They're in the money
UPDATE: Early Tuesday evening, U.S. District Judge David Doty reversed an earlier ruling that would have granted NFL owners access to $4 billion in revenue from the league's TV deals in the case of a lockout. As stated in this article, the judge originally said he didn't want to affect negotiations between the NFL and the NFLPA by ruling on the matter, but clearly his position changed. Tuesday's decision doesn't in any way guarantee an agreement between the two sides before Thursday's deadline, but it does take a considerable amount of leverage away from the NFL. Continue reading to see how exactly how the ruling affects lockout negotiations ...
After months of watching and reading coverage of the NFL lockout, the topic is beginning to inspire in me the same reaction as the likes of Kate Gosselin, Brett Favre and the MTV show "Teen Mom." If I see or hear anything about it, I turn the page, change the channel or close the browser window. Of course in the case of the lockout, it's not for lack of interest -- I very much care whether I'll have football games to attend and cover next season. It's more a matter of oversaturation.
Like the coverage of Favre's annual "will-he-or-won't-he" act, it feels like reports on the lockout have come fast and furious, but without any real purpose. For all the information we've been given, a resolution still seems out of reach. With just hours on the clock before Thursday night's deadline, a lockout is beginning to look inevitable.
Let's take one last look at what both sides are asking for, then zero in on the reason one side has a clear advantage in negotiations.
The league believes player salaries are growing at a faster rate than team revenue. They are particularly interested in curtailing spending on rookie salaries, proposing a rookie "wage scale" that would assign a set salary based on draft position, eliminating any contract negotiations for first-year players. They're pushing for an 18-game regular season and they're demanding a greater percentage of the roughly $9 billion in annual league revenue.
While the league would rather halt play than continue under the current agreement, the NFLPA wants to keep football going while the sides negotiate changes. They're happy for the most part with the current CBA, but they'd like better, longer coverage for former NFL players and more financial transparency from the league. The NFL shares information on revenue, but not costs, thereby denying the union knowledge of the net profit being made by owners.
While neither side is wholly sympathetic -- both consist of millionaires (or billionaires) -- one is less likely to suffer from a season without football.
In the case of a lockout, players would go without salaries or bonuses, be forced to pay out of pocket for health insurance and lose access to team doctors and facilities. As for the league and team owners, because of contractual agreements, they'll still get the roughly $4 billion in television rights, even if not one game is played in 2011. Once play resumes they'll have to pay that money back with interest, but in the meantime they'll still have plenty of money coming in to pay operating costs and avoid defaulting on financial obligations. And, according to Sports Business Journal, the NFL also has a reserve fund of about $900 million that will be accessible to team owners in the event of a work stoppage.
The NFLPA argues that those guaranteed television contracts were designed to give the league the upper hand in lockout negotiations at the expense of maximum revenue. Instead of bringing in more money (a percentage of which goes to players), the union argues that the league agreed to less money as long as "work stoppage" clauses existed, guaranteeing them billions in revenue even in the case of a lockout. The issue went in front of a judge, but he elected not to alter the lockout negotiations by ruling on the case immediately, thereby denying the union a chance to take away the NFL's leverage.
Desperate, the NFLPA has threatened to decertify. As a union, they wouldn't be able to sue, but as independently hired employees, they could legally sue the league for "boycotting" them. If the players association does decide to decertify in a last-ditch effort to block a lockout, the league can either fight their decertification as "sham" bargaining or call the cancellation of the season a simple ceasing of operations, not a lockout. Because the union already used decertification as a bargaining tool back in 1989, then later recertified, it may be hard to try the same trick again.
Only those involved in the negotiations can know exactly what the biggest sticking points are, but from what we do know about the two sides' demands and the NFL's leverage, a lockout seems inevitable. And if a deal isn't made by Thursday night, I'll feel the same way about following all the lockout coverage as I do about the many premature "Farewell to Favre" stories I've seen over the years. This difference is, Favre always came back, and, at least for now, it looks like football won't.