It's the Owners vs. the NFLPA...who's gonna blink first?
**So this is a pretty long post, but it is also comprehensive for those looking for info about the whole situation**
Most people have heard rumors and whispers and the occasional sportscenter story surrounding the labor dispute, but few people truly know the entire scenario surrounding the impending uncapped year in 2010, and the possible labor stoppage in 2011. My hope is to give everyone an idea of the implications this will have on our favorite sport and why it is bad news if you love football as much as The Jeff Report does. We will start from the beginning (note: all information was obtained from my internet research as well as a very informative article from the latest issue of ESPN the Magazine by Seth Wickersham).
The NFL is currently (until March 5th anyway) operating under the Collective Bargaining Agreement (CBA) as orchestrated and put into effect through negotiations between the owners and the NFLPA in 2006. Some highlights of the current CBA include, rookie and veteran minimums, a salary cap (limiting how much a team can spend), a salary floor (mandating a team spend a certain percentage of the salary cap, at the very least), one franchise and one transition tag per team, 4 year unrestricted free agency, and most importantly a mandate that 60% of league revenues go to players salaries. These points will be discussed in depth as we continue on.
The owners put into the CBA when it was negotiated that they could opt out, if they so chose, for the 2010 season. The owners decided to do this and it wasn't even close. The owners are fed up with giving so much revenue to the players and paying soaring astronomical salaries to unproven highly drafted rookies. From the owners point of view, especially in this economy, there are a lot of changes that need to be made to the CBA and there are few areas where they are not willing to compromise. The owners want a rookie wage scale limiting the size of contracts depending on where a player was drafted. This has been used in the NBA to great success. The trade off to that being that they will then have shorter contracts, most likely 3 years now as opposed to the 5 or 6 that was the norm for first round picks. However, that is not bad anyway as any high performing player usually will hold out for a restructure of their contract after about 3 years anyway. I am all for this, as are the owners, as are most of the veterans who don't like seeing an unproven 22 year old (or younger) come in and make more money that a multiple pro bowler veteran.
The owners also do not want to continue to pump 60% of their revenues to players who they feel are compensated more than adequately already. Owners have been complaining that the exorbitant player's salaries have caused the teams to be less profitable and it is not fair to keep pumping the majority of their revenue to players when they are not making money. Seems reasonable, right? Well, normally, yes. The problem here lies in the fact that the owners will not open up their books to the players union to let them see truly how much (or how little) profit they actually make. Well how do the players know 60% of the revenue is being sent to them? Well revenue numbers are know as they are tabulated by the NFL as a by-product of the NFL's profit sharing agreement. What is not known is the amount of expenses each team has (besides players salaries) that would cut down their amount and limit the income that goes to the owners. This situation is exacerbated even more by the fact that many cities have cut their subsidized funding of new stadiums and stadium renovations. This means that money has to come out of owners' pockets and generally results in higher ticket prices for fans. Of course, the players will retort that they are not the ones building these mega state of the art sports stadiums (see: Cowboys, Dallas; Colts, Indianapolis). Nevertheless, the fact remains, the majority of that money is coming from the owners.
These are the biggest reasons that the owners opted out of the CBA a full two years early. This was decided way back in 2008 and "negotiations" have been taking place periodically ever since to try and get a new CBA in place before March 5 and the new league year starts. At this point it doesn't look like an agreement will be reached and we are headed for an uncapped year in 2010. There are a lot of implications of this reality and they are as follows:
Restricted/Unrestricted Free Agency - This is the biggest difference that has the current players howling in contempt for the 2010 season. For those who are unfamiliar, and unrestricted free agent (UFA) was no longer tied to his club at the start of free agency and could negotiate with any team of his choosing. This player would have been free to sign with whomever for whatever price they deemed necessary. A player was eligible for UFA status after 4 years of service in the league. However, if you did not have 4 years of service yet, and your contract expired you were a restricted free agent (RFA). This means that your current team has the right to offer a "tenure" that is set at certain levels by the league. When a player is offered a tender it means they can negotiate with other teams and receive an offer. However, that offer must be larger than the tenure offered by the current team and the current team has one week to match the offer, which if they do the player must stay with the current team. If the offer is not matched, the player is free to go to the new team, but the new team must compensate the old team with a draft pick. The draft pick is determined based on the amount of the tenure offered (different monetary levels equate to higher draft picks).
Now, as a player, specifically a good player, RFA status is not something you want because teams don't like to give up draft picks and it makes it easy for your current team to keep you at a below market price. Players want that big payday after 4 years and you can't get it if you are an RFA. So what's the issue with the uncapped year? Well, now that the CBA is off the table, a player must have 6 years of service to be eligible for UFA status. This means many good players that were drafted in 2005 and 2006 will not be eligible for the big payday they were hoping for. This is especially damaging to the players considering the average shelf life for an NFL career is less than 4 years. There are roughly 170 players that will be affected by this rule change and therefore would not qualify for UFA status in 2010.
