Last week, the NFL Players Association walked out of negotiations with NFL owners over a new bargaining agreement and filed a lawsuit against the league. If no deal is reached before the end of the summer, the $9 billion sport could go dark for a year, costing local economies and sports bars across the country up to $150 million per city.
Who should we blame: the owners or the players?
Public opinion is solidifying behind the millionaire players rather than the billionaire owners. As James Surowiecki writes, it's hard to see how the owners don't have the cushiest jobs in the world. They're cartel owners working in the most profitable sports industry in the history of the world. Why would they choose to lockout their meal tickets?
The answer, alas, is money. "The downturn has made it harder [for owners] to raise ticket prices and to get states and cities to subsidize new stadiums," Surowiecki answers. In tough times, you cut expenses, and players are the biggest expense, eating up 60% of revenues. The owners want more. They have prepared for a year without football games, and the players have not.
Today, player expenses are calculated after crediting owners with the first $1.3 billion out of about $9 billion in total revenue. The owners want another $1 billion credited before the players take their cut, WaPo's Mark Maske explains. The union rejected that proposal, saying it amounts to a $800 million pay cut for players.
The players have a case. Not every guy in pads get paid like Peyton Manning. The median NFL salary is $770,000 and the average career is a little over three years. But the owners are also right that a smaller share of a larger pie is still a bigger slice of pie. Aggressively growing the league by giving owners greater rewards for their investments will pay off for players, just as the remarkable growth of football has paid off for the entire league. Moreover, as austerity sweeps the country, average taxpayers shouldn't have to bear the additional costs of new amenities with higher taxes and outrageous ticket prices.
Like deficit reduction in Washington, a successful NFL deal should involve many small concessions rather than one big change. Raise the owner's credit by $600 million over the next few years and extend the NFL season by one game starting in 2012. In exchange, compel owners to plow more into concussion-resistant equipment and post-retirement medical. Is there any doubt that such a deal wouldn't make both owners and players better off?