Wall Street Journal Sheds Light on NFL’s Labor Strategy

October 13th, 2010

Under the headline, “NFL Braces for a Costly Labor Fight,” the Wall Street Journal reported today that “the lack of progress on a new contract with the players union had already begun to create financial losses.” 

The financial losses referenced in the WSJ article were outlined in a recent NFL report presented to team owners during a private meeting Tuesday at the league’s annual fall owners’ meeting. 

According to the WSJ, who spoke with two senior league officials that had access to the NFL report, “even if a deal were reached late next summer that allowed the league to play the entire season, total losses could reach $1 billion.” 

Ironically, the $1 billion figure is almost equal to the amount NFL owners asked back from the players without justification earlier this year during labor talks. 

The WSJ cited the share of league revenue as one of the key sticking point in current negotiations between owners and players, but also confirmed with NFL officials that “every team is profitable.” Considering team owners voted unanimously in 2008 to opt out of the current CBA early, the question remains as to why the owners continue to stall towards reaching an agreement on a new contract. 

“The NFL’s statements and disclosures come at a time when progress in negotiations has stalled,” noted the WSJ. “They also represent the first time the league has laid bare some of its internal financial estimates.” 

With NFL owners continuing to make moves towards locking out the players in 2011, the WSJ shed some light on the negotiating strategy NFL owners could use in upcoming labor talks with the players union. 

“NFL officials said that if the league can’t agree with the players on a new collective-bargaining agreement soon, the league’s future proposals to the union are likely to get worse rather than better.” 

The NFL’s outside counsel, Bob Batterman, instituted a similar labor strategy of insisting players accept a terrible deal now or receive even worse deals later down the road, while representing the NHL’s owners during the longest lockout in sports. 

Should the NFL’s owners decide to lock out players starting in March, more than half the owners’ costs will go away. In addition, more than half of the owners’ revenues will be guaranteed in a lockout due to the roughly $4.5 billion cushion the league’s television contracts provide. 

It is estimated that more than 150,000 jobs would be impacted by a lockout and cause more than $140 million in lost revenue in each NFL city. So, who stands to lose the most in a lockout?

For the complete WSJ story, click HERE.

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