Professor Blue: The CBA - The Primary Gripe (Players' Perspective)

The players were largely happy with the current CBA.  At the very least, they were happy enough that they didn't opt out when they could have.  But now that the owners have opted out, the players want proof that the owners have a valid complaint.

 

Recall the example I offered previously, whereby if costs are too high, the owners may lose.  It turns out that for each year, the breakeven point is 40%, meaning that owners cannot spend more than 40% of income on non-player expenses to operate their business.  This is because 60% must be paid to the players.  For a moment, I will ignore the fact that businesses can temporarily operate at a loss.

 

For most non-service businesses, keeping costs at this level is an extremely tall order.  Doing some basic investigation on Yahoo! reveals some examples.  On average, grocery stores currently have a net profit margin of  -0.6%.  Business service companies (like Visa) are averaging 6.4% and the cigarette industry, 20%.

 

Ok - now I really get to the players' perspective… here goes.  The above arguments are well and good, but the owners have NOT   shared.   their.   books.   with.   the.   players.  Therefore, they cannot know whether the owners are truthful.

 

Here's what the players DO see:

1. Multi-BILLION dollar media contracts

2. Stadium investments funded 75-100% by taxpayers (and not by the owners)

3. Rising ticket and concession prices and still-good attendance

4. Gi-normous sales prices of NFL franchises, like the $1.1 BILLION purchase of the Dolphins in 2009

 

So despite the assertion that costs are rising, the increasing revenue (and franchise valuation) is a very visible and public reality that I think justifies the skepticism.  Additionally, most of the NFL's non-player costs are FIXED - the rent or mortgage on a stadium remains the same if attendance is 70,000 or 7,000.  So the crux of the player gripe is that the 40% is more than covered by higher income, and that 60% is a fair distribution for the players.  Unfortunately for the players, the NFL and its franchises (except the Packers) are not public companies, so are not required to have their books published.

 

More information:

NFLPA Lockout Central

Economy in History of the NFL

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