NFL Lockout Handbook

Tomorrow around 10:30 p.m. Eastern Standard Time, the National Football League will crown the champion of Super Bowl XLV. One of two storied franchises, the Pittsburgh Steelers or Green Bay Packers, will earn the privilege of raising the Lombardi Trophy in celebration with their passionate fan bases. Of course, after the confetti drops and the pleasantries are exchanged, the pending work stoppage, will become the league's primary focus.

Since my team, the Redskins, don't play in Super Bowls, or at least haven't in 19 years, I haven't spent much time focusing on actual football. Rather, I've written extensively on the pending work stoppage subject over the past few weeks. The themes of my articles have centered around a few important items that I've listed below.

1. The majority of people do not understand the issues.

2. Most people believe the conflict is simply one of greedy millionaires (the players) not getting along with greedy billionaires (the owners). While there is an element of truth to this, the greater divide exists amongst the owners themselves, particularly large revenue teams (e.g Redskins and Cowboys) and small revenue teams (e.g. Vikings, Jaguars, Bills, Raiders)

3. Many NFL fans are in denial, as the potential of a work stoppage that results in missed games is very real.

Today, I've decided to arm the readers of this space with some information that may assist them. I have thus composed a "lockout handbook," where you'll find concise answers to frequently asked questions, and explanations of phrases and rhetoric that you often hear, but may not understand. I hope the column can be a reference if there is something one does not understand. Also, I have other articles on the blog, under the link "NFL Labor Mess," for further reading. Here goes.

In short, what is going on?

Simple. In 2008, the NFL owners voted unanimously to opt out of the final two years 2006 collective bargaining agreement. Thus, the current agreement will expire at the end of the current league year, March 3, 2011, 11: 59 p.m eastern time. It is then likely, the owners will lockout the players, as there will be no collective bargaining agreement in place. The players' contracts and benefits will at that time be suspended.

So, what do the players want?

To keep things the same. Basically, the players would sign off tomorrow on an extension of the CBA that was agreed to in March of 2006, and is set to expire on March 4th. That is, there would be over $3 billion dollars in player earnings, they would have free agency, and a 16 game schedule. There are some details they would like to iron out, such as benefits for retired players, but by and large, the players want to keep the status quo.

What is wrong with the status quo? I read somewhere the owners making a lot of money.

They are. In fact, estimates indicate they netted more than $1 billion in profit in 2009, which comes out to over $33 million a team.

So, what do the owners want?

Good question. It seems they don't even know. 

The owners have done a very good job of fooling the average person into thinking that the conflict exists between themselves and the players. One example of this is the proposed 18 game schedule, a description of which you will find below. Nevertheless, the root of this problem is the owners' inability to agree amongst themselves.

So, you just said they make more than $30 million per team, and can't agree on how to divide it amongst themselves?

Yes. Oddly it makes sense.

You have to remember the owners have made significant investments over the past few years. Collectively, they started NFL Red Zone. Individually, they've built expensive, gaudy, debt laden stadiums, and made extensive renovations to others. Of course, many of these stadium projects, such as the $1.3 billion Cowboys Stadium, and $1.6 billion new Meadowlands, were initiated at the height of the housing market in the middle of the last decade.

Like other Americans, Cowboys owner Jerry Jones and other owners, are possibly upside down in their mortgages. While I don't have Jones financials in front of me, I've calculated that his mortgage payment conservatively, could be about $75,000 <em>a day. </em>

Further, men such as Jones, tend to have high revenues, which means those revenues are shared with smaller market teams, per the NFL revenue sharing policies. Thus, Jones is carrying a huge note on a stadium that produces huge revenues, yet he must share said revenues with owners who have assumed no risk, and produce a mere fraction of the revenues. Jones himself has said he is tired of "subsidizing," financially weak teams like Minnesota. He wants to keep more of his revenues to pay down his debts. The small market owners fears a disparity such as the one that exists in major league baseball emerging. And they have yet to find middle ground.

What is this 18 game stuff?

In short, a bluff by the owners. As stated earlier, the owners have significant disagreement of opinion amongst themselves. However, in an uncreative, transparent way, they are presenting a united front to the players and the public with the 18 game schedule. On the surface, 18 games means more football, more revenue, everyone wins.

Not really. The players want nothing to do with 18 games. Further, they know the owners are not united, and are not buying this bluff. Neither should you.

What is "Financial Transparency"?

A highfalutin, uncreative way of NFLPA Union boss DeMaurice Smith, amongst others, requesting that the owners "open their books," or reveal their financials to the players. Again, don't buy this nonsense.

For one, the owners are under no obligation, legally or otherwise, to reveal their financials. Now, the players will have you think that the owners are greedy fat cats, hiding enormous sums of cash. While that may be true, the owners would only be doing the players a favor by revealing their financials.

Secondly, this is something of a tongue-in-cheek retort by Smith. Smith can be a but abrasive, but he wasn't born yesterday. He knows the owners have a billion dollars in profit they can't decide how to divide amongst themselves, and "financial transparency," is simply his not so sophisticated way of telling them that.

What is "Decertification"?

A really complicated labor tactic. In short, this is the trickiest subject regarding the lockout, but you're going to hear a lot about it. I'll try to explain it without being too long winded.

The Players' Union has voted unanimously amongst the 32 teams to have the option of decertifying itself. In other words, they can vote to have the Union not represent them, which would prevent the owners from locking them out, yet they would lose their collective bargaining power. Why would they do this?

For one, it has worked before. The players decertified the Union in 1989, and ultimately this was a key step to them gaining free agency by 1993. Second, if the Union decertifies, they can potentially prevent a lockout, as the owners would have to lock out the players individually, not collectively.

Second, if the players act as individuals, and the league forces uniform rules, the league opens itself up to potential anti-trust violations. As things stand now, the league is subject to labor laws because it is dealing with a Union. Thus, the owners are not as subject to anti-trust legislation. If the Union decertifies, antitrust laws, which could expose the owners, become more paramount.

Will decertification happen?

Probably not, as the players likely don't have the guts to fore go their collective bargaining power. But the prospects of it pose an interesting dilemma for both sides.

Where does Commissioner Roger Goodell fit into all this?

Good question. Goodell has been firm with player transgressions during his tenure, but he is caught in the crossfire on this one. Many players have asked Goodell what it will take to reach an agreement, and Goodell has not been able to give an answer.

In short, Goodell must somehow bridge the gap between his 32 owners--a monumental task to say the least. However, his legacy as Commissioner is likely contingent upon his ability to make 32 wealthy, driven, accomplished men, find common ground.

Should one be sympathetic to one side or the other?

No. They is plenty of revenue and plenty of interest in football. While the players are rightfully frustrated with the owners lack of internal agreement, there is enough money to keep everyone happy. Both sides need to figure this out.

What will happen?

Hard to say. However, I do not see an agreement being reached by March 4th. Thus, a lockout is likely. At that point, the urgency to get a deal done lessens, as training camp does not begin until July. If a work stoppage were to somehow run that long, the chances of success for the owners increases, as billionaires tend to be more capable of weathering loss of income than millionaires.

However, the players are more united and prepared than they have ever been. If they can somehow remain united, they may be able to force the owners to work things out amongst themselves.

Sadly, that scenario portends a very troubling likelihood--a long work stoppage.

--Brian