Will the Courts Kill the NFL’s Season?

March 22nd, 2011 at 8:06 am | 14 Comments |

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It’s possible that the victory that will have the most influence over the 2011 NFL season won’t happen on the field.  Due to a 2010 Supreme Court ruling in the case of a company called American Needle, illness which produces NFL caps and successfully challenged the league’s exclusive deal with Reebok, the road to an inevitable season-long lockout seems almost assured. In the case, the Court refused to recognize the NFL as a single economic entity (unlike Major League Baseball), but rather as thirty-two separate bodies. Now the NFL, and its contract negotiations, is placed under the vexatious oversight of antitrust law.

The NFL, as it stands currently, violates the Sherman Act in a number of respects, such as with its salary cap or rookie draft (aka “the things that help make football great”). According to the Sherman Act, though, this wouldn’t be an issue if the League’s practices were approved of by a “certified” union (the Players Association). But, the union has recently de-certified (forgoing their government approval), thus allowing them to leverage antitrust law, through lawsuits, over the owners in negotiations.  The negotiations have already stalled because owners were not willing to budge on revenue sharing, due to high maintenance costs on government-subsidized gargantuan stadiums. Quite the circular web.

The nature of the lockout is different than a labor strike in a normal private negotiation. It’s two competing parties trying to out-maneuver the other in a maze of complex government rules and red tape. The lesson one can take away from this entire affair concerns the unintended impact of inflexible and cumbersome regulatory apparatus. As millionaire players and billionaire owners pour fortunes into litigation, hardworking Americans will lose their jobs – casualties in an unnecessary conflict.

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14 Comments so far ↓

  • Smargalicious

    Massive greed by both sides. However, as in the past, the owners hold the trump cards by previous spoiling of players with generous salaries. The players notoriously spend their money quickly and when the cash isn’t coming in, they get soft.

    Expect to see scab players come in as in the past, and the regular guys will cave.


  • PracticalGirl

    There are some serious issues involved here, but I can’t help but wonder when the law of diminishing returns-and not the courts-will kill professional football. While the millionaires and billionaires fight over who needs/gets a bigger piece of the pie, costs to watch this entertainment are fast eclipsing the average family income.

    The average cost of an NFL ticket is $76.47, up 4.5% this year even as incomes plummet. If you have a winning team, like the Saints, the average ticket cost goes into the stratosphere-$404 per ticket average for this season. I understand and embrace the concept of rarity of skill = higher income. This is especially true in entertainment. Movie starst make 20-40 million a picture. Charlie Sheen (famously, now) made 1.5 million an episode. But the average cost of a movie ticket and/or cable is still well within the reach of the average fan, unlike pro football.

    Tell you how you make the millionaires and billionaires STFU: Fan-based “lock outs” and boycotts. See how fast they settle their differences if the hands that feed them refuse to do it.

  • Unsympathetic

    Those stadiums aren’t government-subsidized, they are TAXPAYER-subsidized. It’s not owners who will suffer, it’s fans.

    I have no sympathy for either side – tickets are far too expensive to consider going, and players are paid far too much to whine about wanting to make more.

    • Jim in DE

      I don’t think the players are whining for more. They were perfectly happy with their stake. It was the owners who opted out of the old CBA a year earlier and are asking for the moon and the stars (even though the existing model seemed to be working for everybody).

      I don’t even know what the players are looking for in negotiations, other than not having their heads handed to them by the owners.

  • balconesfault

    Don’t blame the legal system or anti-trust regulations/legislation. This is all about two sides using whatever tools they have in a heated dispute and refusing to budge – the “inflexible and cumbersome regulatory apparatus” you decry is reflecting the way both sides are wielding their legal tools, and not the tools themselves.

    It’s like coming upon two guys swinging sledgehammers at one another, and complaining that someone made the mallets so heavy that they’ll do real damage if someone connects. These particular tools weren’t made for this kind of billionaire-millionaire piss fight – but if they weren’t available instead of swinging sledgehammers they’d be swinging crowbars or axes or whatever else they could get their hands on.

  • Frogmorton

    When the NFLPA and the team owners are negotiating how best to divide up the pie it’s important to remember that we football fans are the pie. Until and when we resolve to withhold our support and make our displeasure known by not watching football on TV and paying big bucks to see a game live we shouldn’t expect to be seen as anything other than food to be served.

    • balconesfault

      FWIW, I attribute the huge inflation in NFL ticket prices (and also MLB ticket prices – check out the $300 seats behind home plate in Yankee Stadium, and consider that they’re selling those tickets for 81 home games, to realize just how much money is flowing around) in no small part to the Bush era tax cuts, and the extra disposable cash it placed in the hands of the wealthy. You’re a Wall Street trader who got a $800K bonus last year? The Bush (now Bush/Obama) tax cut saves you about $40K in taxes on that bonus, so why not drop that money on a 81 game package of a pair of prime seats you can use to entertain yourself and your clients with? And you can even write off the price of the client tickets as a business entertainment expense!

