NFL Labor Agreement: A Detroit Lions Fan's Perspective and Prediction

Background

NFL Football is the most popular professional sport in America. Football is a fast-moving contact sport that involves all 22 players mixing it up on the field on every play.

Baseball sells more stadium tickets only because it has a 162-game regular season.

Super Bowl XVL was the highest-rated telecast in U.S. television history, drawing 111 million viewers. TV viewership of the Super Bowl has climbed steadily since 2005, breaking its own previous records for the fourth consecutive year.

NFL revenues exceeded $9 billion dollars last year. Not bad for an enterprise with fewer than 3,500 full-time employees, including front office staff, coaches and players.

Average player salary in the NFL is about $2 million dollars. The average length of an NFL player’s career is 3.5 seasons, although there are many players with careers that span a decade or more.

USA Today reported that the base salary for the lowest-drafted NFL rookie in 2010 was $325,000.

This base salary does not include signing or other bonuses and also does not include other sources of income for players, such as speaking engagements and product endorsements.

Qualifying players also receive a wide variety of fringe benefits including preseason pay, life, dental and medical insurance, severance pay, disability benefits and pension coverage.

Players on an NFL team’s practice squad earn a minimum of $5,200 per week.

According to BusinessInsider.com, as of November, 2010, the average annual guaranteed base salary of the top ten highest-paid players in the NFL was $9.6 million. This group includes four quarterbacks, three defensive backs, two defensive linemen and one linebacker.

Five of these players have at least eight years of NFL experience. Three are either in their first or second NFL season.

Recent Labor Negotiation History

On September 21, 1982 the National League Football Players Association (NFLPA) launched a strike that lasted 57 days, caused primarily over a dispute about the percentage of gross revenues that the league transferred to its players. No NFL games were played during this strike, which reduced the regular season from 16 games to nine.

NFLPA players went out on strike again on September 22, 1987, primarily over the issue of free agency. This strike lasted 24 days and partially as a result of the NFL’s use of replacement players during weeks 4-6, the regular season was reduced by only a single game.

The settlement of the 1987 strike included agreement on a free agency formula, and the institution of a team salary cap and salary floor.

The Collective Bargaining Agreement (CBA) that the NFL and the NFLPA settled on in 1982 has been adjusted and extended five times, most recently in 2006 when NFL owners voted 30-2 to extend the CBA until March 4, 2011.

In 2006, the CBA extension included a revenue sharing component that essentially required owners—after deducting allowable costs ($1 billion in 2010) from gross revenues—to pay players approximately 60 percent of the league’s net revenue ($8 billion in 2010).

After the 2006 extension agreement, NFLPA attorney Jeffery Kessler was quoted as saying, “The union is delighted. The new CBA is a big leap forward for the players and means a fairer system for all. It also means seven more years of labor peace. Fans can now forget about the lawyers and owners and enjoy football."

Opting Out

The 2006 CBA extension also allowed both the owners and the NFLPA to opt out of the agreement by November 8, 2008, and on March 20, 2008, the owners voted unanimously to do just that, citing their view that the advantage pendulum had swung too far in the player’s favor.

Recently, NFL Commissioner Roger Goodell penned an op-ed column in which he said:

“The union has repeatedly said that it hasn’t asked for anything more and literally wants to continue playing under the existing agreement. That clearly indicates the deal has moved too far in favor of one side.”

“Even the union’s president [DeMaurice Smith] knows this—as he said on national radio on January 27 [2011]: 'I think what really happened is in 2006 we got such a great deal. I mean, the players got a good deal and the owners felt they got it handed to them.'”

It’s safe to say that Smith’s statement pretty accurately sums up the sentiment of team owners today.

Understanding Negotiating Tactics and Strategies

Fans should understand that most of what either side says during labor negotiations is puffery, posturing and positioning.

For example, it’s safe to say that the NFL proposal to expand the regular season to 18 games is really a bargaining chip for owners.

It’s probably true that most fans think four preseason games are two games too many, and it’s undoubtedly true that season ticket holders are miffed at paying the same price to watch preseason games that they pay to watch games that actually count.

And it’s also probably true that most fans would simply be happy if the NFL dropped two preseason games and continued to play 16 regular season games even though it would mean less revenue for owners and players.

The NFLPA’s accusation that the NFL isn’t adequately concerned about player safety needs closer scrutiny. Game rules have steadily evolved to make the game more exciting while at the same time safer for players.

No owner or coach in the NFL wants to see any of their players hurt if for no other reason than injuries hamper the overall performance of their team and makes it more difficult to reach their ultimate objective of winning a Super Bowl.

Players themselves share some responsibility for their own injuries, especially players who don’t take their conditioning seriously or decline to wear all of the padding and protection that’s available to them.

The Issues That Really Matter This Time Around

 —Rookie Wage Scale

Truth be told, both the NFL and the NFLPA want a rookie wage scale instituted. No one except agents who take a three percent cut of ever-escalating rookie contracts—and of course, the top draft picks themselves—like the current arrangement.

As Mike Florio wrote recently on Profootballtalk.nbcsports.com:

“Every year, the growth of the value of the contracts given to the top picks in the draft outpaces every other trend relating to the compensation of NFL players.  And yet there’s no guarantee that the players taken at the top of the draft will ever earn their money.

