NFL Lockout Fallacies: Why Jerry Jones is the real threat to the future of the NFL

Posted: May 17, 2011 in NFL
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Read this article with photos on Bleacher Report

Read the open comments section of almost any article on the NFL lockout, and you’ll find a large percentage of the people holding the opinion that it’s the players who are at fault for this.  They’re greedy, overpaid bums who should just shut up and do whatever the owners say because they’re the employees.  The owners should just fire them all and start over with new players at much lower salaries.  And on and on it goes.

It amazes me that in this day and age, when so many businesses are essentially giving the shaft to their own employees to maximize profits for themselves, that anyone would support a big business attempt to do the same.  Maybe it’s envy because the players are so well paid and do actually have some leverage over their employers, two things the average American very likely lacks, but that doesn’t make it right.

There are numerous fallacies about the lockout that have been bandied about, by both participants in the labor battle and fans in the comment sections everywhere.  In this article, I’m going to address four of what I consider the main ones, and explain why I am 100% with the players on this and why guys like Jerry Jones are the real bad guys at whom we should be throwing our venom.

Fallacy Number One:  Player Salaries are the reason ticket prices are so high

I have quite literally seen this spewed on every comment section of every article I’ve read that even slightly mentions the lockout, and it couldn’t be further from the truth.  Player salaries are, by definition within the context of the CBA, based on a percentage of league revenue.  The salary cap itself, both floor and ceiling when there was an active CBA, is based on a percentage of league revenue.

When ticket prices go up, league revenue goes up.  When league revenue goes up, the salary cap goes up.  When the salary cap goes up, player salaries go up, not the other way around.  There may be some instances where teams do raise ticket prices to account for increased player salaries, but that has more to do with the unbalanced financial system between the big and small market teams than with anyone paying too much to the players.

For instance, the Dallas Cowboys virtually have their own printing press in merchandising revenue.  The Jacksonville Jaguars, on the other hand, bring in a relative pittance.  The Salary Cap is based on total league revenue (minus a billion off the top), so the Cowboys jersey sales make for a higher cap for everyone, even though all of that money is in Jerry Jones’ coffers.  In other words, Jacksonville is playing under a higher salary requirement than their own revenues justify.  How is that the player’s fault if a team like the Jags were forced to up tickets a few bucks to make up for an imbalance in how the league divides revenue amongst itself?

It wasn’t always this way, either.  For almost 40 years, the league had a revenue sharing program for merchandising that split that money evenly amongst all the teams.  That was until a cadre of owners, led by Jones, pulled out of the arrangement, and eventually the NFL itself ended the program altogether.  Basically, the actions of Jones and several other owners have worsened the financial imbalance amongst the league’s teams.  So the players are supposed to pay for a handful of owners putting their own greed above the prosperity of the league as a whole?

Ticket prices are as high as they are because that’s what the market will bear.  And as long as we have season ticket waiting lists that can last decades, prices aren’t coming down any time soon.  The owners would love to slash player salaries, but don’t think for a minute any of those savings would get passed on to the fans, not when so many are willing to pay so much.  What the owners are trying to do here is cut expenses (shrink the pool of revenue the player’s percentage comes from) to maximize profits.  The savings will most definitely not be passed on to you.

Fallacy Number Two:  The Player’s have no right to see the teams’ financial information

This is another one I see every where, and usually it goes hand in hand with some crack about the player’s being just employees and common employees have no right to see their employers financial information.  First, the NFL is in no way, shape or form a normal business.  It is one of a very few enterprises allowed to function outside of the normal (legally mandated) free-market system.  And in order to keep that anti-trust exemption, their relationship with the players has to be closer to a partnership than employee-employer.

Hence the fact that players salaries are contractually required to meet a percentage of league revenue.  If the player’s (employees) weren’t lavishly rewarded for working under conditions that in most cases would violate federal and state labor and anti-trust laws, the courts would wipe out that exemption in a heartbeat.  And with that, the unimagined success that has rapidly generated all these billions of dollars would go away with it.

From simply the point of view of a guy whose pay is based on a percentage of revenue, I would absolutely want to see detailed information on that revenue before I accepted my employer’s word about my pay.  Wouldn’t you?  Would you simply trust your boss if he showed you a generalized financial sheet with nothing but total figures in the ledger to justify your paycheck?  Especially if he was telling you that it was a big pay cut coming because some unspecified and vague portions of the company are losing money, despite the fact that total revenues company-wide have nearly doubled during the past decade?

The main bone of contention in the lockout is the owners asking (demanding) that the players give up another billion dollars in revenue from the salary calculations.  This is for additional operating costs because some teams are losing money, the owner’s have said.  But what they won’t do is go into specifics.  And there’s a very good reason for that.

The owners don’t want detailed financial accounts of all its teams out there, otherwise someone might see exactly how imbalanced the internal financial system really is between the haves and the have not franchises.  It makes for a much more difficult case to expect the players to give up the equivalent of about 12% of the monies their salaries are based on because of money-losing franchises when the big-money franchises are themselves, hoarding local and merchandising revenues.

Plus, how many of these guys do you think are pulling a Frank McCourt, with haircuts, meals, vacations and various other personal items listed as “franchise operating costs”?  I bet there’s more than a few.  No way the league wants that, or the possible repercussions of that, out there.

In a $9 billion dollar enterprise with only 32 teams, if any team is losing money at the end of the day, it’s not because of player salaries, it’s because the owners aren’t playing fair with one another.  And before you say, “Why should the Cowboys have to share their merchandising revenues,” let me just say, those Cowboys jerseys and hats and jackets wouldn’t be such a hot ticket if they didn’t have 31 other teams to play.  How many people do you see around rocking Harlem Globetrotters gear?

