NFLPA Didn't Even Look At Offer?

[Chocolate Lab]

In fairness, just about every single player got a free college education as compensation for their "years devoted to becoming an expert." That's not a small reward considering today's college costs and the background where most of these kids come from.

Not to mention that lots of people invest in themselves to improve their skills and later paychecks. If I spend years and tons of money to get a bunch of IT certifications that improve my worth in the marketplace, do I get a piece of the company one day when someone hires me? Of course not.

 

[YosemiteSam]

If this was one team, or if the league was a single entity, I would agree to an extent. But there are not two parties in this dispute. There are 33 -- 32 separately owned and operated competitors on one side, and the NFLPA on the other. More than anything else, the teams don't want the other teams to see their financials.

Find me another example of 32 competing companies (31 of them privately held) showing each other their 10-year financials. And knowing that the NFL teams are NOT losing money, tell me what the NFL's financials could possibly show that would make the players offer to give up any of their percentage?

Do you think the players would give up anything if they saw that the teams made, say, an average of $2 million profit per team last season? There's no way.

If you hadn't noted the "privately held", I would have pointed you to EDGAR.

 

[theogt]

Clearly I would agree with your scenario. I'm not going to argue just to argue. But tell me how that correlates to the NFL. The NFL is not set up like an LLC. Its clear the owners pay the employees and that the players pay are not tied to business performance. You will have to bridge that gap for me.

Unless I'm not following the NFL correctly, the players are 'guaranteed' a certain pay and promised a sum certain dollar amount, in the form of a contract that stipulates the time and amount of money they are to be paid if their services are used by said team. What am I missing? In now way can a players pay be tied to revenue. I know about the salary cap, but again, that’s a hard number.

Now owners on the other hand, they can make more or less depending on the total revenue of the team. In your scenario one, I would agree that you are entitled to see the financial statements as you are due to receive 40% of the upside. Again, if we make zero, then you get nothing. Give me a scenario where an NFL player has the potential to play 16 games and make zero dollars?

Will do. The salary cap rises yearly because player salary is contractually based on league revenue, subject to adjustments for certain expenses. What they've been negotiating is how to define the calculations of revenue and expenses and what percentage goes to players. It's essentially identical to my scenario two.

 

[FuzzyLumpkins]

Absolutely. It's a crying shame that the players, who obviously just want to play football and get paid, have been subjected to such piss poor representation.

He's a litigator. He's never played football, nor has he likely ever dealt with sports organizations as required by the NFLPA.

He has used it as a springboard to further his career, but if this thing turns any more sour (and if the NFL's PR folks play it right) they can ruin him.

I really miss Gene Upshaw.

you can claim that he is leading them down the wrong path but you cannt say that he is representing them poor in what he is actually trying to do.

He has been EXTREMELY well prepared and foresighted and he has brought the fight onto his terrain.

He has the players on board and Brees, Manning and Brady filing showed a strong solidarity. We ahve heard players say that they are not only behind him but proud of him.

He won the first injunction and he is pressing his advantage.

Unless we get some judicial creationsim, those antitrust statutes will hold, this lockout will be over and the NFL firms cannot act collectively in negotiations on contracts.

They cannot be sued for old practices but they can be sued for practicing them anew.

He looks like he is winning with the players. Thats not bad representation. Every other time the leagues have tried to bust the union and this time its not working.

I certainly would not miss Upshaw. He did not fight for them he tried to be chummy with management in negotiations.

 

[theogt]

Yes, but in scenario two, the owner does not have to agree to giving you a percentage of the profits. The NFLPA wants a percentage of the profits based on looking at the NFL's books which they said no. The point remains, they do not deserve to see those books or a percentage of the profits because they aren't a percentage of ownership. (nor do they service NFL's liabilities)

Personally, I think anyone would be nuts to offer a percentage of the profits beyond something extremely minimal. Like done in the entertainment industry. (an actor may earn 1% profits). The NFLPA is wanting over 40% which is absolutely ridiculous.

The owners have historically agreed to a % of revenue. That is how the CBA has worked and is how the owners' proposal for a new CBA was based.

If this was one team, or if the league was a single entity, I would agree to an extent. But there are not two parties in this dispute. There are 33 -- 32 separately owned and operated competitors on one side, and the NFLPA on the other. More than anything else, the teams don't want the other teams to see their financials.

Find me another example of 32 competing companies (31 of them privately held) showing each other their 10-year financials. And knowing that the NFL teams are NOT losing money, tell me what the NFL's financials could possibly show that would make the players offer to give up any of their percentage?

Do you think the players would give up anything if they saw that the teams made, say, an average of $2 million profit per team last season? There's no way.

The separate entities does add a wrinkle to the situation. And the competitive nature of the various parties represents a reasonable argument in my opinion to not disclose, but the players apparently do not see the argument as outweighing their concerns. Based on what I've read alone, I think the owners offered a reasonable compromise with the third party auditor, but I can't say with certainty without knowing how the negotiations went down in first hand.

 

[Gadfly22]

In fairness, just about every single player got a free college education as compensation for their "years devoted to becoming an expert." That's not a small reward considering today's college costs and the background where most of these kids come from.

