(Updated at 6:30 p.m.)
Against the backdrop of one of the worst U.S. economies since bread lines, a $9 billion sports league is on the verge of shutting down. And we thought Charlie Sheen was an idiot.
We have billionaires sounding like struggling shrimp boat captains on the Mississippi Gulf coast after the oil spill. We have commissioner Roger Goodell claiming the financial structure of the league is broken. We have Jeff Pash, the NFL’s general counsel, proclaiming that teams are being “squeezed.”
Television contracts alone pay out $3.085 billion per year, which basically means each team takes in over $96 million annually before it has sold a ticket, a T-shirt or a peanut. Half of the league’s 32 teams are valued at over $1 billion and the relative pauper of the group, the Jacksonville Jaguars, are valued at $725 million. The NFL is the largest live spectator sport in the world in terms of average attendance (over 66,000 per game). NFL merchandise accounts for $2.7 billion in annual sales. The recent Super Bowl was viewed by about 111 million viewers.
Should I go on, or is that enough to dispel the notion of anyone being “squeezed”?
Just as soon as we get finished fixing the auto industry, the airlines and the real estate market, we all need to help Jerry Jones pay off the note for the Italian marble counter tops at his hot dog stands.
Let’s be clear about something: NFL owners care about two things: 1) Their wallet; 2) Your wallet. Everything else is window dressing.
I’m not anti-business. NFL owners are entitled to make as much money as they can. I’m certainly not going to attempt to paint a picture that the head of the NFL players union is operating on the same level as Sally Field desperately trying to rally textile factory workers in “Norma Rae.”
But this whole thing is bunk.
The negotiating deadline for a new collective bargaining agreement has been extended to Friday at midnight. But the league is close to a lockout, not because the globe’s most successful sports enterprise is in trouble but because a melee has broken out among the pigs at the trough.
It’s not my intent to burden you with the minutia of CBA talks. Having covered too many strikes, lockouts and various forms of labor unrest, I’ve come to learn the average fan just doesn’t care. But this isn’t a typical labor situation.
This is an intended mugging by NFL owners.
They want another $1 billion off the top from total revenues, in addition to the $1 billion they already get off the top before players get their share. Owners rationalize this by saying the money will be “reinvested” in the product, which will lead to even more revenue for the players.
OK, try this. Imagine you work at a restaurant. You make $50,000 a year as a waiter. The restaurant owner said, “I’m cutting your salary by $10,000 so that I can enhance my restaurant with new tables and a flat screen TV in the bar. But don’t worry. Because then we’ll do more business and eventually you’ll make even more money!”
Terrific. So what happened to my other $10,000 again?
Let me tell you what this is really about. Owners are upset because, while they have it great, they don’t have it as great as they used to. Local governments used to approve sweet financing deals for new stadiums or spiffy upgrades. Roads, freeway off-ramps, foundations, walls, luxury suites – much of it was financed by taxpayers.
In short: We were suckers. Then we wised up. Los Angeles residents came to this realization first. You’ll note that there is no NFL team in L.A. because nobody can push through a publicly financed stadium. It drives the league crazy that people there have their priorities straight (Charlie Sheen notwithstanding).
NFL owners might be even more disingenuous than NCAA presidents. They express concerns about the health and welfare of players, yet they’re pushing for an 18-game schedule. Players already wake up five years after their careers and can’t remember what direction the kitchen is – or their legs won’t take them there.
Owners have been planning for this. They had language written into TV contracts that would give them a $4 billion safety net (effectively a loan) in case of a lockout. A U.S. district judge now has declared that language an unfair and illegal labor practice. It’s like he threw the book at 32 Mr. Potters.
By Jeff Schultz