By Don Pierson
Published March 9, 2006
NFL owners reluctantly agreed Wednesday to give players 59.5 percent of all revenues in a new collective-bargaining agreement that at least one owner, the Buffalo Bills' Ralph Wilson, claimed he didn't understand.
Maybe this will help.
What do fans need to understand?
Three things: 1. Their favorite teams now have $7.5 million more than they had a week ago to spend this year in free agency, which starts Friday night. 2. No strikes for another six years. 3. Ticket prices will continue to go up.
How did the owners go from a unanimous "no" vote in a 57-minute meeting last week to a 30-2 "yes" vote? Did the union cave in?
Hardly. Commissioner Paul Tagliabue got most of the credit from owners impressed by his ability to remind them how good they all have it with a salary cap and few guaranteed player contracts, unlike baseball and basketball. More than half of the owners weren't around for the player strikes in 1982 and 1987 so they take labor peace for granted.
Why did Cowboys owner Jerry Jones call the union proposal "mean?"
Because NFL Players Association director Gene Upshaw made more internal revenue sharing part of the agreement. Because the union demands changed from getting a percentage of "designated gross revenues" to "total gross revenues," it was important to include expanded revenue sharing so the gap between rich and not-so-rich teams in previously unshared earnings wouldn't grow at a pace that would keep low-revenue teams from paying players competitively.
How was Upshaw able to pull it off?
By agreeing to the salary cap. No matter how much owners complain about rising labor costs, they know a salary cap fixes those costs, which guarantees profit. So even though the players now are locked into a slice of total revenues, the owners keep control.
Does it really guarantee profit?
Only if teams can figure out ways to run their operations on 40.5 percent of the gross, which is what they have left after paying the players. These days, while the league is making roughly $6 billion per year, that's about $76 million per year per team on average.
Shouldn't that be plenty for a profit
Should be, except some owners will want coaches to cut back on big staffs.
How were low-revenue teams convinced that such an expensive new deal was tolerable?
Some of their worries were addressed by new revenue sharing.
And just how does that work?
An average of $150 million a year from "new revenue" plus contributions from the top 15 teams of previously unshared locally generated revenue is redistributed to the bottom 17 clubs, provided the bottom teams are spending 65 percent of their revenues on players. Some high-revenue teams are spending only 40 percent of revenue on players, thus the perceived problem of competitive imbalance. To start, the top five teams toss in $3 million apiece, the next five $2 million and the next five $1 million. That's $30 million from the high-revenue teams.
Does this necessarily guarantee the health, welfare and future of all small-market teams?
Not if their owners aren't smart or aggressive enough to help themselves also. That goes for some big-market owners as well. As successful as the NFL has been, there is still no legislation against stupid or lazy franchises.
Will this new agreement put Tagliabue into the Hall of Fame?
After such a long tenure of labor peace, unprecedented riches and popularity for the league, Tagliabue has punched his ticket to
Will Tagliabue retire now?
Soon. His contract expires after 2007 and he might walk earlier. He and Upshaw are going to buy an island and float into the sunset.
Will this new deal raise salaries for all players?
Minimums will go up, but it always will be a star-based system.
What teams does this new deal help most?
All of them. In the short run, it might have helped cap-strapped teams such as the Redskins more. It might hurt some owners who won't get as rich as they would have liked. It will be difficult for any team to lose money. Peace, prosperity and the chance to maintain competitive balance prevail.
dpierson@tribune.com
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