Owners' CBA position: Do you buy it?

By now, you've probably heard the NFL owners opted out of the current collective bargaining agreement, putting the league at risk for an uncapped season in 2010 and a potential lockout in 2011.

I'll share with you here the details of the league's press release on the matter, but I'll leave it you to decide for yourself. I'm skeptical, which is natural when all you have is the word of 32 billionaires who say they're being punished by an unfair labor agreement (the league is not required to open its books because it is not a public company). Owners are doling out roughly 60 percent of revenues to player salaries and costs, totaling about $4.5-billion. That's clearly substantial. But league revenues exceed $8-billion.

I'll have some more perspective in tomorrow's newspaper, including what this might mean for the Bucs or your favorite team. But for now, what do you think: Are the owners being greedy or are the players expecting too much?

The gist of the league's press release is as follows:

"A collective bargaining agreement has to work for both sides.  If the agreement provides inadequate incentives to invest in the future, it will not work for management or labor.  And, in the context of a professional sports league, if the agreement does not afford all clubs an opportunity to be competitive, the league can lose its appeal.   

"The NFL earns very substantial revenues.  But the clubs are obligated by the CBA to spend substantially more than half their revenues – almost $4.5 billion this year alone -- on player costs.  In addition, as we have explained to the union, the clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans.  The current labor agreement does not adequately recognize the costs of generating the revenues of which the players receive the largest share; nor does the agreement recognize that those costs have increased substantially -- and at an ever increasing rate -- in recent years during a difficult economic climate in our country.  As a result, under the terms of the current agreement, the clubs’ incentive to invest in the game is threatened. 

"There are substantial other elements of the deal that simply are not working.  For example, as interpreted by the courts, the current CBA effectively prohibits the clubs from recouping bonuses paid to players who subsequently breach their player contacts or refuse to perform.  That is simply irrational and unfair to both fans and players who honor their contracts. Also irrational is that in the current system some rookies are able to secure contracts that pay them more than top proven veterans.

"Our objective is to fix these problems in a new CBA, one that will provide adequate incentives to grow the game, ensure the unparalleled competitive balance that has sustained our fans’ interest, and afford the players fair and increasing compensation and benefits."

Comments

[Duane]

What a joke. when was the last time any owner paid for construction and operating costs of a stadium. I didn't see the Glazer family worrying about the "hard economic times" when they jacked up my season ticket prices this year. If anyone has perpetrated this economic climate it's these greedhead owners who are all probably supply side trickle down economists. For those who don't know history, feudel lords used to practice the same system during medievel times. The fish rots from the head down and to mix metaphors here, I smell some big fat RATS!

[Jh Skyscrapercity]

I think this is great news. Now that the CBA is being renegotiated, Congress can finally dig in and investigate exactly what is wrong with the NFL's business model, and why they have to rely upon corporate welfare to stay afloat. Something tells me that the NFL has truckloads of cash, and may soon be parting ways with some of it.

Lucky for the taxpayers, if something actually does come of it, perhaps we won't have to raise taxes to pay for a company's place of business.

Stop giving our millions to people who already have billions, and maybe we wouldn't have to cut schools, police, parks and transportation to save a little money on taxes.

The NFL is about to fight with itself over how to divvy up tens of billions of dollars in the coming years. With any luck, one of our illustrious 'leaders' will get off their arses, and hold the NFL accountable for the billions of dollars they have taken from communities all over the country, and never paid back a cent of.

[Valrico Rick]

There are always two sides to every story. Take a look at the $35 million guaranteed to rookie quarterback Matt Ryan by Atlanta, and even though he has never taken a snap or even stood on the sidelines of a professional football game once he signs he gets the money even if he never plays a down. I’m not taking sides here but look at Upshaw assuring everyone that the Players Association would never agree to a rookie pay structure, which without one and the way it is now, means millions, I’m sorry hundreds of millions of dollars, are paid to players every year before they even play their first game. Yes the owners are greedy, but through agents and with the protection of the Players Association untested rookies are taking an extremely large portion of the revenue the owners have to pay players, and the owners have no choice but to pay if they want to “attempt” to be competitive. I am seeing greed at every corner, not just with the owners, and the fans are the ones that are really getting the short end of the stick.

