Going back to 2011, the NFL had locked out the players. So
the long negotiation sessions with the NFLPA began. After the NFL draft, fans
of football had nothing to look forward to for the 2011 football season, as
there would be none. As a football fan I can assure you it was a dark time for
fans. I wanted to discuss a few things regarding the CBA and other sports it
impacted. The rookie wage scale was part of the new CBA. We previously discussedwhether the rookie wage scale is working or not. So lets touch on othersubjects.
First, the length of this CBA vs. the last CBA. The last CBA
was an eight-year CBA with a two-year opt out for the league to use in year
six, which they did. The new CBA is for 10 years with no opt out for either theplayers or the league. They are stuck together for ten years. This is
unprecedented! Most Unions will never bow on such a term. You can never really
know the true impact of a CBA until a few years after. The players and league
either both felt it was a win-win situation, or that they got the better end of
the stick.
Money is flowing into the NFL like a river of gold. This
comes from the media contracts that the NFL secured with numerous different
networks as well as the fans buying merchandise and season tickets. In the new
CBA the owners and the players changed the way the money was split. In the oldCBA the money was split majority to the players, around 56% with the ownerstaking home about 44%. The new CBA will split the pot a little different. The owners will get 53% of all revenue over
10 years, and the players will get 47%. The reason the union capitulated to
losing so much of the pot is because the owners guaranteed that they would use
the extra money they are making to grow the pie. A good visual is to think of
the State of Rhode Island as the old CBA. The new CBA is the size of the state
of Ohio. 47% of Ohio is more than 56% of Rhode Island.
The real question to be asked was why was this CBA so significant
in the sports business world? Base ball maybe “Americas favorite past time,”
but Football is “Americas Sport.” More money is generated in the NFL than the
other three major sports (Baseball, Basketball, Hockey) could dream to get too.
This means, more money is tied up in contracts with the NFL than any other
sports. Lets list a few: TV, merchandise, royalties, and apparel. You may think
that is very little, but lets go further in depth. ABC is the only Major
network that does not have a contract with the NFL. Fox, CBS, NBC, and ESPN all
have games. (Yes ESPN and ABC are joint company technically, but we are talking
about basic channels)
In the end of the day, Football being guaranteed to be
played for the next ten years, gives players, owners, fans, and businesses that
rely on the NFL for commerce long term security.
After the NFL agreed to the new CBA, the NBA and NHL had
lockouts over consecutive summers. Their lockouts did not do so well. The NFL
was the only industry to get their deal done before the lockout went into the
season. They took no loss in money. The NHL and NBA both had to have shorter
seasons and lost games because of their lockouts. The NFL CBA also set an
industry standard in terms of length. The NHL’s new CBA followed the NFL’sexample and got a 10-year agreement, although both players and owners can optout at year eight. The NBA also followed and made it a 10-year length.
There is a reason the NFL is Americas Sport. There is a
reason the Super Bowl is the number 1 televised show in America, second in the
world to the World Cup. The reason is the NFL is a product that is amazing. It
is a business that is run competently despite many claims otherwise. There is a
reason most politicians won’t go near it with bills or rules.
One last fun tidbit, during the NFL lockout reporters asked
President Obama if he would get involved to help get things between the NFLPA
and NFL moving. He firmly replied “No.” There are many sensitive political
issues in this country, but Football is where it doesn’t matter if you are Republican
or Democrats. Where the gridiron is concerned Americans are united. Just like we
all want lower taxes!
