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NFL American football faces post-Super Bowl challenges

04 February 11 00:05
NFL action
By Bill Wilson
Business reporter, BBC News

The razzmatazz of the the NFL Super Bowl moves to Texas for only the second time this Sunday.

The citizens, businesses and traders of Dallas may be rejoicing at playing host to the AFC champions Pittsburgh Steelers versus the NFC champions Green Bay Packers.

But a potential storm cloud is on the horizon, as a crucial financial deal between NFL club owners and players for the coming years has to be concluded.

It is all about a "collective bargaining agreement" (CBA), which covers the financial framework of top-level American football, a thriving, multibillion-dollar business.

On 4 March, the present collective bargaining agreement between the NFL and its players expires.

If an agreement cannot be reached, there is the possibility the club owners could lock out the players from their stadiums and facilities and shut down the game.

That would mean empty stadiums and blank TV screens when the 2011 NFL competition is scheduled to restart again on Thursday, 8 September.

Any "lock-out" could remain in place until the owners get what they feel are better terms and conditions from their point of view.

More games?

The owners say that current costs outpace the NFL's revenues, and want to see a "rebalancing" between what they pay out in salaries and what their guaranteed revenue streams, such as from TV or ticket and corporate sales, bring in.

Currently, the players get about 61% of the NFL revenue, which reports have put at as high as $8bn (5bn) a season.

Clubs also believe the wider NFL landscape has changed since the 1980s, the last era of industrial unrest in the game.

They, not the players, have paid out on new stadiums - such as in Dallas where the new Cowboys stadium can hold more than 100,000 people - to ensure that revenues continue to flow in to the sport.

At the same time, the owners want to see the regular NFL season, which currently lasts for 16 games, expanded to 18.

This would not mean more games, though, as two of the current four pre-season friendly matches would be turned into regular season games.

Economic impact

The players, and their representative body, the NFLPA players' association, point to the boom in popularity of the NFL and consequently in its revenues, which they, as the entertainers, have helped to grow.

And without these star professional players, of course, there would be no top-notch NFL on-field product.

They also say the NFL, which has seen booming revenues since 2006 according to Forbes business magazine, risks losing the fans that have driven the sport to all-time high levels of popularity if there is a lock-out.

And they assert that if such a move goes ahead there would be an economic impact across the US, not only in the sport, but in individual cities that host NFL football.

For the past year, the looming dispute has been played out against a backdrop of differing law cases between the NFL and NFLPA, as each seeks the most advantageous legal platform ahead of any shut-out.


After two player strikes in the 1980s, the two sides came together to sign a collective bargaining agreement in 1993.

That has since been re-signed five times, most recently in March 2006 when it was extended until the 2011 season.

But in May 2008, the owners decided to opt out of this agreement and the 2010 season, about to end on Sunday, was played without a bargaining agreement in place.

That meant the 2010 season has been played without a salary cap, one of the major components of collective bargaining deals.

TV money

If there is a lock-out it appears that the clubs are better placed to survive than the players.

For, even though the club owners will not have revenue streams from things such as sales of tickets and merchandising, neither will they have to pay out large salaries to star players.

However, crucially, it appears clubs may still receive the money they get from lucrative television deals, even though no games are being played.

When any lock-out is over, the clubs could theoretically then recompense the TV channels by, for example, allowing more games to be televised in future seasons.

Meanwhile, any lock-out could end the careers of players aged over 30.

And, of course, they will not be paid while they are not working.

Meanwhile, supporters would be unable to watch their favourite teams play, either in the flesh or on TV, and could turn to rival sports such as basketball, ice hockey or baseball.

Fair shares

The upheaval comes in a sport whose business model is very different from that familiar to fans of European team sports.

The National Football League is a closed shop, which has been dubbed "socialist capitalism".

There are only 32 professional football teams in the US and there are strict rules about who can own a team.

Every year they get to split up a huge amount of TV money, so there is no large gap between the richest clubs and the smallest clubs.

This distribution means each year any team can theoretically have a chance of winning the Super Bowl.

That compares with other global sports leagues where rising player salaries have seen the top players gravitate to the bigger clubs as they are the only ones that can afford their wages.

NFL salaries are limited by a centrally set budget, with every team set on the same salary cap, making it impossible to buy your way to the best players.

But that may all be academic for now if agreement cannot be reached by early next month.

It means Sunday's showpiece event may be the last time fans get to see their star players in action for some time, while players and owners indulge in their own off-the-field games.

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