[Valrico Rick]

As far as the NFL business model... The NFL has an antitrust exemption and it is very unlikely that it will be investigated without indication of corruption. I used to live up near St. Louis when the Cardinals left and it took that city only about two years to realize the mistake they made. They gave Georgia everything she wanted and more to get the Rams, and get back what they let slip away. The attitude that the NFL does nothing but suck up the resources of a community is not based on any financial fact. Aside from entities such as NFL charities, and community contributions like Warrick Dunn's homes, the "football industry doesn't make all this money because it has no value. You speak from a point of petty jealousy, skyscraper, not from realistic fact.

[Jh Skyscrapercity]

The facts are indeed clear. The NFL reaps massive profits, and has no financial need whatsoever for the subsidies received to build their stadiums.

Where is the justification for taxpayers to perpetually subsidize their for-profit business? Nothing you have said has justified such an expense, under such conditions.

[frank c. costanza]

didn't the voters vote on the subsidization? where's the beef?

[Skylar]

The owners of NFL franchises don't see returns on their money like oil companies and they have huge investments into these teams. On the other hand, players have very short football lives. What they are asking for seems fairly legitimate considering the amounts of money they pay. However, signing bonuses shouldn't be put in the contract if the owner's aren't willing to pay them.

Secondly, the stadiums and franchises economically impact a city (region) greatly considering special events, the relocation of companies and employment opportunities. We, the taxapayer, subsidize these facilities as they are often used for other community events (i.e. The Outback Bowl, concerts, etc.) Big Money Events! Tampa Sports Authority runs those, not Glazer.

Lastly, I don't think the Player's Association is doing anyone any ethical service when it stands behind players like Garcia and Graham who are willing to dishonor their contracts based solely on greed. Greed can be seen on both sides of this argument.

As long as these rich ones are treated like feudal lords (Amen, Duane), this nonsense will continue. But then look at the Green Bay Packers--aren't they owned & operated by a large group who were fans? The NFL Ownership would NEVER allow that to happen again!

It's just SOS/SOP as usual. As always, it revolves around the big $$$$$$$$$$s.

[DR]

Skylar, don't throw Garcia and EG under the bus. The players argument is that the owners don't have to abide by the contract they signed. i.e. Simeon Rice for one. Yeah, he was injured, because he played ball and got injured, and the team didn't want to pay his contract that they all signed. Granted, it was a good move, but there was a contract to pay the man. If I was EG, with that kind of history, pay me for my production. EG had a great and missed out because of being on the bench. His numbers were better than Caddy's numbers when you prorate it. From EG's perspective, why is Caddy getting paid way more than me? Caddy certainly hasn't lived up to his Auburn contract.
The worst thing for the fan is both sides are greedy as can be and with that, be prepared for the forever increasing ticket prices. Hopefully by fall, people can still afford to drive to the game since gas prices may burn whatever is left in the wallet.

[Stephen_Holder]

Skylar, good points all around. But I have to take issue with one point: Garcia and Graham have NOT dishonored their contracts. Garcia is actually showing up in spite of his differences with the team, and Graham, while absent, hasn't missed any mandatory practices yet.

And here's the thing on signing bonuses: players demand them because it's the only money that's guaranteed to them. You could be cut in Year 2 of a contract and not see any more money. If so, you're just out of luck and the team gets to move on while you have no job. That said, the rookie bonuses are probably out of control and could stand to be addressed. Football players arguably have the worst labor deal among the NFL, NBA and MLB. The other two leagues generally have guaranteed contracts. The injury factor in football makes guaranteeing deals impractical for the NFL.

[Jay]

I don't think the players union and Gene Upshaw understand how good they've had it for these last few years. As it stands now, there is no rookie salary cap, and there are no franchising rights from the team for individual players. Now that they've opted out, both of those subjects will be on the table in the next round of negotiations.

For example, Matt Ryan's big contract might be an anomaly in a few seasons, and players might have to give a portion of their individual gains from endorsements back to the team that currently employs them.

Lastly, the NFL owners might push for some of that player salary to go towards retired / injured players since the Players Union does not adequately address the issue.

