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Tuesday, August 3, 2010

NFL CBA and Potential Lockout

What is the Collective Bargaining Agreement?
The NFL CBA is an agreement between the NFL Players Association (NFLPA) and the 32 NFL owners.  The CBA outlines various aspects of interactions between the two groups and the working conditions for the NFL players.

What has been going on with the CBA?
The current CBA was initially crafted in 1993 and has been adjusted and extended various times since, the last being in March of 2006.  In early 2008 the 32 NFL owners unanimously voted to opt out of the current CBA in March of 2011, one month after this year's Super Bowl.

When the owners opted out of the CBA, the 2010 season became a year without a salary cap.  Why haven't we seen owners offering much larger contracts to free agents?
First, two definitions:
Unrestricted free agent - A players contract has expired and he is free to negotiate with any team, and may choose a team based on the financials of a deal, chances for success, playing time, whatever the player most desires.
Restricted free agent - Essentially is a player whose contract has expired.  First, his previous team offers him a "qualifying" offer - an amount determined by the CBA (a minimum amount required to keep a player a RFA).  Any team is free to offer them a deal, but their previous team may match the offer and retain the player.  There are also guidelines to dictate the compensation the previous team would receive if an offered contract above certain levels.  Find a good explanation here.

In an uncapped season (2010), players must have at least six accrued seasons in order to become an unrestricted free agents, while in a capped season, players must only have four accrued seasons.  Because of this, we have seen the numbers of restricted free agents increase from past years, making it more costly to sign key free agents.

Also, there is no spending minimum, so owners also have the choice to limit their spending and build a team of undervalued players.

Why might there be a lockout in 2011?
First of all, the owners are not majorly concerned about a lockout and losing revenue as the NFL will still be pulling in billions from its network TV deals even if there is no 2011 NFL season.  Sure, they don't want the lockout, but it's a little more likely now with all of the recent TV revenue flowing in.
One issue is for small market teams - as most of the revenue comes from TV contracts (and small market teams such as the Jaguars do not make as much) and teams are required to spend around $112 million (in 2009) on player salaries the profits for these teams are not as high as the owners would like.  This is what enables any given game to be competitive and result in either team winning.  This floor is calculated as a percent of the salary cap, and that percent was going to keep growing under the previous CBA.  Essentially, many of the owners would like to see the salary cap and the salary floor gone.
Another issue is that of revenue sharing.  Under the last CBA NFL owners shared TV revenue, NFL merchandise licensing revenue and 40% of their gate receipts (ticket sales).  There is also a separate $100 million pool that the 15 teams with the highest gross income contribute to and the bottom 17 can draw from.  This assures players that they can make the same amount of many in any market, but the highest grossing teams are not in favor of this pool.
18 game regular season schedule - Another issue to be addressed is the format of the season.  Currently there are four preseason games and sixteen regular season games, but the owners are in favor of changing two preseason games into regular season games.  The players would need to be compensated fairly for an increase in games and they would like to see the studies about long term health risks of adding two more games.
Retirement benefits - Former and current NFL players would like their retirement benefits to be looked at, particularly their health care as the game can have serious long term effects.
Rookie wage sacle - Something that I am completely in favor of, I cannot understand why unproven rookies are getting $50 million guaranteed before they take a single snap!  Players that have proven their worth should be rewarded.

There are many other issues that will be discussed including player misconduct administration and drug testing.  Click the link for more info.

Essentially, if a new CBA is not crafted, signed and considered a done deal there may be a lockout in 2011 and no games played...  Get to work!

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