On a recent Tuesday morning in Washington, D.C., around 25 NFL players sat in a drab conference room listening to how, in the not-so subtle opinion of the speaker, their bosses were screwing them. Though these players were veterans on the field, they were rookies in this arena. DeMaurice Smith, the executive director of the NFL Players Association, was delivering a presentation as part of an orientation for new union representatives. In many respects, Smith, the lead negotiator for the players, was giving a pregame speech, and like any good coach, his tone was incendiary, his message clear: you have to be prepared for what’s ahead, your opponent doesn’t think that highly of you, and this may be the most important fight of your lives. “We will do everything we have to do to protect ourselves,” Smith told the players. “We will counterpunch.”
All the bluster that day was a mere prelude to what could transpire starting March 4, when the collective bargaining agreement between the NFL and its players, which governs the business of football, expires. That day is pro-football Armageddon, and it could easily lead to the temporary halting of a thriving, multibillion-dollar business, which this weekend features two classic conference championship matches, the Green Bay Packers at the Chicago Bears and the New York Jets at the Pittsburgh Steelers.
Which means this year more than any other, fans had better enjoy the weekend’s championship games — possibly the NFL’s most exciting day, even better than the Super Bowl, given the charged atmosphere in totally partisan, often frigid stadiums. After all, there’s a real chance they won’t see them next year. If the league’s players and owners can’t sign a deal by March 4, the owners will most likely lock the players out of their facilities, and shut down the booming game of football.
For the owners, no football means no revenues from ticket sales and beer and soda, but no hefty salaries to pay for star players. And since the owners signed remarkably favorable TV deals that give them money regardless of whether or not games are played, they have a bit of a cushion (though they’ll have to pay a portion of that money back later). For the players, no football means no paycheck, and loss of earning power during their prime athletic years. And for fans, well, no football wouldn’t just be a bitter disappointment that could rearrange their fall weekend schedules, but also a betrayal of intense loyalty that could permanently damage America’s best sports brand.
Both sides will continue to spin their arguments. The owners say that costs outpace the NFL’s revenue growth, which has been remarkable: 43%, in total, since 2006, according to an analysis done byForbes, which calculated that in 2009, the league booked $9.3 billion in revenue. But the owners claim that since, in part, player compensation has doubled over the past decade — according to the league — players need to take a smaller share of a growing revenue pie. That proposal, the union says, amounts to an 18% pay cut for its membership.
The labor tussle is happening at the same time that NFL commissioner Roger Goodell is pushing to expand the season to 18 games — there are currently 16 — a move that would surely grow revenue, and increase the pot for the players, but appears to fly in the face of the league’s new emphasis on player safety. Additional games, the players say, put our future earnings at risk, since NFL contracts are not fully guaranteed in the first place, a notable difference from pro basketball and pro baseball for which the union has been criticized over the years.
When it comes to fights over money, neither pro-football players nor owners are easy to root for. The owners are rich enough to begin with, and the players, though they take part in a violent game that risks their long-term health, are compensated handsomely.
Yet in the p.r. war, the NFL’s success will likely bite the owners more. Public indicators of the game’s overall health are overwhelmingly positive. The sport is setting ratings records every week, revenues are strong, and ESPN is reportedly close to agreeing to increase the fee it pays the NFL to telecast Monday Night Football to around $2 billion annually, an increase of at least 65%. “I mean, if there was a problem in the National Football League with money, fine, let’s fix it,” Smith said during his pep talk to players. “But we can’t be in a world where we don’t think the National Football League is doing better than frankly any other business in America.”
The NFL, not surprisingly, rejects that assertion. “Costs must be properly balanced against revenue so that the league and the game can continue to grow,” Greg Aiello, the NFL’s senior vice president of public relations, wrote earlier this month, in an article published on ESPN.com. “Companies with far more revenue than the NFL have gone bankrupt because they did not properly manage their costs.”
It’s a reasonable argument. But in response, the union makes its own very reasonable point that, frankly, seems pretty hard to dispute. If costs are so high, and teams are not making as much money as they used to, why can’t the NFL show the players each team’s full audited financial statements, which would include a bottom-line item — net income, or profit (or loss) — that gives both sides a fuller accounting of the league’s financial state?
Well, the NFL says, we’ve given the union more information than we ever have in prior negotiations, including audited revenues. “They know more about our revenues than most unions know about the revenues of the businesses they work in,” Jeff Pash, the NFL’s lead negotiator, recently said in an interview with Politico about the transparency issue.
But if it’s all about costs, critics rightly wonder, why the is league not telling the union the full story with audited team costs, and therefore audited team bottom lines. The NFL says it has never provided team profit numbers before, and the sport has had labor peace for 20 years. It also might be concerned that the union would leak this information to the public. But aren’t we talking about the same public that forks over millions to subsidize stadiums and pours money into the pockets of both owners and players? Isn’t there a strong case to make that they also have a right to get a look at the books?
The NBA’s collective bargaining agreement also expires soon — on June 30 — and the NFL points out that even though that league recently turned over audited statements to the players, the union disputed those numbers. What’s to stop the same thing from happening here, the NFL asks. It’s true, of course, that the union will likely spin the numbers, and even dispute any information the NFL hands over. But at this point, could the two sides get any further away from a deal than they already are?
It doesn’t seem unreasonable to conclude that if team finances were truly hurting, the NFL would be chucking books at the players. “I wouldn’t be able to walk down the street without being bombarded with financial statements,” says Smith, the NFL Players Association executive director. “Here’s a copy for your kitchen, here’s one for your bathroom.” One club, the Packers, makes its information public since fans can actually buy shares in the team. In the fiscal year that ended last March 31, the team pulled in $9.8 million in profits, compared with $20.1 million for the previous year. But in a league with 32 teams, the union won’t be satisfied with a fraction of the story.
As a private enterprise, the NFL has no legal obligation to hand over the books. So in a sticky labor negotiation, any smart business would hold its cards, right? But then again, the NFL isn’t your typical private company. If a lawyer, say, isn’t happy with his salary or thinks his bosses are hoarding too much cash, the free market lets him go work at another firm. But in football, there’s simply no other league where players can be similarly compensated for their specialized skills.
Smith, a former prosecutor and litigator who took over for the late Gene Upshaw, a Hall of Fame player, in 2009, is fond of sketching out his arguments on a whiteboard, like a coach diagramming his plays. During another meeting on that Tuesday in Washington, he wrote three things that, from the union’s perspective, are essential for getting a deal done: “Data. Data. Data.” For the good of the game, and the fans, isn’t it time for the league to show all of us — the players, the fans — the money?