*EDITOR'S NOTE:Texans fan Alan J. Burge continues to write his "Voice of the Fan" column for HoustonTexans.com. His latest installment is below. Alan's views do not necessarily reflect the views of the organization. *
Memo to owners (and Gene Upshaw):
Don't screw up a good thing.
In the wake of the new multi-bazillion dollar NFL television contract,* *NFL owners are now arguing about how to divvy up piles of chips that would stretch from here to the moon, while many of us sit here and stare at our hefty season ticket invoices with the "pay by March 15 or else we're going to hit you up for even more" warning on it.
It doesn't seem fair does it?
In any societal structure there are the have's and the have not's. It's just a bit difficult for the average football fan to consider any multi-millionaire, much less billionaire owner to be a 'have not,' regardless of how small their local market might be.
But alas, the stalemate between the have and have-not owners over revenue sharing, and the lack of an agreement between the owners and players union to extend the collective bargaining agreement are two issues that seriously threaten the stability and livelihood of what is, for the time being at least, the most successful professional sports operation in America.
Should we care? Of course we should. It's our sport.
But we shouldn't have to get dragged through this drama.
Let us worry about draft picks, free agents, tailgate parties, wins and losses, the significance of a score of 6 on the Wonderlic, and how we're going to come up with the Benjamins to pay for those season tickets and we'll be just fine.
No, we shouldn't have to get dragged into the business aspect of the game but there's uneasiness about this one that fans haven't felt for more than a decade. It's an uneasiness that is disrupting the normal off-season rhythm of NFL fans across the country, and we don't like it.
At the heart of Issue No. 1 are the owners not being able to agree among themselves on how to share revenue between the big and small-market teams.
A quick history aside: The modern day NFL was built on the concept of revenue sharing whereby, since former Commissioner Pete Rozelle's tenure dating back to the 1960s, all teams have equally shared all revenues generated from television contracts, ticket sales and certain merchandise.
The concept of revenue sharing among teams was a brilliant idea put in place to assure competitive balance between teams based in Green Bay, i.e., small market, and those in large markets like New York.
It has worked – for the most part – until recent years when new unshared revenue streams were developed by larger market and new-guard ownership groups including Jerry Jones, Robert Kraft, Dan Snyder, and our own Bob McNair to name a few.
In the case of McNair, the unshared revenue streams (such as luxury suites, PSLs, stadium naming rights, parking and local advertising) were developed in order to offset nearly a billion dollars in debt he incurred just to join the league.
Compare that operating challenge to other owners including Lamar Hunt, Ralph Wilson, Bud Adams, and Dan Rooney, to name a few, who preside over franchises that were purchased collectively for less than what a modern day rookie contract is worth.
Owners of teams in Buffalo, Jacksonville, Arizona, and Cincinnati claim that the high revenue teams have an unfair competitive advantage because of their markets.
But why should an owner like Bob McNair, who is working (with our help) to reduce his gargantuan league imposed debt, be penalized for successfully marketing his teams and maximizing profits, by having to share every dollar with owners who have little or no equivalent debt or motivation to do any more than take their 1/32 share every year and let the chips fall where they may?
This isn't to say that all small-market and low-revenue owners are lazy and lack entrepreneurial spirit. That would be ridiculous assertion even though it's well documented that some owners are far more aggressive than others when it comes to continuing the growth of their football business. But in terms of access to corporate wealth and marketing opportunity, the larger metropolitan areas obviously have an advantage over places like Jacksonville or Green Bay.
For whatever reason, the disparity is real. It has been reported that some of the large market teams earn $100 million more per year than others. The chasm apparently is growing and it flies in the face of what Rozelle envisioned over four decades ago.
But should big market owners be forced to share all revenues that they generate?
If so, let's just change the red, white and blue NFL shield to a boring shade of socialist gray. Owners should be incentivized to be creative and find new ways to generate revenue. And they should be allowed to keep most of what they earn on their own.
The bottom line is that the owners need to get off their fat wallets and solve this thing now. The fans want to watch football, not hear about millionaires cry that Johnny won't share.
Why not put some rules in place where owners retain 100 percent of unshared revenue until they buy down their existing debt to a certain level. Or put a scale in place whereby increasing portions of that revenue becomes shared (a tax of sorts, up to some agreed-to limit, say 15 percent) as the debt is reduced.
