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Rock Out with Your Lockout: NFL Work Stoppage for Dummies

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March 4th, 2011.

For those that don't know, that's the day the current NFL collective bargaining agreement expires and it's now only 45 days away. The possibility of an NFL lockout has been discussed here and there throughout the 2010 season but as the date nears and after a Super Bowl champion is crowned in Arlington this February, it will no doubt take center stage in the football world.

So to make sure we're all on the same page and know exactly what we're talking about in future discussions, I've put together this beginners guide containing all the basic information you need to know; a lockout FAQ of sorts written for someone with zero to little background knowledge of the situation. It's a complex, complicated situation, however, so keep in mind that there are many more angles, viewpoints, details and motives that come into play and that I have simply not covered.

Hopefully this will foster some great conversation and serve as a good starting point for all future discussion about this all-important topic.

What is collective bargaining?

The dictionary defines it:

-noun; the process by which wages, hours, rules, and working conditions are negotiated and agreed upon by a union with an employer for all the employees collectively whom it represents.

In the case of the NFL it's between the players, represented by their union the NFLPA, and the team owners. Those negotiated and agreed upon rules are called a collective bargaining agreement.

What is the current NFL collective bargaining agreement?

There are all kinds of stipulations, but it's the revenue sharing that's currently in the spotlight. Right now, the players receive 59.6% of the total revenue (after the owners take a little off the top as part of a credit) and the owners receive the rest. There is also a revenue-sharing plan in place among the owners that calls for the 15 highest-earning franchises to financially support the 17 lowest-earning franchises.

Okay, it's pretty simple so far. So what's all the hub-bub about?

The current agreement between players and owners is about to expire on March 4th, 2011. In March of 2006, NFL owners voted unanimously (30-2) in favor of extending the current CBA that was already in place. Then in May 2008, they voted unanimously to opt out of the agreement two years early, which will be this March. There are no plans of a new agreement in place.

Why the sudden change of heart by the owners?

In short: the late Gene Upshaw, NFLPA executive director, was one sneaky son-of-a-gun. He was able to get a player-friendly agreement signed in 2006. Yahoo!'s Michael Silver explains it best...

Many owners believe that the late Gene Upshaw, who served as the NFLPA's executive director for a quarter-century, caught then-NFL commissioner Paul Tagliabue in a weak moment and muscled through an extension to the CBA that was, in essence, a resounding victory for the players.

Upshaw, they believe, knew that Tagliabue - who was preparing to step away after a 17-year stint as commissioner which included unprecedented labor peace - was loath to tarnish his legacy by ending his tenure with a messy fight between the players and owners.

Why do the owners think they deserve more money?

There are a couple of reasons, a major one of those being the actual football stadiums themselves. Things have changed since 2006. Have you noticed how many teams are playing in new or renovated stadiums? The owners claim the cost of doing business is rising, particularly paying for those stadiums, so they need more money. Like everyone else, the owners have been dealing with the rough economic climate.

A handful of owners are also not happy with the current revenue sharing plan among themselves. Some owners have sweet deals in place that call for the city or additional taxes to foot the bill for most stadium expenditures, like our very own Superdome. Others, like Jerry Jones of the Dallas Cowboys, came out of pocket themselves to pay for their state-of-the-art facilities and now have huge loans to pay down. But if the Cowboys are one of the top 15 highest-earning franchises, the current agreement might call for Jerry Jones to write a fat check to someone like Arizona Cardinals owner Bill Bidwell, even though Bidwell is probably doing just fine financially thanks to significantly lower overhead and little to no stadium costs.

What do they suggest?

Basically, the owners want to take more off the top before slicing up the pie for sharing. Instead of a $1 Billion owners credit, they want to take $2.4 Billion, a number they think is fair and realistic. The players would still be taking 60% of the pie, it would just be a smaller pie.

In case you're a visual person, I've created this little graphic. The left is the way money is shared in the current collective bargaining agreement and the right is what owners would like to see in a new agreement.

Nflrevenueshare_medium

So where do the sides stand now?

