Monday, December 06, 2010

NFL Armageddon 2011 (the lockout): This has become a dark ride

Week thirteen of the 2010 National Football League season ends tonight with one of the marquee games of the regular season – the New York Jets heading to Foxboro to meet the New England Patriots. The two teams are 9-2 and the winner will become the prohibitive favourite to hoist the Lombardi Trophy at Dallas Cowboys Stadium on Sunday, February 6, 2011, less then a month before National Football League owners are expected to lockout NFL players. The current NFL collective bargaining agreement expires on March 3, 2011 and based on events that have taken place over the last few days, unless there is a dramatic about face – the NFL’s inevitable will indeed be NFL Armageddon 2011.

The bad news was fast and somewhat furious (both literally and figuratively) over the last few days. Sunday ESPN’s NFL Insider Chris Mortensen broke the news that the NFL Players Association is expected to file a collusion lawsuit against NFL owners no later than Wednesday. Friday, news emerged from the New England Patriots that suggested NFLPA executive director DeMaurice Smith was advising his membership to withhold their last three pay checks, suggesting NFL players save their pay checks for the upcoming monsoon.

According to Mortensen, “NFL Players Association is on the brink of filing a collusion grievance against NFL owners based on a case it has been building since only one of 216 restricted free agents was signed to an offer sheet during the offseason, according to union sources.

“NFLPA executive director DeMaurice Smith is reviewing the case that has been collected by his legal team and is expected to approve a collusion filing with the Special Master by Wednesday's deadline, as dictated by the current CBA. The Dec. 8 deadline is established as within 90 days of the regular-season opener, which was Sept. 8.”

According to Mortensen the NFL’s rationale for not pursuing restricted free agents was largely based on the uncertainty relating to the 2011 NFL season – what the new CBA would look like.

On Saturday, multiple media outlets reported, in a move that should not have surprised anyone, Smith advised his membership “to save their last three game checks this year in case there is no season in 2011.”

On the surface that might seem almost like a declaration of war on the player part but it is more of a symbolic gesture then anything else. It is tough convince young men making hundreds of thousands to millions of dollars it is in their best interest to save today for tomorrow but that was the responsible message the union leadership had to deliver.

"That deadline has now passed," Smith wrote in his letter to the players. "It is important that you protect yourself and your family."

The news did not bring joy to those working at the NFL’s Park Avenue Manhattan offices.

NFL spokesman Greg Aiello called the union's deadline "disappointing and inexplicable, especially for fans."

"We hope this does not mean the union has abandoned negotiating in favor of decertifying and litigating," he said. "We are ready to meet and negotiate anytime and anywhere. But it takes sustained effort and shared commitment to reach an agreement. One side can't do it alone.”

Just one second Greg – was it not the talking head for the NFLPA George Atallah that suggested a few short weeks ago the NFLPA was ready to meet with the NFL and get a deal done (in fairness to George the NFL talking head Aiello is saying the same thing)

"Today's memo to NFL players was an internal deadline to prepare, not for CBA negotiations," Atallah wrote via Twitter, following up with two more tweets: "The NFL knows that we have exchanged correspondence and met regularly," and "To spin this as an end to the NFLPA's negotiating is dumb. Perhaps the outrage can be directed towards preventing a lockout."

With the reality of lengthy two week Christmas break a mere two weeks ago (December 21 thru January 4) the two sides spent much of the past week discussing a report the NFLPA had released relating to the economic impact an NFL lockout may or may not have.

Edgeworth Economics Senior Vice President Jesse David and NFLPA Assistant Executive Director of External Affairs, George Atallah held a conference call Friday to discuss the economic impact of a 2011 lockout.

The discussion focused on an independent study conducted by Edgeworth Economics. Edgeworth’s study was based on publicly available data from NFL teams, stadium managers/owners and other public agencies.

Edgeworth estimated that a NFL Lockout in 2011 would result in an average of lost revenue of $20 million per game that is not played (the range runs from about $12 million to $40 million) or an average of about $160 million in local spending. In addition, a protracted lockout could cost each NFL city as much as 3,000 jobs.

