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NFL Labor: The Battle We Aren't Talking About, Part 2

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NFL Labor: The Battle We Aren't Talking About, Part 2

This morning we discussed a very important and somewhat overlooked part of the current labor fight: the battle between Big Market Owners and Small Market Owners over shared revenue. This afternoon we get back into it and talk about how this puts us in this mess we're in today.

One of the strengths of the NFL—one of the very foundations of it's success—is the fact that at the beginning of the season, pretty much everyone has a shot at a Super Bowl. At the very least you know that financials play a lot smaller part in a championship, compared to baseball.

Every fan knows their team is in it and if that team plays well and is coached well, they can win.

Now what if we're just talking about the Pats and Jets and Dallas and Philly? Every. Single. Year.

I mean, we're already sick of the Pats and they aren't even winning Super Bowls yearly.

What if you knew that your team could never afford to build a team ala George Steinbrenner? That while Kraft and Jerry Jones acquired every good player under the sun, Jacksonville knew going in that it was never going to be able to compete financially and worse, every great home-grown player would eventually play so good as to price the Jags out of the running for his services.

Is that a little hyperbole for effect? Maybe.

It's certainly not inconceivable that things would continue on just as they are and maybe the elimination of the revenue sharing would go by with little impact.

I'd say it is far more likely, however, that eventually even teams like Indianapolis would fade away from contention because they'd never be able to compete with the bigger market teams.

How could they keep a rookie Manning after his first contract? Or to keep it current: Would Josh Freeman be in Tampa after his contract plays out?

Before you start talking about loyalty, let me point out two things.

First, that's exactly what people complain about in baseball. No loyalty to a team. A team drafts you, moves you through the minors, gives you a shot and you reward them by running off to the highest bidder.

For crying out loud the Yankees and Red Sox have had players move between them.  More than once. They HATE each other.

Money is money.

Secondly—and more importantly— how loyal are teams? Consider that a team can cut a player in the NFL with virtually no repercussions. Contracts are not guaranteed (as they are in other sports) so you can get canned at any time and not see another dime.

How loyal do you think a player will be to a team who can cut him pretty much whenever he wants? Especially if another team will pay him more and up front? Why be loyal when the other side isn't?

That's what has happened in other sports and I find it very hard to believe we wouldn't start seeing the same thing pretty quickly.

It'd start with the lower level and mid-range players.

Guys who might already be prone to move already, like Santana Moss or Johnny Knox. No big deal, right? Moss already has moved, Knox isn't a game breaker and neither is really tied to the franchise in the public's mind.

Nobody thinks of either one as a Redskin or Bear, not like you tie Manning to the Colts or Brady to the Pats.

You'd see movement though and probably more and more of it as players saw teams willing to overpay.

They would, by the way. They already do it now when everyone has the same amount of cash to work with.

Eventually bigger names—and names more integral to franchises—would jump ship.

In a landscape where Brett Favre played for not one but two teams not in Green Bay and where there have been rumors that Peyton Manning and Tom Brady could get moved it's not impossible to imagine.

While a team like the Patriots could survive that (likely by signing Manning) could the Colts? I wonder.

I don't want to go all 'zombie apocalypse' on you but how quickly would Buffalo or Jacksonville fall apart? How quickly might San Diego or Houston follow? After that, would Green Bay, Indy or Minnesota falter?

To borrow a phrase: Annnnnd boom goes the parity.

Parity which is key to the league's ability to flourish and not just here on the home front, but abroad as well.

As PackersRS pointed out in the last article's comments, globalization has changed the game.

The idea of expanding the league's influence overseas has really opened up the ability for a smaller market team to make money if they have the ability to capture a market.

As RS points out, the Packers have built their brand up—though I can't speak for it worldwide currently—and there is opportunity to make money in foreign markets.

Putting aside the Packers debate for a minute, we can all agree that some teams like the Cowboys, Raiders and Patriots have a much larger global presence than the Bills, the Dolphins and Titans.

If some of the big market owners are balking at continuing the revenue sharing already in place, one can imagine them going apoplectic over sharing the whole world.

Which brings us back to the heart of this matter. Some of the bigger market owners do not want to share. They don't want to prop up the smaller franchises anymore especially when we start talking worldwide money.

Like I said in the last article, I don't blame them for it anymore than I blame a shark for eating a surfer—we're so damned tasty.

I do however repeat that it is tremendously short-sighted.

The problem comes when an owner like Mara or Rooney, who are big market owners and old school powerhouses in the owners circle, won't budge because they know that long-term the revenue sharing is necessary for the prosperity the league is seeing.

And make no mistake—no matter how often the owners cry poor, the league is making money hand over fist. Costs may have risen but the league is prosperous.

