The last week of labor talks has produced a giddy feeling of football returning on time. But as the Minnesota temperatures (finally, please) hit seasonal rates for summer, there is still a major hurdle left to clear that could be bigger than the seven-bag stack that Joe Webb cleared last year while preparing for the NFL Scouting Combine – the players' side still needs to agree to it.
Essentially what has happened over the last week is that owners have agreed to terms they would accept. It's an important step, but it's also a much easier step than the players agreeing to how much of their percentage of total revenues they will allow owners take back.
This isn't to say rainclouds are imminent over the next two weeks of talks between the owners and players, but like a seasoned weatherman would warn, there is a chance of rain when the sides are talking about hundreds of millions of dollars with each negotiation, and some of the storms have the potential to be severe.
The owners, who quickly opted out of the last CBA they signed when they figured they had given too much, have backed off somewhat in their desire to take $1 billion off the top of what is considered defined gross revenues, a sum of money that determines the salary cap. In a $9 billion-a-year industry, that's 11 percent. Instead, the owners gathered last week and appeared to approve a new way to frame the takeback. Instead of talking about shaving $1 billion off the top of the revenues, they have added that back in but are looking to decrease the percentage allotted to the salary cap.
The numbers and money are astronomical. The league is looking at taking somewhere in the neighborhood of 50 to 54 percent of the revenue, with the remaining portion – nearly half – going to player salaries. As Howard Balzer of The Sports XChange pointed out, 51.5 percent – the actual percentage of revenues spent on player salaries for the final four years of the salary cap – of the $9 billion in revenues the league made last year is $4.64 billion. The players' share would drop to $4.32 billion at 48 percent and $4.19 billion at 46.5 percent. For each team's take, the difference between the high and low percentages would mean $10-15 million.
Lost in the numbers, which are obviously significant, is the emotion of it all. Both sides are playing nice – at least publicly – right now for two reasons. First, they each stand to lose many millions if the lockout causes the any shortening of the season. Second, they each have the threat of the courts ruling against them if they don't continue to make progress and reach an accord soon.
The owners' stance has been that they opted out because they want more money to grow the game, making the pot of money bigger for both sides. Paying off new stadium debt and increasing the league's exposure, both nationally and internationally, are two of the driving factors, and that would already happen if the latest proposal to add a weekly Thursday night nationally televised game is part of the pact. That new money alone could basically make up for concessions the players are considering in the newest negotiations.
There are numerous other obstacles standing in the way of an agreement – health and safety concerns, length of season and retirement benefits among them – but splitting the enormous revenue pie without either side gorging itself is the key. All signs are positive right now, but even if all the issues are agreed upon in the next week or two, there is fine print and legalese that needs to written, ratification from thousands of players and court settlements to take place.
Any fan of the NFL hopes it is all taken care of without cutting into the season, but expecting it all to come together in days and free agency to start after the fireworks on the Fourth may be even a little too optimistic for this eternal optimist.
Tim Yotter is the publisher of Viking Update. Follow Viking Update on Twitter and discuss this story on our subscriber message board.
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