NFL Lockout 3-Pointer: Timing and Antitrust, Propaganda Math & Who’s Looking Out for the Rookies?

March 15, 2011 | Thyrl Nelson

Tuesday 3-Pointer

   

#1 – Timing and Antitrust

 

It’s tough to argue the NFL’s history of sound decision making and business practices. That track record of success however doesn’t insure that the league will simply default to all of the right answers going forward. Look no further for evidence of that then to the current state of the league’s labor affairs. While many look at the actions of the NFLPA in the weeks preceding the decertification and lockout, and surmise their position as looking full steam ahead toward that eventual decertification and the litigation that we now find ourselves in the midst of, I think it’s important to remember that it was the league’s owners who opted out of the now expired collective bargaining agreement prior to its actual expiration that started the ball rolling on this situation in the first place.

 

Given the league’s landslide defeat in the American Needle case decided by the US Supreme Court in 2010, the door for antitrust has been opened (if not by the USFL once upon a time). Surely their decision to opt out of the last collective bargaining agreement despite the Pandora’s box of anti-trust standing so freshly open speaks to bad timing on the part of the league if nothing else.

 

In DeMaurice Smith the NFL has an adversary clearly interested in adding his name to a landmark antitrust case that recent history suggests he has a decent chance of winning. If the NFL’s desire to jab Smith and the NFLPA so quickly isn’t the product of bad decision making and even worse timing then perhaps the owners think they have an ace up their sleeve that we’ll likely see played at some point soon (or not so soon) possibly in the nation’s highest court. Either that or they simply like the makeup of the court as it stands today better than the prospects of whatever anticipated turnover may bring in the future. One thing’s for sure…it’s likely to more interesting long before it gets close to resolution.

 

If I had to bet which way the wind was likely to blow in the coming weeks, my guess would be that the league will play next season under some form of injunction reverting the rules to some old version of collective bargaining. Meanwhile the players and owners will continue to fight it out through court cases and appeals until the government ultimately imposes resolution.

 

You can bet that just like in the American Needle case the NFL’s interest will also represent the collective interests of every other professional sports organization in America. With that interest will likely come their support too. While it sounds like a benefit, again it didn’t help much against little old American Needle.

 

 

 

 

#2 – Propaganda Math

 

As both sides have revved up their propaganda machines in making their respective arguments, some concepts have been tough for fans to discern, possibly leading to our inability to pick a side. (More likely our inability to pick a side is mostly to do with our inability to relate to or empathize with either side) Even simple concepts like dividing whole numbers have become tough to figure out. For what it’s worth…here’s my best attempt at discerning a few of the number we’re talking about.

 

First, we’re all aware that what the two sides are essentially fighting over amounts to about $9 billion. From that the league takes $1 billion off of the top and gives the players a 58% take on the remaining money keeping 42% for themselves.

 

Here, it’s also important to remember that $9 billion represents total revenue and not gross revenue; total revenue is the part of the take that owners mostly share equally and the part that they’re willing to share with the players. Part of what the league is protecting by not disclosing their books to the union is the amount of additional revenue that teams reap from the income sources not covered under the total revenue policy. We’re talking about a lot of money here with $9 billion, but we’re not talking about all of the money.

 

The players’ 58% of $8 billion is $4.64 billion or roughly 51% of the $9 billion total revenue take. That leaves the owners with $4.36 billion or roughly 49% of the total revenue take, amounting to approximately $136 million for each of the NFL’s 32 teams.

 

By asking for an additional billion off of the top of the $9 billion figure, if the players’ split remained at 58% it would amount to $4.06 billion. That would take the players’ take from the original $9 billion down to 45%. It’s a pay cut of just over 12% of their total take. It would also put the owners at 55% of the total take or about $154 million per team, again not counting the revenue streams that don’t fall under the banner of total revenue.

 

Are we really to believe that NFL owners (many of whom enjoy cushy leasing and tax conditions courtesy of their respective local taxpayers) can’t make ends meet from an operational standpoint with a working budget of $154 million per team? How much do owners expect to earn per year on a business largely supported by taxpayer dollars in an environment where the values of their franchises have increased exponentially every 5-10 years? Wasn’t the public at large recently outraged when armed with the knowledge that the owners of the Pittsburgh Pirates and Florida Marlins (2 teams consistently receiving revenue sharing handouts) were earning about as much per year as Alex Rodriguez? Where is our outrage over this? I for one am ready to hear just how much (exclusive of the cushy no show jobs provided to relatives and all inclusive expense accounts) NFL owners think they deserve per year…in profit…in real dollars, not these obscene percentages they’ve been talking about.

 

 

 

 

#3 – Who’s Looking Out For the Rookies?

 

As fans (myself included) have taken to feeling sorry for themselves instead of either side in this process, I think it’s worth mentioning that this year’s draft class seems to be caught squarely in the middle of this whole inferno too. They more then either side are left in limbo while the 2 sides fight for their own interests with seemingly little regard for the interests of the incoming draft class.

 

It seems that the only thing thus far that the two sides have been able to come together on is a rookie wage scale. What that ultimately ends up being is anyone’s guess at this point including the incoming rookies themselves.

 

For this years draft, it’s already become apparent that the league and its owners would like to keep things as normal as possible, given that it’s the only “normal” event that we can reasonably count on in this otherwise up in the air off-season. In so doing they’d like to follow through on their usual practice of having a handful of top tier hopefuls there to celebrate the occasion with their families. For the draftees too, this has to be seen as an exciting proposition, their chance to revel in the spot light, look good in some interviews, raise their profile and persona, and essentially enjoy the moment that they’ve dreamed about and worked for most of their lives.

 

Now it seems that the group formerly known as the NFLPA has asked those prospects to refrain from appearing at the draft. While it seems like a decent jab from the players to do what they can to disrupt a league function with the little remaining leverage that they have, it also deprives a number of young men of the opportunity to follow through on a dream; and it also puts them in the uncomfortable position of choosing between the interests of their future employers and the now defunct organization that will likely represent their interests going forward.

 

How and if the league’s players reach out to the draftees on their respective teams during the lockout will be an interesting experiment in team loyalty vs. union loyalty in and of itself. How the willingness of players to work with picks who go against their wishes and post for the draft will make for an interesting caveat too. And how the rookies come out compensation wise is still anyone’s guess. Hopefully before this episode plays out the players will realize that what they’re asking the rookies to do is unfair, and won’t keep the draft from going off as planned anyway. It’ll just make it a little less interesting. News flash, people don’t tune into the draft because it’s interesting, they do it because they’re nuts….about football. And the players and owners are surely nuts too if they think anything good can come from their continued posturing at this point.

 

 

 

 

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