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NFL, union have ‘lot of risk’ in case of lockout
Question of the Day
NEW YORK | The NFL already is feeling financial effects from the uncertainty of its labor negotiations.
The league estimates its cumulative gross revenue losses could reach $1.7 billion by 2015 if there is no agreement with the players’ union before the next regular season is scheduled to start.
In a 1½-hour session with reporters at league headquarters Thursday, a half-dozen NFL executives set out to explain why they believe both sides could forfeit hundreds of millions of dollars if a new labor collective bargaining agreement isn’t reached by the March 3 deadline.
“Players have a lot of risk; clubs have a lot of risk,” said Jeff Pash, the NFL’s lead labor negotiator. “We know that the financial consequences of no agreement — of a significant delay in reaching an agreement — will be significant and will be shared. It does not fall on one party.”
Sponsorship deal renewals already are problematic, with some companies telling the NFL they will not commit money if there is a work stoppage, according to Eric Grubman, NFL executive vice president of business operations.
The league estimates there would be a cut in gross revenues of $120 million without a new agreement by early March — $350 million if there’s no CBA by August, before the preseason starts; $1 billion if no new contract is in place until September. The losses would continue over the following years, the NFL said, because regaining business would be difficult in some areas.
Among the places where the league figures losses would come: ticket income, because 16 of the league’s 32 clubs are pledging to keep prices steady as a result of the uncertainty; season-ticket renewals; sponsorship revenue; and retail sales.
Based mainly on losses of gate receipts, the revenue losses could reach “in excess of $400 million a week once the regular season starts,” Grubman said.
The union expects owners to impose a lockout as early as March 4.
“If the NFL wants to make the ultimate move for the fans, they should make like Joe Namath and simply guarantee that there won’t be a lockout,” union spokesman George Atallah wrote in an e-mail to The Associated Press.
He also took to Twitter to say: “NFL officials hosted media briefing at their offices today. And we’re the ones that want to negotiate in the public.”
Although no formal large-group negotiating sessions are currently scheduled, Pash said the March 3 deadline could be extended if there’s progress.
“We’ve been talking about when we’ll get together again,” Pash said.
Owners want players to cede more of the gross revenues up front to help pay for things such as stadium construction and improvement, as well as allowing for different structuring of other business deals, including stadium concession sales.
“We have a healthy business. We are not losing money. We have never said that. We do not have a healthy business model,” Grubman said. “We don’t want to be the home-building industry of 2005. We don’t want to be the ‘dot-com’ industry of 1999.”
Saying that a record 495 players could become unrestricted free agents in March if there is a new deal in place, the league estimated those players would lose more than $300 million in potential contract money that month. The NFL also estimated that more than 70 players with existing contracts would not be able to collect about $140 million due March 4 or later in salary advances or bonuses.
Asked about the status of franchise tag rules, Pash said: “I expect the franchise tag to continue to operate as it has in prior seasons and clubs to be permitted to exercise their rights under the tag.”
By Matt Kibbe
The short-term deal will assure long-term overspending
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