NFL Owners walked away from the bargaining table on Wednesday and immediately canceled the second day of meetings with the NFL Players Association (NFLPA) on Thursday, as well as canceling an owners meeting which was scheduled for next week. This means that after two years the owners and players still have not come to any agreement about a new contract, and thus moved one step closer to the lockout which many are dreading. Gary Roberts, editor-in-chief of “The Sports Lawyer told USA Today that with the current way things are going, as well as the standard of such labor disputes, that the owners and the players will probably not come to an agreement till September. So what’s the big issue that is causing the problems? Well as stated earlier here on the blog, the NFL wants to take back an additional $1 billion a year from the players (bringing the amount they take from one to two billion), the players want more financial transparency from all of the teams. Some other issues on the table include: Revenue Sharing, Drug Testing, Rookie Wage Scale, an Expanded schedule to 18 games, better benefits for retired players, a new salary cap agreement, and international play. I think some of these issues like international play could probably be easily agreed upon, but the expanded schedule and new salary cap agreement are probably going to be quite difficult to negotiate.
We are exactly three weeks away from March 3rd, the day when the current Collective Bargaining Agreement (CBA) expires. In a league which has become some powerful from a financial standpoint, the owners and players both have a lot to lose if there is no agreement until September (or possibly later). Projections are that the league would be out about $1 billion if they do not get going until September, and thus miss the preseason. If a new CBA takes longer, the league would lose out on a lot of ticket, concession, and other revenue which goes along with the playing of regular season games. The players also would lose out on a lot. The issue isn’t just one about losing potential earnings and not having paychecks worth a good deal of money, but come March 4th, the players will lose their insurance coverage. Really both sides stand to lose quite a bit if the lockout continues for a long time.
The owners do have a bit of insurance though. Through various television deals, the NFL owners have guaranteed themselves $4.5 billion even if there is a lockout (that’s about $140 million per team). The players tried to block the owners from getting this money, which they dubbed “lockout insurance”, however courts ruled that this money belongs to the owner and will not block them from getting it.
In a final piece of NFL news Anschutz Entertainment Group (AEG) owners of the Staples Center and the aforementioned Sprint Center in Kansas City have signed a deal with Farmer’s Insurance giving the insurance company naming rights for the new stadium they are planning to build in Los Angeles to hopefully attract an NFL franchise. The deal is rumored to be worth around $700 million and would be a 30 year naming deal if the stadium was built. Current estimates have the stadium construction costs at around $1 billion, thus these naming rights would cover 70% of these estimated costs. While the NFL owners complain to players that they don’t have the money to build new stadiums because of the poor economy and the high salaries of players, AEG has gone out and shown the NFL that in some markets, the demand is high enough for a stadium project to potentially be worth private investment.
Probably the best moment of all of this lockout stuff in the last two weeks? When Chad Johnson (Ochocinco) pictured above appeared at the State of the NFL address as a member of the media (he started his own media company, the Ochochinco News Network) and proceeded to try to grill NFL Commissioner Goodell about the lockout demanding that Goodell give an honest answer when this deal would get done. Goodell of course dodged the question with an answer that really didn’t give a true answer.
All signs point to no deal anytime soon. If the NBA goes to a lockout as well, the NHL may be the only major professional sport league playing in the winter next year in North America.