NFL Tries To Push Its Owners Back to Socialism
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Gene Upshaw is waiting for a phone call, a fax, an e-mail – anything from NFL Commissioner Paul Tagliabue saying that all is well, come home, and let’s talk. Upshaw, the executive director of the NFL Players Association (NFLPA) saw what happened to the NHL’s players’ association when they took their concerns to the end of the earth. He and his players are waiting to come to the table and hammer out an extension to the NFL’s present collective bargaining agreement, but it can’t happen until the owners can get themselves together.
The call didn’t come two weeks ago from Detroit; it didn’t come last spring from Maui, or from Atlanta or from Washington following owners’ meetings. If it doesn’t come soon, the NFL may have a major labor dispute on its hands.
The present CBA deal, which has been extended four times since its inception in 1993, expires after the 2007-08 season. But if a contract extension isn’t reached by the end of 2006, the NFL could end up like Major League Baseball in 2007 and not have a salary cap to control player costs as stipulated in the present agreement.
In the ongoing labor negotiations between Tagliabue’s NFL and the NFLPA, it seems rather odd that Upshaw should be scolding the owners for not being able to bring a proposal to the table. Upshaw and the players have said they’d be willing to sign a contract extension if only the owners could agree among themselves on the sticky issue of revenue sharing. But that is proving to be a substantial barrier.
The only tangible result of the series of owners’ meetings in Maui, Atlanta, Washington, and Detroit since March has been the steady decline in tropical scenery. Five owners – Washington’s Daniel Snyder, Dallas’s Jerry Jones, New England’s Robert Kraft, Houston’s Robert McNair, and Philadelphia’s Jeffrey Lurie – have decided not to share all of their local revenue with their fellow 27 owners, and in a league where revenue-sharing is the key to financial success, that’s a problem. What’s worse, they can’t be forced to share; the owners have a non-binding revenue sharing agreement among themselves from television and attendance monies and other revenue sources.
The NFL has been extremely successful over the past four decades because of a very simple philosophy that can be summed up in one term: League think. NFL owners in the early 1960s, led by the Mara family in New York, George Halas in Chicago, and Daniel Reeves in Los Angeles, accepted Commissioner Pete Rozelle’s gospel that NFL owners were much better off sharing revenues equally from television and other national sources than putting individual owners and teams ahead of the league. Rozelle delivered on his theory by signing record TV contracts that enriched owners beyond their wildest dreams and made the NFL the dominant money-making sport in America.
Over the years, Rozelle and then Tagliabue were able to rein in “renegade” owners who didn’t want to opt into what former Cleveland Browns and Baltimore Ravens owner Art Modell called “NFL socialism.” As long as revenues kept increasing through the decades, owners were willing to stick with Rozelle and Tagliabue.
But that communal League think philosophy is rapidly deteriorating, and the owners’ unity is going with it.
High-revenue owners like Jones and Snyder have been looking for ways to keep more revenues from luxury boxes and local marketing packages (including stadium-naming rights) for themselves instead of sharing money with lower-revenue owners like Indianapolis’s Jim Irsay, Arizona’s Bill Bidwill, San Diego’s Alex Spanos, Minnesota’s Ziggy Wilf, New Orleans’s Tom Benson, and Oakland’s Al Davis.
Snyder needs the extra revenues because of the enormous amount of money he and his partners spent to buy the Redskins from the Cooke estate in 1999. Some of the other renegades unwilling to share – like the Patriots’ Kraft, whose family privately financed the entire $325 million construction project of Gillette Stadium in 2002 – need the extra revenue to pay off debts.(It should be noted that Forbes magazine estimates that Snyder’s, Jones’s, and Kraft’s franchises are worth more than $1 billion each and that Lurie’s and McNair’s franchises come in at about $950 million.)
Needless to say, this schism between large-revenue and small-revenue franchises isn’t sitting well with some owners, like Miami’s Wayne Huizenga (former owner of baseball’s Florida Marlins), who said last March in Maui that some guys are trying to replicate baseball, where the richest teams spend first and ask questions later.
Unfortunately, getting the NFL owners to continue to buy into the League think philosophy is extremely important to Tagliabue in the ongoing CBA negotiations with the players’ association.
For his part, Upshaw is not too happy with the arrangement. He and his union would like to see Jones, Snyder, McNair, Lurie, and Kraft continue paying and maintain the status quo. Upshaw has made it known that the association members want more money flowing their way, and they want it from total football revenue, not from what is defined in the CBA as designated gross revenue. Upshaw feels there is more money available from total football revenue and that would mean more money would be available for his association.
During the past decade, Upshaw has been a cooperative presence in CBA negotiations, which always included a salary cap. But Upshaw has warned that the two sides better have an agreement in place by the end of 2006, or the salary cap will be gone and the union will take full advantage.
That’s obviously something the owners don’t want, but it may also be something the players don’t want. Under the terms of the present CBA and its salary cap free-agency clause, if the salary cap disappears, the players would have to wait six years instead of four years to become free agents. Most NFL players don’t last six years and would never see free agency. That’s why the union wants to come to the table as soon as possible to iron out a new deal.
The NFL isn’t like the NHL, which closed its doors last year in an effort to rein in player costs after four franchises – Los Angeles, Pittsburgh, Buffalo, and Ottawa – declared bankruptcy between 1994 and 2003.The NFL is awash in money; no one is going bankrupt. Not one NFL team is holding a fundraiser like Green Bay did some 50 years ago to raise cash, not with the new national over-the-air and cable TV deals, not with all of the national and local sponsors, not with city and states paying off stadium debts while owners like Lurie and Mc-Nair reap huge revenue streams from the municipally built stadiums.
Tagliabue is twisting arms and is hoping to have all the owners on the same page soon. But the commissioner is finding himself to be less persuasive than ever, and while he still has some time on his side, the clock is ticking. Tagliabue needs the richer owners to re-embrace Leaguethink. If they don’t, the NFL could see the bigger-market teams drive up the price for free agents and leave the smaller-market teams scrapping for survival.