NFL Doomsday Scenario, Part II

April 27, 2011

More movement in the NFL lockout.  NFL owners urged Judge Nelson to place a stay on her decision, the players fired back and said “NOT SO FAST” (in their best Lee Corso voices).  The NFL players are now urging Judge Nelson to not grant a stay, so they can move forward.

In the 23 page filing which is opposed to the NFL Owners attempting to get a stay on the previous ruling, the players have asked for four big things if the stay is not granted..

First, they want a billion dollar bond (yes, $1 billion).  I would suppose this would be to cover player costs, but at this point they are simply noting that it is to “protect players’ rights”.  The $1 billion would be a bout 25% of total compensation that players receive in a year, and would seem to help solidify the end of the lockout in some individuals opinions.

Second, and potentially more important, the NFL players have asked for a new system which does not violate any antitrust laws.  Now yesterday I posted talking about what I thought may have been Goodell’s irrational fears of the players gaining too much power.  I dismissed this as many players had said they wanted to head back to the status quo.  Yet, it is rather vague what the players’ association really is going for here, when they want an end to all antitrust activities.  Does the draft violate antitrust? Should all players be unrestricted free agents?  Certainly there are good arguments for giving these things to players under antitrust law.  This has major implications depending on how it is interpreted, I would be curious to see if the NFL players try to move away from their current status quo, towards a system which gives them even more power (and would likely hurt certain groups of players and owners alike, and help others).

The other two parts of the filing note that the NFL has little chance to win, and that a lockout is not in the best interest of the public.

The drama continues, and Judge Nelson’s decision here today could have major financial implications for all involved.


NFL Doomsday Scenario?

April 27, 2011

National Football League (NFL) Commissioner Roger Goodell has been given space in today’s Wall Street Journal to write his own opinion piece of what he believes will happen if the players win this lockout battle going on between owners and the players.  The picture which Goodell paints, is one of a true Doomsday scenario for the league and owners.  He believes that the recent ruling by Judge Nelson which will potentially end the lockout will cause a lot more problems for the NFL and potentially lead to the demise of the league.  While the ruling is still being considered by Judge Nelson, and even if she did rule in the players favor, the owners would still probably get time with the business friendly Eight District Court of Appeals.  In all of this, what Goodell see’s as the future is if the players manage to have rulings made in favor of them, it will give too much power to the players, and that the players would want to take more and more away from the owners.

Now this is quite funny in my opinion, as it was the owners who wanted to take away more money from the players, and the players refusing which lead to the owners locking out the players, not the players going on strike.  In fact, it seems many of the players would liked to maintain a status quo, with the league and players keeping their splits from the previous collective bargaining agreement (CBA) without the owners trying to pull over $1 billion from the pot before things were split.  Now to have Goodell, who is really acting in the best interests of the owners, not necessarily the league as a whole is writing what looks to me to be a piece that is focused more on scare tactics than reality.

Goodell tells of a league that has no draft, where all players are independent contractors, and everyone is an unrestricted free agent.  While the players would love such conditions in many cases, as it would allow players to try and demand higher salaries and really test their value on the market, this scenario seems more likely to be something Goodell has nightmares about, than necessarily becoming reality.  Goodell in his piece notes:

In an environment where they are essentially independent contractors, many players would likely lose significant benefits and other protections previously provided on a collective basis as part of the union-negotiated collective-bargaining agreement. And the prospect of improved benefits for retired players would be nil.

And that reasoning would indicate that this is exactly why the players would most likely come back to the table even without the lockout ended by a judge and negotiate a new CBA.  In fact, many players came out and discussed this topic today, including Jeff Saturday, the Players Union Rep for the Indianapolis Colts.  On both the radio and television he noted all the players want is things to basically go back to the system they had before, the one where owners weren’t pulling out an extra billion dollars.  As noted before, if the owners opened their financial statements and showed hardship, then they might have a case, but they continue to refuse to do so, and really make things tough on themselves.  Goodell does end by trying to pander to the fans.

Is this the NFL that fans want? A league where carefully constructed rules proven to generate competitive balance—close and exciting games every Sunday and close and exciting divisional and championship contests—are cast aside? Do the players and their lawyers have so little regard for the fans that they think this really serves their interests?

As Gene Wojciechowski of ESPN notes, the Wall Street Journal isn’t probably the best venue to reach football fans.  He also notes:

Goodell said in the WSJ piece that the current system provides “incentives” that resulted in “two dozen new and renovated stadiums.” Interesting, since Goodell has argued in the past that the current system isn’t conducive to new infrastructure expenditures such as stadiums. So which is it, Commish?

Really, Goodell seems to be losing his war against the players union, and it could be costly for the owners if they come to some agreement soon.  Will it “endanger” the league as Goodell claims it will?  In the short-run I doubt it, in the long-run, it will probably be in the owners and players best interest to get a CBA back in place.