Owners like Mara and Rooney wield power over many of the other owners (that comes with respect earned by not being a jerk, something some owners might want to learn how to do) and make it unlikely that revenue sharing will die for some time.

And here we are.

I can't say that the bigger market franchises are behind this labor strife with certainty. It feels that way and the logic adds up. I've no proof though.

Still, it seems to me that some owners might have perceived the players and their wallets as an easier target then their fellow owners.

They were wrong and what's worse is that almost no matter what the outcome of this is, the real problem—how the pie is cut and who gets a slice—will remain.

Everyone keeps saying how foolish it is that the players and owners can't figure a way to split nine billion dollars.

The truth is, it's even more foolish that the owners can't figure a way to split their huge portion of it.

while I was working on this, someone turned me on to a great series of pieces at BloggingtheBoys.com. Check them out.

Part 1

Part 2

Part 3

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Fan friendly comments only: off Comments (19) This filter will hide comments which have ratio of 5 to 1 down-vote to up-vote.

David's picture

Andrew,
Great article. As a brit I see the contrast between the NFL's structure, of Anybody "could" win the Superbowl, in stark contrast to soccer in Europe where the highest payers win each year. In England the winner is almost dictated within 4 teams, in Scotland 2, in Spain 2, Germany 3, France 2 etc.
I understand why a 'bigger market' Owner would want away from shared revenue but I feel it would diminish the game's standing both domestically and overseas - but do the bigger market teams care? In Spain Madrid and Barcelona negotiate their own TV rights deals and subsequently are on TV every week leading to massive financial disparities meaning no other team in Spain can realistically hope to win. In the UK at least the revenue is shared but it is still skewed towards success - which begets success.
The NFL stands-out as the one sport where planning (the draft), the salary cap (and financial acumen within the cap on Free Agency) and overall coaching give even the Lions a shot at getting a ring.
Does Jerry Jones give a damn about any of this? Nope, but the other 31 should.

andrewgarda's picture

first, thanks for the read and glad everyone has liked these so far. Second, your perspective is REALLY interesting in light of a discussion I've been reading in the message boards at Footballguys.com. In a 'Master Labor Thread' there was talk about using the multi-tiered approach from futbol/soccer for the NFL. There were many very opposed but also many adamant it wouldn't hurt competitiveness. Thanks for the on the spot perspective

PackersRS's picture

Great point David. I come from soccer, but from brazilian soccer, which if very different. But still, I see the perspective, and completely agree with you. And with Andrew, the model of soccer is not viable for the NFL.

But there are a couple of key differences between the 2.

First of all, the format of the tournament. While it's very, very true that the revenue sharing is a major reason while there're only 2 contenders in Spain each and every year, the fact that the winner is decided by points, and every team plays each other twice, and there's no tournament also affects it. With that system, the best roster will almost always win, while in the NFL, it's the best team in that day.

The longer you play, the less the games mean, and consistancy becomes more relevant than certain wins. In my personal opinion, it's a terrible and boring system.

Also, there's the fact that there is no competition for the La Liga and the EPL. Good or bad, people will watch it. While the NFL not only has to compete with other leagues such as the UFL and the CFL (right now it doesn't, but once upon a time there was the AFL and NFL, and it could very well happen again if people lose interest in the NFL), but it also has to compete with other sports, such as baseball and basketball.

In soccer, there's much more leeway for the dominant teams to remain dominant.

SpartaChris's picture

I can understand why Jerry Jones doesn't want to continue to subsidize the likes of Mike Brown or Zygi Wilf. Jerry, whether you like him or not, is a very good businessman, who works hard to turn a penny into a quarter. Contrast this to Brown or Wilf, who seem content to let the other owners fund their football teams, and I get why Jones would be declaring shenanigans.

That said, it seems to be this whole revenue sharing should have a simple solution: Split the league generated revenue, and keep anything you generate for yourself. Keep the salary cap and base it on league generated revenue. It's a win for Jerry as he'd get to keep all the money generated from concessions at his stadium, plus any extra marketing deals or private clothing lines or whatever. It's also a win for Mike Brown, because his expenses don't have to go up every time Jerry Jones creates an extra $32 Million off his franchise.

I honestly don't see how this A) wouldn't be more than fair, and B) why it couldn't work. Neither Jones, Snyder nor Kraft would be able to buy the best team money could buy, because he'd still be bound by limitations of the salary cap. This would allow teams like Cincy and Minnesota to extend the contracts of their best players.

andrewgarda's picture

I think it's not a bad plan.

The key to this is also a salary cap as well as a floor. The fact that the Pirates don't have to spend any money so they can just be cheap to turn a profit has been just as damaging as the out of control top salaries for baseball.

I think a solid cap is just as vital - without it any plan will ultimately fail.

