Lockout looming? Another option exists

While many speculate that a lockout looms, there is another option short of a labor agreement that could allow play in 2011. Howard Balzer breaks down the revenue issues and explains another plan the league could enact.

The word "why" is one that has been used often in recent days by DeMaurice Smith, executive director of the NFL Players Association. As in, "why" are the league's owners pushing so hard to drastically slash the money that goes to the players?

The league continually stresses how the change in the economic model that occurred in 2006 has made the current deal a bad one. A look at the numbers shows that isn't reality. At least on the surface.

Before 2006, players essentially shared a percentage of gate receipts and national television money. That was termed Designated Gross Revenues, or DGR.

In 2006, the system was changed to a share of "all" of the revenue generated by the league. There was a significant spike in the salary cap in 2006, but there were much smaller increases the next three years.

What also occurred was that the gap between the salary cap and salary floor grew so that by 2009, numerous teams were more than $10 million under the cap. In addition, the expense credits exceeded $1 billion in 2008 and 2009. Those credits constitute money taken off the top of "all" revenue before the remaining percentage of "total" revenue then went to the players.

The combination of those credits and teams not spending to the cap actually resulted in the players' share going down after 2006. In fact, the percentages of all revenues in the final three years of the salary cap were actually lower or very close to the years before 2006.

According to figures supplied by the NFLPA and not challenged by the NFL, here are the percentages of "all" revenue the players received from 2000 through 2009: 2000, 56.5; 2001, 52.6; 2002, 51.8; 2003, 50.5; 2004, 52.3; 2005, 51.1; 2006, 52.7; 2007, 51.8; 2008, 51.0; 2009, 50.6.

As for the "total" revenue share, those are also very similar after 2006 to what occurred in prior years: 2000, 61.7; 2001, 57.1; 2002, 56.1; 2003, 54.3; 2004, 57.0; 2005, 55.1; 2006, 58.4; 2007, 58.0; 2008, 57.7; 2009, 57.1.

What's notable is that if reports last week that the players' latest proposal included a 50-50 split of "all" revenue, their 50 percent is lower than in any year from 2000-2009.

So, what is it that the league really doesn't like? It seems to be one of two things. Or, perhaps both.

One is that they simply are seeking to pay the players less (a lot less) and keep more for themselves. Maybe they can't be blamed for trying, but the players' response can't be a surprise. That's why a lockout threat, which also means the cessation of health benefits, has been used in hopes of pressuring the players.

But there is one major issue that has been bubbling below the surface and is likely at the root of the owners' unease.

The system prior to 2006 only included revenue already equally shared by all 32 teams. National television money went into the pot along with a percentage of gate receipts that was the same for every team.

Not so after 2006. There is a wide discrepancy between many teams in the local revenue that is generated. Thus, a supplemental revenue sharing plan was instituted in which clubs with higher revenues paid clubs with lower revenues.

That created a division within the league, one that isn't discussed a lot, but clearly exists. The high-revenue teams resent sharing, especially with teams they don't think try very hard to generate as much local revenue as possible. Conversely, some of the lower-revenue teams realize they are not the Cowboys or the Redskins, but even with some sharing, they still had to give up a larger percentage of their local revenue to help pay all of the league's players.

Where this situation stands today, 17 days before the expiration of the collective bargaining agreement, is precisely for those reasons.

Still, don't think that a lockout is such a sure thing, as many have been convinced. The more it's talked about, the more it is believed. Sure, it could happen, but as noted, it is a scare tactic, and part of the gloom and doom approach often heard in negotiations like these.

Just as likely, is that the owners improve their offer in the next two weeks. Then, if there is no agreement by the deadline, rather than shutting business down (which proves what?), the owners declare an impasse, implement that last offer, and the league year begins.

At that point, the next move belongs to the players. Would there be decertification of the union? An antitrust suit? Perhaps. But, most important, the new year would begin. And we could then begin speculating which free agents teams will pursue.

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