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 No Work Stoppage. Salary Cap in Place for 2008 and 2009 Seasons
As expected, the NFL officially notified the NFLPA that the owners have opted out of the current collective bargaining agreement. The vote was unanimous. The owners extended the CBA in March of 2006, which could have continued through the 2012, but had the option to opt out of the agreement by November of this year. The NFL released the following statement: Even without another agreement, NFL football will be played without threat of interruption for at least the next three seasons. The 2008 and 2009 seasons will be played with a salary cap. If there is no new agreement before the 2010 season, that season will be played without a salary cap under rules that also limit the free agency rights of the players. If not extended, the agreement would expire at the end of the 2010 league year. A collective bargaining agreement has to work for both sides. If the agreement provides inadequate incentives to invest in the future, it will not work for management or labor. And, in the context of a professional sports league, if the agreement does not afford all clubs an opportunity to be competitive, the league can lose its appeal.  The NFL earns very substantial revenues. But the clubs are obligated by the CBA to spend substantially more than half their revenues – almost $4.5 billion this year alone -- on player costs. In addition, as we have explained to the union, the clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans. The current labor agreement does not adequately recognize the costs of generating the revenues of which the players receive the largest share; nor does the agreement recognize that those costs have increased substantially -- and at an ever increasing rate -- in recent years during a difficult economic climate in our country. As a result, under the terms of the current agreement, the clubs’ incentive to invest in the game is threatened. There are substantial other elements of the deal that simply are not working. For example, as interpreted by the courts, the current CBA effectively prohibits the clubs from recouping bonuses paid to players who subsequently breach their player contacts or refuse to perform. That is simply irrational and unfair to both fans and players who honor their contracts. Also irrational is that in the current system some rookies are able to secure contracts that pay them more than top proven veterans. Our objective is to fix these problems in a new CBA, one that will provide adequate incentives to grow the game, ensure the unparalleled competitive balance that has sustained our fans’ interest, and afford the players fair and increasing compensation and benefits.
NFLPA executive director Gene Upshaw had been expecting the owners to opt out, and said so in his weekly “100 Words†address yesterday: The NFL owners will hold their spring meeting in Atlanta this week. One of the issues surely to be discussed is the timing of the early termination notice of the CBA. We should expect a notice to be given to us following this meeting. The notice will have no material effect on the players. It only means the CBA will end after the 2010 season unless an extension is negotiated. With all the talk about early termination, it will be good to get this issue behind us since all the owners have done since signing the 2006 agreement is complain.
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Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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