BY Art Thiel 09:44PM 03/03/2011

A question for NFL owners: Why?

No telescope can detect a threat to the empire worthy of lockout.

National Football League Players Association President DeMaurice Smith argues the NFL has made no credible case that its empire is in financial peril / Getty Images

The NBA was once in such provably bad shape financially that the owners threatened the players with shrinking the league by merging franchises and thus eliminating jobs.

The threat was real, and it worked. The collective bargaining agreement struck in the early 1980s, which included American pro sports’ first agreement on tests for street drugs, ushered in the NBA’s golden era.

For more than 25 years, the owners of Major League Baseball were collectively so stupid, going 0-for-7 in work-stoppage disputes with the union, that they finally reached labor peace partly through the argument that the players’ union had to help take gun away from owners to keep them from blowing the game’s head off.

That worked, too. The game has more competitive balance and economic stability than at any time in its history.

But as to the NFL . . . its biggest problem in its current dispute with its players is that it doesn’t have much of a problem.

As America’s most popular sport, as the owner of eight of the 10 highest rated shows in the history of television, as a monopoly operator without threat or rival, and as creator of its own unofficial national holiday, the NFL is so bulletproof that the Pentagon is studying whether to deploy the the league to Afghanistan to turn the country into a world power.

Yet the owners plot to lock out players because they don’t have enough power, money and prestige? How Microsoft of them.

The only reason the owners are being so belligerent is because they have no reason not to be – at least, they didn’t until Tuesday, when the league lost a ruling in federal court that said its $4 billion stockpile of unearned TV revenue loaned to them by the scared-spitless TV networks violated the rules it agreed to in the current collective bargaining agreement.

That court victory may prove to have tipped the balance of power in the argument, because it took away from the owners what amounted to strike insurance in the event no games are played this fall.

At the least, it helped prompt a 24-hour extension of the scheduled expiration of the current CBA Thursday night. Whether one day is a difference-maker, or whether the sides ask for more time, or tell each other to drop dead, the owners at least put forward a proposal the union felt was worth a bit more consideration.

But the incremental development changes nothing regarding the plain fact that the owners have little game.

Besides the overt signs of gargantuan wealth,  the NFL’s financial success is revealed in some detail in the records of the Super Bowl champion Green Bay Packers, the only franchise in major sports that is publicly owned. The rest of the ownerships predictably guard their financial secrets with Vatican intensity.

Despite being the smallest market in pro sports, the Packers’ net income from 1998-2002 averaged $5 million. From 2003-2008, the average rose to $21 million. The last two years, amid the worst economic times since the Great Depression, the Packers still managed $4 million annual profit.

Any machine that can make an economic colossus in a backwater mill town that also wins championships is worthy of celebration and emulation, not shutting down.

The owners have a legit argument that the current uncontrolled spending on the highest picks in the NFL draft is a bad trend. The situation begs for the sort of rookie salary slotting that is among the few good recent achievements the NBA has managed in the argle-bargle with its union.

Even the union will probably concede the point. Beyond that, there has yet to be invented a squint so acute that a threat to the sport can be spotted on the horizon.

Unless, of course, we’re talking about the Three Horsemen of the Sporting Apocalypse — Hubris, Greed and Narcissism.

Rich guys are always easy targets for populist rage, particularly these days. But quite apart from sentiment, there is no metric or statistic that in any way backs ownership’s position of being threatened by rising player salaries, simply because they are not rising as fast as league-wide income. At a press conference two days before the Super Bowl, NFL Players Association president DeMaurice Smith addressed reporters on the topic.

“Did any one of you think when you started covering that game right after the merger between (the NFL and old AFL), that football would be America’s No. 1 sport and not baseball?” Smith said. “Did any of you believe that the [annual] revenue generated for the National Football League would probably exceed $9 billion?

“The disagreements that we have are fundamental. Because we believe that every economic indicator that we have — whether it’s Forbes magazine, whether it’s Bloomberg –anybody who independently looks at this, agrees with the players’ perspective. The business of football is not only exciting and tremendous. The business of football is probably the best business economic model in the country.”

As the recent collective national and world experience has proven again, all industries are cyclical.  The NFL may be extraordinary, but it is not an exception to the rule.

Just ask anyone in Seattle who worked for the once-hugely successful Washington Mutual:  The plunge from the peak is often voluntary.


YourThoughts

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  • Barry Werber

    Greed is a terrible thing!
    The owners give lip service to want to protect the health of the players,
    but want to endanger them and with no compensation!!

  • http://seattlealaskasports.blogspot.com/ Soggyblogger

    I am waiting for someone to take any notice of the fans. Some interesting questions could be asked. Is it a forgone conclusion that the price of tickets only goes up? How does the fan figure into this business model? Why can’t Seattle do what Green Bay did? For basketball? Then I think of LA, and how they don’t even have a football team. I’m “just” a fan, Art, but you are a big shot sports writer. Shouldn’t you represent our interests? Is that some other column?

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  • p1u1n1x1

    I think it’s pretty obvious, before the ruling, the owners knew they could break the union, now they are not so high and mighty. We only have Green Bay as an example, but for a business with an operating budget well over $100 million per year to have a 4-5% profit margin is pretty narrow considering how popular the sport is. I think the owners wanted more security, and were confident they could get it, but thankfully they lost their war chest and really don’t have as much leverage. Hopefully we get a rookie cap, a 16 game season, and a 2011/12 season.

  • Dave

    Pride, as always, comes before a fall.

  • huskies2010

    Solution: don’t have the school pay players directly, but allow them to do paid endorsements and community appearances.