Sunday, February 13, 2011

The 2011 NFL Lockout is Like Sibling Rivalry

Soon after the Super Bowl, G asked me when the next football game was going to be played. He was warming up to the Patriots to such an extent that he almost sat still to watch an entire quarter with me a couple of months ago. And normally after such a question, I would remark that the Super Bowl was the last game of the season and that we would have to wait until he was in school again after Summer Vacation before he saw another game.  I probably would tell him that if it were true or not, quite honestly.  But this season was a little different.  Instead of just saying the same thing I tell him every time he asks me that question, I decided to tell him the truth – good or bad. I thought that this would be a good teaching moment for the kid.

“There might not be football next year. The Owners and the players don’t get along.”

“You mean like when we don’t get along and you send us to our rooms for quiet time?” he asks comparing the NFL labor strife to the brotherly spats that often fill up the JMR household – particularly when Xbox time and bed times are at stake.

“No.  I mean that the owners and players both want to be paid more and if they can’t agree, then they won’t be paid any thing.” Kind of like you can’t have any dessert if you don’t eat your vegetables.

I'm rich and you're not!                           photo courtesy of KTBB
Later on after watching ESPN’s incessant coverage of the problems, and reflecting on the possibility of a season of no football, just as I was in the beginning stages of planning a September trip to Las Vegas, I again found it funny that my six year old son compared the impending lockout of the players on March 4 to the fights with his brother. Really, isn’t that what we’re talking about when we talk about how the Players and the Owners can’t find out a way to share $9 Billion in annual revenue – that everyone involved is acting like children?  For instance, do you notice the similarities here?

Jerry Richardson whines that the 2006 CBA was bad for owners and that they (the owners) should “take the game back” - similar to my older son taking the game (in this case his Nintendo DS game) back from his 6 year old brother if the younger brother has been playing it too long.

Richardson also complains that the Players want to be "paid more to work less." I know how this feels when my 6 year old asks for more allowance while lying on the couch letting his 4 year old sister pick up his Lincoln Logs. I’m not taking sides here, but aren’t the Owners endorsing an 18 game schedule? That seems like working more to me.

Player Representative Kevin Mawae went on record recently stating that the players don’t want anything more, they just want things to stay the same – kind of like when my 8 year old wanted to stay up until 10 every night because he got to stay up late the night before.

I get it.

Having been both a W-2 employee and a small business owner, I can see both sides of the equation. I don’t understand the amount of money at stake, obviously, but I understand the concept. The players have a limited window in which to make money in the sport (with many not having ANY contingency plans for life after football) so they need to make as much money as possible. The Owners on the other hand take all of the business risk of failing franchises, falling revenue and skyrocketing costs. And the Owners take their cut of the pie and have to pay for the overhead, stadium and debt. Even worse, you have players who need the money (Cromartie and his children) who don’t care about he union as much as getting paid and you have owners with different agendas – Jerry Jones make a ton of money on his stadium compared to someone like Jerry Richardson. This is really a disaster if you ask me.  But I like the solution that has been floated out there in recent weeks.

The current deal says that the Owners take the first $1 billion of League revenues (and not revenues that are local to a club like ticket sales, concessions and parking) and then the remainder of the revenues gets divided 60% to the Players (in the form of the salary cap) and then 40% to the owners. Jason Cole of Yahoo Sports had a good idea about a solution that I want to expound upon. Because this is a business to everyone involved, I think that it would be foolish to treat the players as employees when in reality what they are are partners with the Owners. So let’s consider the NFL a private equity firm partnership. The Owners are the General Partner and the Players are the Limited Partners. Each team is a part of the business' Portfolio. 

The first thing is to ensure a certain amount of revenues are league wide.  That would include TV and Radio Contracts, NFL Properties, Internet revenues and revenues related to the Super Bowl.  Revenues such as tickets, concessions, in stadium advertising and parking should remain the individual teams'.  After all, putting people in the seats and making them buy food, beer and stuff should be up to the individual teams.  And the Owners should use that team by team revenue to pay overhead and debt service.  The Players and the Owners would split these League wide revenues 75%-25% until the Players reached a set number.  Upon reaching that set number, the percentages would reverse so the Players would get 25%.  All this other stuff (rookie salary caps, franchise tags, etc.) should just go away.  Teams have to work within their budgets or fail trying.

And if the Owners and the Players can get along, they can stay up later and play video games.  Come back later this week to read about my solution to the 18 game dilemma.  

1 comment:

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