- The National Football League (“NFL”) and the National Football League Players Association (“NFLPA”) reached an agreement last summer for a new Collective Bargaining Agreement. But the relationship still appears strained. From Bounty-gate, to the commissioner’s disciplining authority, to the parties’ failure to reach an agreement on Human Growth Hormone testing, nothing seems easy. The NFLPA has even challenged the league’s changes to equipment rules. What’s the status of the so-called “labor peace” and how will these tensions affect future dealings between the league and its players?
It’s important to define what’s meant by labor peace. Does it mean that the players and management have agreed on the rules that will govern their relationship for the next decade? Or does it mean that all issues between the parties have been resolved, ending all future disputes? Obviously the answer is the first option: The players and owners have an agreement on the rules and structure of their relationship. This does not mean that there will not be tension and disagreements. Although both parties ultimately have a similar goal — to grow the game so that each benefits financially — their methods, risk and respective responsibilities are viewed from different lenses.
This is normal behavior in labor-management relations. The dynamic between a union and a management is always tense. By nature they are meant to disagree, and one could argue that healthy disagreement protects the integrity of their deal.
League owners and sports pundits once lauded the close relationship of former NFL Commissioner Paul Tagliabue and the late executive director of the NFLPA, Gene Upshaw. That doesn’t mean they agreed on everything. The pair occasionally locked horns over their different interpretations of document language and past conduct, and behind the scenes, their staffs constantly challenged the other side’s interpretation of different provisions of the agreement. As a result of these contentions, several side letters meant to clarify ambiguities or address unintended consequences were executed over the many of years of that so-called “labor peace”.
But whatever the disagreement, Tagliabue and Upshaw tried to come together to get things done. Their mutual understanding of each other, their priorities, and their constituents allowed them to work together to reach a solution. Time will tell if Roger Goodell and DeMaurice Smith can reach a similar arrangement.
- Franchises and sports marketers continue to struggle with lagging game attendance. What’s the problem? Are rising ticket prices deterring fans? Or as some argue, is the improved home viewing experience so much better than the in-game one? Does the solution lie in technology and the insatiable desire for people to be connected at all times?
It’s all of the above. Ticket prices continue to rise. The cost of bringing a family to a game, much less buying season tickets, are close to prohibitive. The lagging economy, along with IRS rule changes on entertaining business associates, has reduced discretionary spending on sporting events. Furthermore, and not to be discounted, the home experience for most sports, save hockey, is outstanding. High-definition displays, endless camera angles and near-instant replays, plus commentary explanations and real-time information, significantly enhance the in-home viewing experience. Add to that the cost factor, and one can see the inherent problem. (You can drink three sodas, two beers, and consume a sandwich at home for the cost of a 16-ounce beer at the stadium.)
Recent conversations among sports professionals have focused on technology, connectivity and the fans’ need to get information instantaneously. Discussion has focused on improving the in-stadium atmosphere and trying to energize it with non-sports-specific entertainment and music. And when it comes to fan concessions and stadium design jargon, “Wi-Fi” and “band width,” have replaced “point-of-sale” and “cushioned seats.”
But the question still remains: Will these efforts attract the fans back to the arena or stadium? Let’s be clear — nothing attracts fans as quickly and successfully as an exciting, winning product on the field. Winning remains the single most important marketing tool a team can employ.
But it’s true that teams and stadium owners must also provide the requisite technology so that fans can remain connected to people and information beyond the venue’s walls. This alone, however, will not solve the attendance lag. Not only must the cost of attending games be examined, but the convenience of getting to and from the games has to be addressed. If it takes a fan two to three hours to exit the stadium area, are they not more likely to stay home, where the experience ends with a click of the remote? I think the answer is yes. Fans are more concerned about their ability to exit the stadium, garage or parking lot than they are about non-game related entertainment. Easy transportation to and from the games, in my opinion, remains a key attendance motivator and needs to be a top priority for any franchise.
