Is a lockout coming?

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National Football Post's Bechta talks about the possible lockout and how GM's are preparing for it...

Owners are preparing their generals | National Football Post

Successful business people don't take unnecessary risks, so how do you think the Kraft's will play it forward?

 

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Owners seek double-digit cut in player salaries | National Football Post

Why are we here?

We are talking about rolling back players’ salaries not because owners are losing money but because already thin margins have tightened in this new economy. But mostly we’re here because the NFLPA won too great a labor victory in the 2006 CBA. The late Gene Upshaw was the undisputed winner, getting far more categories of revenue included under the cap and revenue sharing. He won a whopping share of the NFL revenue pie. Upshaw may deserve criticism for how that pie was served to his players, retirees and those suffering from debilitating injuries, but he won a huge victory. But much like the Treaty of Versailles, which ended World War I but helped cause World War II, too great a victory can sometimes have very negative consequences. The salary cap, which is based on revenue, rose from $80 million per team in 2005 under the old CBA, to $102 million in 2006, $107 million in 2007, $116 million in 2008 and $128 million this year, not because the NFL added new revenue, but because the 2006 CBA changed the calculation of the cap and eliminated a variety of carve-outs, mostly from luxury amenities, that had allowed owners to keep money in their own pockets. The floor also now sits at about $112 million. This is why no owner fears the coming uncapped and unfloored year the way they did back in 2006. The shrinking economy, especially business entertainment spending, has hurt owners, and they’re demanding a change.

 

[mgteich]

Most posters and most media said that a no-cap year would never happen, even though teh CBA provided for it and the owners have been preparing for it for at least a year. It still might not happen.

Now, most of us are saying that a lockout will not happen, even though the owners are clearly preparing for one.

It is clear that that current CBA deal provided the groundwork for what has happened: an early end to the CBA, the no-cap year, and the 2011 draft before the strike/lockout. The current CBA provided much order and transition.

Of course, everything could work out, but this time I fear there may be a work stoppage before we see a new deal, or we could see one next week.
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I think that this year will be very different from last. Contracts will be structured differently, with different owners and agents taking different views on how to accomodate the possibility of a work stoppage. This difference may expecially manifest itself in the willingness to engage in long-term contracts. Some owners just won't sign the huge bonus contracts with older veterans. After all, the risk structure is very different if a team may lose Year 2 of a contract. A second year roster bonus has been mentioned as one contract tool. The issue for everyone will be guaranteed monies.

Perhaps different teams will take different views with regard to 2011 draft choices. There could be a first year salary schedule for rookies in 2011, if there is a 2011, making these picks very valuable. Alternatively, if there is no 2011. these choices will be less valuable than normal and a team who believes that there will be no 2011 might want to trade choices into 2010.
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THE OWNERS
There are some owners that are in serious trouble in 2010 and will be in even more finacnial trouble in 2011 if there is a stoppage. I expect that several owners will spend much less than the 2009 minimum in 2010; and, they will get no revenue sharing money from the successful owners.

The Krafts are among the most successful owners in the league. My personal bottom line is that I do NOT have a clue with regard to what is best for the financial well-being and future of the patriots. However, even more than my confidence in Belichick as a coach, I have every confidence that the Kraft's will do what is best for the future of the patriots.

 

[Metaphors]

There is only one way this ends. The union will have to give up some sources of revenue that are included in the current cap calculations. The only variable is what non-revenue concessions the owners will give up in return. My guess? Not much.

The players are holding a losing hand and everyone knows it. The smart move would be to get anything they can in the next couple of weeks and settle on a new CBA. Once momentum builds toward a lockout, the owners will use it to score a decisive victory against the union. They will want even more from the players and will give up nothing.

The owners have about $30M per team per year coming from DirectTV even if there is a lockout. The players get $0. I'm not a math major but even I can figure out who wins in that situation.

 

[mgteich]

I forget the details of the network TV deals, but I as I recall there were either continuing payments or a large first year payment (that smart owners spread out budget-wise over the years of the contract).

Also, many owners will spend less this year preparing for 2011. Even if the Kraft's spend the 2009 cap amounts, they still would not have ton pay revenue sharing to the less successful owners. Also there are several player benefits (like 401K's) that are suspended for the 2010 season. Even if the successful owners spend the 2009 cap, they will still have "excess" gains that they can save for a 2011.

