“Deal To Be Made” Between NFL, NFLPA, But September 1st Deadline Optimistic

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The NFL and NFLPA have initiated “preliminary talks” on a new Collective Bargaining Agreement (CBA). While the existing CBA doesn’t expire until after the 2020 season, Pro Football Talk has reported that the league “genuinely wants” a deal in place before the start of the 2019 season. Meeting a self-imposed September 1st deadline would ensure that the league’s 100th anniversary season is celebrated without the distraction of labor negotiations and guaranteed long-term labor peace would give the league the opportunity to begin negotiating their next round of broadcast rights deals. But the NFLPA doesn’t seem to be on the same timeline – union leaders have been working to financially prepare their constituents for a work stoppage.

Howie Long-Short: It’s unclear just how serious the NFL owners are about having a deal in place before the season starts. Their motivation is logical, but forcing themselves to abide by a self-imposed deadline would give the player’s association leverage in negotiations. Scott Rosner (academic director of the sports management program at Columbia University) believes Sept. 1st is a soft deadline – that “the owners are not going to do a sub-optimal deal just to get it done when there is so much time remaining on the current CBA.” Similarly, while broadcast companies appreciate the certainty that a signed CBA guarantees, the league isn’t doing a bad deal just to placate potential media partners.

An extension may not happen before the end of summer, but Rosner believes that there’s “definitely a deal to be made. The league is so healthy financially, it seems unlikely that either side would be inclined to shut the sport down.” He’s got a point. The NFL generates upwards of $15 billion/year in revenue (+/- 50% more than the next big four sports league – MLB) and the salary cap has risen +40% since ’14. Sure, there’s “always things that can be negotiated in an agreement” (think: an extra point of revenue), but unless the players are willing to strike over guaranteed money there wouldn’t seem to be anything within the current CBA that would be worth stopping the gravy train over.

There are several concerns that the players would like to address in the next CBA including limits on Goodell’s authority (particularly for cases concerning of off-the-field conduct), increased roster sizes, improved medical benefits and the elimination of marijuana from the league’s banned substances list. While technically the NFL and NFLPA could modify the drug policy outside of CBA negotiations, authorizing its use is an easy carrot for the league to dangle in negotiations (since it has no impact on the game or the bottom line).

Roger Goodell has publicly acknowledged that he’d like to cut down on the number of pre-season games played (from 4 to 2) and has suggested that the league replace them with two additional regular season contests, but the players oppose the idea because of the enhanced risk of injury (remember, starters play limited reps in the pre-season). The league isn’t going to get the players to bend on 18 games without significant concessions, so it’s believed that the two sides will settle on a compromise – likely the elimination of two pre-season games, a 16-game regular season schedule and a 14 team playoff pool (up from 12). Adding a 7th playoff spot within each conference would give the league two additional post-season games and the incremental revenue growth it desires and Rosner believes that adding just two games would be “more palatable to the NFLPA than 2 extra games for every team.

Fan Marino: The NFLPA is collectively saving 4 years’ worth of “Madden [royalty] checks” in preparation for a potential work stoppage. The belief is that the larger the “war chest”, the longer the union could hold out for a better deal. Yahoo! reported that the players plan to have more than $600 million in “rainy day union money” saved before the end of the 2020 season. $600 million sounds like a large number, but remember it’s a battle between millionaires and billionaires and it’s the owners – not the players – who have the financial wherewithal to withstand a lengthy work stoppage. As Rosner said, “it doesn’t matter if the players are squirreling away a few additional nickels and dimes, that will never change.”

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Author: John Wall Street

At the intersection of sports & finance.

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