      So as a result, millions more dollars flow into the Yankee coffers each year … so why shouldn’t the Yankees use that money to go buy players away from the Pittsburgh Pirates or Cleveland Indians?

      We’ve been running our economy for a few decades to ensure that the wealthy get wealthier, and as a result the gap between wealthy and middle class continues to reach record proportions. And luxury items – like pro sports tickets – get more expensive. There’s no surprise here.

  • hisgirlfriday

    The Courts won’t kill the NFL’s season. The greedy owners will. The Dan Snyders of the NFL will. Fans are not clamoring for an 18-game regular season subjecting our favorite players to even more risk of injury, both for their own well being and for the well being of the teams we root for in terms of having healthy rosters going into the playoffs.

    It’s fundamentally unfair for the owners to think they are entitled to more revenue from the game at the same time they impose more salary restrictions on players and expect them to participate in more regular season games.

    And on a personal note, as a lifelong Bears fan, I was heartbroken over what happened with Dave Duerson recently and I hope the players union prevails in getting more retirement healthcare and safety considerations regarding head injuries for the league’s players.
    Owners don’t entertain me on Sunday afternoons. Players do. And I am firmly on their side in this dispute and I hope most NFL fans are as well.

  • Frumplestiltskin

    Smarg, (yes I know he is a troll but his post here isn’t) the owners can’t use scabs because they are the ones locking out, the players are not striking. Hence the owners can not use scabs because they would be violating players contracts (well, they can play scabs but they will also have to pay the players).
    One thing I am not sure about, if they are locked out, can the players play on their own? Renting a college stadium on a Sunday wouldn’t be too difficult and the owners can’t sue players to prevent them from playing if they aren’t paying them.

    • PracticalGirl

      One thing I am not sure about, if they are locked out, can the players play on their own

      The cynic in me is certain that they wouldn’t do this, since I think it’s more about the benjamins than the glory for most pros. The realist in me hopes they don’t, since this is a dangerous sport that could leave players hurt, debilitated or worse with little or no insurance. A player making $14 million a year (if he’s been smart) could probably take care of himself in this situation. An injury to a player making the league minimum (even if it’s a big salary, comparatively) would be screwed for life.

      • hisgirlfriday

        Renting a college stadium on a Sunday wouldn’t be too difficult and the owners can’t sue players to prevent them from playing if they aren’t paying them.

        It would be VERY difficult.
        1. Colleges get a lot of donations from rich NFL owners. Just one example, Michigan would not lease the Big House to NFL players because Miami Dolphins owner Stephen Ross is a huge Michigan booster.

        2. Colleges are full of stuffy academics who would not want their towns quiet idyllic Sunday afternoons bothered by lots of traffic and drunken tailgaters when they already have to deal with that one day a week on college football, which at least has the benefit to them in helping brand their schools and recruit prospective applicants. Why would they want the headaches/liability of leasing out their stadiums to something like this?

        3. Similarly, many college stadiums don’t or won’t sell booze. All Big Ten conference stadiums do not sell booze. This was a big deal to a lot of Vikings fans when they had to play at the Minnesota stadium last minute last season. I know my alma mater, Illinois, had to jump through a lot of hoops to approve alcohol sales for the NFL games held at their Memorial Stadium when the Bears played there about ten years ago while Soldier Field was being renovated.

        4. Who would manage the ticket sales? Who would manage the concessions? How would players be paid? How much would players be paid and who would decide the payscale?

        5. Who would televise the games and risk the wrath of the NFL owners?

        Yeah, the players could develop their own professional league and maybe even get financing to hold some games in arena size places as a gimmick, but no way could they lease college stadiums of any big size or a big TV contract to make the whole thing financially worthwhile to the players and the risk they would take with their bodies.

  • oldgal

    Two sides can’t figure out how to divide up a few billion, so neither will get any in the meantime. Send them all back to kindergarten where they can once again learn how to share.

  • Frumplestiltskin

    oldgal, actually, the NFL is guaranteed revenue from the networks even without any games, and they have their merchandizing revenues as well.

  • JP4266

    The salary cap and rookie draft are the things that help make football great? I must have missed something because I thought it was the games and the talented players that made football great!

    I think the main issue here is that small market NFL teams don’t feel they are making enough money despite having a salary cap to keep salaries lower and to create a competitive balance. The big market teams don’t want to increase revenue sharing hence the design to pull more money back from the players.

    However the players are in a unique position to negotiate as not only are they employees but they are the product as well. Replacement players will no longer work – The popularity of the NFL is helped in huge part by fantasy football. As a Jets fan I may still watch the Jets replacements(out of curiosity more than anything) but not any other games as I would do normally.