SBJ/Jan. 31-Feb. 6, 2011/In Depth

Teams map out their contingency plans

Editor's note: This story is revised from the print edition.

The Houston Texans created a CBA response team. Several teams have furloughs lined up starting March 4 when the league may be operating without a labor deal, while most teams wrote into coaches contracts reduced pay for 2011 if games are lost.

As the prospects of a lockout or work stoppage grow larger, teams are moving quickly to prepare for a radically changed landscape.

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Teams have been given guidelines for reimbursing fans for tickets for any missed games.
"Our clubs have prepared for all outcomes," NFL Commissioner Roger Goodell told reporters this month in Atlanta. "The clubs are going to be responsible and they are going to be prepared for every alternative. The hope here is to get something done quickly so that we don't have to get into those issues. But they are prepared."

No club contacted by SportsBusiness Journal would openly discuss its plans. But anonymously, team executives talked about issues with sponsors, premium seats and suites, just to name a few.

The league has already required that general tickets to any canceled games be reimbursed 30 days after the end of a work stoppage, with interest as determined by each team. But it left premium seating to the teams, and that's because many of those are governed by contracts.

SPORTS BUSINESS EXECUTIVES WERE ASKED:

» Will the NFL and its players sign a new labor deal to avoid disruption of the 2011 regular season?

Source: Turnkey Sports Poll, December 2010. The survey, conducted by Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal, covers more than 1,100 senior-level sports industry executives spanning professional andcollege sports.

One big-market team executive said its contract language requires no reimbursements for suites or club seats in a work stoppage, and similarly for any potentially prorated reimbursement for personal seat license fees. However, this executive said it is not always cut and dried, especially when a key partner might own the suite or club seat in question.

Sponsorships can be trickier because while it may seem easy to simply prorate the value based on games lost, many sponsors activate year round. So it is not as easy as making games lost the factor in determining reimbursement. There is no cookie cutter approach to sponsorships, team sources said. Some deals have provisions requiring payment during a lockout, while others do not. Signing new deals is obviously a far tougher task.

Then there is the issue of staffing. How many people are kept if there is little business to conduct, and how do you ramp back up in a heartbeat if a deal is suddenly signed? One team said it would have one-week furloughs every month for every employee.

The Texans' response team is essentially composed of top executives whose responsibilities are to communicate with key stakeholders, from the community and elected officials to seat holders and sponsors.

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