Re: Owners,players discussing almost 50/50 reveue split
posted at 6/23/2011 9:38 AM EDT
In Response to Re: Owners,players discussing almost 50/50 reveue split
Babe's argument is partially right, partially wrong. His characterization that the players have been "routed" however seems a bit more like Babe's wishful thinking than the truth. After all, as Z points out above, a 50-50 split of all revenue was the players' original counter offer to the owner's original proposal. So if anything, the final deal is looking like it will closely resemble what the players offered back in February. There's no doubt that a 50-50 split will be better for the owners than the old CBA if revenue growth is strong (and if the deal is a long one). This is because the expense credit (about $1 billion last year) is not likely to grow as fast as revenue and therefore, under the old deal, the players actual take might have grown from the recent 50% to something closer to 60%. It's doubtful, however, that the 50-50 split is worse for the players than the owners' original proposal. As I understand it, the owners originally wanted to take a larger (and possibly faster growing) expense credit off the top, plus reduce the split of remaining revenue from 60-40 to something more like 50-50. DeMaurice Smith said that the owners original proposal would have dropped the salary cap to about 40%-42% of all revenue from the recent 50%. That's where the widely quoted 18% pay cut comes from. (A 9 percentage point drop from about 50% to about 41% would equate to an 18% reduction.) The owners' second proposal (the last minute one before the union decertified) was not much better for the players, since it took most of future revenue growth out of the equation. Players would have gotten about 50% of revenue initially, but their portion would likely have shrunk significantly over time. What's good for the players in the current 50-50 split is it ensures their proportion of the revenues over the entire life of the deal stays about equal to what it has been over the past few years. Compared with the old CBA, the future growth potential for the players isn't as high, but the new agreement does "keep players whole" at the current percentage. Overall, I see this as a good deal for both sides. It stabilizes the players' share of revenues at the current 50% of revenue, protecting the players from future reductions in that percentage and the owners from future increases. This was the unions first counter proposal . . . and so the owners coming around to it bodes well for an eventual deal since this is something the players seemed ready to accept back in February.
Posted by prolate0spheroid
The settlement is almost 100% identical. The players actually offered a 49/51% split as their opening offer in early February (11th) ... with the exact same language and the exact same demands. It is also identical to the settlement offer that was rejected March 22nd and again on March 28th IIRC. The only thing that has occured that is meaningful in that span of time is that the owners have a.) had their war chest locked up, and b.) had it decidely firmly that the anti-trust portion of the battle will not be headed to the NLRB.
The owners' opening demand was 38%, which sweetened to 40-42%, and then that silly trick language deal where the players got 50%, but were essentially excluded from any real growth over the length of the deal with an outrageously low and artificial growth projection that defied what Moody's and Forbes projected for the NFL, which would have been worse than 40% in the long run.
At the time, the owners, if you recall, dubbed this 50/50 offer unreasonable and ended negotiations. In fact, the one quote they grabbed indicated that the only reason the owners showed for that couple of hours is because they mistakenly assumed that the 50/50 figure was 50% of "total" revenue, which would have been close to giving them 3/4 a billion right then, and that they quickly left once they realized it was a proposed 50/50 of "all" revenue, with a new grammer that didn't include the differentiation between "total" and "all."
Most of the posters here calling this a "victory" for the owners considered this very same offer "unreasonable" themselves months ago. People were talking about how the union wouldn't budge and were driving football off a cliff. How the union would rather kill football with offers like this, and that they wouldn't give "an inch" until the NFL was finished financially and they had too.
Now it's a route.
The 8th or Judge Nelson could have sent this back to the NLRB under Norris-LaGuardia, but they will not. As Marsha Coyle wrote, a while back, on the Law Journal: Experts and other observers, however, agree the dispute will settle. "The main issue is whether it settles at a collective-bargaining table or at a table in the courthouse," LeRoy said. "If at the bargaining table, the NFL gets a good deal; if it settles in a courthouse, the players get a good deal. That's the issue."
That is the beginning and the end of this. It was decided in court, and the players have all but gotten the deal they wanted from the outset. The owners got nothing close to what they wanted at the outset, and the longer it goes on the weaker their argument that decertification was a "sham."
It may be a rational deal, as you say, but the fact that the owners are lightyears off their intial 38% bargaining posture shows how irrational that was from its inception.