"Proven players don’t like it.  And they shouldn’t.  The money paid to players picked at the top of the draft makes them largely bulletproof, resulting in some of the bonus babies listening to nothing that veteran leaders—or anyone else, for that matter—have to say.”

“There can be no doubt that it’s in the best interests of the league, the teams, and the current members of the union to ensure that unproven players don’t continue to get inflated contracts, the growth of which continues to outpace the increase in pay for veteran players.”

The NFLPA has derided the owner’s rookie salary cap proposal as a “veteran wage scale” because, as DeMaurice Smith noted in a memo, it would also affect players with three to five years of experience, or as Smith put it, “the core of our membership.”

Florio has proposed a simple solution to solve this disagreement that certainly merits at least a quick read by fans, owners and players.

(http://profootballtalk.nbcsports.com/2011/02/12/a-simple-solution-to-the-rookie-wage-scale-problem/)

Does anyone really believe that the imposition of a reasonable rookie wage scale would discourage talented high school and college football players from pursuing careers in the NFL?

It may be true that the average career span in the NFL is 3.5 years, but if you had the chance to earn at minimum $1 million dollars during that time and then use your (scholarship-paid) college degree and NFL notoriety to earn a better-than-average living, would you pass on that opportunity?

If the impact of a rookie wage scale was limited to players with less than two years of experience and a fair portion of the money teams saved with its institution were allocated to boost veteran salaries and retired player benefits, it would very likely receive broad player support.

—Revenue Sharing

30 owners agreed to accept the 2006 CBA extension that stipulated that the bottom 17 teams in revenue will not contribute to the revenue sharing pool. They further agreed that the top five revenue teams would contribute the most to the pool, the second five less than the first, and the third five teams even less.

At the time, owners agreed that this arrangement was necessary to make it possible for teams in low revenue markets to retain high-value, high-priced veterans and maintain a semblance of league-wide parity and competitiveness.

It wasn’t a perfect arrangement, but it did buy four years of labor peace and encouraged the fans of small-market basement-dweller teams to hold on to the hope that their team could be competitive one day.

Ironically, two of the lowest-revenue teams voted "no" to the 2006 CBA extension.

One of them was then-88-year-old Buffalo owner Ralph Wilson, who commented at the time, “It is a very complicated issue and I didn't believe we should be rushing to vote in 45 minutes. I'm not a dropout ...or maybe I am. I didn't understand it.”

The real question here is whether the NFL would be better off with a handful of perpetually dominant large-market teams or a revenue sharing parity agreement among all 32 current franchises.

An NFL consistently dominated by large market teams would likely result in a league composed of fewer teams down the road.

Dallas Cowboy owner/GM/coach Jerry Jones is reportedly the biggest owner-opponent of continued revenue sharing. All you who agree with Jerry, raise your hands.

All of you who didn’t just build a $1.3 billion Cowboys Stadium that features a 152-by-72-foot hi-def TV screen hanging 90 feet above the center of the playing field, please lower your hands. 

The health of the NFL depends on parity. Revenue sharing among a 32-team league is essential to parity. Get over it, Jerry.

Get Real

Hey NFL and NFLPA—here’s a useful heads-up. Most of us consider earning approximately $2 million a year a pretty good living. The truth is that a contest today between billionaires and millionaires doesn’t qualify for sympathy from your blue-collar fanbase.

Most of us fans would be ecstatic to earn $100K a year, which is less than one third of the minimum salary of a low draft choice in the NFL.

What we do care about is the caliber of play in the sport that we love. We work hard to make a living. These days, things are tough all over in the real world. Please don’t insult us and the sport we love by being greedy.  

If you’re a union member, your primary objective is to obtain the best deal you can without killing the goose that lays the golden egg.

If you’re on the management side of the bargaining table, your primary objective is to maintain control of the destiny of your organization and your ability to grow your business and increase your profit margin.

These two goals are not mutually exclusive.

The best outcome of any labor negotiation is to find a happy medium that rewards employee performance and productivity with competitive compensation while allowing the company to grow and prosper.

Recent Progress

As of this writing, the NFL and NFLPA have recently held six consecutive days of federally-mediated bargaining talks.

That’s a good thing.

Despite this, it’s entirely possible that an agreement on a new CBA won’t happen by March 4th.

However, if an agreement isn’t reached before the expiration of the current CBA, there is a strong possibility that the NFL will cite an impasse and then implement their last best offer pending more negotiations that lead to a formal agreement.

Players could then accept the last best offer until a new CBA is formally agreed upon or strike. And the NFLPA has already pledged that it won’t strike.

Prediction

It’s pretty safe to assume that most players don’t want a lockout or strike to occur. It’s also pretty safe to assume that veteran players would accept a two-year rookie wage scale assuming that the cap benefits them and their retired brethren.

If owners yield on the 18-game regular season schedule proposal, get a rookie wage scale, further address player safety issues without turning the game into a glorified flag football contest and nudge the benefit pendulum back a little closer to center, they are not likely to want to risk fan disenchantment over a lockout.

If a new deal isn’t done by March 4th, players will likely agree to play under the league’s last best offer until the next CBA is finally agreed upon.

As many people have already stated, including Hall of Fame coach and broadcasting icon John Madden, NFL football is “too good to screw up.”

From a fan’s perspective, here’s a bit of good advice: get the new deal done and let’s get ready for some football!