You would think with the name "Union" that they would bring people together but most of the time they dismantle everything.

[panthers55]

The articles above reference whether the NFL is making more money or not and that really isn't in question. That is a given. And player's salaries are not being reduced. The league wants to reduce the percentage of gross revenue from 60% back to closer to 55%. So the owners want to make more but the reality is that if the league makes more so will the players. Players salaries are tied to the cap which represents right now 60% of the amount of money made by the league as a whole. Owners are saying that they want to make closer to 45% of the toal since they have to fund costs like renovating rebuilding stadiums and other factors. The idea of players paying capital costs for building was floated as an arguing point but won't be adopted.

If an owner purchased a franchise for lets say 400 million dollars and is getting back in profit 25 million a year that is a return on investment of 6%. There are very few people who will purchase a business with such a small profit margin. The whole net worth argument sounds good on the surface but isn't realized unless you sell. How many owners actually sell? I don't know the statistics but has anybody sold and got close to billion dollars for their franchise? The truth is most owners made their money elsewhere and continue to do so. Football franchises are bought for the glamour and prestige of owning one not profit machines.

[riddel]

When some players on the team are taking home more money in season than the teams are making in profit, then something is wrong.

If you read, the 32 owners made an estimated $33 million in 2009 sales alone, which doesn't include the $125 million in TV guaranted money. 19 of the 32 teams are worth a BBBBBBBBBBBBBBBBBBBillion dollars.

Can you guys seriously not read?