There are a lot of ways the players can lose on this one, and if they're smart, they'll start looking for someone other than Gene Upshaw to handle the negotiations.

[BK]

I think we need to look at the most important issue here, which is awarding exorbitant rookie contracts. I think this is the most important aspect of owners opting out of the labor agreement. Look, I do not mind veterans getting guaranteed contracts, as we all know, they can get cut by their teams 2 years into a contract and never see the rest of their money. However, I strongly disagree giving unproven and untested rookies huge contracts. We live in a society that expects to get the job done now; how are you going to do that with highly paid, unproven rookies.

[Jh Skyscrapercity]

Btw, according to an article I recently read on espn.com, the NFL brings in about $8 billion a year, and that figure goes up every year.

Yet taxpayers in Hillsborough County have to pay extra sales tax, because these billionaires claim that they can't afford to build their own facilities?

Again, when people complain about the taxes we pay, they should take a look at where it goes. That's your money they collect. Money you would otherwise have to pay for inflation (gas!), or to leave in government to pay for transit or better schools or whatever. As it is now, a few dozen people worth an absolute ton of money are having their balance sheets subsidized by the rest of us.

Who cares how the league splits up our tax dollars with the players? I just want to know when they're paying us back.

[Kurt]

Let me explain how this works DR. The players sign contracts that have clauses that allow the team to opt out if say, the player does not live up to expectations (i.e. injury, laziness, etc.) I don't believe Ryan Leaf gave any of his money back, do you? In fact, I don't ever remember a player giving money back willfully, although I do remember a few who had to pay money back (McCardell.) You are wrong in stating that the Bucs did not abide by their contractual agreement with Simeon Rice. What they did was clearly in the contract. Rice received all of his guaranteed monies lest he would have been suing the Bucs.

To think that the owners are playing some kind of deceitful game with players' contracts is naive at best and ridiculous at worst. The owners typically are the only ones who actually honor the contracts that are signed. Holding out is a form of not honoring one's word. You actually make Skylar's point with the Caddy contract, where the team gets hit even when a player underperforms. At this point, he's already earned the lion-share of his money and really hasn't played well enough to deserve it. Are the Bucs getting any money back for that? Should he give some of his money to Graham? Of course not, but the team shouldn't have to either, that's why they have option clauses which make your argument mute. Good try though.

[Skylar]

Skyscraper; refer to my earlier comment where I explain the benefits of an NFL franchise, and all the money we make off of that facility when it's not being used for football. I've submitted a request to the TSA for actual numbers, but I haven't heard back yet.

Also, concerning Garcia and Graham: I may have misrepresented my thoughts as I merely was trying to show how greed is prevelant on both sides of the argument and how it's happening right under our noses. G & G haven't held out yet, but have hinted at it nonetheless.

Many people (including myself) believe that their success was mostly the product of a much improved O-line (which I guarantee is the thinking at 1-Buc Place,) and therefore these guys are really taking advantage of public ignorance in attributing the success to themselves instead of the team. They are both replaceable with players already on the team, so they better watch themselves. (Greise/Dunn) can achieve the same or better results, especially with the addition of Faine and Zuttah and a healthy Pettigout.

I think a small raise is warranted to both parties, but creating dissension amongst the ranks is not a wise move as I believe this administration looks for team players; not egos.

[Rerun]

Skyscraper is not an economist. I met an economist once and he's no economist I tell you!

[Jh Skyscrapercity]

Skylar... I used to work for the TSA (2002-2003). I know the numbers. The Bucs get almost all of the revenues when other events are held at the stadium. Go ask USF student groups what they think of the Bucs deal.

Again, you haven't touched the crux of the problem. These businessmen make BILLIONS every year. To anyone who thinks about it for a moment, it should be clear that these stadiums would be built anyways, regardless of whether or not poorly informed voters like you are duped by slick PR campaigns into building it for them. The owners have the money. They have more than enough. But why pay, when you can sucker someone else into paying for you?

