A little CBA history and reading the tea leaves

I have been following the CBA pretty near to obsessive status for a while now, and I just wanted to highlight what seems to be happening what what I am extrapolationg from all of this. I don't really care who's fault all of this is, though it amazes me that both sides are so stuck on thier high horses when they both have such glaring weaknesses in thier stances. That said, this will be a pretty anti owners piece, but simply due to the fact that they have had the biggest shifts in thier position through the course of this process, and through the process they have revealed some pretty shady tactics. But, let's get into breaking down the whole thing.

As you may or may not know, there was a CBA (collective bargaining agreement, which is the deal between the players and owners in order to play football) renegotiation back in 2006. The two sides agreed to a deal that seemingly heavily favors the players. At least this is the stance the owners are taking now, despite the vote being 30-2 by the owners in favor of the (recently extended by 24 hours in order to remain) current CBA. The 2 owners who voted against the CBA were a notorious miser in Mike Brown (Bengals) and the smallest market owner, Ralph WIlson (Buffalo). However, a little under 2 years ago, the owners agreed to opt out of the current CBA (which would have run through the 2012 season) two years early. Since that time there has been various build-ups along the way to get to the point that we are at right now. So let's look at it in further detail.

After the owners opted out, there has been various posturing and strategizing by both sides. Until about the last month, that's all that there was, save a few meetings which inevitably were followed by various accounts of finger pointing. About a month ago the sides decided to try and sit down and get something done. This round of negotiations ended badly after the owners created a stink one meeting and simply left the meeting and cancelled all further negotiations.

As an aside, I would like to say that this was the moment that I officially lost hope for a full NFL season. I had a feeling that the only way that this would get done was by the players ceding to nearly 100% of the demands of the owners. I felt that the Players weren't going to do that, but would actually have to after not getting thier game checks because they have a difficult time handling thier money and couldn't sustain financially for very long. Then it would be up to the owners to go through with the season, or just call it all off to really twist the knife in the gut of the players to provide an experience that they wouldn't want to encounter again for a long while.

Meanwhile, the owners had just about all the money they needed. If we break down the numbers (something I do naturally, so this always seemed obvious to me), we all know the NFL got about $9 billion this past season, and that the owners got 40%, while the players got 60%. So the owners would see only 3.6 billion. That works out to an average of $112.4 M per owner. Now the owners signed TV contracts that net them $4 billion dollars this season, which works out to $124.3 million per owner, even without any football. Look at that, a 10% raise without the overhead of having to pay the players! No wonder they were ready to sit back and wait for the players to cave. However the owners got the first billion off the top, therefore got about 4.1 billion as a group, or 126.6 million per owner. Now the owners also signed TV contracts that net them $4 billion dollars this season, which works out to 124.3 million per owner, even withough any football. So we are talking about the difference between 2 million dollars per owner, or less than a 2% loss, in order to get the long term concessions they were looking for. No woner they were ready to sit back and wait for the players to cave!

But they continued with thier negotiations, and even brought in a mediator. He agreed to keep a media silence, so we were left in the dark, with only the fact that the sides were talking to try and figure out what was happening. And it seemed like they were doing a lot of talking, but no resolution. The mediator did give one comment, and that was to say the sides were still very far apart on the "core issues" after 7 straight days of talks. I assume he was essentially talking about 9 billion of these core issues.

Then a funny thing happenned. On the evening of March 1st, Judge David Doty ruled that the owners violated fair labor practices by setting up the TV contracts in the way that they did. It turns out that they actually took money off of the initial 2 years (being the '09 and '10 seasons) in several of the TV contracts, which would have been more money to give the players thier 60% split (along with thier 40%), in order to have the insurance money of $4 billion that would go directly to the owners should there be no football. After the ruling, the $4 billion will now either be put into escrow, or split with the players. This money had been called a number of things by the media. A security blanket, war chest, cushion, and a hanful of other descriptions, and if combined they were all spot on and then some. Basically it provied the comfort the owners needed to operate from a position of power. No matter what happened prior to this ruling, the owners would go home no worse for the wear if they had the TV contract money. Yes, they would have had to pay a good chunk of it back, but that would probably come right out of the player's pockets after they caved to the owners demands. But now all of that free money was either put away or to be split by both sides.

The owners lost their leverage, and about 1/8th of a billion dollars per owner is up in the air. They also lost the ability to keep up with their high profile mortgages. (I wonder, if anyone has asked Jerry Jones if a potential work stoppage would be devistating to the NFL today, what his answer would be.) And the people saying that the owners will appeal it, well, look at the report that Doty issued. He basically blew the lid off of any case that the owners had, and they would have to discredit everything that the ruling meant. I'm not a betting man, but if someone was giving me an even spread on the players ability to uphold that ruling in an appeal, I would gladly take the opportunity no matter the minimum buy in.

Now is when another set of numbers come into play. This is the estimates of that the NFL projected it would lose should a work stoppage happen. They said $500M by August, $1 billion by kickoff (one month later) and $500 million per weekend. Going by the current CBA, now in the owners eyes, they see about a 5% loss (or $6.25 million per) by August, another 10% by September and 5% every week after that. That's over $20 million that these guys would lose by not playing the first week of football. Thier losses are now real and can be felt. On top of that, the players union would decertify, and the players would then try and sue the owners for the possibility of getting more money. The roof is really starting to cave in on them, and they're forced out of their bunker into the open field where the players have been waiting. Whether they fight and cause more casualties or kiss and make up, it's up to them. But at least there is no where left to hide.

This one was the crack in the dam that us fans were waiting for, and look what's happened since. On Wednesday, the mediated talks continued, but only for a 4 hour session. Though the owners went and had thier own meeting, which was scheduled anyway, they ended it early. I imagine it was pretty short because they voted for plan B, which was to play ball in the negotiations. Shortly after, Goodell scooted back the mediators office, and after another short round of negotiations today, we have an extention on the table. I honestly think this nightmare is coming to an end folks, and quickly. And I'm not the only one.

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