Is the end of the salary cap era upon us?

My quick editorial on the salary cap, the current CBA, etc: I love it. This is a strange position for a Redskins fan, since there are few, if any, franchises that would benefit more from an end to revenue sharing. The Redskins are currently 2nd on the Forbes list of most valuable NFL franchises , in virtue exclusively of the Cowboys' new stadium. At 312M in revenue last year, the Redskins are over 50M richer than the field. The team's 60M operating income is likewise tops in the league.

So why do I love it? I think the NFL as a whole benefits from a system the fans believe encourages and equal field of play, and what is good for the sport is good for the Redskins. I don't want to overstate either the point or my knowledge of it, but I wouldn't be the first to attribute the NFL's successful growth since the 1993 CBA to that agreement. The reasons that a business entity as large and complex as the NFL cannot logically be attributed to simply one aspect of the game, though growth milestones exist. An example from a year ago:


As the 86th season of the NFL comes to a close, how does it compare financially?
Over the past three-to-five years, this business has had double-digit year-over-year growth, much of it driven by very strong relationships with our broadcast and cable partners. We have renegotiated all of our television packages in the past year, save one — the Thursday/Saturday package — and the increase in the average annual rights fees is now 42 percent over the last deal. And if you exclude TV, the other pieces — licensing, international, and sponsorships — have enjoyed 34 percent year-over-year growth over the past three years.

Of course, you can't yield the money from broadcasters if they don't believe there are people to be broadcast at. The rhetoric on NFL growth is typically complex and way over my head (I have no background in economics) but every fan understands their role in the process, as we're the consumers of the product and, thus, the spenders that drive the business. In other words, the NFL grows as the amount of people watching grows.

Chris Cooley gets it:

It's unfortunate to me that there are owners who choose not to acknowledge why their team makes money. Two reasons: fans and players. Fans want to see great athletes compete. Fans don’t give a shit who is paying for the team, they just want a team. As a kid my idol was John Elway and the Broncos were my team. I watched closely as John led miraculous comebacks week after week. I cried when they won the Super Bowl. I could have rattled off the entire roster in numerical order yet one person that would not have come to mind, the owner. Taking this a step further, as a current NFL player, I couldn't rattle off more than 6 or 7 current owners.

The subtle point he's trying to make is that owners benefit from things that fans like, and fans like competetive football. That doesn't mean there aren't fans out there who would do away with the CBA, it just means that the league will suffer once we reach the point where fans believe or have good reason to believe that money talks on the field. As much as I'd love a Redskins dynasty formed of 10 consecutive Super Bowls as a result of our vast economic advantage over the other 31 teams, that would effectively kill the sport outside the District. People wouldn't care about Football if it were widely believed that the only thing that mattered was the money.

Fortunately, even with the end of the CBA, that probably would never be the case for two reasons, both stated elegantly by Jason La Canfora at Redskins Insider. First, even if the owners opt out of the CBA between now and its expiration, that might only be temporary:

Well, for one, the current CBA that is supposed to run through 2013 would now cease after the 2011 season, and, as such, the 2010 season would be uncapped. But don't get too excited. Sure, Joe Gibbs would go on and on about how that without that pesky salary cap Dan Snyder would no doubt buy a dynasty, but even if the owners opt out today, that uncapped year is far from a certainty.

An early opt out most likely will be the first step towards an early return to the bargaining table as both sides try to has out a new CBA. And that process - again, giving both sides the benefit of the doubt - could very likely result in a new labor deal well prior to 2010. A resolution like that would negate the uncapped year. (I see the process unfolding in this manner).

In the scenario Jason describes, the ending of the CBA is simply the catalyst for negotiating a new one. The vast majority of the owners recognized the importance of the CBA when they extended it in 2006 (only Buffalo and Cincy voted no -- small market teams curiously working against their interests, more on that in a moment). The disagreement, I believe, is over the terms of the CBA, not over its philosophical base. Owners are aware of the growth the NFL has experienced since the CBA was agreed to in 1993 and extended in '98 and '06, and although that correlation doesn't mean the latter caused the former, it is a strong argument for supporting a status quo that has shown financial signs of success.