There hasn't been much progress and right now things aren't looking so good. NFLPA officials said last week that there have been no bargaining sessions since before Thanksgiving and no future bargaining sessions are scheduled. The owners will meet on Tuesday in Atlanta.

The players are happy with the current agreement and want to avoid any possible lockout. Kevin Mawae, the retired NFL center who is the union's president recently said...

"We want to be on the field. We don't want a lockout. We didn't ask for this. We didn't opt out"

But before starting negotiations, the player officials want to see some financial information from the owners...

"We are willing and ready to negotiate anytime they want to," said Indianapolis Colts center Jeff Saturday, a member of the players' executive committee, "but unless they have any meaningful information to give us ... there's not a whole lot to talk about."

On the other side of the table, the owners aren't backing down and appear steadfast in their resolve to get what they want. Listen to what Jerry Richardson - owner of the Carolina Panthers and co-chair of the NFL's Management Council Executive Committee which is responsible for labor negotiations - had to say earlier this month...

"There are 32 owners and 32 opinions and as you know I am the co-chair of the committee and I have been chair for a number of committees through the years. I would say that we are the most united we have been. In 2006, ‘07 and ‘08 we generated $3.6 billion in new revenue. The players have gotten $2.6 billion of the revenue and 32 teams have gotten $1 billion. And we have a negative cash flow of $200 million. Now, I don't think many business schools would say that's a model that's going to sustain itself and we have tried to explain that as best we could to the representatives of the Players Association.

I am not as optimistic as some are that we're making much progress. I get a lot of letters each day from union representatives from all over the world and somebody is spending a lot of time on things like that which I believe are counterproductive and we're not spending enough time trying to come to some resolve."No one has fought for labor peace more than I have.

The realities are that states, counties, cities and nationally, things are not well economically and I don't know what to believe on unemployment. I don't know if it's 9.6, 9.8 or 10 percent, but it's a bad number and we can't sustain revenue production like we have had in the past and it's just a reality. One of the first things that was said to me when I meet with union lawyers is, ‘Mr. Richardson, we want more money, more benefits and we want to work less.' And then they say, ‘Let's begin negotiations.' And I'm not optimistic we're making a lot of progress."

Who has the leverage?

That's tough to say. Obviously there will be some money lost if no NFL football is played, but the owners are slightly insulated because they can still collect checks from their network TV contracts even if no football is played, though it has to be repaid.

The players have a little leverage as well. The NFLPA could choose to decertify as a union, thus giving them the ability to sue the NFL for antitrust violations. You might remember Drew Brees writing on this subject last post-season. Some teams, including the Saints, have already voted earlier this season to decertify.

What is going to happen if there actually is a lockout!?

That's anybody's guess. Some things are more certain than others. There will still be an NFL draft. Players will still remain property of their teams, however, there would be no free agent signing period, no trading, no rookie camps, minicamps or organized team activities. Players cannot even walk into team facilities.

There may be games played with replacement players just like in 1987. NFL players might make a move over to the UFL for the time being. Or they could even start their own league. With no CBA, players will not be held to any restrictions regarding marketing deals or be monitored for any drug use. It will be pandemonium.

That sounds scary! Can't they just work out a new CBA already?

Eventually we can assume there will be a new CBA. Obviously it's just a question of when. To reach an agreement there's going to have to be compromise from both sides. Chances are good that an 18-game regular season will become a reality as a way to increase owner revenue without cutting player salaries too much if at all. A longer season means increased physical demand on players which means medical coverage and benefits for retired players will also get brought up at the bargaining table. The implementation of a rookie wage scale (like the NBA) will probably be used as a bargaining chip and included in a finished agreement as well.

What can I do?

I'm not sure the owners are looking for your help but the players are reaching out. You can sign the petition at NFLLockout.com. Tomorrow is #LetUsPlay day, which will be "an online blitz of the Block the Lockout message "LET US PLAY" from NFL Players across social media outlets." You can participate in that and help spread the word if that's your kinda thing.

Don't forget that you, as a consumer, hold all the power with every NFL-related purchase you make. No matter what you believe, you can do your talking with your wallet or purse. Without your money, the NFL would cease to exist. Forget about the players and owners, it's all about you.