Despite Extension, NFL Remains on Verge of Lockout

By Benjy Lipsman in News on Mar 4, 2011 8:20PM

With the NFL's collective bargaining agreement set to expire at midnight, the league's owners and players' association decided to extend the deadline an additional week as they work with a mediator to try and come to an agreement on a new deal. Meanwhile, the players have threatened to preemptively decertify their union in order to prevent a league-wide lockout. By doing so, the owners would be in violation of anti-trust laws were they to carry out any unified lock out.

The labor confrontation came to a head when the team owners opted out of the current deal because they want more money. Under the deal in place, the league's owners take the first billion dollars off the top of the league's approximately $9 billion annual revenues. The players collectively receive 60% of the remaining pot as salary and benefits. The owners want an additional billion off the top before divvying up the rest with the players. They're pleading poverty under the current system, despite the vast revenues generated, but won't open their books to prove their claims.

The players just want to stick with the current CBA. They've agreed to work in a system with non-guaranteed contracts in spite of short average careers (about 3.5 years). Until they vest after three seasons, they have no access to post-retirement pension or health care coverage. Even then, the health care is only for five years after playing. Given the extensive injuries players suffer on the field and the long term brain damage that often develops, God only know what individual health insurance premiums are for these guys when their league coverage runs out. Star players may make enough that none of this matters, but the special team guy whose career ends after an injury in his second season isn't making Tom Brady money. But again, the players aren't asking for any improvements to the current system -- they just want it to stay as it is. It's the owners who want to cut back on the players' piece of the pie.

And the team owners thought they had incredible leverage in the negotiations. Knowing that this labor dispute was coming, the NFL worked out TV deals with the various networks broadcasting NFL games that would have paid them even if no games are played. But this week, a federal judge overruled the decision of an arbitrator by saying the NFL was in violation of the CBA by negotiating $4 billion of so-called lockout insurance. This puts a bit more pressure on the owners, who still have to pay their other employees, make loan or rent payments on stadiums, etc.