NFL, Players Need Deal Both Sides Are Unhappy With

For one day, at least, St. Louis is the center of the NFL universe. The last time that happened was way back in January of 2002, when the Rams/Eagles game at the Edward Jones Dome decided the NFC Championship. This time, the stakes are even higher than deciding who will play in the Super Bowl…this activity can go so far as to determine the fate of the 2011 season.

When the three judge panel of the Eighth Circuit Court of Appeals meets at the Thomas Eagleton courthouse, they will hear the NFL’s argument that Judge Susan Richard Nelson’s decision in Minnesota court was incorrect. And, the NFLPA will argue that this is strictly a legal case…not one that should be overseen by the National Labor Relations Board.

While the court very well could play the biggest role in when the NFL will play again, owners and players apparently are getting some cold feet as they get closer to judges deciding their fate. According to numerous reports, five NFL owners and commissioner Roger Goodell met with five NFLPA representatives and executive director DeMaurice Smith in Chicago, apparently to resume negotiations without lawyers present.

What this means to me is that both sides are at least a little bit afraid of what might happen when the courts rule. For all of the bravado the NFLPA has displayed during the lockout, the fact of the matter is that the owners knew the players would win in Minnesota and were counting on some love from the Eighth Circuit. And in the wording of the stay they granted in keeping the players locked out, it appeared that the owners had good reason to believe they would prevail.

But speculated on Thursday, as word of the owners and players meeting leaked out, that motivation for these talks could come from “questions or statements from one of the two judges believed to be leaning toward allowing the lockout to remain in place indicating that one or both of them quite possibly could go the other way.”

In any walk of life, when someone is about to make a big move, some doubt has to creep in. Whether it’s changing jobs, buying a house, or getting married, it’s natural to think about the negatives that could occur. And it’s reasonable to think that Goodell or Smith…as confident as they might have been throughout this process…might be worried about the outcome of this hearing and decide a bird in the hand is much better. So it makes sense that they would heed the suggestion of their mediator in Minneapolis and get back to the table.

For most of the NFL’s existence, the owners have been happy with their labor deals because they had the players under their thumb. There was no free agency, players could be cut with their non-guaranteed contracts, and rarely was there another league to drive up player salaries.

That has changed in the last few years, when players became happy…and owners unhappy…with the deal that former commissioner Paul Tagliabue and late NFLPA chief Gene Upshaw negotiated in 2006. Players got a sweet deal and knew it, and didn’t want to change anything. They were shocked and saddened when the owners, as was their right under the terms agreed to, opted out of the deal because they thought players were getting too much of the pie.

What has to happen now is that both parties need to be unhappy with the eventual resolution. Are the owners going to get the players to agree to a 60-40 split of the league’s revenue? No way. They’re going to have to enhance player benefits, provide free agency, and perhaps back off their demand for an eighteen game schedule. And that 60-40 split is going to have to be closer to 50-50.

Are the players going to get half the revenue the league generates? No way. Owners have said that, like the rest of America, their costs are rising. To suggest that owners are immune from the rising costs of building materials for stadiums, debt service for those stadiums, infrastructure for the NFL Network, travel and insurance is folly.

The Green Bay Packers, who are publicly owned and therefore are the only NFL team required to release its financial information, have seen their operating profit fall 71 percent in four years, from $34.2 million in the budget year ending March 31, 2007, to $9.8 million in the year ending March 31.

NFL owners aren’t losing money, but based on Green Bay’s records, they appear to be heading in that direction. The reason we have a lockout right now can be seen in the Packers’ financial statement, in which they report player costs jumped from $110.7 million to $160.8 million this past year. Player costs up $50.1 million, profits down $24.8 million. Somehow, Green Bay…and presumably the rest of the league…must find a way to stop the downward spiral of profits.

So are players going to be able to maintain what they’ve enjoyed over the last five years? Unlikely. What needs to happen is simple. Before one side or the other has their back pressed to the wall by a court decision, they need to reach an agreement. An agreement in which both sides don’t get what they want, and both sides walk away unhappy when they sign on the dotted line.