There are rumors out there that there has been progress, perhaps even a breakthrough, in negotiations for a new collective bargaining agreement (CBA) between the NFL and the NFL Players Association. However, before the players and owners can agree how to split up the billions of dollars the league will take in, the owners must decide how to split it up among themselves, and that could prove to be a considerably trickier task.
The issue is what some teams call local revenue and others call unshared revenue. Some teams, like the Redskins, Cowboys, and Patriots take in a lot of it. Others like the Bills and Jaguars do not. You can guess which group calls it local and which calls it unshared.
The battle lines are drawn. The higher-revenue owners want to be able to keep what they have in terms of income from luxury seating, stadium naming rights, concessions and parking, the less-wealthy owners want their cut and the players don’t really care how the owners split the money up as long as they get their share of it.
NFL teams currently share ticket revenue with the home team keeping 60% of the gate and the other 40% going into a pool that the 32 teams split up equally. They also divide up the massive pool of TV rights fees; that income alone will bring each team in the neighborhood of $100 million in 2006.
That means that the “little guys” still aren’t doing too badly. With the salary cap at around $95 million, their player salaries are paid for before they sell a single ticket. Most business owners would love to have their payroll covered before opening up business for the year.
Still, the “little guys” are complaining that the high-revenue teams have a competitive advantage over them. This is difficult to understand since the reigning champion Pittsburgh Steelers are among the teams complaining that the big bullies are going after them. Their owner Dan Rooney said last spring (following a 15-1 season):
There's about eight or 10 of the high-revenue clubs that seem to be united in a bloc. They want to keep the disparity. They want to knock us down and have us get up at the count of nine, so they can have another fight and knock us down again.
If what Rooney’s team has been through the last couple of years is getting beaten down for the count, Dan Snyder would sure like to get into the ring and get knocked silly a few times himself.
Even if you buy the argument that higher revenues create a competitive imbalance that in and of itself does not make a case for local revenue sharing. How much is enough to field a competitive team? Are all teams entitled to equal profits? Along those lines, should this money be shared is there any guarantee that the owners who would be net takers from the pool would spend it on their teams rather than sticking it into their pockets?
Snyder, who would be a net giver into such a pool, is among many owners who are paying off debt on their teams. Snyder alone is also paying debt on the stadium his team plays in and improvements to that structure. Those loans were made by financiers on the premise that there would be a certain amount of money generated through the local revenue streams. If those streams are slowed to a trickle by mandated sharing, the bankers will not be happy. A financial crisis could well ensue.
It boils down to this: Ralph Wilson’s team, the Buffalo Bills, play in Ralph Wilson Stadium. Should Snyder, who felt that selling the naming rights to what was Jack Kent Cooke Stadium was the fiscally responsible thing to do, have to write out a check that goes to Wilson, who chooses to forgo that revenue?
It would appear that the higher-revenue teams have the advantage over the mere high revenue teams when it comes to determining what, if anything, will be done. It would take a ¾ majority to enact any new proposal to split revenues. That means it takes only nine votes to prevent a change to the status quo. Reports are that seven teams are adamantly opposed to any changes in the current setup—the Redskins, Cowboys, Eagles, Giants, Jets, Patriots, and Texans. That means that they have to recruit just two more votes from a group that may include teams like the Bears, Seahawks, Bucs, and Chiefs to block any money grab by the Bengals and Jaguars of the NFL world.
Indications are that the higher-revenue teams are willing to share some of the local income, just not in the form of direct payments to the other owners. One possible plan is for the cut of the money to go into a fund that would pay for expenses such as player benefits. The teams like the Bills could then put the money they’re spending on that into other areas such as scouting or coaches if they chose to do so.
The “have-nots” had best take the best deal they can get and soon. If there is not a CBA by the start of the free agency period, the NFLPA could well decide to go ahead and enter 2007 as an uncapped year. That’s a decision that the union could make unilaterally since the current CBA calls for it. If the Rooneys and Wilsons think that they have trouble staying even now, wait until they have to compete for talent in such an environment.
Rich Tandler is the author of The Redskins From A to Z, Volume 1: The Games. This unique book chronicles every game the Redskins played from 1937 through 2001. It is available at www.RedskinsGames.com