Forbes: ‘Economic Realities’ for Lockout Unwarranted

[lamafist]

Numbers Show NFL’s ‘Economic Realities’ for Lockout Unwarranted

Jan. 10 2011

posted by MAURY BROWN

The claim by the NFL is that if the players don’t reduce salaries and increase the amount they are providing in “expense credits” for expenditures such as stadium development, the league could see rocky times.

“Yes, NFL players deserve to be paid well,” said Commissioner Goodell in a January letter to fans. “Unfortunately, economic realities are forcing everyone to make tough choices and the NFL is no different.”

But, do the economic realities really point to the NFL needing to make “tough choices”? Here’s how it all breaks down.

...

Required reading for NFL fans who want to know the facts behind the two sides' rhetoric.

 

[Phokus]

The average operating income of an NFL team is 33 million. ESPN increasing their payment to the NFL by 900 million means that each team almost doubles their operating income (it's about an additional 28 million per team). The fact that ESPN is willing to pay almost double for continued access to broadcast NFL games means that the game is wayyyy more popular than before and the owners are full of ****.

 

[BradyManny]

I wonder at what point the Commish and owners start listening to fans...well, I guess I know at what point, the point at which it starts costing them $$. Of course, w the situation as explained above, the owners have all the leverage.

But based on the facts as they are laid out here, it won't be long before the general NFL fan has firmly sided him or herself with the NFLPA, and against the owners.

It does seem like the owners are being unreasonable.

 

[JMarr]

The NFLPA is already screwed because of the TV situation--billions of dollars coming in from the networks even if no games are played. We already know how this is going to end--either by the players caving, or [more likely] by a lockout. Seven more weeks til it happens, and given the level of greed that the owners are showing, it won't be at all surprising if they don't get an agreement done at all in 2011.

This makes the stakes all the higher in terms of who gets to hoist the Lombardi next month. There might not be a SB next season, and the owners seemingly have no hesitation in sacrificing the overall quality of their product if it means bring in more $$. :eat1:

 

[Chupacabra]

In other news, water is wet.

 

[A.C Vegas]

F them both i want football but i could care less about (mostly) millionaries vs billionaires

 

[pheenix11]

Sounds like the owners are following the lead of the banksters. This is really ridiculous. If they want people to believe they are hurting then open the books! Otherwise shut the eff up because I don't buy it for a second. It's really amazing in a league that is doing so well that it is still not enough. These greedy bastards still want more. It's never enough.

 

[BradyManny]

F them both i want football but i could care less about (mostly) millionaries vs billionaires

I wouldn't say most football players are millionaires - it's a little short-sighted when the average NFL career is less than 4 years. The stars are the exception, not the rule.

The average football player is not going to make enough in his career to live off of comfortably for the duration of his life, and probably sacrificed his body in the process.

Now, for some, that has to do with the way these guys spend money, sure. The NFL and the NFLPA has to do a better job of mentoring these young kids in what to do with their money.

 

[pheenix11]

I wouldn't say most football players are millionaires - it's a little short-sighted when the average NFL career is less than 4 years. The stars are the exception, not the rule.

The average football player is not going to make enough in his career to live off of comfortably for the duration of his life, and probably sacrificed his body in the process.

Now, for some, that has to do with the way these guys spend money, sure. The NFL and the NFLPA has to do a better job of mentoring these young kids in what to do with their money.

I think NFL players are the few athletes who earn their money. It is a rough sport that will affect many of them for the rest of their lives and they can't play it for that long.

In comparison MLB salaries are a joke, they don't deserve what they get.

 

[lamafist]

The NFLPA is already screwed because of the TV situation--billions of dollars coming in from the networks even if no games are played.

Not necessarily.

While it's true that under the contract with the TV networks, they continue to pay on schedule in the event of a lockout, the NFL doesn't get to keep the money. They are required to enter into arbitration with the networks over the appropriate levels of compensation. This will, of course, take approximately.. for-freaking-ever. So while the owners won't be hit as immediately as the players, they're still losing money long-term.

Secondly, no matter what the owners or their reps are saying, they have to have an idea just how damaging a lockout would be.

The NFL is enjoying unprecedented growth at present and an interruption right now would be terribly disruptive.

Thanks to on-demand, netflix and DVR, the networks are madly in love with live event television right now... especially if it attracts young men. It's no accident that shows with live performances and results, like American Idol and Dancing With the Stars do so well, as well as buzzy serialized shows like Lost, where if you don't watch on time, you'll probably end up having what happens spoiled for you.