SpartaChris's picture

Oh certainly, and the floor would be based on the same figures. My plan allows for the teams to share league generated revenues, which the salary cap and floor would be based on. TV and radio deals, endorsements, NFL shop, ticket receipts, etc.

Those who are more industrious, such as Kraft, Snyder or Jones, would then pocket anything extra they make without having to share it. This would include naming rights to their stadiums, their own teams pro-shops, concessions and any other marketing rights they secure outside of what the league does. The catch is they couldn't use it for player salaries. It would also prevent other team's salary floors from having to increase just because Jones found a way to make more money off his brand than Mike Brown did.

packeraaron's picture

I get what you're saying here Sparta, but its easy to be a "more industrious" owner when you have television markets that are at least three or four times as big as other owners.

SpartaChris's picture

Sure, I get that, but I think using market size as an excuse can only get you so far. Without using Green Bay as an example, because I believe us to be the exception to the rule, according to http://tvbythenumbers.zap2it.com/2008/09/10/nielsen-local-television-mar..., San Francisco has the 6th largest television market, yet Blogging the Boys had them 27th in revenue generated.

Atlanta has the 8th largest media market, yet ranked 25th in revenue generated. Tennessee ranks below Cincinnati, Buffalo AND Atlanta in terms of market size, yet generated more in revenues than all three.

While I get there's only so much that can be done in areas with smaller market sizes, I'm not convinced some of the owners are interested in doing all they can to maximize their own revenues. I believe some are content just sitting back and collecting what has become the NFL Owners version of welfare.

I agree revenue sharing is important for the health of the league. I would hate to see football turn into soccer or baseball, where most of the league becomes a farm team for the four or five power house teams every year. However, I think you can split revenue sharing between league and owner generated so those owners who work really hard at exploiting their markets can keep what they earn while still sharing in revenues generated by the league.

Chazman's picture

I agree that keeping money made specifically through the franchise (ie- concessions) is a problem but I think it is only a part of the problem. George Steinbrenner spent money to not only make money but also to win. Its why he paid millions of dollars in penalties a year. I think part of the problem is that people like Jerry Jones and Daniel Snyder want to be able to throw as much money as they can into acquiring the top talent so they can win every year.
Liked both articles so far Andrew. Keep it up!

SpartaChris's picture

But that's why there'd be a salary cap. To prevent Jones and Snyder from squatting on all the best players and trying to buy a championship every year.

As for concessions, I would let the teams keep those, but split ticket revenue. I see no reason for Green Bay to have to split the revenue generated from the Packers hall of Fame tour, the Lambeau Tour or meals at Curly's Pub. Maybe I incorrectly classify those things as concessions, but regardless, I don't see why Minnesota or San Francisco or Dallas should get a cut off those revenues.

andrewgarda's picture

I think concessions in a stadium basically tend to include more food and such but the overall revenue shared is more t shirt/hat variety. I'm not sure what the tour would get labeled as but I THINK it would be kept in house., Like Jerrah Jones' tours of the Jones Taj Mahal.

Chazman's picture

I understand about the salary cap and other things that would keep the league competitive and I agree with them and pray that they never go away. I'm just saying that for some of these success driven individuals, winning is almost as important as increased revenue. As long as there are competitive checks and balances to curb the ability of the Joneses and Snyder's from buying the best team there will be conflict within the owners.

SpartaChris's picture

@Chazman- I completely agree with what you're saying, but they'll just have to learn to deal.

If the problem is "We're not making enough money and hate having to share with other owners who don't do their best to make more," then the solution I laid out is simple and solves the issue.

If the problem is "We can't buy championships," then too bad. As much as I love football, I would hate the game if it turned into soccer or baseball. I love the "Any Given Sunday" aspect of the league, but if that disappears, it no longer becomes worth watching.

Chazman's picture

Amen to that Sparta!

PackersRS's picture

That is a great post man. Completely agree with your solution.

PackersRS's picture

The series have been amazing, Andrew. Too bad the owners and the league can't join the debate nor care to do so, because, honestly, what they've been doing so far isn't good. Thanks for the citation, and for expanding my line of thought, btw.

andrewgarda's picture

No problem - it was a GREAT line of thought and something I had thought about a few weeks ago then forgot. So I was happy you reminded me of it as it fit so well!

Glad everyone has enjoyed the pieces.

joshywoshybigfatposhy's picture

can someone answer this: who exactly would be the authority figure to 'punish' a team if they decided to have contact and distribute playbooks. i guess i'm not saying go so far as to have training camp, but what would happen if mccarthy just said "come pick up your playbook at my house while i'm out buying cheese curds" ? would the owners say green bay has to forfeit a game?

i think this is especially interesting/specific to green bay - with their unique ownership structure.

bomdad's picture

the commissioner would had out the punishement, and it would be something like Belicheck got for cheating...forfeit of draft picks and a hefty fine on the coach.

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