NFL projects $1 billion in lost revenues if there's no labor settlement until September
By Mark Maske
UPDATED (3:16 p.m.)...
NFL teams already have begun to see the effects of a prospective work stoppage on their revenues for next season and would lose a projected $1 billion in potential revenues if a labor settlement with the players' union is not reached until September, league officials said Thursday.
The league disclosed its loss-of-revenue projections as part of a presentation to reporters in which NFL officials said both sides have strong economic incentives to settle their bargaining differences before their current labor deal expires in early March.
"There is a very substantial incentive for both sides to get an agreement.... There is a lot of risk for us [and] a lot of risk for the players," said Jeff Pash, the NFL's executive vice president of labor. "We'd like to avoid this as much as we can."
George Atallah, the union's assistant executive director of external affairs, called the league's disclosures the "same old story, no new deal," and said in a written statement: "None of the facts or arguments justifies a lockout."
Players and union officials have said they expect the players to be locked out by the franchise owners after the current deal expires.
League officials said the threat of a work stoppage already is affecting financial matters such as the NFL's dealings with sponsors and teams' ability to sell tickets for next season. The effect on revenues would increase over time if there is a work stoppage, NFL officials said.
According to the league's projections, the NFL would lose $120 million in potential revenues if there's no settlement with the union until March, $350 million in revenues if there's no settlement until August and $1 billion in revenues if there's no settlement until September.
The regular season is to begin in September. The league would suffer a projected $400 million per week in lost revenues during the regular season if there is a work stoppage, according to the NFL's projections.
The NFL has total annual revenues of approximately $9 billion.
The league would continue to receive television rights fees under its contracts with the networks during a work stoppage. But NFL officials continued to stress Thursday that any money received from the TV networks during a lockout would have to be repaid to them. The union has challenged the structure of the NFL's TV deals in a pending case before the sport's special master, Stephen Burbank. The union's case contends the TV contracts give the owners what amounts to a lockout fund.
NFL officials said Thursday that because the players would be paid based on a percentage of league revenues if the sides agree to restore the sport's salary cap system under a new labor deal, the players would be affected by any revenue losses suffered by the teams.
League officials also said that more than 500 players would be directly affected in March alone if there is a work stoppage and teams aren't signing players to contracts.
According to the league, 495 players would be eligible for unrestricted free agency in March if the free agency requirement under the salary cap system--four seasons of NFL service time--would be restored as part of a labor settlement. Those players could receive an estimated $500 million in bonus money in contracts signed in March alone, based on past free agency trends from 2008 and 2009. In those years, about half the available free agents signed contracts in March with bonuses totaling an average of around $2 million.
In addition, according to the league, 74 players currently under contract would receive option bonuses, roster bonuses or salary advances in March totaling about $143.5 million if there's no work stoppage.
"There are very powerful reasons for both sides to get an agreement by the beginning of March," Pash said. "We have our frustrations with the union, and they have their frustrations with us. But I think they know that. Despite all the evidence to the contrary, I continue to be optimistic that we can. Not that we will, but that we can."
League officials continued to say the sport's current economic system needs to be fixed because the players have received an inordinate amount of the incremental revenues generated since the NFL's last labor settlement in 2006. The owners have proposed increasing the amount of money taken out of the revenue pool before the players' portion of the revenues would be calculated under a salary cap. Such an adjustment, league officials have said, would give the owners incentives to re-invest in the sport and increase revenues, ultimately benefiting the players as well. The union has characterized the owners' economic proposals as substantial pay cuts for the players.
Pash said Thursday the two sides are in the process of scheduling their next bargaining session. He said the deadline to complete a new labor agreement could be pushed back if there's progress in bargaining before then.
"If you're making progress and your negotiations are proceeding toward a conclusion, certainly you can stop the clock," Pash said.
January 27, 2011; 2:18 PM ET
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Posted by: bestmick1 | January 27, 2011 6:12 PM