Teams have 3 Tags instead of 2 - Before the release of the CBA teams were allowed two "tags" each year, one "transition tag" and one "franchise tag." If a player's contract had expired and the team could not work out a new contract but wanted to keep the player, they could buy themselves more time by franchising this player for a year. If a player was given a tag then they could not negotiate with other teams and had to play for one more year. However, they would have to be compensated accordingly. If given a transition tag that player would have to be paid the average of the top 10 paid players at that position, if given the franchise tag they would have to pay that player the average of the top 5 paid players at that position.
Now, having one more tag per team means that there are even more players that are off the market. Let's just say there are an extra 30 tags used this year, that means that between the extra tags and the RFA's there are 200 players that would've hit the open market that won't this offseason. That is a lot of people missing out on a lot of guaranteed jack and subjecting themselves to one more year of possible injury before they can get that big contract.
Final 8 Rule - This rule is one of the ones that really strikes me as pretty crazy. I obtained this from an article on NFL.com:
"The rule will restrict the final eight teams in the playoffs from signing free agents. The final four teams shall not be permitted to negotiate and sign any unrestricted free agent to a player contract except for players who acquired their status by being cut or were on the final four team when their contract expired. Playoff teams five thru eight get a break to sign one player with a salary of $4,925,000 or more and any number of players with a first-year salary of no more than $3,275,000 and an annual increase of no more than 30 percent in the following years; There is a mechanism to permit the final eight teams to sign an unrestricted free agent for each one of their own unrestricted free agents who sign with another club as long as they don't spend more than what their own lost player received from his new club."
So this is saying the Saints, Colts, Vikings, and Jets are not allowed to sign ANYBODY unless he was on that team before he became a free agent. The Ravens, Chargers, Cardinals, and Cowboys can sign somebody only if that player has a certain salary minimum of $4.9M and can sign anybody else as long as the first year they negotiate doesn't pay that player more than $3.275M and their salary doesn't increase more than 30% any year of their contract. Basically, they can only sign an average player, and not any really good ones as they would all blow up these contract limitations.
What does this all mean? - The entire landscape of the NFL has changed and it is the opinion of The Jeff Report that this has not gotten enough attention. The NFL is cruising towards what happened to the NHL in 2004 and it is not good news. Football is America's favorite sport and what will happen with a labor stoppage? The NFL has been increasing in popularity and gaining so much in revenue ($8B last year alone) that people seem to forget the far reaching implications this can have.
Personally, I feel this is quite ridiculous. Both sides have legitimate gripes about the current state of the way everything is, but honestly, everyone is making money why would you put that in jeopardy? If the revenue decreases the owners are suggesting take place then it would lower the average salary by maybe $70k-$100k. While this is not chump change, when you subtract that amount from the current league minimum which is in the $450k-$500k range, it doesn't seem as bad. The biggest issue at this point are the ego's involved. Demaurice Smith head of the players union, may be a very qualified individual but he has an ego that is very large and when you put that toe-to-toe against the ego's of the owners, it becomes just ridiculous.
Does anybody remember what happened to baseball in 1994? The strike absolutely ruined baseball and The Jeff Report's baseball fandom never recovered (basically, I hate baseball). The NHL was cruising along great through the late 90's and early 2000's until the lockout and horrible management from their commissioner ruined the sport. Now it's impossible to be a hockey fan, even if you try hard (and trust me, I have tried very hard). Could the same thing happen to football?
The NFL seems to be the only league in recent memory that could take a lockout and survive it with minimal hit to it's popularity. But what if that's not the case? What if the american public gets fed up with superstar diva football players shooting up nightclubs and driving drunk and getting arrested for drug possession all crying about how much money they are getting? Especially in these economic times where some fans aren't even employed but still fork over money for their favorite teams. Do you think if the job market doesn't recover and people have an additional couple thousand dollars from season tickets that they are gonna be likely to renew whenever the NFL starts back up? Are the fans going to put up with an increase in ticket prices on top of that? None of this seems likely and the NFL should be very concerned.
This is a different climate in America and with the advent of high def tv's and great broadcasting it is almost just as good to sit at home and watch a game. At 1/10 the cost. The NFL is at risk of taking a small problem now and turning it into a huge problem later. If they are crying about revenue now, what happens when they lose fans and ticket sales drop? Then no matter what the economy is there won't be as much revenue to go around and players will lose money anyway and possibly more. The players are taking a short term problem and making it a long term issue that could have ripple effects for years down the line.
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