SBJ/November 5-11, 2012/Opinion

Reporting on NFL labor agreement misleading

An article in the Oct. 22 issue of SportsBusiness Journal claims that the NFL “got what it wanted from the newly enacted collective-bargaining agreement,” that the owners won “steep financial concessions” from the players in the new CBA, and that the owners are “keeping a greater percentage of overall revenue beginning in 2011,” with the players’ share of all revenue being reduced to the “mid 40 percent range.” Nothing could be further from the truth.

As we have previously and publicly explained, the most accurate way to compare the players’ share of revenues between the new CBA and the old CBA is on a cash basis — i.e., what percentage of real dollars, as opposed to “salary cap” dollars, did the players get to take home in 2011 in comparison to prior years. On a cash basis, under the old CBA, the players’ share of All Revenue averaged to around 50 percent, and the percentage decreased each year from 2006. Under the new CBA, the players’ cash share in 2011 enjoyed healthy growth to about 55 percent of All Revenues. This is a major increase over the prior CBA and nearly 10 points higher than the “mid 40 percent range.”

How could SportsBusiness Journal be so wrong? The answer is that NFL teams have been able to use various CBA provisions to spend very large amounts of cash on players above the cap, and have even greater flexibility to do so under the new rules in the 2011 CBA. As a result, even though the new CBA sets the salary cap plus benefits at between 47 percent and 48.5 percent of “All Revenue,” teams can and do spend much more than that on players so that there were no “steep financial concessions.”

Team cash spending on players increased substantially in 2011, with players being paid about $160 million per team in cash plus benefits. This was well above the $142.4 million in salary cap dollars plus benefits for 2011, i.e., a lot of cash over cap. The players’ cash share of AR in 2011 of about 55 percent was actually higher than the players’ cash share in any year under the prior CBA.

In short, contrary to the SportsBusiness Journal article, so far the new CBA has delivered a higher, not lower, percentage of revenues to NFL players. An easy fact check by an editor or a simple web search could have avoided such an egregious error in reporting.

Tom DePaso
General Counsel,
NFL Players Association
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