Tuesday, February 21, 2006
Please Mr. Tagliabue Git-R- Done…..
As most of you already know the NFL is reaching a critical point with the Collective Bargaining Agreement. The first real problem starts March 3, 2006, which is the Free Agency Period. This date could either be pushed back till April 01, 2006 or teams will have to cut some pretty heavy losses due to inflated salaries. If the CBA is not reached by the March 03, Deadline; Here is why and how things are going to happen if no CBA is reached. The collective bargaining agreement expires in 2008, not 2007 like I first thought. 2007 is an uncapped year.
The NFL Players Association and owners do not want the CBA to expire (we will get to why later) So they built incentives into the current CBA to encourage negotiations. The incentives include the uncapped year in 2007 and a nightmare transition year in 2006 (this year). If no deal is done by March 3, the NFL, as we've known it since the cap started in 1993, won't be the same. If a new deal isn't worked out, NFLPA executive director Gene Upshaw said the union will proceed to the uncapped year in 2007 and not look back. That will make pro football the first sport to lose a salary cap.
The NFL is currently a $6 billion business and is expected to hit $10 billion by 2010. The teams currently get 64% of designated gross revenues. Teams at the top of the revenue list don't want to share their profits with the lower revenue teams. Heading the list of high-revenue teams are the Dallas Cowboys, Washington Redskins, New England Patriots, Houston Texans (yes Texans, I was surprised too, however they are a new team with a new stadium) and Philadelphia Eagles. The problem is it only takes eight votes to block any deal such as a CBA, If the owners prevent a deal from getting done and it could cost the league the salary cap. The owners are standing strong against each other on the topic of revenue sharing. The revenue differences in a league that made its success by sharing has grown apart. A top team such as the Redskins can make between $200 million and $240 million in gross revenues and that number should grow to $300 million. The lower-revenue teams are in the low $100-million range. What the high revenuers are hoping is that the union would do a deal without revenue sharing. This can’t happen because the league can't have a top revenue team pay 35-40 percent of its revenues on payroll while a low revenue team pays 70 percent.
How does this affect this 2006 season? Normally, incentives have to be earned during the season and are posted on the next year's cap. Teams have to leave room for the extra charges and that will take anywhere between $100 million and $150 million of cap room out of the free agent pool. With less room, fewer free agents will get big dollars, and fewer free agents will be signed. Another problem is the 30-percent rule for base salaries. Any contract that extends into an uncapped year limits the increase of a player's base salary to 30 percent a year. That kills the teams over the cap because they can't negotiate simple replacement deals in which they replace base salary with signing bonuses. The base salaries can increase only 30 percent a year so teams would have to negotiate two or three years of reductions. It will be harder for teams to free up money under the cap because of that.
Another big problem facing this year is draft, there is even reports that if the CBA does not get reached by March 03, there may be no draft in 2006. Here is why: Signing draft choices will be more difficult because teams can prorate signing bonuses for only four seasons. Already, agents figure the most a top draft choice can make under that scenario is $15 million, a major reduction from recent years. That leads to long holdouts by draft choices. The real problem comes from the teams themselves, because all the caps hit this year due to the uncapped 2007 season many feel there will be no money to even sign a rookie this season. I also found out that in 2008 there will be no more NFL draft, which is part of a clause inserted in the current CBA. To get players out of college, it could be open negotiations. Minimum salaries for all players will be eliminated in 2007, so every contract, including those for rookies coming out of college, has to be negotiated individually and those players get what they can get.
The real bad news is that 2008 more then likely will be another NFL strike or owners will lock out the players. Which will piss off the networks, who invest over $100 million a year in rights fees.
Here is why the players due not want the CBA to end: They will lose some protection. Even though it's more of a procedural thing that has to do with antitrust laws, the union will go out of business if there is no CBA. That will cause uncertainty for the players. Teams can change and cut down the benefits package that players receive, which is considered the best in sports. With no structure, teams can pay young players below the current minimums of $235,000, $310,000 and $385,000 a year.
Normally players hit restricted free agency after three years and unrestricted free agency after four years under the current rules. If no CBA agreement is reached this year, players won't begin unrestricted free agency until after their sixth year. This could be good or bad. For the Buccaneers if there was no CBA we would never have lost Sapp or Lynch, but we never would have gotten Keyshawn and Keenan McCardell, Michael Pittman, Brad Johnson, so we may have never won a Super Bowl. If there is no CBA, teams like Houston and the Jets could not rebuild and compete next season.
This is in no doubt a mess, I pray and I do believe that an agreement will be reached, but if not the NFL we all love and enjoy will be over and a new NFL era starts.