Business

NFL clubs and players extend deadline for agreement

  • 4 March 2011
  • From the section Business
The NFL Experience show in Dallas
Image caption The NFL is a multi-billion dollar business

National Football League (NFL) team owners and players are to take an extra 24 hours to try and resolve a row threatening to cancel the 2011 season.

The NFL is one of the richest sporting series in the world, with annual revenues of about $9bn (£5.5bn).

But the players union, the NFLPA, is in dispute with the owners of the league's 32 teams over working arrangements.

The talks cover wages, drug testing, pension benefits, and plans to increase regular-season games from 16 to 18.

Under a collective bargaining agreement (CBA) that has been in force since 2006, the first $1bn of the league's revenues goes directly to the franchise owners.

The rest is split between the owners and the players, with the players taking a share of roughly 60%.

But that deal expired at midnight on Thursday, with efforts to draw up a new agreement so far proving fruitless.

'Brutal' game

For the past fortnight, the two sides have been taking part in a formal federal mediation process in an effort to settle their differences.

The owners claim that the existing deal is too generous towards the players.

They want a further $1bn set aside for themselves before the remainder is shared out. It's a proposal which has received short shrift from the players themselves.

Although the talks also include issues such as health benefits, pensions and plans to extend the NFL's regular season, it is clear that the revenue-sharing plan is the main source of conflict.

"Players believe they've earned their money, that they play a brutal and dangerous game and that they've earned their rewards", says Michael McCann, a sports law expert at Vermont Law School.

"Owners believe that the game itself is in a precarious spot - that if the players don't give up some of their earnings, it will no longer be economically sensible for teams to exist and for owners to keep those teams."

'Decertify'

If a deal cannot be reached soon, then the consequences could be severe.

As a starting point, the owners are expected to impose a lockout, effectively paralysing NFL business and depriving players of pay and benefits.

Meanwhile, the NFLPA may decide to "decertify", effectively renouncing its status as a union and becoming a trade association instead.

Image caption This year's Super Bowl broke broadcasting records

This would ensure that arrangements made in the past through collective agreements between the union and the NFL would no longer be immune to competition law, and could be challenged in the courts.

Such arrangements are central to the way the NFL works.

They include the salary cap, which limits the amount clubs can spend on wages, and the draft system which ensures the weakest clubs have first refusal on the best players coming through the college system.

These measures mean that the richest clubs cannot simply buy up all the best players, and ensure that the league remains competitive.

But in the absence of a collective agreement, they could be deemed illegal, and expose the NFL to potentially damaging lawsuits.

The new NFL season is not due to begin until the autumn.

But already there are serious concerns that a drawn-out dispute could lead to games being cancelled, and damage the credibility of the league.

"It would be a mistake to cancel the season," says Professor McCann.

"There's a market here. If the NFL isn't playing games, other sports will enter the picture.

"Major League Baseball, the National Basketball Association, even major League soccer would benefit by the NFL not playing games."

Billionaires v millionaires

Meanwhile, President Obama has called on the two sides to see reason.

"We've got owners, most of whom are worth close to a billion dollars. You've got players who are making millions of dollars", he told a press conference at the White House

"My working assumption is that at a time when people are having to cut back, compromise and worry about making the mortgage and pay for their kids' college educations, the two sides should be able to work it out - without the president of the United States intervening."

If a deal cannot be reached, it would mean empty stadiums and blank TV screens when the 2011 NFL competition is scheduled to restart again on Thursday, 8 September.

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