This is a huge advantage for the NFL at the moment... but it's not going to last forever. Eventually, as the other options become more familiar and more convenient, people will eventually stop missing the feeling of knowing that they're watching something live at the same time as everyone else. With the rate that the new delivery streams like netflix and on-demand are growing, 2011 is not a year the NFL wants to sit out -- this might be the last best year for the NFL to grow its brand.

Finally, while the NFL might still get it's weekly checks from the networks, they might come at the expense of poisoning the well. The TV networks do not have the liquidity and are far more dependent on their NFL programming than they were in the early 80's. A strike this time could badly damage the league's relationships with the networks, as well as the networks themselves. Right now, the NFL is one of a scant few properties that makes the current network TV model still make the slightest bit of financial sense. If the NFL pulls the rug out from underneath the networks just now, network television as we know will not survive 2011.

It's starting already with Comcast buying out NBC -- eventually, the networks are going to all be absorbed by companies who are part of the new entertainment distribution paradigm. The old networks will continue to exist as entertainment brands, but they will no longer be allowed to throw good money after bad to prolong their existence... they will have only as much money put into them as their cable/internet providing parent companies can expect to get out.

What does this mean for the NFL? It means no more negotiating with desperate fools clinging to the old ways of doing things who might really want the NFL, but don't need it the way the current networks do. It also means negotiating with companies that won't tolerate DirecTV getting exclusive out-of-market and web broadcasting rights. It means lots of big, scary and expensive changes in the way things work.

Basically, the NFL is in a really, really good, but equally tenuous, spot -- the owners have to know that this is not the time to be rocking the boat.

 

[TheGodInAGreyHoodie]

Wow, talk about one sided. Was that just a reprint of a union press release?

I am not taking sides with either sides. But that clearly was pure player spin poorly disguised objective analysis.

Sadly too many folks are going to fall for it as being unbiased.

 

[BradyManny]

I think NFL players are the few athletes who earn their money. It is a rough sport that will affect many of them for the rest of their lives and they can't play it for that long.

In comparison MLB salaries are a joke, they don't deserve what they get.

Agreed completely

 

[BradyManny]

Sadly too many folks are going to fall for it as being unbiased.

Pretty much all of the talk in the media thus far has taken this viewpoint. Mainly b/c so far, its the only logical one. I don't think anyone is "falling" for anything, it is what it is. If ownership were to provide some concrete support of their claims, they might have some facts on their side. Until then, they don't.

 

[lamafist]

Wow, talk about one sided. Was that just a reprint of a union press release?

I am not taking sides with either sides. But that clearly was pure player spin poorly disguised objective analysis.

Sadly too many folks are going to fall for it as being unbiased.

So it's got to be "player spin," and couldn't possibly be that the NFL's claims about their economic hardships are just empty posturing?

Sometimes the facts are a little one sided.

What reason would a Forbes writer have to carry water for the NFLPA? They're not exactly known for holding hands and singing folk songs about solidarity with the workers of the world over there, you know.

 

[Va_Pats_Fan]

So it's got to be "player spin," and couldn't possibly be that the NFL's claims about their economic hardships are just empty posturing?

Sometimes the facts are a little one sided.

What reason would a Forbes writer have to carry water for the NFLPA? They're not exactly known for holding hands and singing folk songs about solidarity with the workers of the world over there, you know.

I'm not taking sides yet, but that article left out some facts also. Take this passage:

Are the players willing to bend on any issues?

Yes. The NFLPA proposed changes to the rookie wage scale that has been in the works for over a year. The union for the players offered up what they call a “Proven Performance Plan”. The proposal would reduce rookie contract lengths to a max of 3 years. According to the NFLPA, that would reduce spending on rookie salary by approx. $200 million. The proposal would then take those savings and divert $150 million to players who signed relatively low contracts either as rookies or veterans, but whose performance has been much greater. The rest of the balance (approx. $50 million) would be devoted to a fund for new retired player benefits. The proposal is also seeking the league to match those funds creating a $100 million pool for retired player benefits.

I remember when the NFLPA guy was on Mike and Mike and made that statement. What he and this article fail to mention is they also tied it to dropping of franchise tags and the pool of $$ that is distributed to tenured vets. I am not saying its a bad idea, just that the whole story isn't being presented.

 

[ayjackson]

I think the real issue is and always has been between owners. How they share their money is the biggest issue. Owners that build their franchise value want a bigger return. The first place they'll look is the players, but in the end, it will be owners fighting owners.