Are team furloughs worth the pain?

Daniel Kaplan’s recent SportsBusiness Journal article, “Jets prepared to begin furloughs,” [Feb. 21-27 issue] was shocking to me. According to the article, the New York Jets will begin furloughing employees if the NFL and the NFL Players Association do not reach a new collective-bargaining agreement. The terms are such that each of the team’s 158 employees must take one week of unpaid absence for each month the CBA is not signed.

While I’ve never run a professional sports team, I have more than 16 years experience running marketing programs and customer care initiatives for top brands. When a product changes and the customer experience is impacted negatively (such as the NFL season changing), more staff is needed, not less. During a lockout, the Jets will now have fewer employees doing more work, and getting paid less.

How much money will this furlough tactic save anyhow?

Back-of-the-napkin math: With 158 employees earning $100,000 each (which is likely high), and then one-52nd of that for an unpaid week, the Jets will save about $300,000 per week.

What about the hard costs (money) and soft costs (man hours) of such a tactic?

Marketing communications: The team will need to send communications to ticket buyers outlining how refunds work, what scheduling changes are, etc. If a direct mail and e-mail communication needs to be developed and distributed, a staff of account people, creatives, Web folks and a production team will be needed, at minimum. Anything with a schedule will need to be modified and reprinted.

Call center: Thousands of fans will be calling customer care asking what is happening. A training manager will need to develop frequently asked questions and answers to all these questions, and the call center will need to be trained and ramped up substantially.

Ticket sales: This group will need to provide refunds or credits to ticket buyers, reissue tickets, etc. Those in premium sales will need to find clever ways to make good with top clients.

Sales: Reps who sold space on stadium signage and in game-day programs, negotiated with TV and radio networks, and created partnerships with soft drink and sneaker companies will need to manage clients wanting money back. Sales reps will be spending their days mending relationships and providing assurances to clients that all is well (which it won’t be). When sales start up again, it will be even tougher, because clients will expect better deals due to reduced viewership.

Information technology: The IT staff will spend most of their days updating systems to work based on the above requirements.

Human resources: Those working at a professional sports team do so for the excitement, prestige and passion, not the money. If they receive pay reductions, it is inevitable that a percentage will seek better paying jobs. HR will then need to go through the time-consuming process of replacing employees who left, interviewing candidates to hire the right people. Plus, there will be countless unproductive hours spent by employees bantering about their unpaid vacations. This will hurt morale that HR will need to mend.

All of this work described will need to be done with less staff (those furloughed, plus those who left).
Meanwhile, the team is saving money in player salaries. Football players aren’t paid during a lockout or for unplayed games. So, if the players are not paid, doesn’t the team have more money to pay their front office staff?

Since the New York Jets pay about $3.6 million per game in base salary to players on their roster, wouldn’t it make sense to take the savings and pay the furloughed 158 front-office staffers their $300,000 a week and let them work? This amounts to 8.3 percent of the money saved on one game of athlete salary. The team can use the remaining $3.3 million to pay for resources discussed above. To me, it is shocking that any team would take its year-round staffers who are now going to be working even harder, with fewer hours, and reduce their pay. I just don’t get it.

But then again, I’m just a marketing guy. &;