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Now that the Super Bowl is over let the REAL games begin!

NOW THAT THE SUPER BOWL IS OVER THE REAL GAMES WILL BEGIN

 

Wow, what a Super Bowl it was this year, was exciting right down to the very end.  For most football fans they will turn their minds to other sports and then again in late summer, their mind clock will click and once again football season will be upon us.   This summer will be different and I would urge all football fans to stay connected because the games that will unfold in front of us will be just as funny, maddening, frustrating and we may not learn the outcome until the final seconds as time is about to expire.

What I am talking about is the NFL Collective bargaining agreement is in the process of being renegotiated.  Both sides are posturing themselves, their peers and the public for what appears to be their battle royal over how to split the NFL pie.  This year it may be spectacular!

Let me digress for a moment and provide some background and where I am headed.  For well over three decades I wrote books and taught the subject of negotiations all over the world.  Couple that with a sports addiction (why else would I be spending countless hours in fantasy leagues, writing and watching, not to mention countless dollars to go to many events over the country.) and I want to link the two and help sports fans understand and follow what is really taking place in the labor negotiations.  I have always enjoyed watching the labor negotiations with the unions in all sports, plus the individual players negotiations with their ownership or the free agent market.  Some of the techniques that are used are indeed classic.

My plan is to break this up into a series of articles.  First I want to start at the very beginning, the concept behind the collective bargaining agreement with the owners and players in the NFL and how it relates to our society in general.  In doing this, a history of the NFL labor negotiations will have to be included which some folks may find interesting.

My idea is to start with the overview then to the concept behind the NFL agreement, then continue in to what I call, “The dirty little secret” that the ownership likely would prefer not be common public knowledge.  Much like an onion, which looks fairly innocent on the surface, once you start peeling away the outer layer you will soon notice your eyes start to water and it has a real odor to it.  Indeed so do the labor agreements between ownership and the players unions in most all sports.

Arguments between labor and ownership over how to split the profits between worker and owners have been going on since the world began.  In the early part of the last century there were riots, and a lot of unrest as labor unions made their way into our society.  Prior to that the owners pretty much were just that and treated labor as an “expendable” commodity, known as serfs in many societies.  That has all changed as our society has evolved.

Let me not get ahead of myself.  In a capitalistic society there are several factors, a product which hopefully the public wants to buy, ownership who invests time and energy to develop that product and capital to build factories, offices, research facilities to continue development, and then labor to make the product, and get things done from raw material to the marketplace.  In many cases the owners either invent or buy the initial product as Bill Gates did when he bought the technology for Windows.  In order to raise capital to produce his product and take it to market he had to sell stock (oh how we wish we could have bought some of the original Microsoft stock!) so there were in effect many owners that had invested their capital to get that part done.  Then he had to hire labor to complete the tasks necessary to build the product and take it to market.

Now ownership can indeed be very greedy and tyrannical, the stories about Leona Helmsley and how she treated her employees were legendary.  On the other hand owners can be very concerned about their employees.  Mark Cuban has been quoted many times as saying one of his happiest moments was when he sold his company and 300 of his 330 employees became millionaires, some many times over.  Go to Winnebago county, Iowa where the modern day recreational vehicle was started and you will see quite a collection of millionaires that were once factory workers and the like.

Now how does this relate to the NFL.  Well the product is actually the game of football itself.  The NFL does not own the game, only the rights to part of the professional game in the United States.  The NCAA also owns part of the product, that played in colleges in the country, and one can go on to high school, Pop Warner leagues, Canadian football, semi-pro and probably even more.  Bottom line is people look at football as entertainment at many levels and the entertainment event is their product.

Now the players are indeed the predominant labor factor, they indeed produce the product, game after game after game.  When you think about it, I went to see my grandson play in a couple Pop Warner games last fall and paid my $2.00 at the door.  In effect they sold their product, only the labor component was donated by the kids.  One would hope the same holds true for high school and college but that shall be left for another discussion.