"The point here is not to try to get sympathy to a group of players or anything like that,'' union spokesman George Atallah said.”It's just to identify the broader impact that this game has.''

"When the teams and the developers are seeking that money, they often commission studies of the economic impact that a stadium and the NFL operations in it will have on the local economy,'' David said on a conference call arranged by the union. "Those numbers are clearly relevant to the question of what will happen if NFL activity stops.''

"These 10 were taken as representative. They include teams in large markets or high-revenue teams like the Cowboys. They include smaller-market or lower-revenue teams, for example, like the Saints. They run over a range of time periods from 2002 to 2010. ... We've assumed,'' David said, "that those as a group are representative of the league more broadly. If they're not, then the number could be slightly different.''

Aiello took the NFLPA economic study with a grain of salt suggesting “"The fairy tales continue.''

To which Atallah shot back, “Tell that to the mayor of Buffalo, who estimated $140 million in lost revenues in one of the NFL's smallest markets. Why don’t you tell the hotels, bars, stadium workers and people that support the game what they lose in an NFL lockout?''

Aiello claimed the league does not have its own estimate of the potential effects of a lockout on NFL cities. But he questioned the validity of the union's numbers.

"None of these third-party studies cited today had anything to do with the economic impact of a season-long work stoppage. If any of this had credibility, each city would have its own figure, taking into account all the relevant factors, such as stadium capacity, fan base, and market demographics,'' Aiello wrote. "It's unfortunate that the union has been circulating unattributed research about the impact of a potential lockout and it's now clear there is no such credible, original research done by the union, the league, or anyone else.''

Let us get one thing straight when it comes to any economic study – if you are hiring the guys doing the study chances are they will deliver the results you are looking for. Look no further then those infamous Super Bowl studies subtly sponsored in part by the National Football League, whatever the local Super Bowl organizing committee happens to be and the local chamber of commerce. Who is kidding who here – every report suggests in no uncertain terms a Super Bowl is worth hundreds of millions of dollars to a city.

There is no doubt a Super Bowl is of tremendous value to a city in building that cities brand. Super Bowl XLIV was in Miami – during one of the better times tourists head to South Florida. Does anyone not believe many of the hotel rooms Super Bowl XLIV filled would have been filled anyway – regardless of whether or not Super Bowl XLIV was held in Miami?

NFL owners are scheduled to meet December 15 – and it is easy to believe the lockout will be the focus on their meetings that day; well hopefully the owners may be interested in discussing what they might do to negotiate a new CBA. Currently NFL players receive 60 percent of football generated revenue. The owners want that to drop by 18 percent to 42 percent, not as dramatic as the 33 percent NBA owners are looking for from NBA players in their new CBA but a dramatic step backwards from the 60 percent the players bargaining and negotiated for in good faith in previous CBA’s. That’s not suggest times have not changed, but the last time anyone checked the NFL owners club can be called the billionaires owners club.

Of course NFL owners have a right to make money but....NFL owners (as is their right) refuse to open their books to the players. NFL owners may suggest the start-up costs for the NFL Network have been considerable, but the NFL gives games to the NFL Network, games it could sell to its network partners and generate even more revenue from its media rights fees.

Thursday night the NFL Network showcased Michael Vick’s Philadelphia Eagles and the Houston Texans. Vick is the NFL story of the year, meeting the NFL’s Houston based franchise – Houston being the fourth largest American TV market if the average marquee NFL game attracts between 15 and 22 million viewers. How does the NFL feel when a game on the NFL Network manages to gather 5.4 million viewers less than the 7.05 million watchers with the matchup between Miami-Heat-Cavaliers, the third-highest in cable history for an NBA regular-season game. Through its first four games this season, NFL Network has averaged fewer than 5.8 million watchers.

The NFL Network offers some tremendous programming but it might be in the best business interests of the NFL to put their games on network TV or ESPN, generating more revenue and more money to pay the players and for the owners to pay their bills.

Enjoy tonight Monday Night Football game – enjoy the remaining regular season game, the playoffs and Super Bowl XLV – then get ready for NFL Armageddon 2011.

For this is Howard Bloom

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