NFL Union Leader Paints Bleak Picture of Future

[Scott Campbell]

I wonder if the new union boss will be as successful as Gene Upshaw was with holding the union together during difficult negotiations. Is the union looking for something other than a bigger slice of the pie?

I think the size of the slice of the pie is the biggest negotiating point, but there are others. It won't be getting bigger. The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.

[pbmax]

The economy will not recover for years and the union could not have picked a worse time for this, but when has that ever stopped them?

Unfortunately, the Owners picked this moment, not the Players.

[swede]

I wonder if the new union boss will be as successful as Gene Upshaw was with holding the union together during difficult negotiations. Is the union looking for something other than a bigger slice of the pie?

I think the size of the slice of the pie is the biggest negotiating point, but there are others. It won't be getting bigger. The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.

If that is the case, that the owners are determined to shrink the slice in order to stay viable during a prolonged economic downturn, then we really are in for trouble. No one likes a pay cut. And it is hard for anyone to say if the the owners are taking a "pay cut" as much as the players are if they won't show us the books.

In a perfect world, the league/player negotiations are interrupted by an emissary from the Cardassians who have become addicted to NFL football broadcasts that have leaked out into open space and slipped through a wormhole. Looking at the business end of a Cardassian disrupter frightens both sides into an agreement brokered by the wisdom of an advanced--if somewhat ruthless--extraterrestrial civilization.

[Smidgeon]

One thing that hurts the union in terms of solidarity is that 10% of the players make 90% of the money. Aaron Rodgers makes 25X as much money as Matt Flynn. There are situations like that all across the league. The stars can afford to take a year off to get what they want, but it's a lot tougher for most of the other guys.

Yeah..those $450,000 minimum contracts just SUCK!

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.

Let's not kid ourselves here. I live in the bay area. My sister lives in SF. We have both either survived before or are surviving currently on less than 45k. That's right. 10x less than the amount that "isn't a huge sum of money". While the value of 450k in SF doesn't go as far as the same value in Wisconsin or Tennessee, it is still a huge sum of money to be a yearly salary no matter where you live. Even assuming that half of that goes to taxes, 225k is still a lot of money. Is it a monstrous amount? No. But it isn't something to complain about.

Part of the problem is that people in general don't know how to be judicious with their finances. Players hit it rich and go nuts.

[Smidgeon]

It's funny how we bitch about how much football players make, as if we have no control over it. They make the money they do because so many of us watch them and support them. We're complicit in this to some extent, people.

We live in a culture that nearly worships hyper-masculinity. We are encouraged to consume, to relax - we work so hard! We've earned it! - to praise the violence of the sport.

The money they make reflects the values of our culture. We love to talk about how policemen are underpaid - but in fact if our culture thought they were more important, then they'd make more. We pay lip service to all the right things but our actions speak the truth.

We're okay with guys maiming themselves long term for our entertainment. Just don't make us confront the reality of it.

Well said.

[channtheman]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

[pbmax]

The real question is how much smaller it will be. Upshaw got greedy the last time around and pushed it up to ~60%. That never sat well with the owners, and thus they decided to opt out of the agreement. This is a classic example of why its so important to negotiate win/win agreements.

So are you saying the Union has lost Upshaw's mind control device?

Because the owners voted yes of their own volition once already. But with four years to prepare, believe they are in a position to drive a harder bargain. Rumblings that factions wanted to opt out preceded the recession and the credit market collapse (not saying those are not real issues, but they may be temporary). Its not as simple as win-win in this negotiation. Each faction (and there are different interests among the owners) wants its pound of flesh.

The owners are already WAY below the 59.2% they COULD spend on players, They are at 52% or so for this year. This is about local revenue sharing and salary floor. And the only person who isn't admitting this is Goodell (publicly at least).

Talk about 59.2% being the issue is a red herring. The owners have never spent to the limit. That is also a reason the complaining about high first round draft pick contracts is half-baked. There is no mechanism (beside the soon to be departed salary floor) that will force teams to spend the savings on veteran players.

[Patler]

A few things:

1. Taxes - Half of this money is likely to go to the tax man, insurance, etc.

2. Players don't get to choose what team they play for (when drafted, anyhow). 450k goes way farther in GB than it does in NY or Cali. This isn't a huge sum of money by any means in SF.

3. Considering the lifespan of NFL careers and the danger that they put themselves in I don't consider it very much. I don't think I'd want to be a special teamer and get beat up and risk it all for 450k a year if I was in SF or NY.

1. Taxes? Federal tax bill on $450,000 of taxable income is $135,183. I believe the maximum marginal tax rate is 35%. State taxes vary, but does any state have more than a 6% marginal rate? Players with better salaries should have advisers who lessen their tax bills with investments and other programs for their money.

Insurance? What insurance? The player, his spouse, and his family get medical, dental and prescription benefits paid for by the league. If vested, the benefits continue for 5 years just as for active players, to allow the player to get established in a new career. Who of us gets 5 years benefits while pursuing a new career?

