Some believed that Tuesday’s ownership meeting in Chicago would become a gripe session of the owners who don’t like the path on which the current labor negotiations is moving. Apparently, however, there’s a fundamental difference between griping to a reporter on an off-the-record basis and standing up in the company of one’s peers and poking holes in the promise of progress.
The proverbial elephant in the room remains, for the owners, revenue sharing. As one source with knowledge of the situation tells us, it’s still a big issue for the small-market teams, but so far no one has been willing to bring it up.
Details leaked Tuesday regarding the league’s proposal will make revenue sharing an even bigger sticking point. Giving players 48 percent of all revenue means that the per-team responsibility will be skewed by the significant unshared revenues generated by large-market teams. As a practical matter, this drives up the relative labor costs — and eats into the profit margins — of the small-market teams.
In the past, a cap floor at less than 90 percent of the spending maximum gave the small-market teams some relief. With the league now willing to commit to a minimum annual cash expenditure that, according to ESPN.com, could approach 100 percent of the spending limit, the low-revenue teams will be forced to sacrifice profit in order to comply.
In the short term, that’s good news for each team’s fans. No longer will franchises like the Bucs be able to play games with the cap figures, using phony “likely to be earned” incentives to push cap dollars from one year to the next, building up an excess that, thanks to the uncapped (and unfloored) season of 2010, never was spent. Instead, the money must be spent on signing new players and/or keeping guys already on the team.
Absent improvements to the current revenue-sharing system, the fans of some teams could face heartache in the long haul. This new system, if adopted, will make small-market teams far less profitable in their current markets, forcing them to consider looking for greener (literally) pastures. Indeed, the only way to remain financially competitive will be to max out revenues. And if a higher revenue ceiling exists in, say, Los Angeles than in, say, Buffalo, it eventually will make good business sense for the team to move.
It all means that the business-minded owners finally have taken over. It never was going to happen via an edict from 280 Park Avenue; it was destined to occur organically, with nature taking its course after Mother Nature rewrote the rules. And so, without expanded revenue sharing, teams from the lowest-revenue markets eventually could migrate to large markets, with Los Angeles getting one or two teams, with a franchise moving to Toronto (if/when the Bills leave Buffalo), with a team moving to London, and with markets of a certain size, like Chicago, possibly picking up another team.
Of course, before teams move out of Buffalo or Jacksonville or any other underperforming markets, the NFL could attempt to extract Saints-style concessions and subsidies in order to stay put. Given that the public has developed a distaste for contributing taxpayer money to building new stadiums, perhaps the next frontier in NFL-style government cheese will entail sticking up cities and states to cut sweetheart deals for teams in small markets that have suitable stadiums.
Either way, the proposed CBA will change things dramatically for small-market teams. Without changes to the current revenue-sharing system, the drama eventually could include moving vans.