NFL Lockout Summary

With Superbowl XLV now in the record books, fan interest has shifted off the field. Football is over and, while fans are ready to deal with their annual half-year sabbatical from the sport, no one is ready to face another all too possible scenario: a 2011 NFL lockout. Today is February 10th and, if the NFL and the Players Association (NFLPA) cannot come to an agreement within the next three weeks, there may well be no football for at least part of the 2011 season. So, with that in mind, let's take a look at the sticking points in the negotiations between the NFL and NFLPA, the chances of a work stoppage, and the possible consequences of an NFL lockout.

The possibility of a lockout was first raised back in 2008 when the NFL owners decided to opt out of the Collective Bargaining Agreement after the 2010 season. At the time, few took the possibility seriously because the NFL was (and remains) the most popular sport in America, enjoyed robust annual revenues, and was still growing its fan base. Everyone thought the two sides would rapidly come to an agreement for the good of the sport. However, this optimism was dashed as 2008 and 2009 came and went without an agreement…or even serious negotiations. Gradually it became clear that the two sides' positions were simply too far apart and there were a number of sticking points that inhibited the organization's ability to compromise.

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What are those sticking points? From the NFL's perspective, the players receive too large a share of league revenues through salaries and benefits. Salaries increased exponentially during the term of the recently expired CBA and, despite the fact that each team remains profitable, those annual profits are shrinking and small-market teams will soon be in the red if current trends continue. For example, the iconic small-market Green Bay Packers franchise, which remains the only NFL team to publicize any significant portion of its financial accounting, posted net annual profits in excess of twenty-five million back in 2006. Despite better on-field performance (and consistent sellout attendance) since, the Packer's annual revenue shrank to less than ten million in 2010. From these small team's perspectives, something had to give. On the other hand, players continue to insist that the recently expired CBA accurately reflected the fact that they take all the risks in the sport and should, therefore, continue to receive more than fifty percent of revenues in any future agreement.

The second major sticking point concerns the possible expansion of the NFL season to eighteen games. Both the NFL hierarchy and several individual owners have repeatedly asserted that additional revenue from two regular season games might be enough to prevent some of the otherwise needed cuts to player salaries and benefits. However, the Players Union rejects these claims and states that, on top of being hypocritical by stressing player safety but opening the players up to two more games worth of potential injuries, an eighteen game season would shorten careers and decrease the games' quality in the playoffs. Therefore, the NFL wants a longer season and salary cuts while the Players Union would like neither and would never sign an agreement that includes both sticking points. These are the key reasons a lockout could happen.

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So, is there a chance that the two sides will move past these problems within the next three weeks? Yes, it is certainly possible. The NFL Players Union has stated that it would agree to an eighteen game season if post-career benefits were increased, roster spots added, and a new bye week included in the season. While these additions would sap some of the revenue increases from the two additional games, a compromise along those lines is very possible. In terms of salary cuts, the Players are not prepared for a lockout and will likely be willing to compromise and agree to a minor cut as long as they continue to receive fifty percent or more of league revenues.

Moreover, both sides know that a NFL lockout would be financially costly and could set the games' growth back for years to come. It took Major League Baseball a half decade to recover from the 1994 strike. Indeed, some would say it never recovered since the NFL took over baseball's position as the country's most popular game sometime in the late 1990s. NBA basketball has not been the same since Michael Jordan retired and the league suffered the 1999 lockout; two unrelated events that both irreparably damaged the sport. Even though NBA viewing is up in recent years, more than half of the NBA's teams have been losing revenue for most of the last half decade and the sport has never regained the spot in the national consciousness that it enjoyed in the 1980s and 1990s. It has settled in as a solid third sport in terms of fan interest but few would describe it as “electrifying” or “amazing” (to use the league's own tagline) anymore. Even the National Hockey League suffered from its 2004 lockout; long a second tier sport, the NHL could not even negotiated a broadcasting deal with a major cable channel after the crisis and settled for Versus. Therefore, while a punishing lockout may be a tempting option to NFL executives, historic, empirical evidence suggests that both sides would be well served by compromising and coming to an agreement.

Of course, any NFL lockout analysis has to recognize that people don't always do the smart thing. Both the NFL and NFLPA are wealthy, powerful, and stubborn organizations that have a bone to pick with one another. Will they come to an agreement? We'll see. And the entire football-loving population will wait with baited breath.

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