2011 NFL Owner's Lockout and a Look at Team Finances and Player Salary
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The Story the Owners are Telling
The NFL Player's Association and the Owners have been conducting meetings to avoid a lockout for the 2011 season. The major issues on the table are to expand the season to 18 games, remove two preseason games, and implement rookie salary cap.
But the real gorilla in the room is the percentage of earnings paid to players. Currently the NFL salary cap is based upon 59.6 percent of NFL revenue. The owners argue that is too much. They incur all the marketing expenses for the NFL and claim that they are not profitable.
My realistic side says that if that was the case, we would see more NFL teams switching hands; however, it is rare for NFL teams to go up for sale. I would conclude that is because they rake in the money left and right. But we don't have to go off of my subjective opinion because the Green Bay Packers is publicly owned, non-profit company. Let's look at their numbers.
Green Bay Packer's Financials
The truth?
According to Bloomberg and the Packers' 2010 Annual Meeting, the Packers made nearly $10 million in profit last year. That is a far cry from not being profitable. Their increase in revenue comes from profit sharing from the league, so the rest of the league appears to be healthy despite a plateau in Green Bay.
That would make sense. Green Bay has a population near 100,000. It is not a large city like most of the homes of NFL teams. It is an amazing testament to an outstanding local fan base that Green Bay still has a team. The big money from big companies flows to other teams. So if Green Bay is making money, I am pretty sure Dallas, Atlanta, Chicago, New York, and all the other cities are too.
Or else their teams would be up for sale.
Forbes Magazine did report that two teams, the Miami Dolphins and Detroit Lions did lose money in 2009. Those are only estimates because the financials of these privately held companies are kept private.
The Reality of the Situation
The owners are playing the wrong cards during the wrong era. The frustration of Americans will be ignited if the owners force a lockout to decrease the pay of our favorite athletes. It could even create a society-wide uprising against the corporate executives who continue to increase their profits while the working class remains unemployed. We live in a different America than it was in 1987 when the owners successfully did this before. There will not be much sympathy to wealthy owners who, like their corporate counterparts, make good money.
Nobody in the NFL is poor, but why should the players take less pay when the owners are already profiting off of their ability, hard work, and injury risk to their bodies?
Now if the owners are not making good money, just open up the books to the union and show those losses. I would be sympathetic. Transparency would convince; until then, I will assume that the owners are just feeding us lies to pad their pockets.
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Thanks, Fred. I most often write about God, but I just hadn't read an article on the net expressing these sentiments, so I had to write it.
I do not care wether the owners make or lose money. The fact is that what these players make effects my ticket price and my cable bill. The players make enough and how soon they forget that 30 years ago Johnny unitus worked the winters at a steel mill to make ends meet. Now these players are all rich and unwilling to take a pay cut when revenue for the entire NFL is down. Enough is enough.
Lee,
If the owner's opened their books, showed that the revenue was actually down, then they would take a pay cut. Their pay is just based on a percentage of revenue. However, the owners want to lower that percentage.
It's not just Green Bay that supports that team... you might as well include the rest of Wisconsin in on that. It's not much but to shortchange the team and assume only 100,000 people care about that team is wrong. Milwaukee pumps a lot of money into that team.
Evan,
Are you saying that they would be one of the more profitable teams?
So, what you're saying is Greg Jennings, to pick one example, actually should be making *more* money, getting more than twice the profit of the entire team? (Not meaning to pick on him, but his annual salary -- without incentives -- of $16M leaped to mind when I saw the $10M profit number above.)
As for profitability, GB has one of the top ten player payrolls in the NFL. Make what you will from that.
What I wonder about is all those employees of the team that *aren't* players. What happens to them when the blessed few get their piece of the pie enlarged? (You *do* realize that teams employ more than just players, right?)
And an interesting question: Any idea what the employer's side of a $16M W-2 comes to? That's not part of the 59%, after all.
Now, I've long been of the opinion that CEO's are overpaid. But when the time comes that individual employees make that much more money than the boss, any business textbook would tell you the business is in trouble.
Maybe I'd have more sympathy if the players cared about something more than themselves. But when they block any plan put forward by the owners to increase contributions to the old-timers, it's hard to care about them (NFL owners proposed to immediately increase former players pensions last year, NFLPA said no, and tried to tie it to extending the CBA for two more years, essentially saying "no one gets anything until we get ours"). After all, the average third stringer today will make more than $1M in his average 3.5 year career.
My take: A group of millionaires gathers in a room and each yells that they're being exploited and deserve more money. Yawn. Let 'em all lose. Make them get a *real* job.
Arlen, those are good thoughts and worthy of a hub in themselves.
The players aren't arguing for a increase in the percentage of profits paid on them. They are asking for it to no be cut.
Pilgrimboy, the NFL players won't be receiving a paycut. The percentage will be made up by the implementation of a rookie-wage scale where guys like Alex Smith won't be making $60 million dollars guaranteed without playing a down in the NFL.
fred allen Level 1 Commenter 20 months ago
First time I read something from you that wasn't about God. I'm also a big NFL fan. I'd hate to see a lockout. The players are the reason we watch. They are the reason the seats get filled and the TV revenue is so high. To think that guys in ties can hold the game hostage in the name of a higher percentage of the money they make of the guys with helmets, bothers me. I hope they get it resolved before the last minute, but it is my gut feeling that it will go down to the wire or beyond. Time is more in favor of the owners than it is the players whose job expectancy is about 3.5 years last I checked. Good hub.