This has been quite a season in the NFL. Teams like the Chiefs, Buccaneers, and Jaguars coming out of nowhere, the return of the Patriots’ dominating ways, and the electrifying ways of Michael Vick have made this season one to remember. The question has been whether there will be an NFL season in 2011. With all of the rhetoric from Roger Goodell and DeMaurice Smith it is easy to get lost in the catchy one-liners, but this debate is about far more than that. Lost in the millions of dollars being thrown around is a meaningful debate on a number of basic questions- Who should bear the costs of new stadiums? Should players be exposed to the harm of an 18-game schedule? Is a rookie pay scale on the way? What makes a $5 million contract in major league baseball better than a $10 million in the NFL?
I wanted to take a look at how these debates are being played out in the ongoing labor dispute, with what better place to start than player salaries? The Union argues they are looking at a pay cut, the NFL says the players still stand to make more money under their proposal. After the jump I outline the two positions on this debate, and where I come down on it.
In the past, the NFL salary structures have allocated players 59% of total gross revenues for the NFL. This is higher than the NBA (57%), NHL (55.6%), and MLB (53%), and has steadily escalated over the past several collective bargaining agreements while other major sports have seen their percentages wax and wane over the past decade. That 59% however is taken into account after a certain percentage is taken off for owners to help cover their own costs. In 2009, this amounted to $8.5 billion in total revenue, with $1 billion given to owners, and the remaining $7.5 billion considered gross revenue. This led to $4.43 billion being allocated for player salaries.
However, the league is now proposing an 18% “credit” that would remove additional money before the “gross revenue” is calculated. In 2009, this would have turned the $1 billion given to owners into $1.35 billion, with that much less left for players. So the NFL contends that as revenues continue to grow, players will see more money, even if they are getting a smaller percentage of the money. The Union contends, on the other hand, that they will receive a pay cut relative to what they would have without the credit. Unfortunately, both are right- if revenue grows by a leap in 2010, which I am not sure will happen in this economy. Players could easily see less than $4.43 billion for several years until the pie gets big enough.
But why the credit? Teams are arguing that players must bear the burden for new stadiums and other infrastructure upgrades that teams are paying for themselves at the moment. But why? Why should a Ravens player help pay for a new stadium in Minnesota? For that matter, why should any player pay for the building he works in? The building I work in sometimes seems like it is going to collapse any minute. I don’t recall my boss asking me to take a pay cut to help the company pay for a new one. Moreover, teams ought not claim that they need players’ help to pay for new stadiums while they are also getting local and state governments to pay for their stadiums as well- not that that is any better.
I have long argued that if the NFL wants to argue poverty, they should throw open their books and show the Player’s Association and the world at large where their shortfalls are. The NFL can’t argue that revenues are so strong and will grow by leaps and bounds in the coming years and at the same time argue that they need more money for owners because they are in the red. It’s either one or the other.
Next installment: I will dive into the 18-game schedule- what is at stake for players and why it is an inevitability.