SBJ Football: Union Talks Enter Eleventh Hour
At 2:40 am London time this morning, I appeared on BBC Radio 5 Live's late-night sports chat show to talk about the NFL union situation and the possible 17th game. I should have anticipated the first question: Does this make a London franchise more likely? I don’t think it does, but it would mean more total games overseas.
CRUNCH TIME FOR THE UNION CONTRACT
- Breaking news from the NFLPA’s conference call about the pending labor deal: The executive committee voted 6-5 against it, but the full membership will get a chance to vote regardless of what the 32 player reps decide today (those scoops from Tom Pelissero and Dan Graziano, respectively).
- The executive committee’s rejection is somewhat surprising, but not the last word. According to the NFLPA constitution, the 32 player representatives must approve any deal by 2/3rds vote and 50.1% of the membership must approve as well. It’s not impossible that those two things could still happen despite the executive committee’s vote. Expect more news this afternoon.
- Here’s the bullet points on the proposal debated by NFLPA player reps at this hour. The twin billion-dollar questions they’re asking: 1) Did we get enough in exchange for a longer season? 2) Will the deal get better if we reject this and wait until next year?
- Along with the obvious revenue growth, a 17th game would allow for a big expansion of the NFL’s international strategy. The extra game each season would still be a home game -- the idea of a mandated neutral site game on top of 8 home/8 away is dead -- but it would expand the inventory available to be shifted overseas. (Recall, Roger Goodell told me in August that a lack of inventory is the main reason the NFL isn’t moving faster abroad.) Germany and Canada are the obvious next steps, though even more games in Mexico and the UK would come too. Remember, the NFL is preparing to give marketing rights in particular countries to certain teams, which would empower the teams to start laying the groundwork in those countries on their own.
- The deal’s headline term is an increase in the players’ share of all NFL revenue from 47% to 48% starting in ’21, with it going up to 48.5% once the schedule is expanded. But there’s a couple other important elements: Gambling will be included in the “all revenue” pot that gets shared with players, including some unknown portion of non-football activities. Also, the deal will make more clear what teams can and cannot do with player tracking technology. Finally, Goodell will lose his right to hear most disciplinary cases to a “neutral decision-maker,” and penalties for marijuana use will go way down.
WHAT'S THE RUSH?
- The current NFLPA contract doesn’t expire for 13 months, but owners are pressing the players now. Why? They believe the current seller’s market for broadcast rights might not last. Are they overstating the case? Longtime media consultant Lee Berke thinks so. “If things have to recycle to this time next year, I don’t expect my analysis of what’s going to happen from a financial standpoint to change demonstrably,” Berke said.
- Berke thinks annual rights fees go from $6.5B to “well over $10B” if the owners get the 17th game and playoff expansion. Even with a status quo schedule, he thinks the NFL will get a 50% increase to between $9B-$10B. Owners have a point about 2020 ratings maybe declining in an election year, and the overall economy is overdue for a downturn by historical standards. But, Berke said, it’s difficult to imagine changes to the fundamental phenomenon driving sports rights inflation -- the growing viewership delta between the NFL and any other programming option.
- “I don’t see any huge change in the upside for the NFL,” Berke said. “That being said, there’s a certain sense of momentum around the NFL and the negotiatons, and you want to further that momentum, why stop now?" The 17th game and playoff expansion is not just an incremental gain, he added -- it opens up the door to new, creative media packages that could drive bidding even higher and get unconventional media partners into the fold.
NIKE MAKING MORE MOVES IN L.A.
- Nike is in talks with SoFi Stadium/Hollywood Park for a major sponsorship deal that would integrate the brand in the 298-acre mixed-use complex in Inglewood, industry sources have told me and my colleague Terry Lefton. Nothing is settled, but the appeal is obvious: Nike is already an NFL sponsor and has also agreed to sponsor LA28 Olympics, which will hold its opening and closing ceremony at the stadium.
- At one point, the shoemaker/apparel giant was considering Hollywood Park for office real estate purposes. Nike is looking for space for 1,000 workers as it looks to relocate its Culver City offices elsewhere in L.A., sources said, but it needed to move before the office space will be available at Hollywood Park.
- L.A. is one of 12 key cities around the world that Nike is targeting for growth, feeling they will drive as much as 80% of future growth for the $40 billion company. Even if the office space didn’t work out, it’s a conceptual argument for how much value Hollywood Park could deliver for marketers that prioritize a role in sports and entertainment. A single company could have venue rights for 20 NFL games a year (or more) an extensive concert lineup, along with branding, retail and offices in one place.
- NFL owners were a big part of Tuesday’s flood of pardons from President Trump. First, former 49ers Owner Eddie DeBartolo Jr. was pardoned for a decades-old corruption charge, and some argue this was a ploy to curry favor in election-critical Ohio, where DeBartolo is still loved. Later, the Patriots’ Robert Kraft was among several pro owners to be officially listed as supporting Trump’s pardon of Michael Milken.
- XFL TV viewership may have been down in Week 2, but betting -- at least in New Jersey -- was up. William Hill Director of Trading Nick Bogdanovich said that the league TV coverage's "emphasis on gambling has helped inspire wagering and he believes action could improve once bettors lock in on a favorite team or player."
- The XFL Vipers will finally host a home game tomorrow at Raymond James Stadium after opening on the road in N.Y. and Seattle. The Tampa Bay Times' Mari Faiello reports while the squad's green, lime and gold team colors "don’t necessarily match with the red seating bowl and decor of Raymond James for the Bucs," fans will "see a bit of change in the aesthetics with Vipers-themed wraps and art around the field and throughout the stadium, similar to how USF uses Ray Jay for its home games." Separately, the St. Louis BattleHawks predict 28,000 fans for its home opener on Sunday, the last XFL home opener.
- Should the Bengals, owners of the No. 1 overall pick in April's Draft, be nervous about Joe Burrow's "leverage" comment to the Ft. Worth Star-Telegram? Burrow, an Ohio native, said, "(The Bengals) have their process and I have my process. ... There’s a lot of things to happen." The Athletic's Lindsay Jones: "It’s not just the media who act like the Bengals are some sort of NFL outlier. That’s the feeling from many people in the league, from agents to executives who deal with the Bengals. Cincinnati just operates differently than most teams. ... I believe Burrow sees those things and is hearing those things, which would explain his lukewarm reaction to questions."
- Legends COO Mike Tomon visited the SBJ offices in Charlotte this week to talk about the Raiders' move to Las Vegas and the SoFi Stadium project.
------ It’s Not Over Until WE SAY It’s Over ------
Fresh off a killer few days of deal-making at CAA’s WCOS ... Don’t miss the most glitzy and glamorous night of California’s sports business week -- the Forty Under 40 Awards.
It will be a night of selfies, swagger and salutations.
Attend both events and receive $400 off. Register now at EVENTS@SportsBusinessJournal.com.
Forty Under 40 Awards: March 26, 2020 | Monarch Beach Resort | Dana Point, CA
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