So, I agree that the players are not in a good position. But then, niether are the unsuccessful owners. I don't see this solved before 2011, hopefully before the normal season is set to begin.

I think a lot depends on how the successful owners view the weaker ones. They may be tired of this corporate welfare, and may want to allow some teams to fold and/or move.

There is only one way this ends. The union will have to give up some sources of revenue that are included in the current cap calculations. The only variable is what non-revenue concessions the owners will give up in return. My guess? Not much.

The players are holding a losing hand and everyone knows it. The smart move would be to get anything they can in the next couple of weeks and settle on a new CBA. Once momentum builds toward a lockout, the owners will use it to score a decisive victory against the union. They will want even more from the players and will give up nothing.

The owners have about $30M per team per year coming from DirectTV even if there is a lockout. The players get $0. I'm not a math major but even I can figure out who wins in that situation.

 

[Metaphors]

So, I agree that the players are not in a good position. But then, niether are the unsuccessful owners. I don't see this solved before 2011, hopefully before the normal season is set to begin.

I think a lot depends on how the successful owners view the weaker ones. They may be tired of this corporate welfare, and may want to allow some teams to fold and/or move.

Agree, but this is another problem for the players. If a team folds, 53 players stop getting paychecks forever. The rich businessman who owns the team continues being a rich businessman. I can't think of an angle where the players are better positioned in any way if a lockout happens (or even gets close).

A key is going to be with the public relations handling. Communities stand to lose jobs and vital local business. The owners can stand to be a little more blunt about the situation (need to improve the bottom line for small market teams in struggling parts of the country) than the players (we have average salaries of over $2M a year and won't settle for $1.8M). If the players lose that battle, the endorsement money will also start to dry up. Who wants to see Goober and Goober, Jr licking cookies when thousands of people in Jacksonville have directly or indirectly lost their jobs.

 

[upstater1]

Agree, but this is another problem for the players. If a team folds, 53 players stop getting paychecks forever. The rich businessman who owns the team continues being a rich businessman. I can't think of an angle where the players are better positioned in any way if a lockout happens (or even gets close).

A key is going to be with the public relations handling. Communities stand to lose jobs and vital local business. The owners can stand to be a little more blunt about the situation (need to improve the bottom line for small market teams in struggling parts of the country) than the players (we have average salaries of over $2M a year and won't settle for $1.8M). If the players lose that battle, the endorsement money will also start to dry up. Who wants to see Goober and Goober, Jr licking cookies when thousands of people in Jacksonville have directly or indirectly lost their jobs.

The owners could start a form of cannibalism by feeding teams. If you start folding franchises, you start losing markets, and even though it's going to benefit you not to pay as much welfare, that TV contract will start to shrink.

How much football do they watch in LA nowadays? Is it much less than it used to be when they had a franchise?

NFL owners could also damage the game if it becomes like baseball (I stopped watching baseball because I'm so sick and tired of the big market clubs).

Lastly, they expose their flank if they drop franchises. If the players ever got some real balls, they could start their own league and do heavy damage. If the players were willing to forgo a year or two of mega paydays, by year 3 they could have huge income from a TV deal with all the profits going to them.

NFL owners own a brand. That's it. A billion tied up in a brand name, and that brand name has no real value if it becomes sullied as inferior. The owners should think about that.

I'm not saying the owners don't have a point if indeed they cut the players in on the luxury boxes, etc. Maybe the pie needs to be sliced thinner, but the owners should not wield a hammer or consider getting rid of the salary cap.

 

[Jimke]

I will be curious to see how the UFL will react. It might be time

for the league to expand in 2011. They would have their choice of

1700 locked out players. Some major TV outlet might offer the UFL

a big contract.

 

[Ochmed Jones]

No doubt in my mind that both sides are about to dig in big time and the train grinds to a halt.

 

[mgteich]

A lockout or strike is bad for everyone. However, a sustainable CBA with teams in dolid markets is something that will come out of this.

How can everyone be better off with teams in small markets that cannot sustain the financial success of those teams?