Thursday, February 4, 2010

From the Center for American Progress

Post-Superbowl Strategies

by David Madland | February 4, 2010

Video: NFL Contracts and American Workers

During Super Bowl week most people focus on the game, its matchups, and the hype. And this year these storylines are especially good: Two of the league’s premier quarterbacks—Peyton Manning and Drew Brees—are matched up, with Brees and the upstart Saints representing the city of New Orleans’s potential for rebirth while Manning and the Colts symbolize a model of consistent success.

Yet lurking underneath all the excitement is a disagreement between the players and owners that could potentially cause next year’s football season to be the last for some time. We should care about these negotiations not just because their failure might force a change in our Sunday afternoon rituals, but also because of what those labor negotiations show us about the problems in our economy.

At first glance, it might seem far fetched to claim that a dispute between two groups of the extremely wealthy—National Football League players and owners—is at all relevant to our working lives. But the fact that the players are able to bargain on equal footing with the owners is directly relevant to our economic fate. One of the contributing factors to our current economic situation is that most workers—unlike the NFL players—are not able to negotiate on relatively equal footing with their employers as part of a union. That’s why workers’ wages have stayed flat for decades, instead of rising alongside their companies’ profits.

Because Americans tend to feel more comfortable discussing the NFL than the causes of Great Recession, this year’s NFL labor negotiations could well become a teachable moment. The 2010 football season may be last for sometime because the current contract between the players union and the owners expires at the end of that season. The owners opted out of the existing contract early and are threatening to lockout the players, meaning cancelled games in the 2011 season unless they get a new contract more to their liking.

Primarily at issue is how to divide up the money the league generates. Currently players receive 59 percent of all league revenue. The prior agreement ensured players 60 percent of “designated gross revenue,” which didn’t include a lot of local revenue that clubs generated, and so was more favorable to the owners.

Owners argue that 59 percent of total revenues is too much and say they need a greater share to help the league grow. “Clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans,” the owners wrote on the league website. “As a result, under the terms of the current agreement, the clubs’ incentive to invest in the game is threatened.”

Players in other professional sports currently receive slightly less of league revenues than football players. Currently, National Hockey League players receive an estimated 57 percent of revenues, National Basketball Association players about 57 percent, and Major League Baseball players 52 percent, down from a high of 63 percent in 2003.

NFL players note that the league and its owners have immensely prospered under the current labor contract. As the NFL Players Association Executive Director DeMaurice Smith argues: “We do know the NFL generated in excess of $8 billion last year. We know that the average team has grown by 400 percent in 10 years. What we don't understand is what is wrong with the current deal when those facts exist."
To read the entire article click here.

David Madland is Director of the American Worker Project at CAP Action. He will be writing about the NFL labor negotiations throughout the year to highlight the importance of collective bargaining to the economic competitiveness and broad-based prosperity of the American worker.

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