The second point Jason mentions, and the one that is ignored by fans like me who frequently hyperventilate at the possibility of an end to the CBA era, is that even in a league where money talks more explicitly than the current system, that doesn't mean money wins:

Now, from a Redskins perspective they would undoubtedly be heavy spenders - they've already spent $40 million more on players since 2000 than any other NFL team - but no cap hardly ensures the richest guy wins. Pro sports ain't that simple.

Throwing globs of money at players without a cap would allow you to purchase some serious depth, perhaps, but chemistry and front-office acumen and cohesion and leadership has never been for sale to the best of my knowledge. Watching that off season leading up to an uncapped 2010 season sure would be an interesting socio-economic experiment if nothing else. It would be a novelty for this generation of players, and a good portion of the owners as well.

In other words, there's a lot going on on a football field that leads to winning, and money just happens to be one of a multitude of factors. Good, poor owners will do better than bad, rich ones. All things equal a team would prefer more to less money but all things are never equal.

Jason does not some urgency with the CBA, as he hypothesizes (and I've heard it elsewhere before) that once the owners play without the CBA, they won't ever go back. Essentially: if the CBA era ends on their watch, it will end forever. Forever seems like a long time to predict, but since that's the conventional wisdom I'll happily buy it. With that being the case, I really do hope the owners get their collective act together and extend the CBA.

So why is the CBA doomed? Says NFLPA President Gene Upshaw:

We met with NFL negotiators last Thursday in New York. Attendees included owners Jerry Richardson and Pat Bowlen, the League’s financial team and its new outside attorney, Bob Batterman. The NFL discussed the 32 teams’ financial condition and how the CBA has caused every club to lose money. They are attempting to gather financial information to share with the NFLPA. We made it clear that we are willing to discuss their financial condition, but we cannot expect our players to embrace the NFL’s position without the owners providing audited financial statements. This is just the first step in the process.

Caused every team to lose money, huh? Well they'd know better than I would, but, as above, logically I doubt any team owner could possibly know that, as it would require reaching into the heart and mind of every NFL fan to find out what it is that makes them watch and pay. As a practical matter, the average value of all 32 teams increased last year, so when they say the CBA is making them lose money, they don't mean it literally. Rather the claim would necessarily be they could be making more money but for the CBA, which I find dubious. In any event, Upshaw called the bluff, and I'd be interested to see why and how their calculations conclude that the CBA is limiting franchise growth.

A good clue as to why the owners have soured on the CBA may come from evaluating the stated reasons why exactly two of thirty-two owners were against its extension two years ago. Buffalo's Ralph Wilson provided this nuanced explanation for his vote:

"I didn't understand it," said Buffalo's Ralph Wilson. "It is a very complicated issue and I didn't believe we should be rushing to vote in 45 minutes. I'm not a dropout ... or maybe I am. I didn't understand it."

Ok, maybe not... Wilson's confused take on the last extension is confusing for its mere existence; of all the owners who should've been willing to pony up to the CBA, he's the guy. As per the agreement, the 15 richest franchises pay the 17 poorest and not the other way around. Among the 15 richest: Washington Redskins. Among the 17 poorest: Buffalo Bills. Total sharing (just one provision of the CBA) cost owners (ie: the ones sharing) nearly one billion dollars over the next 6 years. That's a subsantial transfer of wealth towards teams like Buffalo from teams like the Redskins. More from the article:

The crux of the debate over the last few days has centered on revenue sharing and the disparity between high- and low-income teams. Low-income teams such as Buffalo, Cincinnati and Indianapolis say that high-revenue teams -- Dallas, Washington and Philadelphia, for instance -- should contribute proportionately to the player pool because they can earn far more in non-football income such as advertising and local radio rights.

Those high-revenue teams might contribute only 10 percent of their outside money compared with 50 percent or more for low-revenue teams.

"Some teams are contributing a little more than others," Redskins owner Dan Synder said. "This is really a win-win."

My concern is that the current dispute has less to do with sharing and more to do with the amount of money the players are guaranteed, but there are 32 different owners with 32 different opinions on a myriad of topics covered by a hypothetical extended CBA. Simply put, there are a lot of opportunities for these rich men to disagree with one another.

Who knows how this thing will play out? (I hope reader(s) think they do; I'm soliciting your opinion.) I hope the owners get all their individual concerns worked out in the best interests of the league and extend this thing. The CBA era in football is the one I'm most familiar with, and I know that huge NFL growth can occur under it. I say: why mess with a good thing?

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