More information on why talks broke down

The negotiation situation between the owners and NFLPA is far worse than I even thought this morning based on this report from ESPN.com. Essentially talks broke down yesterday when the union 'flipped the script' on the entire negotiation, and both sides took a step back from even what they'd previously agreed to.

As it stands I think this situation has gotten so colvoluted, with so many different terms being thrown around that I want to attempt to explain the impasse as simply as possible and without rhetoric one way or another. I will attempt to tackle this...

After the jump

When the last CBA was signed in 2006 this is the way revenue was divided: 

- $9 billion total to divide

- $1 billion was divided between all 32 NFL teams

- The remaining $8 billion was divided in a 60/40 split to the players

This meant that when you do the rudimentary math the players as a whole made $4.8 billion and the owners made as a whole $4.2 billion. The reason for this firm $1 billion number was to protect the owners somewhat. If attendance was vastly effected, if the league fell into catastrophic issue at least every NFL team had a buffer of roughly $31 million to pay staff, keep stadiums maintained etc.

 

Fast forward to today and the owners are saying they gave up far, far too much in the 2006 CBA that meant the players were getting more than the owners. Here is what they are asking for today (assuming the same $9 billion to split): 

- $9 billion total to divide

- $2 billion to be divided between all 32 NFL teams

- The remaining $7 billion would divided in a 58/42 split to the owners

This is a substantial change that represents the players as a whole getting $2.94 billion and $6.06 as a whole going to the owners; and this is the impasse.

The owners claim that rising expenses in player salaries, stadium maintenance, inflation as a whole, advertising... everything means that their operating fees (that first $2 billion split) need to be higher. From there the remaining revenue (the 58%) would help them grow and sustain their business.

The NFLPA originally said they would not consider allowing the owners to up their operating fee to $2 billion until all 32 owners opened up their books to show how much they are spending and earning. The owners refuse to do this.

So that was (until yesterday) the impasse in a nutshell. So what happened yesterday? 

According to the ESPN report the union entered yesterday's meeting with a counter offer: That they would not need to see the owner's books, and they would take a revenue split down to 49/51 to the owners... however, the kicker was the owners would have no operating fees; not the $2 billion the owners wanted and not even the $1 billion the owners had in 2006- nothing.

This would have made the revenue split $4.41 billion to the players and $4.59 billion to the owners.

See the problem with this? The 2006 CBA, the one the owners believed was broken had the players getting $4.8 and the owners $4.2... the union's new proposal took only a slight cut, while giving the owners only a slight boost and taking away their safety net in the event of catastrophe.  

----------

My opinion on the issues: The NFLPA are out of their depth and don't have a clue what they're doing.

At this point it became like a child saying "I want three cookies" then a parent saying "No, two cookies" to which the child said "Okay, how about four cookies?" 

The negotiations are moving backward now, not forward and whatever positive elements had been gained were lost. Roger Goodell cancelled next week's meeting with the owners because (in my belief) there's nothing to say. This proposal by the union is so far away from where it should be that it's not even worth discussing.

We can argue 'who makes the league' until the cows come home, but in the end there's only one of these two parties who has any financial risks to endure... the owners. Teams have to eat costs on misjudged contracts, stadium maintenance and building, marketing, ticket sales, TV deals, blackouts... everything. The players don't make 50% less if they're playing so poorly that nobody buys tickets, but the owners have to eat the costs.

Looks to me like this situation is so far from being over that we need to prepare for a long wait until we see football again.

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