(originally published February 10, 2011)
You don’t become a billionaire by settling for a pretty good deal.
As the NFL labor talks wend their way through the next few months – or beyond – it will be easy to lose sight of this fundamental truth. The NFL owners are not merely rich; they are super-rich, and they got there by putting the pedal on the floor and pressing for every advantage.
Good enough is for millionaires. You earn that “b” in front by always getting more.
Is there anyone alive who doesn’t think pro football’s owners are already making huge profits? I’m not disputing their right to make those profits; I’m just asking if any owner honestly believes he is not doing extremely well under the terms of the current agreement.
According to The New York Times, NFL revenues last year totaled $9 billion. During the extension of the collective bargaining agreement between the league and the NFL Players Association that was agreed to in 2006, the median player salary increased 9.4 percent, while the value of a franchise increased by 16.2 percent. Player salaries under the agreement approach 60 percent of the league’s revenue; the salary cap is set through a determination of that revenue figure. (The NFLPA contends that with approximately $1 billion taken off the top for overhead costs that include financing stadiums and the NFL Network, the real salary figure is closer to 50 percent.)
If I run a business where sixty percent of my revenue is going to labor, and my revenue is $90,000, I’ve got a problem. If it’s $9,000,000,000, I’ll be ok, even if I’m sharing that figure with thirty-one partners. We can probably run a team on our annual $112,500,000 each, having already paid for the cost of our players.
This is the deal the NFL owners opted out of in 2008, deciding that it wasn’t a good enough deal for them. This is the formula that’s going to lead to a lockout in March.
Why’d they do it? Because they can.
This isn’t baseball, with no salary cap, high player-development costs, an inequitable distribution of revenues, and teams looking for purchasers with no one willing to buy them.
It also isn’t pro basketball, with an elastic cap, image problems, and smaller arenas, where several teams will welcome a labor dispute next year as a way to stop hemorrhaging cash.
It’s football. The talent-feeder system is provided by public and private institutions across the country. The salary cap is firm. The broadcast revenues are almost exclusively national, and divided equally.
In baseball, Pittsburgh is a stepchild and Green Bay isn’t big enough for a Class AA franchise. In football, they’re the conference champs.
It’s the NFL, the league that pioneered seat licenses – upfront fees demanded in exchange for the right to purchase season tickets. It charges full price for games it calls “preseason” rather than exhibition, in which first-stringers play briefly and mostly try to avoid injury. Its player contracts are not guaranteed; most mega-contracts you hear about are as meaningless as Donovan McNabb’s $78 million extension from the Redskins, of which he’ll see only the tiny guaranteed fraction.
Broadcast revenues (including cable and satellite, not including the value of the NFL’s own network) will be $4 billion in 2011, and that money is guaranteed — the owners will receive it whether or not games are played. Understandably, the owners want to negotiate a new agreement with the players before extending the league’s over-the-air TV contracts, currently set to expire after the 2011 season.
Despite the state of the economy, those rights fees are certain to rise. Pro football provides the only surefire appointment television in the fragmented post-network universe. Super Bowl XLV was the most-watched program in television history, seen by a total audience estimated by the Nielsen Company at 162.9 million people. Some part of the 2011 NFL season was seen by over 207 million unique viewers, the most ever, and the ratings were the highest since 1989.
There’s no point in showing the players the size of the pie from which they’ll be expected to take a smaller slice.
The owners assume that if they lock out the players and threaten the season, the players will cave. They probably will; owners are in it for the long haul, while the average NFL playing career lasts three and a half years. Players know their jobs are at risk every day, whether from in-house competition or the constant threat of injury. The loss of even a few games takes a serious bite out of their career earnings capacity.
Moreover, the owners have trotted out the specter of an 18-game regular season. This might appeal to the fans, particularly if it will eliminate two of the four full-priced preseason exhibitions, but comes after a year in which injuries — particularly concussions – have been in the spotlight like never before. The Super Bowl champion Packers put 16 players on injured reserve during the season, and lost two more during the game itself.
Who will be durable enough to make it through 21 weeks of dangerous collisions just to get to the final game? Do we really want to see the Lombardi Trophy handed to the staggering survivors, like the winners of a Depression-era dance marathon, or Jonathan at the end of “Rollerball”?
The extra games may be a bargaining chip, something the NFLPA can bring back to its members and say, Yes, we’re taking a smaller percentage of total revenues, but at least we held fast to the 16-game schedule. Extended medical benefits and improved pensions would be helpful too. Both sides could throw a titanium bone to the players of the past by expanding benefits for those who sacrificed their bodies to build this empire.
There’s plenty of money in hand already to do these things. But that’s not the billionaires’ way. They’d rather play Chicken with the sport’s popularity after its most successful season, threatening the present to try to line up even more gigantic profits in the future.
They’re billionaires with a “b”. There’s no “b” in “good enough.”
There is one in “obscene.”
