NFL Labor Strife

There’s been a lot of doom and gloom the last week or so about the status of the NFL’s collective bargaining agreement (CBA). There really aren’t many analysts out there who understand what the real issues in the negotiation are. There are really two separate arguments in-play here. [This is an expandable post and if you don't care about football, you should probably just move on with the rest of the blog.]

The first dispute is between the owners of the wealthier teams (Cowboys, Patriots, Eagles, etc.) and the poorer teams (Cardinals, Vikings, etc.). The primary beef is over what money gets shared amongst all the franchises. The biggest chunk of change that is divvied in revenue sharing is the national TV contracts. Under the old agreement, money from stadium naming rights, “official sponsors”, and luxury boxes belonged to individual teams. This is a big deal because a lot of cash is at stake with those deals. The Colts just sold the naming rights of the old RCA Dome for about $180 million. Obviously, the poorer owners would love a piece of that action.

The second dispute is between all of the owners and the player association over what percentage of the shared revenue goes to the players (as reflect in the salary cap). This issue is closely tied to the first in that they don’t know what percentage to ask for because they don’t even know what pie they’re asking for a piece of. Under the old agreement, the players got around 54% of the revenue. Currently, they want something like 60%.

I’m not going to get into my own specific view on the deal now, but I do want to say a few things. The first is that the owners in wealthier markets do deserve some of the benefits of being in those markets (there is a flip side to that coin). There’s also the issue of owners who don’t, for instance, sell the naming rights to their stadiums. Why should they get the cash from another team that’s doing all they can to make their team profitable while they’re, in the case of Cincinnati, naming their stadium after the owner’s dad? As for the players, I think they should hold out for every last dime. Across professional sports, they are subjected to the most physical punishment and are rewarded with the shortest careers. It’s also patently absurd that Chad Pennington is making less than Doug Meyechart.