There is a reason why NFL commissioner Paul Tagliabue is so highly regarded among his peers. There is a reason why New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones are known as consensus-builders, and there are 30 reasons why the NFL has a new Collective Bargaining Agreement and six more years of labor peace.
On Wednesday night, NFL owners voted overwhelmingly for the extension by a 30-2 margin. The NFL still remains the only American professional sports league not to have faced a work stoppage in the past 15 years. Reaching any sort of consensus among this group of 32 owners was far from easy. Free agency, set to begin on Mar. 3, was pushed back twice due to CBA negotiations.
But in the end, credit must go where credit is due, and that is with the high-revenue teams. When the last NFL CBA was inked in 1993, local revenue was a trivial factor, as players were entitled to a certain percent of the league's total revenue. Most of this money came from television profits and ticket sales and did not include stadium-naming rights, luxury-box sales, and local radio rights, all of which generated little revenue.
But local revenue has increased greatly in the past decade, and the issue has created a divide in the NFL between the league's big moneymakers and the rest of the teams. Wealthy franchises like the Patriots, Cowboys, and the Philadelphia Eagles, who benefited tremendously from the increase, see the money as fruits of their own hard work and fan bases and believe it shouldn't be added to the league pot of shared money.
Owners like Wayne Weaver of the Jacksonville Jaguars and Dan Rooney of the Pittsburgh Steelers, who generate almost $100 million less in local revenue than the Big Three, argued that revenue-sharing that excludes local money wasn't revenue-sharing at all. Wilson and Weaver argued that allowing teams to keep local money would create a financial rift in the league that would lead to greater and greater talent differentials.
Throughout the entire process, it was clear that the players would receive a greater portion of NFL revenue based on the increased local revenue of teams like the Patriots. The question was who was going to pay for this increase, a point on which agreement between the owners was critical. Low-revenue owners, however, argued that they could not afford to, nor should they be required to, pay more money to players based on the skyrocketing local revenue of the few wealthy teams.
Retrospectively, the union might have done the NFL owners a favor by forcing this divided group to reach a consensus on exactly how NFL revenue would be shared.
Kraft of the Patriots, Jones of the Cowboys, Woody Johnson of the New York Jets, Bob McNair of the Houston Texans, and Daniel Snyder of the Washington Redskin represented the high-end revenue group, having successfully created new sources of local revenue in the last 10 years. This group was faced with the choice of either sharing their local revenue with the rest of the league or paying the bulk of the rising player costs. The wealthy owners chose the latter.
Under the final agreement, the 17 teams with the highest revenue will cover the increase in player expenses. Two plans were originally proposed, one from the wealthiest owners and one from low-revenue teams. But Jones, Jerry Richardson of the Carolina Panthers, Arthur Blank of the Atlanta Falcons and Kraft helped build a broad-based coalition that merged the two plans together.
This compromise became the basis for the final agreement, proving that NFL owners put the best interest of the league before their own.
The wealthier owners certainly got the shorter end of the deal, but they realized that they operate in a financial goldmine that is growing more prosperous each year. And with the sacrifice, NFL labor peace is brokered, at least for now, and the league will be relieved to return its focus to the NFL draft this spring.
