As the clouds begin to gather for a possible — emphasis on “possible” — work stoppage in 2011, there’s an extremely important point to keep in mind.
More than 20 years after the last NFL strike, most owners aren’t in a position to swallow with a work stoppage.
The issue is debt. Owners who paid big money for franchises and/or stadiums need that ticket-and-TV money to continue to flow, so that they can continue to make payments on the money they borrowed to make the transactions happen.
So why is the league risking Armageddon by possibly pulling the plug on the CBA two years early?
Basically, why not?
Even if the owners don’t come out of the negotiations with an agreement that pays the players less than 59 or so cents on the dollar in total football revenues, the early negotiations present an opportunity for the owners to undo some of the noneconomic gains that the union made when the league pushed the current CBA through without considering the one-sided proposals made by the union regarding issues such as player discipline and bonus forfeiture.
We’re also hearing rumblings that the players aren’t as adamant about not making cash concessions as NFLPA Executive Director Gene Upshaw claims they are, setting the stage for a situation that would justify Upshaw’s fear of being undermined by forces within the union that don’t believe the per-team spending limit needs to continue to increase by $7 million per more each and every year.
Still, with Upshaw looking to hang onto his job and with a long-term deal reached sooner rather than later making Upshaw irrelevant to the future of the union, it’s in Upshaw’s interests to toss around rhetoric in an effort to push the situation closer to the brink.
If/when it gets there, the challenge will be for both sides to avoid falling off the cliff.
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May 20th, 2008 at 5:46 am
Well for some teams not addressing this issue now could send them over the brink. Take a look at the Wilf ownership group of the Vikings. They paid 650,000,000 for the franchise, and have been operating at a loss of $X,000,000’s…… I am not sure of the exact dollar amount but it’s in the multi millions. For the team to become profitable they need to increase venue seating….Fill those seats… and get cash flow by directly investing in retail space around the Venue. Here comes the real kick in the teeth. With the ownership group operating at a negative it would be nearly impossible for them to secure a private loan large enough to build their own stadium. Throw in the fact that the NFL has exhausted its funds for assisting in building large seating venues. And The State of Minnesota will not part for funds for the building of a new venue do to the fact that they are also operating on a negative budget. This is partly to blame because they just approved new venues for both the Minnesota Twins and The Minnesota Gophers. Then for good measure throw in an economic down turn that will erode team’s ability for short term growth before the Collective bargaining agreement is up. I’m just using Minnesota as an example. But there are many teams in the same position. The success of the current CBA is reliant on a stable market. But the NFL is susceptible to Market forces just like any other business. When there is a down turn you need to have enough flexibility to control your operating expenses. But that is not allowed under the CBA. I know it’s a contract. They were stupid enough to sign it. But just wait till one of the NFL teams has to file for Chapter 11. (Ahem…Broncos)
P.S. Just kidding about the Broncos
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May 20th, 2008 at 5:46 am
Every time I read news about the CBA, Players Union, owners, and the NFL Network I cringe. There looks to be a perfect storm on the horizon that I would usually ignore but it concerns my favorite sport/conversation subject.
I love PFT for all the dirty stories it shamelessly posts but on these matters I almost wish I was as ignorant on the league’s troubles as your average ESPN fan. *shivers* I’m cold
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May 20th, 2008 at 8:11 am
If the owners can’t afford to have a work stoppage would they consider using replacement players again. I know it is really bad quality football but the last time they did that it caused a riff int he players union. Another riff in the players union this time and there would be major changes at the top.
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May 20th, 2008 at 8:36 am
NFL owners and “can’t afford” shouldn’t be part of the same phrase.
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May 20th, 2008 at 8:43 am
I love the NFL, but my opinion is the owners and players need to be knocked off their high horse, and if that means a work stopage, I am fine with that. And its not like the fans wont return, this is a country in love with football. The first game after a work stopage the stands will be full, people will be buying jerseys, and the big networks will be broadcasting games.
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May 20th, 2008 at 9:23 am
a little extra info
the vikings lead the way in losses for operating income at $-19.1 million.
As of the start of the 2007 season, as per Forbes article on Oct 1 2007, only five teams operated in the red for the 2006 season:
Seahawks 2.6 million in the red
Colts 17.3 in the red
Lions 1.8 in the red
Falcons 3.4 in the red
Vikings 19.1 in the red
Dont think they published an updated version for the 2007 season, it will be interesting to see what vote these teams will carry when it matters.
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May 20th, 2008 at 9:53 am
Shouldn’t Upshaw be removed from the bargaining since he has a conflict of interest that affects the players’ bargaining position? He is not interested in the best deal for the players, he is interested in staying in office.
With both sides unhappy with the current deal, the best thing is to get back to the table to discuss a new deal now.
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May 20th, 2008 at 10:25 am
Owners “cant afford”??
“I” cant afford to fill up my gas tank.
I’m sure all the Mordimeres and Randolphs will figure out a way to make ends meet…
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May 20th, 2008 at 10:41 am
Yea, I cant afford The NFL NETWORK.
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May 20th, 2008 at 10:57 am
It looks like Ralph Wilson wasn’t so crazy after all when he refused to vote to approve the CBA. Everyone trashed him as a senile old man who was out of touch with the modern NFL. To all the so called media “experts” who dissed him (ESPN), Guess who has the last laugh now!
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May 20th, 2008 at 12:41 pm
Only these “smart, savy, financial geniuses” would pluck, defeather, and fry up the golden goose that laying golden eggs just to get one meal.
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May 20th, 2008 at 1:38 pm
Ralph Wilson is a senile old man that’s out of touch. You may be too, because Wilson’s (and Mike Brown’s) vote hinged on the revenue sharing aspect of the CBA. There’s less chance that the rest of the NFL will bend on that than there is a chance of the players cutting their share down to 50% of revenue. As long as he’s (and Brown’s) content to name the stadium after himself (or dear ol’ dad) and blow off any opportunity to generate revenue via a naming rights deal, Wilson and Brown don’t have a leg to stand on and they’re going to be the only dissenting voices. Even the smallest market team in the NFL voted for the CBA so I don’t want to hear about how the CBA would hurt small market teams. The unanimous vote is *clearly* a show of unity in the face of a split vote in which a vast minority’s vote of Wilson, Brown and whatever other “poor boy” bumpkins they could muster would certainly opt out of the CBA. Also there are probably a few very deep-pockets owners that would love nothing better than an uncapped year and it wouldn’t surprise me if they intended to vote out in 2010 from the start. Can you imagine a Jerry Jones or Dan Snyder or a Robert Kraft with no spending limit? What about Paul Allen? He’s worth like 17 billion bucks!
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May 20th, 2008 at 2:18 pm
Well Tom Benson could withstand a lockout. This cat gets 20+ million from the state + 90% revune from the ticket sales, parking, concessions. There is a reason the Saints are one of the most profitable small-market teams in all of professional sports.
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May 20th, 2008 at 2:55 pm
the owners can afford a work stoppage about 3 weeks longer than the players can, and folks, that’s all that matters.
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May 20th, 2008 at 10:46 pm
The Minnesota Gophers?
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