NFL owners opt-out of CBA; Newman deal possible

by Dave Halprin on May 20, 2008 10:30 AM CDT in News Comment 10 comments

If there’s one thing I hate writing about it’s the labor issues of the NFL. I don’t know enough about it to speak authoritatively, but it’s an issue now as the owners have shortened the current CBA to end after the 2010 season.

So 2008 and 2009 will run under the current salary cap structure. Then 2010 is an uncapped year and therein lays the problem. I have no idea what that will mean. Maybe some people do but I’ve yet to see it adequately explained. One thing’s for sure, the rules of getting contracts negotiated will change, and that will start right away.

For instance:

The Dallas Cowboys and cornerback Terence Newman are close to agreeing on a new multi-year contract, according to two sources, but the deal faces a tight deadline.

Tight deadline? What could that be in the middle of May? Oh yeah, it’s one that just passed this morning.

If NFL owners opt out of the current collective bargaining agreement at their spring meeting today in Atlanta, contracts done afterward would have to follow more stringent salary-cap rules set up for 2010 and beyond.

What are these new rules and could it really stop a deal with Newman from going through? Anybody out there have some knowledge on this issue?

Richard Bartel wants to pull a Tony Romo.

Hashmarks weighs-in on the Hollywood Cowboys.

Click below to read the full statement sent out by the NFL about opting-out of the CBA.

NFL STATEMENT ON CBA EARLY TERMINATION DECISION

What happened?

The current collective bargaining agreement, initially negotiated in 1993, has been extended on several occasions, most recently in March 2006. The 2006 extension, which could have continued through the 2012 season, gave both the NFL and the NFLPA an option to shorten the deal by one or two years.

NFL clubs today voted unanimously to exercise that option and to continue negotiating a new agreement for the 2011 season and beyond that will work better for both the clubs and the players.

What does this mean to fans and games on the field?

Even without another agreement, NFL football will be played without threat of interruption for at least the next three seasons. The 2008 and 2009 seasons will be played with a salary cap. If there is no new agreement before the 2010 season, that season will be played without a salary cap under rules that also limit the free agency rights of the players. If not extended, the agreement would expire at the end of the 2010 league year.

We are resolved to do our best to achieve a fair agreement that will allow labor peace to continue through and beyond the 2011 season.

What are the issues?

A collective bargaining agreement has to work for both sides. If the agreement provides inadequate incentives to invest in the future, it will not work for management or labor. And, in the context of a professional sports league, if the agreement does not afford all clubs an opportunity to be competitive, the league can lose its appeal.

The NFL earns very substantial revenues. But the clubs are obligated by the CBA to spend substantially more than half their revenues almost $4.5 billion this year alone -- on player costs. In addition, as we have explained to the union, the clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans. The current labor agreement does not adequately recognize the costs of generating the revenues of which the players receive the largest share; nor does the agreement recognize that those costs have increased substantially -- and at an ever increasing rate -- in recent years during a difficult economic climate in our country. As a result, under the terms of the current agreement, the clubs' incentive to invest in the game is threatened.

There are substantial other elements of the deal that simply are not working. For example, as interpreted by the courts, the current CBA effectively prohibits the clubs from recouping bonuses paid to players who subsequently breach their player contacts or refuse to perform. That is simply irrational and unfair to both fans and players who honor their contracts. Also irrational is that in the current system some rookies are able to secure contracts that pay them more than top proven veterans.

Our objective is to fix these problems in a new CBA, one that will provide adequate incentives to grow the game, ensure the unparalleled competitive balance that has sustained our fans' interest, and afford the players fair and increasing compensation and benefits.

Hat tip to Hashmarks.

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Comments

Very interesting

I’m not big on the theory that Jerry will spend like a crazy man during the offseason preceding 2010, but this should make extending our own players a lot easier. If you can offer them a huge bonus during that season, they’re obviously going to be compelled to take you up on the deal. And you can do so without suffering the cap ramifications.
For example, let’s say Jerry wants to give T-New that extension. He’d give him a five year contract starting next season, with each year paying Newman 6-7 million dollars, a substantial signing bonus at the start of the contract, and a bonus of 8-10 million in 2010 if Newman has played 30 games during the previous two seasons while making at least one pro bowl. Obviously, the details are sketchy and a guy like Stephen Jones would know a lot more about cap structure than I, but it does open up some interesting possibilities.
Btw, even if Jerry won’t lose his mind, I wouldn’t make the same guarantee about Danny Snyder. I wouldn’t be surprised to see him hand out FA contracts which total to nine digits.