And finally, then the ownership provides capital.  In effect most of today’s modern day NFL owners have paid hundreds of millions of dollars to buy the franchise, provide the capital for payroll, training facilities, office space and the like….in theory anyway.  This will be covered in detail in a subsequent article.

To digress for a moment, while I mentioned the odor of the labor agreements in sports, I must also say that in my opinion the concept behind the NFL Collective bargaining agreement is by far the best in professional sports in the United States.  The idea is simple.  The owners of the NFL teams have a pool which I believe is called, “defined gross revenue” which consists of combining all regular season television money, and 40% of the gate receipts, sale of NFL merchandise and other items which have been agreed upon by both parties.  That pool is then distributed between labor and ownership at the agreed upon formula in the contract.

At one time, before most teams were virtually sold out, the visiting team would get 40% of the gate receipts.  For many years when Tampa Bay was in the same division with the Bears, Packers and Lions, the only game they would sell out would be when the Bears came to town, there would be more Bear fans in the stands than Bucs fans.  I recall going to a tail gate party for Bear fans and there were 3,000 people there.  While the visiting teams would get the same percentage of the gate, the Bears being a bigger draw, would end up with more money than say the Lions would as they would not sell out.

I read a few years ago where they decided to pool the visiting gate receipts as well and divide it equally among all teams.  To make it simple we will call the pool of “defined gross revenue” the pie.  Now the collective bargaining agreement defines clearly what goes into the pie.

In theory it is a win, win and win.  I mean the players win because if their product produces a bigger pie, they get more money.  The owners win because they get a guaranteed share and as the pie increases they too get what they felt was their fair share…..at least at the last negotiations.  How do the fans benefit?  Well it gives the small market teams an equal chance to compete with the big market teams unlike most every other professional sports in the US.  Let’s face it, at the beginning of the baseball season at least 60% of the teams know they have no chance……and most every year it is the same teams in the smaller markets.

Contrast that with the NFL.  In the last 20 years, 13 different teams have won the Super Bowl and 15 of those 20 years the winning team was from what is considered a smaller TV market.  From the perspective of the fans there is always hope.  Teams move up then they move back down and the hope is spread throughout. All 32 NFL cities indeed have hope year after year.  The fan instinctively know sooner or later the cycle will allow them to have a good, if not great team.  I only went back 20 years because the NFL revenue sharing and salary cap was not always there and it would be a much different comparison.  Prior to the salary cap the winning teams were many times pure and simple a function of the ownership and how much they were willing to pay to get good players to win a championship.  When Hugh Culverhouse owned the Tampa Bay Buccaneers they really never had a realistic chance, he just was not as committed to winning as an owner like DeBartolo was in San Francisco.

With that as an overview, the concept is pure, both owner and labor create the product and then they share in the pie.  That is until we start to peel away at the onion.

One of the reasons that teams can cycle from good to bad to good is the draft system.  Many fans do not really understand how that came about.  In the early days of the NFL they were having trouble attracting fans, the college game was dominant.  To create a splash George Halas paid Red Grange, “the galloping ghost” the huge sum of $100,000 to leave the University of Illinois and join the Bears.  Indeed it was a terrific marketing move because it was the beginning of creating NFL fans (customers) all across the nation. He even took the Bears on barnstorming tours across the country so football fans could see this real life star.

Halas, on the other hand knew he had created a problem.  The original Chicago Bears were the Decatur Staleys and it did not take Halas long to realize he had to move to a much bigger city if his team was to survive.  Once he paid Red Grange he also realized the big market teams had a much better revenue stream, than say Green Bay and they could no longer compete for top talent.  All one has to do is look at modern day baseball and see how right he was, at one time the Yankees had one player making more than the entire team in Tampa Bay.  Certainly the teams with the $150-$200 million  payrolls seems to win more than their share of games in MLB.