Well, not "free" if we're talking in the broader economic sense since they had to provide football performances for their schools -- which also involved years of preparation (for most).

That gets us into what the economic payoff was for the schools fielding expensive football teams -- mostly at the higher divisions. Not sure how that economic angle fits in to the current discussion.

I'd say that since the owners had no part in footing the college education bills, the fact that players got that education for "free" or not has no more bearing on the NFL owners versus NFL players argument than does the fact that some owners worked their way up to wealth that permitted them to buy their teams and others got theirs by way of inheritance or marriage -- i.e., for "free".

 

[DCDave]

Will do. The salary cap rises yearly because player salary is contractually based on league revenue, subject to adjustments for certain expenses.

As Theogt notes, the cap has gone up pretty much every year, even though it could conceivably go down if revenues fell. The fact that revenues consistently (and substantially) increased over the life of the last deal makes the claim that the owners are incurring new costs and expenses that are somehow outstripping these new additional revenues pretty hard to swallow. Which is why, I suspect, the players are seeking evidence.

 

[Dough Boy]

Will do. The salary cap rises yearly because player salary is contractually based on league revenue, subject to adjustments for certain expenses. What they've been negotiating is how to define the calculations of revenue and expenses and what percentage goes to players. It's essentially identical to my scenario two.

Does the salary cap ever reduce and can the players ever play 16 games and not get paid?

 

[theogt]

Does the salary cap ever reduce and can the players ever play 16 games and not get paid?

The salary cap is set based on expected revenue growth. If there were expected contractions during negotiations, the salary cap would almost certainly be reduced. I would think the logistics of the situation prevent payment based on actual results rather than estimates.

As to the second point, we can adjust the rights of classes of stock/membership interests to adjust for which owner takes financial hits on results first. In other words, one investor can be protected from loss where another is not.

 

[wileedog]

Well, not "free" if we're talking in the broader economic sense since they had to provide football performances for their schools -- which also involved years of preparation (for most).

Getting into semantics a bit, but ok not "free." That said they were more than fairly compensated for their years of work through high school and college with an education worth well over several hundred thousand dollars. Not to mention an opportunity a lot of these guys never would have had without the football system as it currently works.

I'd say that since the owners had no part in footing the college education bills, the fact that players got that education for "free" or not has no more bearing on the NFL owners versus NFL players argument than does the fact that some owners worked their way up to wealth that permitted them to buy their teams and others got theirs by way of inheritance or marriage -- i.e., for "free".

Its part of the system. The owners may not pay it, the colleges do (and reap their own rewards for it), but at the end of the day if you are going to credit the players for the training and preparation before the NFL, you also have to credit the ancillary benefits. 99% of the players (outside of maybe the odd foreign FG kicker) came through the college ranks and pretty much had to play at least some college ball to be even seen by NFL scouts. Its not like there is another avenue into professional football outside of college.

 

[AdamJT13]

I disagree that sweat equity is typically assigned in new ventures, particularly in the private equity industry. I think most would view sweat equity as a type of compensation just like any other investment return. I think the only difference is the form, not the substance.

Let's say you and I start a business. We form a limited liability company in which you have 60% ownership and I have 40% ownership. You contributed all of the capital to the company and I contributed no monetary capital. But I have the expertise and run the business on a day to day basis, despite contributing no capital. After a year, we generate $1 million of profit and you get yours ($600k) and I get mine ($400k) accordingly.

In another scenario, you can start an LLC in which you own 100% of the member interest and contribute 100% of the capital. And instead of a co-owner, I am the "employee". But as an employee, you and I agree to a contract in which I receive 40% of the profits. After a year, we generate $1 million of profit and you get yours ($600k) and I get mine ($400k) accordingly.

In the scenarios, the difference between me being an owner and an employee is in form only. The substance is the same. In both scenarios I am contributing significantly to the business. In fact, we both agreed that my contribution (i.e., investment) was worth 40% of the business.

The players and teams don't split the profits, they split the revenues.

In your second scenario, how does the LLC fund its operations? How would it fund expansion?

 

[theogt]

The players and teams don't split the profits, they split the revenues.

The players and teams don't split revenues, they split revenues adjusted for certain "expenses," which is akin to profit.

In your second scenario, how does the LLC fund its operations? How would it fund expansion?

It's a crude scenario, not intended to address every possible issue.

 

[FuzzyLumpkins]

In fairness, just about every single player got a free college education as compensation for their "years devoted to becoming an expert." That's not a small reward considering today's college costs and the background where most of these kids come from.

Oh no you do not.

I find NCAA's indentured servitude system to be repugnant.

That education has a dollar value. It costs $40k a year and that is at the prices the university itself sets of its own product.

I would contend that the NCAA makes a ton more money off of football than the $40k a year that it looses on a scholarship.

If the owners paid it then you might have a point but they did not and as such no fruit cup.

 

[Gadfly22]

Getting into semantics a bit, but ok not "free." That said they were more than fairly compensated for their years of work through high school and college with an education worth well over several hundred thousand dollars. Not to mention an opportunity a lot of these guys never would have had without the football system as it currently works.



