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Professional Football
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The NFL's Looming Battle
Tom Van Riper, 09.04.08, 11:55 AM ET
Is labor strife coming to the NFL?
The untimely passing of National Football League Players Association Executive Director Gene Upshaw on Aug. 20 leaves the union rudderless, just as player-management tensions are heating up.
The owners already voted to opt out of the current collective bargaining agreement early, meaning that play could come to a halt after two more seasons. They're trying to recoup some of riches they've ceded to the players in recent years, to the tune of 59% of the game's revenues.
Throw in the cost of benefits and pension contributions, and the players essentially own about 70% of the business, according to Chicago-based sports business consultant Marc Ganis.
"The players are making more money than they had ever imagined in their wildest dreams," Ganis says.
In a collective statement last spring, owners complained of the building, operating and maintenance costs of new stadiums. Small market clubs, they say, are hit hardest. While NFL television dollars are distributed equally throughout the league, corporate sponsorship revenue at the stadiums tends to be much higher for large market clubs.
"The current labor agreement does not adequately recognize the costs of generating revenues," say the owners.
The two-year window for the next collective bargaining agreement does leave some time for the union to settle on its next permanent leader. Expect the search to take at least through the end of the 2008 season, according to Andrew Brandt, a former vice president and salary cap manager with the Green Bay Packers who is now president of nationalfootballpost.com, a Web site dedicated to NFL news and analysis.
He figures the next director will be willing to work with owners on a deal that could reduce the players' overall take of the revenues, provided he can save face by giving the union something in return.
"It could be fewer years of service for free agency, or more guaranteed money, among other possibilities," he says. A spokesman for the player's union declined to speculate on what the next negotiation might bring or who might be considered for the executive director's post.
Whoever ultimately steps into the executive director's chair will have to tread carefully, Ganis says, balancing the players' short-term interests (their share of the pie), against their long-term interests (making the pie larger). He's not optimistic it will happen. The passing of a charismatic union leader, he notes, usually has the effect of bringing out the antagonist in his replacement. The new guy, trying to look strong against management, always wants to jump in with a splash. But louder isn't always smarter.
"I think that's what will be missing from the NFLPA without Gene there," Ganis says.
Names flying around as possible replacements for Upshaw include acting executive director Richard Berthelsen, outside council Jeffrey Kessler and former player and NFLPA president Trace Armstrong.
Upshaw took a lot of criticism during his 25-year run for supposedly putting too much effort into helping management grow the business rather than acting as a pure player advocate. But his results speak for themselves. The median player salary has roughly doubled since 2000, to over $800,000 a year.
The league is in the middle of a six-year, $8 billion television deal with CBS and Fox, signed in 2006, which doesn't even include separate deals with NBC for Sunday night games and ESPN for Monday night games. Figure that the league takes in over $3 billion annually from the tube, or about $100 million per team. And with a salary cap that moves in tandem with the TV dough, the players are certainly getting their cut.
Old school union honchos may not have liked Upshaw's approach, but they credit him with being smart enough to know that to improve the fortunes of the employees, the business itself needed to be better. Those still fighting the battles of the 1950s are seeing their employers and their unions die out--just ask the United Auto Workers.
One thing not likely to change soon no matter who assumes the executive director's seat: a rookie salary cap. At least not if the sport's powerful agents continue to wield influence. Despite grumbling by veterans of the injustice of handing out eight-figure deals to those who have yet to play a down in the league, rookie contracts are where the agents make their money. By the time a player is older, the parameters of his market value are mostly set by the salary cap. Many will save money by foregoing an agent altogether on contract negotiations.
And don't expect a new union head to do much about another issue that Upshaw took recent heat on: pensions for retired players. There's just very little enthusiasm in the rank and file to share a slice of their paychecks with their forerunners on the field.
"I don't think a candidate for executive director who favors players giving 3% or so of their pay to retired players will get many votes," Ganis says.