Car, homeowners, etc policies are no different for the player than for anyone else in the same home with the same vehicles.

2 & 3. Does the person in the military service get to pick where they will serve? They don't even have the right to "quit" at any time for any reason. He/She may have to serve in a combat zone, or not. No choice, different risks, minimally different pay. Some employers will "offer" transfers to other locations. Some are take it, or leave, just like the athlete.

Pro athletes have a GREAT thing going for them. I don't feel the least bit sorry for them, regardless of the "risks," the inconvenience and the lack of choices they may have for a few years.

[Maxie the Taxi]

The whole idea of a "union" for these guys is laughable. It's like George Clooney being a union member. I thought unions were for the little guys.

[Smidgeon]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

[ThunderDan]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

[Smidgeon]

I actually don't have a problem with how much money the players make. i think the owners are the greedy ones. I think they should compensate the fans for what we've done. The league doesn't go anywhere if we don't go to games and if we don't buy their overpriced concessions. Ticket prices should be lowered as should concessions. I really doubt that owners are running in the red. Oh yeah owning this team worth million and millions of dollars is SO hard. Well Mr. Owner, then sell your team and go cry somewhere else.

That's part of the problem. There won't be a lot of people out there willing to buy teams if the profit doesn't compare to other like-sized companies. It isn't a question about how much they're making, but a question of how much they're making compared to what they could be making with the same amount of investment in another field. Yes, you will still have the people who own for the sheer joy of owning the team or because it's been in the family for generations, but in order for the NFL to remain competitive long term, they need innovators and people whose best interest is advancing the sport.

All that to say, I'm not on the owners' side nor on the players' side. I think a deal is important. I don't have a problem with what players are paid, and I don't have a problem with the owners getting paid what they are. This just isn't as simple as everyone would like to make it.

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

Your numbers are arbitrary. Also, they fail to take into account the comparative value in other fields when they sell their businesses.

[Patler]

I disagree.

If you could buy a franchise for $400 million. Lose $4-5 million a year in operations and sell the franchis 10 years later for $750 million you have made a hell of a lot of money. On top of that you have ordinary losses to offset income at ~35% for that level of income and sell the franchise for a gain and pay 15% cap gain tax.

Net effect neglicting time value of money:
$400 M Out to Buy
$50 M in losses (tax savings of $18 M) -> $32 Million Out
Sell for $750 M (Money in Pocket)
$350 M gain taxes are $52 Million Out

750 - 400 - 32 -52 = $266 M (more than the $400 M to start) in pocket after 10 years. 66% return on investment after taxes. Pretty hard to beat that right now in any market.

So for the financial risk, headache and bypass of other investment opportunities, the owners' return is about what his franchise QB will make, and the QB is given guarantees whereas the owner is not.

[digitaldean]

This is the case of trying to kill the goose that's laying the golden eggs.

The players already make 50-53% of league revenues. Yes, they are the reason the game is what it is. But, you still have to have someone taking the financial risks to outlay this money.

Killing the salary cap, though not the end of everything, is a MAJOR step toward disaster.

It's this perfect storm of idiots (De Smith, and greedy owners like Jerry Jones) that may cause no football in 2011.

No regards for the fans, the local economies that depend on this (ESPECIALLY Green Bay!!!).

Goodell, the owners and the players union will torpedo this era of unprecedented wealth for the NFL.

They have a stranglehold for now on the sports entertainment industry. Leaving the door open for an alternative to come in to fill that void in 2011 is a monumentally stupid and dangerous approach.

[pbmax]

The whole idea of a "union" for these guys is laughable. It's like George Clooney being a union member. I thought unions were for the little guys.

Maxie, there is a book from the last 15 years or so called "Lords of the Realm". It is about the history of ownership in baseball and their relationships to their employees. It makes a compelling case that the owners could have avoided a strongly Unionized workforce at any number of critical junctures, and certainly could have limited the gains the Union made during the early years of Baseball's labor strife with a simple, logical evaluation of their position. But the owners willful disregard for treating players fairly and equally along with an iron clad belief in the very thin legal basis for the Reserve Clause caused them to overestimate their position. Their long-standing feelings of paternalism blinded them to the possibility that the players would act in concert for themselves.

It is one of the older stories of corporations in the 20th century. When a company gets a Union, it has usually been asking for one longer than it can imagine. It is much the same willful blindness that has caused the NFL and its Union to overlook its older veterans medical issues for too long and the same impulse that initially led the league to try to bury the concussion issue by wrapping its arms around the research and snuffing it out. The short-term fear of a new cost (disability payments and lawsuits) caused them both to ignore very real problems. In the case of the formation of a Union, both leagues waited until it was too late.

It is also no accident that what was an acceptable labor cost scenario in the first half of the century was made obsolete when National Television contracts brought wealth to all teams, far beyond the owner's previous ability to realize income mainly through the gate receipts. Had the owners opened the spigot when these contracts hit (or had the mechanism existed to channel that revenue in more or less automatically) then the push for strong Union action would have slackened.