So what happened was this.  Halas got together with his fellow owners and they came up with the idea of the college draft.  The team with the poorest record got the first pick and so on down until the league champion from the previous year got the last pick of the first round and so it goes.  It was sold to the public as a way to give every team a fair chance and with the media fanning the flames the public bought into it.  Now on my secret BS meter it scores an 8.5 on a scale of 10.  While fair might have a little bit to do with it, it is anything but fair!  Basically it was designed to have control over the labor market, now teams did not have to compete for talent coming out of college.  It was several decades before another player made the kind of money Grange made in the NFL.

Let me give you a real life example.  I have known two players that went on to play in the NFL.  Met several others but really known only two.  Both were linemen, one I went to high school with and one went to high school with my youngest son, and both ended up with the San Francisco 49ers.  I went to high school with Leonard Rohde, who graduated in 1956, played his college football at Utah State and then went on to play several years for the 49ers.  I will tell you that Lenny worked very hard to become a good football player and when he graduated from college there was exactly one football job available for him in North America, he was drafted by the 49ers and could sign with them or wait another year to have a different team draft him – hopefully.  I recall vividly meeting him is our local pizza place the spring after his first year.  What a thrill it was sitting at a big round table with our local hero Lenny who actually really played in the NFL.  If my memory serves me correctly Lenny told us he made $10,000 and at the end of the year he got a $5,000 bonus.  Now that was decent money even in those days, you could buy a really nice house for $25,000.  At the same time there was little negotiations, here is your contract, take it or leave it!  I am reminded about the great line in Mike Ditka’s book talking about trying to negotiate a contract with George Halas, Ditka said, “He throws nickels around like they are man hole covers!”

In the next article I will take the history of the NFL labor situation up to the modern day, how they ended up with the current collective bargaining agreement and then we will discuss, “The dirty little secret”.  We will then follow the negotiations in the newspapers just like everyone else and see if we can shed some light as to what is really going on.  So far from what I have read, ownership is not pleased with their share of the pie and want more.  Now that could be a ploy because in most labor negotiations it is labor who want more and they compromise somewhere in between where they currently are and where labor wants them to be.

The reason I say it may be a ploy is this.  One of the techniques in negotiations is to change the expectations of the other person.  I know of a case where a person was in an auto accident, their vehicle was damaged yet they walked away without a scratch.  The person got a slick lawyer and sued the other party for a million dollars, which just happened to be the upper limit of the insurance coverage.  What a shock it was when the insurance company offered a settlement of $50,000 and backed it up with evidence that their offer was in line with the type of claim submitted.  There was a long “wait it out” period in the negotiations because they knew that the person filing the claim had a very unrealistic expectation of the outcome which had to be changed.  I think it was finally settled for something like $52,500.

In this case labor might well be trying to get a larger part of the NFL pie.  Most labor negotiations start with the current contract and go up.  The NFL, with their posturing as wanting a reduction in the percentage going to the players could really be posturing so they end up where there were or with only a small increase.  Or it easily could be the same percentage with a few more items, say a percentage of parking or luxury box receipts added to the pie.  It will be interesting to see where it ends up.

At the same time, I want all readers to be alert to some of the tricks of the negotiations game.  Take note of the fact that during Super Bowl week the head of the players association was quoted as saying there is likely to be a lockout on the horizon.  Now the ownership likes to make Super Bowl week their showcase, just like every league does for their championship series.  The timing of that remark was a sharp poke in the eyes of the ownership and immediately the commissioner played down the remark and tried to get the focus back on the Super Bowl.  That remark about a lockout, and the timing was no mistake, and accomplished just what it was designed to do….the underlying message was “hey fans, if there is no football next year, do not blame us, the players, it is the greedy owners fault.”  Both the players and owners will try to use the media to their advantage and that will be in full view.  In this case, with our president attacking “fat cat” bankers, huge bonuses and profits in industry it was pretty easy for the players association to tag along.

As they told my grandson at Disneyworld, “buckle up, keep your hands inside the car, it is going to be an exciting ride!”

Click HERE for Part 2 of the series, and HERE for Part 3.

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• Now that the Super Bowl is over let the REAL games begin – Part 2 | isportsweb
• Now that the Super Bowl is over the REAL games will begin – Part 3 | isportsweb