Its part of the system. The owners may not pay it, the colleges do (and reap their own rewards for it), but at the end of the day if you are going to credit the players for the training and preparation before the NFL, you also have to credit the ancillary benefits. 99% of the players (outside of maybe the odd foreign FG kicker) came through the college ranks and pretty much had to play at least some college ball to be even seen by NFL scouts. Its not like there is another avenue into professional football outside of college.

I'm not disagreeing with you that the players coming out of college got something of value for their college play.

I'm saying: (1) the owners didn't provide any of that value, so it's not really relevant; (2) even if you say that a college player got something in return for his physical investment (i.e., an expensive education) that's just the economic trade he made at that level, and (3) if you believe that the valuable education completely offset the physical investment (i.e., so that the player made no net investment at all), plenty of NFL owners got their investments by means other than actually investing -- e.g., they inherited their valuable holding. So they could be said also to have made no investment at all.

But going back to my point (2), the college player trading his performances for an education is analogous to a money investor putting funds in an enterprise and getting an interest. He didn't get that interest for "free". He paid for it, just like the college player pays for his education with a football performance. Whether the value of that education is less or greater than the physical investment is harder to answer than whether a money investment gains or loses.

 

[wileedog]

O

I find NCAA's indentured servitude system to be repugnant.

As a side note, I agree.

If the owners paid it then you might have a point but they did not and as such no fruit cup.

The owners pay for what the players are doing currently today, just like my current employer is doing (well not arguing on the internet, but I digress).

If Gadfly wants to start considering their work years prior to joining the league as part of their "investment", which the NFL also has no part of or say in, then you also need to include that every one of these players is afforded an education they would not otherwise get.

If there were other avenues into the NFL I would agree more with you. But there isn't. If you want to play in the NFL you are forced to go to college, like it or not. Its a benefit to your pre-NFL work that every potential player is given access to.

Personally I think you should cancel both things - pre-NFL work and training and compensated education - out of the argument and concentrate on the present, not the past.

 

[FuzzyLumpkins]

As a side note, I agree.



The owners pay for what the players are doing currently today, just like my current employer is doing (well not arguing on the internet, but I digress).

If Gadfly wants to start considering their work years prior to joining the league as part of their "investment", which the NFL also has no part of or say in, then you also need to include that every one of these players is afforded an education they would not otherwise get.

If there were other avenues into the NFL I would agree more with you. But there isn't. If you want to play in the NFL you are forced to go to college, like it or not. Its a benefit to your pre-NFL work that every potential player is given access to.

Personally I think you should cancel both things - pre-NFL work and training and compensated education - out of the argument and concentrate on the present, not the past.

They got the education through means other than the owners.

If anything it makes their labor capital more valuable because now they have more skills than just the phsycial ones for the field.

Gadfly's point is that these skills should be seen as investments that hold bargaining power. They are being palyed as such.

 

[wileedog]

(3) if you believe that the valuable education completely offset the physical investment (i.e., so that the player made no net investment at all),

That's pretty much what I'm saying, and as such I don't think either thing should be considered at all in the current negotiations.

We all went to school or had some form of training to get to our current jobs, I don't get compensated in any way for it. I am expected to or I wouldn't get the job.

plenty of NFL owners got their investments by means other than actually investing -- e.g., they inherited their valuable holding. So they could be said also to have made no investment at all.

Not true. Even if an owner inherited his money to buy/manage the team, he still has an opportunity cost. That money could be invested in other things, and it could be lost if the business goes sour.

But going back to my point (2), the college player trading his performances for an education is analogous to a money investor putting funds in an enterprise and getting an interest. He didn't get that interest for "free". He paid for it, just like the college player pays for his education with a football performance. Whether the value of that education is less or greater than the physical investment is harder to answer than whether a money investment gains or loses.

Yes, he worked for his college education and received it as payment. Why should he get paid again for it in the NFL?

 

[AdamJT13]

The players and teams don't split revenues, they split revenues adjusted for certain "expenses," which is akin to profit.

No it's not, because only a certain amount is deducted, and it's enough to cover only a portion of the total expenses.

It's a crude scenario, not intended to address every possible issue.

Well, the issue that it doesn't address is at the crux of the NFL's problems.

 

[wileedog]

They got the education through means other than the owners.

So why should anything that happened before the player became an employee of the NFL be taken into consideration be considered for future compensation? That work and training could be considered necessary to have the qualifications for the current position, just like a doctor is required to go to med school. The fact they got to go get that 'degree' for free is even a bonus. I'm sure plenty of doctors wish they could start their practice without a bajillion $$$ in student loans.

 

[theogt]

No it's not, because only a certain amount is deducted, and it's enough to cover only a portion of the total expenses.

It most certainly is. It may not be a perfect definition of profit, but it is akin to profit. Not all definitions of profits (or "earnings") are the same. Some take into account certain types of "expenses" and some do not. The CBA definition of revenue is neither truly based on profit nor revenue.

Well, the issue that it doesn't address is at the crux of the NFL's problems.

It wasn't intended to. It was intended to show the similarity between certain ownership and employment situations.