Professional Football
LINK
The NFL's Looming Battle
Tom Van Riper, 09.04.08, 11:55 AM ET
Is labor strife coming to the NFL?
The untimely passing of National Football League Players Association Executive Director Gene Upshaw on Aug. 20 leaves the union rudderless, just as player-management tensions are heating up.
The owners already voted to opt out of the current collective bargaining agreement early, meaning that play could come to a halt after two more seasons. They're trying to recoup some of riches they've ceded to the players in recent years, to the tune of 59% of the game's revenues.
Throw in the cost of benefits and pension contributions, and the players essentially own about 70% of the business, according to Chicago-based sports business consultant Marc Ganis.
"The players are making more money than they had ever imagined in their wildest dreams," Ganis says.
In a collective statement last spring, owners complained of the building, operating and maintenance costs of new stadiums. Small market clubs, they say, are hit hardest. While NFL television dollars are distributed equally throughout the league, corporate sponsorship revenue at the stadiums tends to be much higher for large market clubs.
"The current labor agreement does not adequately recognize the costs of generating revenues," say the owners.
The two-year window for the next collective bargaining agreement does leave some time for the union to settle on its next permanent leader. Expect the search to take at least through the end of the 2008 season, according to Andrew Brandt, a former vice president and salary cap manager with the Green Bay Packers who is now president of nationalfootballpost.com, a Web site dedicated to NFL news and analysis.
He figures the next director will be willing to work with owners on a deal that could reduce the players' overall take of the revenues, provided he can save face by giving the union something in return.
"It could be fewer years of service for free agency, or more guaranteed money, among other possibilities," he says. A spokesman for the player's union declined to speculate on what the next negotiation might bring or who might be considered for the executive director's post.
Whoever ultimately steps into the executive director's chair will have to tread carefully, Ganis says, balancing the players' short-term interests (their share of the pie), against their long-term interests (making the pie larger). He's not optimistic it will happen. The passing of a charismatic union leader, he notes, usually has the effect of bringing out the antagonist in his replacement. The new guy, trying to look strong against management, always wants to jump in with a splash. But louder isn't always smarter.
"I think that's what will be missing from the NFLPA without Gene there," Ganis says.
Names flying around as possible replacements for Upshaw include acting executive director Richard Berthelsen, outside council Jeffrey Kessler and former player and NFLPA president Trace Armstrong.
Upshaw took a lot of criticism during his 25-year run for supposedly putting too much effort into helping management grow the business rather than acting as a pure player advocate. But his results speak for themselves. The median player salary has roughly doubled since 2000, to over $800,000 a year.
The league is in the middle of a six-year, $8 billion television deal with CBS and Fox, signed in 2006, which doesn't even include separate deals with NBC for Sunday night games and ESPN for Monday night games. Figure that the league takes in over $3 billion annually from the tube, or about $100 million per team. And with a salary cap that moves in tandem with the TV dough, the players are certainly getting their cut.
Old school union honchos may not have liked Upshaw's approach, but they credit him with being smart enough to know that to improve the fortunes of the employees, the business itself needed to be better. Those still fighting the battles of the 1950s are seeing their employers and their unions die out--just ask the United Auto Workers.
One thing not likely to change soon no matter who assumes the executive director's seat: a rookie salary cap. At least not if the sport's powerful agents continue to wield influence. Despite grumbling by veterans of the injustice of handing out eight-figure deals to those who have yet to play a down in the league, rookie contracts are where the agents make their money. By the time a player is older, the parameters of his market value are mostly set by the salary cap. Many will save money by foregoing an agent altogether on contract negotiations.
And don't expect a new union head to do much about another issue that Upshaw took recent heat on: pensions for retired players. There's just very little enthusiasm in the rank and file to share a slice of their paychecks with their forerunners on the field.
"I don't think a candidate for executive director who favors players giving 3% or so of their pay to retired players will get many votes," Ganis says.