Thursday, December 29, 2011

NFL Armageddon – Tebow Time (the NFL in 2011)

The Green Bay Packers won Super Bowl XLV and remain the prohibitive favorite to win Super Bowl XLVI. While the Packers were the NFL’s best team in 2011, the biggest National Football League business story was the protracted NFL lockout.

The NFL lockout began on March 11 following the break down of negotiations between the NFL and the NFL Players Association. The NFLPA filed antitrust lawsuit in U.S. District Court in Minneapolis to block a lockout. The two sides presented their cases before U.S. District Judge Susan Nelson in early April and she forced NFL owners to end the lockout.

The owners won a temporary stay of Nelson’s ruling on April 29 and the lockout was back on.
The Wall Street Journal reported the NFL had lost close to a billion dollars in off-season revenues as a direct result of the lockout. Two weeks after the court ruled in favor of the owners the two sides began serious talks.

Why the two sides didn’t continue to negotiate after the lockout began on March 11 and waited until the courts ruling remains not a mystery but, rather, an example of poor management by both parties.

On July 21 the NFL and the NFLPA announced the longest CBA in sports labor history, a ten-year collective bargaining agreement.

"We are pleased to announce that our clubs have approved the terms of a long-term negotiated agreement with the NFL players," said NFL Commissioner Roger Goodell. "It includes many positive changes that emerged from a spirit of compromise rooted in doing what is best for the game and players. DeMaurice Smith and his team, and the players and owners involved in the negotiations, deserve great credit for their skill and professionalism. If approved by the players, this agreement will allow the league and its players to continue to benefit from the NFL's popularity and will afford a unique opportunity to deliver to fans an even better, safer, and more competitive game in the future.”

“This has been a long road for everyone involved. While it is not yet over, the diligence demonstrated by active and former players speaks volumes to their dedication to reaching a fair deal,” said Kevin Mawae, NFLPA President. “This settlement is an essential component to what will be a long-term agreement benefitting players, owners and fans.”

"On behalf of the NFL, our teams and players, I want to express our deep appreciation to Chief Magistrate Judge Arthur Boylan. Judge Boylan was the court-appointed mediator, but his contributions far exceeded that role. His patience, determination, and commitment helped keep everyone focused on the goal, and helped lead us to today's announcement."

The key for the owners was closer to a 50/50 split of football generated revenue. The previous deal was closer to 60/40 for the players. The players also received 55% of television related revenues.

On December 15 Roger Goodell announced new network broadcast agreement through the 2024 NFL season. Fox’s average rights fee will jump to about $1.1 billion a year from $725 million in 2013. CBS’s payments will increase to nearly $1 billion from $625 million, and NBC’s fees will go to $950 million from $612 million. Three months previous ESPN approved a 73 percent increase to $1.9 billion annually for eight years.

The NFL will generate more than $4 billion annually in broadcast revenues, an average of more than $134 million for each of the NFL’s 32 member franchises.

“In these difficult economic times, you want to create stability and planning for our business,” said Robert K. Kraft, the owner of the New England Patriots and chairman of the league’s broadcast committee in a New York Times report.

“When we made our C.B.A. deal with the players,” he said about the collective bargaining agreement reached last summer, “we promised if they worked with us, they would be the big beneficiary — and they’re getting 55 percent of the TV money.”

“These agreements underscore the NFL’s unique commitment to broadcast television that no other sport has,” NFL Commissioner Roger Goodell said. “The agreements would not have been possible without our new 10-year labor agreement and the players deserve great credit. Long-term labor peace is allowing the NFL to continue to grow and the biggest beneficiaries are the players and fans.”

There was little if any chance the National Football League would lose two months of their regular season schedule to a labor dispute like the NBA. The average NFL career is less than 3.5 football seasons and the average NFL salary is $1.9 million. The average NFL median salary is $770,000.
The minimum NFL salary for an NFL rookie in 2011 was $375,000.

The NFL generates more than $9 billion annually. Once the lockout ended and the two sides reached a new labor agreement several points stood out. NFL contracts are not guaranteed. While NBA, MLB and NHL players all enjoy guaranteed contracts, football players can be cut from their teams for any reason and be out millions.

The only guaranteed component of an NFL contract is the bonus. Guaranteed contracts were never an issue the NFL and the NFLPA even broached. A rookie rage scale, fewer practice days and the players receiving fewer dollars are all a part of the new CBA.

From the opening of training camps it became obvious very quickly the NFL wouldn’t suffer from any lingering anger football fans had regarding the lockout. The NFL may have lost close to one billion dollars in revenues but when the 2011 regular season ends Sunday night at Met Life Stadium in New Jersey, 2011 will be another year of record television ratings for the NFL.

According to Nielsen the three top rated television programs for 2011 was Super Bowl XLV, Super Bowl XLV (pre-game show) and Super Bowl XLV (post-game show). Nine of the top ten rated 2011 television programs were NFL games. While the Super Bowl preceded the lockout, it’s a pretty safe bet the three top rated TV programs for 2012 will again all relate to the Super Bowl.

Tim Tebow, and Tebowmania, has delivered exactly what the sports world needed in a time when the sports industry is experiencing a daily assault as a result of child sexual abuse scandals from Penn State to the heart of the Amateur Athletic Union (AAU).

An athlete people can believe in for all the right reasons.

The Broncos began their season with Kyle Orton as quarterback. After the team started 1-4, Broncos coach Jim Fox named Tebow the starting quarterback against the Miami Dolphins.
Tebow led the Broncos to a 7–1 record before being blasted in their last two games against New England and Buffalo. He led five game-winning drives in the fourth quarter and/or overtime.

Tim Tebow became the NFL’s most polarizing figure in 2011 generating great ra NBC failed to “flex schedule” the Broncos/Patriots game on December 18 even though All sports fans wanted to talk about leading up to the game Tim Tebow and his showdown with Patriots quarterback Tom Brady.

Brady, not surprisingly, bested Tebow in the Patriots 41-23 win.

The Broncos meet the Kansas City Chiefs Sunday at Mile High Stadium. If the Broncos win, Tebow and the Broncos will host a playoff game the following weekend in Denver.

Wins and losses aside, Tim Tebow was good for the NFL in 2011. The lockout seems a distant memory, and with a network broadcast agreements that guarantee each NFL team more than $134 annually the NFL remains the sports industry’s gold standard.

For Sports Business News this is Howard Bloom

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