- Although labor peace seems unattainable, the CBA’s new rookie wage scale appears to be working, offering a smoother signing process and fewer first-round holdouts. But we may not be able to say the same about veteran players, particularly those with shorter NFL life spans, such as running backs. Has the new system improved “signablility” or just shifted the problem to another group?
The new NFL rookie scale seems to be working fine, and, as we have experienced with the National Basketball Association’s rookie wage scale, we’re not bombarded by stories of nasty contract negotiations before a player has played his first professional game. Furthermore, unproven rookie players are not catapulting to the top of a team’s pay scale ahead of proven veterans.
Negotiations have always been and will always be about leverage and who has it in a given situation. It appears now that the players most lacking leverage are veteran running backs in between their fifth and eighth years in the league. This includes Maurice Drew-Jones of the Jacksonville Jaguars, Matt Forte of the Chicago Bears, and Ray Rice of the Baltimore Ravens. It’s not only the system hurting these players in their negotiations, but the reality of the predicted playing life span for this position.
Success at running back can come quickly. And unlike other positions that require a steeper NFL learning curve, running backs start faster, allowing a team to judge a player’s impact almost immediately. Furthermore, running backs historically and statistically lose productivity at 30 years old. Depending where he is age-wise when his contract is set to be renegotiated, teams are reluctant to enter into long-term deals with a running back.
One might argue that NFL contracts are not guaranteed and a player can be cut in any year of the contract, relieving the team of its obligation to pay his salary going forward. Although this “non-guaranteed” dynamic is present, NFL contracts, especially for successful veteran players, often include a large signing bonus that under the salary cap rules can be amortized over the life of the contract. For example, a $5 million signing bonus on a five-year contract counts as $1 million toward the team’s cap each year for five years. And payment of that bonus amount is guaranteed.
As a result, a running back’s inability to perform carries dual consequences: It forces a team to pay salary to a less-than-productive player and further threatens the team’s ability to pay for his replacement.
Managing a salary cap is about value and allocation of resources, and it appears that the running back position is becoming the squeezed asset.
- As we approach the college football season, stories about football playoffs and super-conferences are crowding out stories about who might win the national championship and which teams are looking good. In the rapidly changing college landscape, what stories or trends could crop up in the remaining months of 2012?
The answer to this question will continue to develop into 2013 and the college basketball season. Thirty three years ago, basketball was the agent of change. Back then, the birth of the Big East and the growing pie of college athletics events spurred bidding wars among television networks eager to land college basketball broadcast rights — especially for the NCAA Basketball Tournament.
But these days it’s clear that college football is driving the bulldozer for the changing landscape of college athletics, and it is hard to predict the future.
It appears inevitable that the current Bowl Championship Series system is going to undergo some sort of change. The power conferences — the Big Ten, SEC, Big 12, and Pac-12 — all might have different ideas about what the new system will be, but all agree that they hold the power to make any change. Will the tentative four-team playoff system include only conference winners, or will it be the top four ranked teams? Will it eventually expand to eight teams? Will there be a selection committee like in basketball, or will it be strictly polls? What role will the traditional bowls play? And what about the NCAA? Can it survive as it is presently constituted?
Additional questions and issues also crop up. Some are related to the football playoff directly but all seem to be tied to money. For example, what are the next moves in conference realignment? Does Notre Dame have an automatic place in the reconfigured college football playoff system or will it have to become a conference member to protect its spot? What role will ESPN, CBS, Fox, NBC, and their sister stations play in relation to the new conference networks? Are certain colleges and universities going to be left out of realignment, and do those schools have any recourse?
The last question should be — but may not be — the most important one: What about the interests of the student athlete?
Will the transfer rules be relaxed so that he or she has the same ability to change schools as the coach who recruited him or her? Will there be some accommodation on compensating student-athletes, or at least giving them some rights so their scholarships are not dependent on the whim of the coach?
All these questions will be interesting to follow, and for that we’ll turn to Kirk Herbstreit and Dick Vitale, among others. Stay tuned.