NFL Lockout in The Forecast For 2011: Who's to Blame?

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NFL Lockout in The Forecast For 2011: Who's to Blame?
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With an uncapped NFL season looming in 2010 and the collective bargaining agreement negotiations at a standstill, NFL Players Association executive director, DeMaurice Smith, said he expects a lockout prior to the 2011 season.

It's hard to fathom what a winter would be like in Chicago without Sunday and Monday Night Football, with the occasional Thursday or Saturday game sprinkled in there. What do you do with yourself on Thanksgiving or Christmas with no football?

Smith even states the possibility of a lockout for the 2011 season is a "14" on a scale of one to 10, with one being most likely to reach an agreement. That is not an optimistic number and should worry the overall business of the NFL, but most importantly the fans.

No fantasy football leagues for people to obsess over each week. No getting out of family obligations to watch your favorite team play. And worst of all, no Super Bowl or the parties that accompany it.

Sundays with no football would be a crime. A crime against the fans.

But who’s to blame in this mess?

Many think that the players are, due to their desire to be paid more during a recession.

However, the NFL is arguably the most dangerous and vicious sport, and the players of this profession are guaranteed the least amount of money in their contracts. The average length of a NFL career is about three and a half seasons. Furthermore, NFL players are a lot more susceptible to injuries that are not only career-threatening, but cause many longterm effects and can even be life-threatening (i.e., head and spinal cord injuries).

In order to comprehend the business of the NFL, you have to fully understand the way the revenue sharing system employed by the NFL works. It has many integral parts.

Each team receives an equal amount of league revenue, TV deals, merchandising, and home game ticket revenue. During the regular season, home teams get to keep two-thirds of their ticket revenue, while the remaining third goes into a pool shared by all teams.

Therefore, a team’s success or lack of sell outs like the Detroit Lions and Jacksonville Jaguars doesn’t necessarily affect its chances of posting a profit.

On top of all these, most teams that make a run to the Super Bowl end up losing money compared to those that failed to make the playoffs. The expenses for a team usually outweigh the profits brought in during the playoffs.

However, the NFL continues to thrive as the most profitable sport in America. Despite eight teams losing money for the first time in ten years in 2008-most notably the Oakland Raiders (-7 percent), the Detroit Lions (-6 percent), and the Indianapolis Colts (-5 percent)-the 2008 season was the NFL's third most profitable year.

Revenues for the league’s 32 teams were up 31 percent with each team averaging an operating income (earnings before interest, taxes, depreciation and amortization) of $32 million. The main reason for these gigantic profits is due to the TV deals the NFL has with CBS, NBC, FOX, and ESPN.

In 2008 alone, each team received $94 million from these four major TV networks and another $22 million from NFL Sunday Ticket on DirecTV.

In 1984, the year I was born, the average worth of an NFL team was $80 million. Going into the 2009 season, the average worth was just over $1 billion with the Dallas Cowboys topping the charts at an estimated worth of $1.7 billion (expected to be worth $2 billion by start of the 2010 season).

With these ridiculous amounts of profits rolling in year after year, the NFL owners need to take a long, hard look in the mirror.

The NFLPA is simply asking that all 32 NFL teams open their books to show what teams are losing money and how much. This would allow for the NFLPA to better understand the 18 percent rollback on revenues applied to the players that is currently being proposed by the NFL. The players currently take 59 percent of applied revenues generated by a team while the new proposal would cut that to 41 percent.

Going into the 2009 season, there were 19 NFL teams that were estimated to be worth at least $1 billion (for a complete list of the value of all 32 teams check this out: http://www.forbes.com/2009/09/02/nfl-pro-football-business-sportsmoney-football-values-09-values_slide.html).

The top five most valuable teams are the Cowboys, the Washington Redskins, the New England Patriots, the New York Giants, and the New York Jets. The bottom five are the Detroit Lions, Jacksonville Jaguars, Atlanta Falcons, Minnesota Vikings, and Oakland Raiders ($797 million).

In a time of recession it is easy for the average fan to look at the players as being too greedy, but when you actually break down the numbers, it is the owners that need to get with the program.

Over the past 15 seasons, it is estimated that many teams have increased in value by almost 500 percent. That is an enormous growth in only 15 years and with 2008 being the third most profitable season ever, it is unlikely to change in the coming years. The popularity of football has risen to new heights in America and has become the most popular sport.

However, that popularity is thanks to the fans. The overall revenues generated each year are in large part due to the fans attending games, buying food and drinks, and purchasing team merchandise.

There is still plenty of time to find a solution to the collective bargaining agreement prior to the 2011 season.

However, if the NFL owners don't have a reality check soon everyone will suffer, most importantly the fans that made this sport the most profitable and popular in America.

Shame on you NFL owners for your misguided greed in a time of economic instability, shame on you.

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