SBD/Issue 59/Leagues & Governing Bodies

NFLPA Set to Fight To Retain NFL Supplemental Revenue Sharing

 
The NFLPA will file a special master case against the NFL early this week after the league informed the union in a letter last week that it planned to end the supplemental revenue-sharing plan in the uncapped '10 season, according to a union source. The league is contending that the supplemental revenue-sharing system, in which high-revenue clubs share more than $100M with lower-revenue clubs, does not apply to the '10 season, which will operate without a salary cap if there is no labor deal struck by March. “An uncapped year is a totally different system,” NFL Senior VP/PR Greg Aiello said in an e-mail yesterday. The issue of whether or not low-revenue clubs get the extra money -- first reported by ESPN on Sunday -- could adversely affect the amount of money those clubs can spend in an uncapped year (Liz Mullen, SportsBusiness Journal). In N.Y., Judy Battista notes nine teams "at the bottom of the revenue pecking order" drew from the supplemental revenue-sharing pool this season, and the union is "concerned that even the loss of a relatively small amount of money could imperil the competitiveness of smaller-market teams" (N.Y. TIMES, 12/7). NFLPA Assistant Exec Dir of External Affairs George Atallah said in an e-mail, "Revenue sharing helps maintain the 'any given Sunday' dynamic in the NFL. The amount of money some owners propose to pull out of the system in 2011 could mean the difference between playoffs and blackouts for many teams" (AP, 12/6). However, Aiello said, “The union is just trying to make some noise to get some attention. The CBA has special rules to protect competitive balance in the uncapped year. There will still be billions in equally shared revenue in 2010.” The NFL, which has enjoyed the greatest competitive balance of all major leagues because of its lucrative national television deals, shares more than $6B in revenues now (Mullen).

DOES IT APPLY? Aiello said the league is "simply going forward on the terms the union approved" in March '06. But a union source said that the supplemental revenue-sharing plan -- which was added to the NFL CBA for the first time in '06 -- applies to every year of the agreement, which expires in March '11. The league’s contention that the revenue sharing does not apply to the '10 uncapped season “is not what the CBA says,” the source said. The NFLPA found out about the league’s plan after the union sent a letter inquiring as to whether the league planned to continue the supplemental revenue-sharing plan in the '10 season, a union source said, adding there has been dialogue between both sides over the issue for the last several weeks. "They have not articulated why they plan to do this over our disapproval," said the source. Ending supplemental revenue sharing is “a material change” to the CBA, which must be approved by the union, the source added. The union source requested anonymity because this person was not authorized to speak publicly on the issue (Mullen).

High-Revenue Clubs, Like Cowboys, Reportedly
Leading Charge To End Revenue Sharing
SAVINGS PLAN: The NFL did not immediately respond to a question of whether the low-revenue clubs were in favor of this plan. If the additional revenue is not shared, low-revenue clubs would have less to spend on players in an uncapped year and high-revenue clubs -- which have the most to lose during a lockout -- would get the benefit of greater cost savings, a union source said. “It is clear that the high revenue clubs, like the Cowboys, are leading the charge to end this,” the source said. ESPN first reported that Cowboys Owner Jerry Jones was fined more than $100,000 earlier this year for making public comments indicating that the supplemental revenue-sharing plan would end at the end of the current CBA. The NFL first added the supplemental revenue-sharing plan to the CBA in '06, at the insistence of late NFLPA Exec Dir Gene Upshaw. Under that CBA, players received a percentage of all revenues, including local revenues that were previously excluded from the players' share in prior CBAs. NFL owners have complained that the players received too high a share of revenues under the current CBA almost from the time they agreed to it, and owners voted last year to end the deal two years early (Mullen).

OUT IN THE COLD: In Minneapolis, Judd Zulgad notes the Vikings have been a "major recipient" of supplemental revenue sharing because they "generate among the lowest stadium revenue in the NFL" by playing in the Metrodome (Minneapolis STAR TRIBUNE, 12/7). In St. Paul, Sean Jensen notes it is believed that the end of the program "would cost the Vikings between [$15-20M] a season, further heightening the team's effort to generate support for a new stadium" (ST. PAUL PIONEER PRESS, 12/7).  

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