Big Date In NFL Labour Dispute
While the excitement of the regular season and anticipation of the postseason might have been the focus lately, updates on the NFL’s labour dispute continue to stream out. NFL owners and the Players Association have been locked in a bitter struggle and at
the root of it all is money.
There are reservations regarding the 18 game season, player safety and health benefit issues, better coverage for former players and much more but fundamentally, it is all about the money. Everyone wants a bigger slice of the pie.
The current Collective Bargaining Agreement (CBA) was hurriedly put together in 2006 but the owners were not happy about it. According to the CBA, the players received 59% of the gross revenue. The owners feel that it is a bit too much. In 2008, the owners
opted out of the CBA which expires in March. They argue that they need more money skimmed off the top before revenue is calculated because of the rising costs of keeping the business running.
The owners want to use this greater slice of the NFL pie to generate more revenue by pursuing initiatives like more games overseas and possibly a new Los Angeles based Franchise. They say that with these initiatives the NFL could increase total revenue and
the players would actually start making more even though they would get a relatively smaller share of NFL’s revenue. Players don’t see eye to eye with the league on getting a smaller cut issue.
Since the owners have been arguing that they are struggling financially, the Players Association has asked the league to open up their financial books for review by the NFLPA. The PA also holds that the players don’t get any part of new stadiums so there
is no reason why they should bankroll them? The NFL owners already take away a large chunk before the rest is divided 59-41 between players and owners. They took a billion dollars off last year’s $8 billion revenue before the total was cut between the two
sides. The owners want more.
With neither side willing to back down, a lockout is beginning to look like the only possibility. But that could depend on the outcome of the legal wrangle between the Players Association and the NFL surrounding media rights. NFL owners signed a contract
that pays them guaranteed money with or without a 2011 NFL season. The association has argued that the owners are using that revenue as ‘lockout insurance’. In the event of a lockout, the players would be more severely impacted.
Without a source of income, the players would have no choice but to give in to the demands of the owners but without the contract, both sides would suffer equally. A legal battle about to commence could level the playing field. The Players Association is
going to argue that the league signed those deals for less then what they could be worth. The NFLPA will argue that in doing so the league acted in contravention to its obligations under the CBA since at the end of the day, revenue is shared with the players.
On Tuesday, evidence would be presented by both sides in the dispute. If the NFL is found in violation of the CBA, the Players Association could receive a large chunk of the nearly $4.5 billion worth of deals and nullify the owners’ lockout insurance. The
association would ask that the sum of money be held in escrow until a new deal is reached.
The league has maintained that there is no strategy to force a lockout and the NFLPA’s allegations are unfounded. The payments that media groups make to the NFL would have to be returned if a game is cancelled for any reason, including work stoppage. In
any event, without $4.5 billion to fall back on, the owners would be a lot less comfortable with a lockout and under more pressure to get to the negotiation tables and settle the dispute at the earliest. But that would depend on whether the NFLPA can in fact
get a decision in its favour.
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