"As It Heads For Labor Showdown, NFL Shows Collective Bargaining Leads To Shared Prosperity"
Another National Football League season ended yesterday — with a 31-25 Green Bay Packers victory over the Pittsburgh Steelers in Super Bowl XLV — and it’s a distinct possibility that next year will be a year without professional football. The NFL’s owners have opted out of their collective bargaining agreement with the NFL Players Association, in the first step toward a labor lockout.
In 2006, the collective bargaining agreement was extended for six years by the owners, but they used their opt-out option just two years later, in a gambit to have the deal renegotiated. The owners’ beef is that NFL players currently receive 59 percent of the league’s revenue, which is slightly higher than players in other major professional sports.
“Clubs must spend significant and growing amounts on stadium construction, operations, and improvements to respond to the interests and demands of our fans,” the owners wrote on the league website, in an attempt to justify their desire to renegotiate the collective bargaining agreement . “As a result, under the terms of the current agreement, the clubs’ incentive to invest in the game is threatened.”
However, a closer look at the data shows that the current collective bargaining agreement has been a win-win for players and owners alike, as the growing popularity (and therefore revenue) of the game translated into broadly shared prosperity. David Madland and Nick Bunker ran the numbers:
Players have done quite well under these terms, with the median NFL salary in 2009 equaling $790,000 a year, according to data provided by the National Football League Players Association. Since 2000, the earliest year with data available, we calculate that the median NFL player salary increased by 79 percent, and since signing the 2006 extension, median player salary has increased by 9.4 percent, meaning that player salaries have increased even during very tough recession years.
Similarly, the owners have done quite well under the current agreement, despite their claims to the contrary. Since 1999, the year Forbes magazine started to value NFL franchises, the average franchise value has risen by 171 percent, so that by 2009, the average franchise was worth $1.04 billion — with 19 of the 32 franchises valued over $1 billion — according to Forbes’s annual “Business of Football” valuations. Since 2006 when the current CBA was signed, the average NFL franchise value has increased by 16.2 percent, a growth rate that is faster than the median player salary increase.
Of course, a lockout not only affects the players and the owners, but the local economies around where the games are played.
As Atrios wrote, “liberals should care and side with labor, even if some of the players do make a lot of money. This is about how the pie gets split, and that matters even if it is a really big pie.” Even if no games are actually played next year, the NFL owners will still receive millions of dollars in guaranteed money from their television contracts.