NFLPA Executive Director Gene Upshaw made his case for the media on Wednesday regarding the looming negotiations on a new Collective Bargaining Agreement.
Upshaw used “easy-to-digest charts, graphs and bold-faced type beamed on a large screen” to support his position, according to USA Today.
As one league insider observed in response, “If Gene Upshaw is showing media slapdicks slides, charts and graphs, why can’t the agents and the players see the same thing? It baffles me that we can’t get any information out of the union and we have to read it all from news reports. How hard would it be to send e-mails to players and agents and keep us up to date?” (Perhaps the multiple millions of dollars paid to Upshaw per week buys only a weekly “100 Words” from Gene.)
Regarding the merits, however, we agree with Upshaw’s contention that, if the owners are going to take the position that the 59-cent payout to the players from every dollar in revenue generated by the teams should decrease, then the union needs to have access to the teams’ financial information.
Upshaw reportedly has made such a request, but was rebuffed. So how can the union fairly assess the issue that the NFL is presenting as the centerpiece of its attempt to shrink the 59-cents-on-the-dollar obligation?
Based on the information that is available to the union, Upshaw believes that the league has operating income of $18 million per team per year. If true, this undercuts the case for reducing the players’ share.
And maybe that’s why the league doesn’t want to give Upshaw a peek into the change purse.
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May 22nd, 2008 at 3:07 pm
I’m not sure what a “slapdick” slide is, but I’m very afraid of it.
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May 22nd, 2008 at 3:22 pm
What is the difference between “slapdicks” and “cockeyed”? I hope circumcision isn’t involved.;-)
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May 22nd, 2008 at 4:21 pm
Long ago, I was in Restaurant management. Our target labor costs at the time were 20% of gross revenue. If the players are getting 59%, and then you have to add in coaches, FO types, and all the non-glory positions (secretaries, cooks, janitors, etc) that keep a team running, it seems plausible that labor costs could be in excess of 70% for NFL teams.
How does this compare to the other major leagues?
Ultimatley, the owners have a right to make a profit larger than the highest paid employee on the payroll. It is, after all, their money that allows all those others to get paid 100’s of 1000’s of dollars or more.
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May 22nd, 2008 at 4:37 pm
Not to get too technical, but as an accountant, I need to point something out. (Oh, who am I kidding? If Florio is going to subject us to non-stop legal analysis, I can throw out some finance talk).
Operating income is different from Net Income. Operating income generally does not include debt service (i.e. principal and interest payments). Given the costs associated with purchasing a team or building a stadium these days, $18 million more than likely isn’t going to cover the debt service. Let’s say a team has $250 million in debt (which is relatively modest considering the cost to buy a team these days is nearly $1 billion). Let’s assume the debt has an interest rate of 8.5%. That’s $21.25 million in interest alone each year.
If your team is lucky enough to have been owned by the same family for 30 years and had the city pay for the new stadium (although the team usually has to put in something), they can probably get by with $18 million without a problem. But I’m betting most teams aren’t in that situation.
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May 22nd, 2008 at 4:45 pm
Isn’t the reference to “slapdicks” a blatant clue that the league insider here is Brian Billick?
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May 22nd, 2008 at 4:50 pm
If it’s only $18M in operating income per team I don’t know why the union would think they should get a higher %. That’s not the ‘bottom line’ - you still have to subtract interest and taxes to know how much $ teams really make.
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May 22nd, 2008 at 5:01 pm
If the teams were really having a hard time financially, wouldn’t they be opening up the books for all the world to see?
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May 22nd, 2008 at 5:16 pm
I’d also say that Upshaw’s contention that Jamarcus Russel’s deal helps veteran players by driving the market is non-sensical. If the salary cap is a fixed % of revenues, then every dollar committed to high picks that don’t pan out is a $ that proven players never got a chance to see.
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May 22nd, 2008 at 5:34 pm
$18 million seems way too low. Shouldn’t that read $180 million?
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May 23rd, 2008 at 8:10 am
I have been a union firefighter for over 20 years and involved in many contract negotiations. While the fire service is nothing like the NFL, employment costs are 85-90% of total budget, having access to the employers financial data is essential to good faith negotiations. In our case the information is public record and easy to obtain, in the NFL not so much.
One possible scenario is that the NFL locks out the players while claiming poor mouth but refusing to allow access to its books. This is exactly the type of thing that could place their anti-trust exemption in place. Can anyone say, “Arlene Spector?”
I believe the baseball situation from years back is a good example. With that being said, in my opinion, the NFLPA would do good to agree to a rookie salary cap and a more reasonable cut of revenue around 55%.
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May 23rd, 2008 at 10:35 am
How many privately held companies share financial info with a union? … oh right, none of them.
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May 23rd, 2008 at 1:21 pm
capo gino asking for more info:
dammit kevin how are we goin to pull my fat ass out of the fire?
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