NFL owners and players can’t agree

 

By: Larry Fitzgerald
Minnesota Spokesman-Recorder
Originally posted 3/09/2006

 

Free agency has again been put on hold while NFL owners and the Players Association (NFLPA) try to reach an agreement on a new collective bargaining agreement.

 

NFL Commissioner Paul Tagliabue said, “Our challenges as a league going forward are to maintain the strength of our business partnerships and its structure and to adapt it to meet the new realities of the 21st Century. We have to work hard on many other initiatives, including, as a priority, the extension of our collective bargaining agreement with the players, something that we have to accomplish.”

 

Apparently the owners and players can’t get it done. An extension could add $10 million to this year’s cap, which is around $94 million per team, and maintain labor peace for the NFL.

 

It’s important to get an agreement, because 2007 would be an uncapped year ending 13 years of labor peace for the league and bringing about the potential of a strike or lockout in 2008. NFLPA Chief Gene Upshaw said, “The fight between the owners themselves is at the heart of this impasse.”

 

The landscape has changed in the NFL. With new stadiums that are publicly financed (in Jacksonville, Cincinnati, Pittsburgh, Baltimore, New England, Houston, Tennessee, Cleveland, Denver, Chicago, Detroit, Green Bay, Washington, Philadelphia, Tampa Bay, Carolina, Atlanta, Seattle and St. Louis), teams have really been able to cater to the elite fans.

 

In some of those markets, NFL owners have been able to generate enormous cash flow wealth from suite sales, stadium naming rights, private seat licensing, club seating, and other revenue streams that are generated just because of the new stadiums. Recently, Vikings owner Ziggy Wilf proposed that he will put up one billion dollars of his own money to move forward with a proposed new retractable-roof stadium development in Blaine that includes parks, offices, wetlands, stores, and a 250-room hotel.

 

With all of those new stadiums, each market is not created the same. New England, for example, gets between $100,000 and $300,000 for suites; cities like Minneapolis, Jacksonville and Cincinnati, just to name a few, get about an average of $20,000 to $30,000 for suites.

 

In some cases, it has created a major difference in defined gross revenues from team A to team J. And that has put some owners in a position where they are asking their partners and other owners to share some of the extra revenue with them, because they can’t come close to making that kind of money in Minneapolis, Cincinnati, Pittsburgh, Carolina, etc.

 

The owners currently don’t share any of the revenue that they make with the players from the multi-billion-dollar Direct TV contract signed three years ago. The players are trying to be included. The last deal agreed on by the owners and players was in 1993, and ever since they have been doing extensions.

 

That’s 18 new stadiums that the league has plus its own financing, and the players have to contribute to that. It’s a different landscape today, and much has to be accounted for before they redesign this system from an economic standpoint.

 

The NFL and the union were approximately $2 billion to $2.5 billion apart over the course of an extension through 2011. Tagliabue has described the union as “overeaching” in asking for 60 percent of the NFL revenues. The league is offering 56 percent.