If you’re going to count that revenue toward player compensation, and to do otherwise would be enormously unfair to the guys whose names and numbers are on all those top-selling jerseys, and expect teams like the Jags to pay more in salaries because of it, then that money has to be available to all.  It’s a cock-eyed system that creates money-losing franchises and it has absolutely nothing to do with how egregious Albert Haynesworth or JaMarcus Russell’s contracts were.

Essentially, the owners are demanding the player’s lifeline struggling franchises by taking a pay cut so guys like Jerry Jones can keep his own little personal merchandising and sponsorship ATM.  I don’t blame the players one bit for wanting a detailed explanation as to why Jones can keep all of his millions, but the players have to sacrifice some of theirs.

Fallacy Number Three:  The NFLPA decertification is a sham

Admittedly, on the surface, it looks that way.  But reality is a much different thing.  First off, the technique of decertification was used in the late ‘80s and early ‘90s by the players to some success.  They actually won initial free agency rights during that time.  Secondly, there is language in the CBA that just expired directly related to decertification and its possible use in the future.  The CBA states rather explicitly, that if the union were to decertify in the future in response to a lockout if the CBA were to expire, then the owners were prohibited from filing a formal labor complaint, nor could they deem it a fraudulent action.  That hasn’t stopped the league from doing just that.  Who’s being fraudulent now?

And that’s not the only instance where the owners have attempted to largely ignore contractually binding language in the CBA to their benefit.  As everyone knows by now, the league was recently smacked down in court for leaving a significant amount of money on the table in television rights negotiations to provide a warchest of funds specifically designed to starve out the players during a lockout.  Damages from this action could possibly run into the hundreds of millions.

The league not only reduced total revenue through this deal, which in turn took money directly away from the players, they planned to use that warchest to force the players into signing a worse deal than would otherwise be possible, thereby taking even more money from them.  This act on the part of the league is what I would call a sham, not the players collectively bargained right to decertify in the face of a lockout.

Because of that language in the CBA, I strongly suspect that the league’s National Labor Board complaint against the players will go nowhere.  In fact, just filing the complaint in the first place marks the second instance that the owners have violated terms of the CBA to acquire unfair (and likely illegal) leverage in negotiations.

If anyone really thinks the owners sat down to legitimately negotiate at any point since they pulled out of the CBA a couple years ago, they’re kidding themselves.  Virtually every action taken by the league has been designed for one circumstance and only one; a lockout that starves the individual players to the point that they force their own union to accept a bad deal just to get their paychecks back.  That’s not what I call playing fair.

Plus, no matter how many times I hear Roger Goodell say that it’s negotiation not litigation that will solve this in response to the player’s legal maneuverings, I find his comments disingenuous.  If the league and the players sat down and collectively bargained a system that divides all revenue (merchandising, local monies, etc) evenly amongst all teams, how quickly do you suspect that guys like Jones, Bob Kraft and/or Dan Snyder would have their lawyers in court?  Hey, Al Davis has made a career of suing the league to get his way.  Don’t let the pot call the kettle black, Roger.

Fallacy Number Four:  The NFL will be irreparably harmed if forced to play a 2011 season

This is the biggest joke of all.  The only way the league stands to suffer irreparable harm from this situation is precisely the opposite; if they don’t play a 2011 season.  And even then, it’s debatable if there would be any long-term impact.  There haven’t been in past work stoppages in the NFL.  The true threat to the league is in continuing to allow a few fortunate franchises to hijack the league and strong arm the players and other owners alike into letting them gut a financial system that has made the NFL one of the most successful enterprises going.

According to Goodell, the league can’t possibly play a 2011 season with no CBA because of the difficulty in crafting rules for player movement and such.  Well, maybe I wasn’t paying attention, but didn’t they just play a season under a vastly different set of rules for player movement than the one before?  And correct me if I’m wrong, but the 2010-11 season seemed like a pretty successful one, no?

This entire circumstance has occurred because of the greed of a few owners who want to put their own bottom lines above the health of the league as a whole.  To blame the players in this instance is short-sighted and, quite frankly, un-American.  Imagine if the top hospitals in the nation all colluded together to hold a draft of the top surgeons coming out of med school every year, and those same surgeons would then have to face a cap on their earnings and be unable to negotiate with or work for any other hospital in the premium group than the one that drafted them.  How quickly do you think that group of hospitals would have their rear-ends handed to them in court?

Name one other industry in this country that is allowed to put the kinds of restrictions on employee movement and compensation that professional sports leagues do.  You can’t because there aren’t any.  What these leagues do is illegal.  And it’s only because the players accept it through collectively bargaining partnership-level compensation that the Justice Department turns somewhat of a blind eye to it.

But strong arm the players too much, and they will target those exemptions in court, and they will ultimately win.  Of course, a “victory” in that case would actually be a loss, but that’s another story.  Gone would be the draft, the salary cap, any revenue sharing, any exemptions to individual state labor laws, and parity would be a thing of the past.  I don’t think it’s an exaggeration to suggest that, without those exemptions that allow the league to grow collectively, the NFL would be down to a 12-team league inside of a decade, if it was still in business at all.

If the league really wants to avoid irreparable harm, then at the next owner’s meeting, Goodell needs to tell Jerry Jones and his ilk to sit down and shut up, and that we’re going to do what’s best for all 32 teams and the players alike, not just you.  Holding your breath for that?

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