Hard Drive Manufacturer Hires Barkley

by BudLight on May 20, 2008 10:39 AM CDT reply actions 0 recs

Its bad for business if your paying out more than 53% to players

This is the same problem the National Hockey league got into a couple of years back, everyone thinks these owners are raking in money, they are not. I recently heard on a radio program about the money and the misconception that owners in the NFL are making big money, he mentioned that Jerry jones in particular, who alot of people think is making a ton of money from the cowboys, he said this is absolutely not true, in fact this person, who is part of the sport business magazine, who’s name I cant remember at this time, said that Jerry, in a big market owner would be lucky to be making 5% profit every year from the cowboys and has to give money to other organizations for them to break even. He pointed out that the Broncos laid off staff this offseason to save money. There are many teams that are losing money or barely breaking even and are being bailed out by big market teams. You can continue to payout these enormous contracts for players, the players union have to realize that they cant continue to take more than 52-55% of the total income of these teams in salaries and that doesn’t include operating expenses of the team, coaches, scouts, trainers, doctors, airfare, front office,hotels, etc, isn’t included in the players salaries. The last deal that was signed was ridiculous for the owners, its time for the players union to start to give back or this league is going to be in big trouble.

by Deke on May 20, 2008 10:55 AM CDT reply actions 0 recs

Like the NHL, the problem was the breakdown in self-control

You can point a lot of fingers here, but it seems like salaries went berserk in the NFL at a defined point: roughly two offseasons ago. Owners got way under the cap, had bad teams, and went nuts with the spending. That’s when Guards started getting $7m a year, CBs $9+m/year, etc. Salaries skyrocketed in the NHL under similar circumstances, but there wasn’t a cap at that point.

I guess the cap is just too large now, because it’s clear that no owners are thinking long-term with their spending (look at some of the contracts the Raiders gave out this year). It’s going to be hard to talk the NFL players into the “your salaries are the problem” angle with the sport being the most popular in America by far and the players already getting a relatively bum deal compared to NBA and MLB players.

Someone is making a ton of money off the NFL, that’s for certain. My guess is NFL Inc.

by grapejoos on May 20, 2008 12:53 PM CDT up reply actions 0 recs

The players are making most of it, but alot of other folks are making out too

Mort reported on ESPN that presently 60% of the leagues revenues, on paper, are going to the players and that in actuality they are getting a little more than that. Now Im not sure where he got those numbers but Im sure it’s more than just their salaries. It probably includes hotels, transportation, etc. From a certain perspective I guess you can say that NFL players are getting a “bum deal” compared to NBA and MLB players. Couple of things to keep in mind though is that there are more players on an NFL roster than there are on an MLB roster, much less an NBA roster. So the pie is getting cut up into smaller pieces. Granted the NFL’s “pie” is bigger, but that only gets you so far. 40% of billions is still quite a chunk of change but lets not forget we still have to pay the coaches and trainers and front office people and marketing people and advertising and equipment and supplies, etc. With coaches alone making millions of dollars a year each in many cases that can eat up the remainder pretty quick.

by WB3forMB3 on May 20, 2008 1:36 PM CDT up reply actions 0 recs

PA

I don’t think the NFLPA is going to give back money without a fight. I am hoping to see rookie salary slotting in the next CBA like the way the NBA does it. No rookie hold outs and the top vets get more money. Seems like a no brainer to me.

Derek

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by DerekSTheRed on May 20, 2008 10:59 AM CDT reply actions 0 recs

BTW

I think is the beginning of the end for the Salary Cap. I just hope some form of revenue sharing remains so teams like Green Bay can still be competitive.

Derek

Signature! I don't need no stinking signature!!

by DerekSTheRed on May 20, 2008 11:00 AM CDT reply actions 0 recs

I have no idea whats going on but i read somewhere i deal will get done before 2010 no matter what so its not going to change anything…

What the French?! Toast!

by thebigham on May 20, 2008 11:31 AM CDT reply actions 0 recs

the owners and players will eventually

reach another CBA at some point, they both know how good they have it and will work to get something done within the next few years.

In Romo we Trust

by Terry on May 20, 2008 12:59 PM CDT reply actions 0 recs

my two cents

i know very little about this part of the NFL business but i have to belive that IF the players association and owners can come up with a better package to HELP (mind you HELP) players AFTER they have done their time in the league, salaries would stop spinning out of control.
I think most players are greedy, not all but most, but i have to belive that part of that greed is their agent telling them that they HAVE to make the HUGE money NOW, because if they get hurt or when they retire, MOST will not have a source of income. Obviously some, can fall back on ecucation, and some can rely on using their name to continue a stream of revenue, acting, stuff like that, but MOST players play a few years and fall into obsceurity….
now, much of it is their fault, as you can’t live like a rock star unless you are making rock star money, so for a few years most of the players are set, it’s when that income goes away etc…
i am not saying GIVE them money just because they played, but maybe if the league recognized that players now pave the way for players tomorrow etc.. the could help be more active in future plans for players 401k equivalent and stuff like that..

by stephena on May 20, 2008 1:07 PM CDT reply actions 0 recs

This is going to be a dog fight

I wouldn’t at all be surprised if we hit a uncapped year in 2010. One of the problems they have to correct is the rookie salaries. This has become a major problem over the last few years. To give Jake Long 30 mil in guarantees and hasn’t played a lick of football is down right crazy. The NFL has to implement a slotting system for rookie salaries unless this is going to get out of control, if it hasn’t already.

by Boyzfan94 on May 20, 2008 1:36 PM CDT reply actions 0 recs