Billionaires vs Millionaires row could shut down NFL
Billionaires vs Millionaires row could shut down NFL
By Larry Fine
NEW YORK | Wed Mar 2, 2011 7:13pm EST
(Reuters) - A row between billionaires and millionaires threatens to rob the American public of seeing their favorite sport as a contract deadline between NFL owners and the Players Association fast approached.
How to divide a massive $9 billion in revenues generated by the most popular U.S. sport was at the core of the labor talks for a new collective bargaining agreement to replace one that expires Thursday at midnight.
Without a miraculous meeting of the minds, NFL owners were expected to announce a lockout of the players in the absence of a new labor pact and the business of the professional gridiron league would be put on hold.
For season-ticket holders and sofa-bound fans devoted to watching on TV from home, uncertainty over the future could lead to heartbreak over a 2011 season delayed or destroyed.
For Madison Avenue executives who market the commercials, the Hollywood talent that makes them, the media moguls who pay billions for TV broadcast rights and even the souvenir sellers at the stadiums, the economic effect could be crippling.
The players are largely satisfied with the status quo, but owners want a bigger slice of revenues.
Currently the owners take $1 billion off the top to cover their costs before dividing the rest, with the players' share of the remaining $8 billion set at just under 60 percent.
Owners have said they would be willing to leave the split as agreed in 2006, but want at least another billion dollars put on their side of the ledger before the share taking -- which could cost the players more than $500 million a year.
COURT ACTION
Jockeying between the sides has moved from the bargaining tables to the courts for collisions worthy of pigskin action.
The NFL sued the Players Association saying it was not bargaining in good faith, intending instead to set the stage for its members to sue the league on antitrust grounds.
The union, meanwhile, won a court ruling that the NFL had breached their CBA by structuring contracts with television partners to receive a $4 billion stockpile of cash to help it through a possible lockout.
"When this gets before the U.S. court system anything can happen. Nothing is a slam dunk," Andrew Zimbalist, professor of economics at Smith College and author of books on sports business, told Reuters in a telephone interview on Wednesday.
Labor strife last marred an NFL season in 1987, when a 24-day players strike led owners to use replacement players for three games and one game was lopped off the schedule.
The players, however, won the right to reach free agency after decertifying the union and taking the league to court.
Jeff Pash, general counsel to the NFL and its lead negotiator, has said no lockout would be implemented as long as good-faith negotiations were proceeding, but the prospects of further court action could exacerbate their differences.
League officials estimate lost revenue of $1 billion if no agreement is reached by September and could rise by a further $400 million a week if regular season games are scrubbed.
Zimbalist believe there is room and motivation for compromise and does not believe the season will be lost.
"I'd be extraordinarily surprised if this went beyond a few games of the season," he said about a worst-case scenario.
For the near term, teams will still conduct the annual draft of college players in April -- the primary way clubs rejuvenate their squads -- but no draft picks can be signed, and the league's nearly 500 free agents will remain in limbo.
Players will not be allowed to work out with their teams and a protracted wrangle could disrupt preseason training and stall development of new players coming to the teams.
The financial outlook could be bleak for media partners if an agreement was not reached.
"A strike would risk over $3 billion in gross national advertising dollars generated by the NFL," Nomura media analyst Michael Nathanson said in a client report.
(Editing by Frank Pingue; To query or comment on this story email sportsfeedback@thomsonreuters.com)
http://www.reuters.com/article/2011/...3?pageNumber=1
