On opening NFL books and the crucial $1 billion

While both the NFL and the players’ union continue to meet today in advance of Friday’s deadline for a new collective bargaining agreement, a few noteworthy tidbits have come out.

As we all know, this fight is going to come down to the owners’ request for an additional $1 billion for expenses (there is already $1 billion exempted from the 60-40 revenue split on the side of the players).

The two sides have made a little bit of progress on that front, but they are still about $800 million, according to various reports. But the Sports Business Journal reported today that the union has told the league they’re not budging one more dollar unless the NFL opens its financial books and proves it needs the money.


(To that end, the NFLPA has retained an international investment bank to help decode any documents that are turned over)

A couple of things about the owners opening their books.

First, here is Patriots owner Robert Kraft on the topic during the Super Bowl:

“If I thought that was the variable, I’d push for that. The NBA opened its books (Note: Kraft said this in a manner that it hasn’t helped that situation — it hasn’t). It’s just…I don’t want someone telling us we’re not spending enough on a marketing guy or this or that. That isn’t the key issue to getting a deal done. If it were, I’d be a big supporter of it.”

Another point: what we’re talking about with the current $1 billion or even another $1 billion has been a little bit misconstrued. Probably even the way I’ve characterized it from time to time.

The conventional language is “$1 billion off the top goes to the owners.” Like it goes into some secret stash and owners raid it for whatever they need.

Actually, the $1 billion (5 percent of the revenue) (as a reader points out this number doesn’t compute, so I’m trying to get a better answer. I have one in the next paragraph) goes directly to third parties – most of it is stadium related — and each of those expenses is not only audited but approved by the NFLPA.

(NOTE: The $1 billion is not a percentage. It’s defined by the number of credits and the cost of those credits, which is negotiated by the union and the league. So basically, it’s a list with a total of $1 billion)


And any additional credits the owners want for investment in the game (the much-talked about $1 billion) would be treated in the same manner. It’s not going directly to the owners. The NFLPA would have to approve those expenses, and every penny would be accounted for.

Of course, some of these credits the owners are requesting are a little dubious. Andrew Brandt laid some of them out and the reaction of the NFLPA at nationalfootballpost.com:

Other costs that ownership is seeking “credits” for include: practice facility construction and renovation, weight room and training room renovation, team travel, practice field maintenance, NFL Network operations and other infrastructure costs. As one exasperated union official told me, “Do they want us to pay the players too?”

Some of those can be viewed as legit where the players benefit, some are not (travel). But that’s where negotiations come in.

Not sure how opening the books helps those along on this key front, in my opinion (maybe it does), but the NFLPA’s request is reasonable. Is it essential to getting a deal done? I’m not so sure. CBAs, including the one that is about to expire, were done long before financial transparency in sports.

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