[Skylar]

You are exactly right Rerun, because if Skyscraper and DR did their homework they would see that the average NFL team is worth approx. $800 million. If they receive $3.5 billion in total net revenue ($8B - $4.5B-player salaries) divided by 32 teams, that equates to approx. $110 million per franchise in profit. Considering the value of the club (or the owner's investment) of $800 million, the actual profit margin is only a 14% yearly return. Apparently, it's a billionaire boys club because those aren't the best return numbers in the world and apparently they're getting worse. Everyone always forgets about the money these people have to come up with to buy these teams and the enormous risk they are taking. Do you have $800 million dollars to invest? Don't be surprised to see GW an owner in the next decade. He just seems like the type.

[DR]

If GW becomes an owner, that team will be destined to fail since that is the only thing he is any good at. He fails very successfully.
Kurt, take your rose colored glasses off and get off your knees, what you're doing is disgusting. Are you the cross dressing secretary for Gruden and the Glazers or something? To say that the owners live up to their end of the contract is naive and well beyond stupid. That's right, all the owners have the players interests first before anything else. Cutting a player and not giving him the salary they signed for is living up to the deal. Don't mind the fact that they tell a player to take a salary cut and if he doesn't then he gets released. Sounds like a fair shake to an idiot.

[Skylar]

DR...A contract is a legally binding document! You abide by it or get sued (see Keenan McCardell.) You were wrong about Rice's contract and you are wrong here. Nothing new. I never said the owner's had the player's best interest...that's something you made up. The owner's need some recourse when signing these huge deals that protects them from the numerous players that don't live up to their purported worth. Again, you make no reference to owner's getting money back for undervalued contracts because it is an inconvenient truth (thanks Al) you'd like to overlook.

You act as though the owner's are villians for putting up their hundreds of millions of dollars and offering multi-million dollar contracts to play a game everyone loves. You act like one of those welfare jerks who always want to blame the hard-workers for being rewarded for their labor. 1 unit of my labor is worth more than 1 unit of yours I daresay. (I know that went right over your head DR, but read up on it and learn something new today j@ck@ss.) I do agree with you concernig GW though...that's a positive note!

[Greg]

The owners are getting too greedy. As if they are not already making enormous cash off of their investment. They have no real capital cost since the tax payers take care of that for them. This will come back and bite them in the rear. It will hurt fans if it degrades into another strike, and that will hurt ticket sales and other revenues. You would think they are smarter than that. But greed clouds vision.

[Kurt]

So, it's OK for the player to be greedy, but not the owner - right Greg? Or is it all just business?

[DR]

Getting all economical on me, ha ha! what, did you just learn that term and feel proud about using it? It's the suckers who keep voting to give their dollars up to these billionaires for stadiums that make me sick. The team staying in the city they're in doesn't stimulate the local economy like the way the morons say. It stimulates the owner's pocket.

[Skylar]

Wow...how do I respond to such utter ignorance? Communist Manifesto would have been the right answer DR, and I didn't use a "term" to describe it. There's no need to argue this point any longer. Bit@hsl@p you later homie.

[Stephen_Holder]

Everyone makes some solid points here. But as for the equation referenced earlier about the return on investment, that's not totally accurate. Though the franchises are worth $800M or so on average, in the case of the Bucs, for example, Malcolm bought in for, I believe, $192M back in '95. So, if our guess of $110M annual profit is correct, that is one HELL of a return on initial investment. My mutual funds certainly aren't getting that, evidenced by my need to continue working.

[Greg]

Kurt, fair point, it does sound a little one sided to say Garcia should negotiate, but owners should not. But that is not really what I was saying or my point. The point was owners are doing very very well. The NFL has been extremely successful and they are making a lot of money. If they get too greedy they will mess up a good thing. They can negotiate all they want. But look what regular strikes have done to baseball. The owners should put themselves in that position again because they are just hurting themselves. It is all just business, but being too greedy is not good business.

[George Leslie Hicks]

I have been following the nfl ever since I was in my teens. I think the owners has some complaints, But how about all these young players coming into the league. Why not 1st of all. Make it reasonable for the average fan to come to game once in a while. 2nd the owners are the main reason the nfl mess is in shape it is. Some are Greedy and some are not. With the rising prices, lets see if all the sports teams survide.