There are rumors floating around of a possible National Football League lockout that could possibly come as soon as the 2011 season. While having a talk with players DeMaurice Smith, NFL Players Association executive director said a lockout is very likely.
“On a scale of 1 to 10, it’s a 14,” Smith said on ESPN.
However NFL commissioner Roger Goodell says otherwise.
“You don’t make money by shutting down your business,” Goodell said on Sirius NFL Radio.
The NFL has a salary cap. This means teams have to pay at least $86.4 million in salaries and could give out as much as $116.2 million to players. Most of the money for player’s salaries comes from national TV contracts. There is no cap on coaching, scouting and other staff.
It was thought that the league would have a new deal by the end of July.
But that didn’t happen.
The length of a contract and money are the two main factors behind the delay in reaching a new agreement. The NFL prefers a short-term agreement of two years, for the 2009 and 2010 seasons.
The NFL’s collective bargaining deal with the players also ends this year and there is no salary cap. Yet a national TV deal has been reportedly made.
The difference between high revenue and low revenue teams is the result of local radio contracts and local sponsorship dollars.
Teams that are more popular and successful tend to charge more for tickets but smaller market teams make less sales but still make revenue sharing on tickets sold.
For example, economically, Detroit may be in for a horrible football season especially due to a very high unemployment rate there and the potential of General Motors going bankrupt.
Goodell has taken a 20 percent pay cut and the league has laid-off 169 employees due to the recent economic recession. The NFL put out a recent statement saying, “It will continue to take collective sacrifice to get through this challenging economic environment, but these and other steps by our office and clubs will enable us to be more efficient and better positioned for future growth.”
Some players are preparing for what’s to come. Many are being urged to save 25 percent of their salaries.
“We’ve told them, ‘don’t go out and buy a new boat. Don’t go out and buy a new car. Pay off whatever debts you have,'” said Indianapolis Colts center and player rep to ESPN.
“These are things we’ve been learning from history,” he said.
Photo: At left, NFL Commissiner Roger Goodell shown at Sun Life Stadium in Miami. At right, DeMaurice Smith, Executive Director of the NFL Players Association, speaks during a House Judiciary Committee hearing. (AP Photo/File)