We’ve long believed that the current labor dispute arises fundamentally from an insistence by the NFLPA* to continue to receive 50 cents of every dollar that passes through the cash register, and from a refusal by the owners to continue to provide that percentage. And so the NFL finally seems to be pushing a dollars-over-decimals message to the players.
“When you’re doing your budget and paying your bills and things like that, you’re not looking at a percentage, you’re looking at how many dollars you have in your checking account,” NFL general counsel Jeff Pash told Pat Kirwan and Tim Ryan of SiriusXM NFL Radio on Thursday. “If we can continue to have the kind of growth that we’ve had over the last 10 or 15 years, if we can do that going forward, which I totally believe we can do, there’s no question but that every player in the league will have rising income, rising salary, rising benefits.”
Of course, if the players are getting less than 50 percent of the increasing revenues, it means that the owners will be getting more. But as one management-side source recently explained it to us, the league believes that much has changed since a 50-50 split worked for everybody.
“Not long ago every team in the league had a stadium paid for with public money,” the source said. “Now teams have huge stadium debt. Not long ago most if not all teams had stadiums whose operating expenses were paid for by the public. Now almost all have huge operating expense bills. Not long ago we had revenues we could raise without incurring much cost, i.e., tickets prices. Most teams are now at a point where tickets prices don’t have much room and generating revenues if you can even can do it, has a lot of cost. So 50 percent worked when the owners didn’t have these kinds of costs but that reality has changed and is likely to keep getting more challenging from here.”
And here’s the other reality to which the league is now aggressively pointing. The players receive 50 percent, and it’s basically profit (after taxes, which of course the owners pay on their pay and profit, too). The owners receive 50 percent and from it they pay all other costs associated with running a football team. As these other costs grow, the amount that represents profit shrinks, in time dramatically.
“There are real reasons that aren’t greed,” the source said. “The business model has changed. They can make more money than they make even today but there are real credible reasons why the percentage can’t and frankly will not be the same. If we can’t get De Smith to understand or recognize this, I don’t know how this will end.”
Of course, one way to get Smith to “recognize this” would be to open the books and prove to the players that the trend is real.