The entrepreneurial owner's reward is that the vast majority of what they earn can stay in-house where it can be used to improve facilities or otherwise re-invest in the team. The small market owner's reward is they get another welfare check from the league every year. (If I was a mover and shaker marketing manager in a mid-market team, I would hate that idea).
But then again, I'm not an owner or a millionaire or a financial guy so what do I know…
If that wasn't enough, yet another issue threatens the NFL landscape as we know it.
Since 1993, the NFL has enjoyed a peaceful relationship with its players union but as we all are so painfully aware, the two sides have about five days to reach an agreement on an extension to the current collective bargaining agreement otherwise all heck could break loose on the NFL labor front.
Let's call this Issue No. 2.
Thursday, March 2 is the proverbial fork in the road for these negotiations, unless the start of the league business year is postponed until after the owners meetings in Dallas on March 6 and 7.
But at the time of this writing, the new league year — and free agency — begins March 3, and negotiating player contracts will become far more complex if a new agreement is not in place by then.
What's the holdup?
The main sticking point to Issue No. 2 is that the players want a bigger piece of the pie (surprise) and the owners are unwilling to give it to them. Most of the players' share of gross revenues comes from television contract money and ticket sales. Currently, the players share is 64 percent. From reports, owners and players are haggling over roughly 4 percentage points which represent about 10 million dollars per team salary per year. Here's an idea: How about meeting halfway and getting on with it?
What does no extension to the collective bargaining agreement mean?
For one thing, it means there will be no salary cap in 2007, a poison pill that was put in the current agreement by both sides as an incentive to drive them to the negotiating table.
NFL Players Association executive director Gene Upshaw has said the players have told him to "bring it on" (no cap). Some owners, including McNair, have said they are ready to operate in such an environment. But the truth is that it will be bad for both sides.
Do they even care about us?
No agreement between players and the league will dramatically affect the way player contracts can be written. A few of the highlights (or lowlights) of the consequences of no agreement:
- Prorations of signing bonuses can only be for four years instead of seven making it more difficult to sign or re-sign high salary players.
- Not-likely-to-be–earned incentives will count entirely on the 2006 cap as they are realized instead of pushing them out to next season. Meaning that a player who has a $250,000 incentive in his contract (for example) who achieves that incentive in say, Week 11, will require that money to hit the cap immediately instead of the following season. In a worst case scenario, one player might have to be cut to accommodate another's incentive.
- The practice of releasing high-priced veterans on June 1 for the purpose of spreading the money to the following year's cap would no longer be allowed. This requires teams to budget even more space under the cap this season to deal with cap casualty players.
- There would be no high or low limit on payroll. Meaning top players will get exorbitant amounts of cash but experienced mid level players will no longer have guaranteed minimums, meaning they might have to work for the same money as a rookie.
- The 30 percent rule. Players' salaries could not increase by more than 30 percent per season meaning contracts have to be more front loaded and more guaranteed money paid up front to the player for new contracts written in '06. Many players will demand one year deals, making contract negotiations even more difficult.
- Contributions by the league to the player's pension fund and other retirement benefit funds would cease.
- The players union could be decertified and a strike or lockout could occur after the 2008 season.
Is that enough?
Even though it's only a remote possibility at this point, we don't want to read about strikes and lockouts. We would rather not even know what an uncapped year means. We don't care about threats to decertify the union, and what it might do to our game, especially when we know that the league is wallowing in cash – and a lot of it is ours.
Some of us remember the strikes in 1982 and '87 and we weren't real happy then either. We don't really want to watch scab players or the CFL. We also don't want to witness the makings of a ready made script for The Replacements II, even though our GM would probably say "Hey! We've done it before, we can do it again."
Yeah, let's just roll in Keanu Reeves and the cute cheerleader and away we go. I don't think so – Homey doesn't play that no more.
Seriously, the differences between the players union and the owners seem far less difficult to overcome than the revenue sharing differences between the owners.
Upshaw has been saying for weeks that the owners need to agree on revenue sharing before a deal can be struck with the union. Many owners disagree, saying that the two issues can be resolved separately and not in any particular order. Who knows? Just quit arguing already, lock yourselves in a room and don't come out until it's finished.
Whatever you do, don't screw this up for the ones who pay the bills. That would be us, over here ….. you know, the fans?