Thread: Wall St. Journal: NFL could lose $1 billion with lockout

actual story for those that care about the numbers:

http://online.wsj.com/article/SB1000...l?KEYWORDS=nfl

CHICAGO—Even as the NFL romps through a season of record television ratings, the owners, and some of the league's key sponsors and corporate partners, are bracing for what could be an expensive and debilitating player lockout next spring.

In a private meeting Tuesday at the league's annual fall owners' meeting, NFL officials presented a sobering financial forecast. According to two senior league officials who have seen the report, it stated that the lack of progress on a new contract with the players union had already begun to create financial losses—and that even if a deal were reached late next summer that allowed the league to play the entire season, total losses could reach $1 billion.

EA Sports, a top merchandising licensee, has already requested a $30 million reduction in its scheduled payments because of the labor uncertainty, according to people with knowledge of the discussions. An EA Sports spokesman confirmed that talks with the league are ongoing.

If there's no deal in place by March 1, the NFL report said the league could expect to lose $125 million as existing corporate partners demanded discounts on sponsorship deals and others decided not to sponsor late-season events like the Pro Bowl.

The report said owners could expect to lose $400 million in March alone, the prime month for fans to renew their season tickets and for the league to organize games abroad. From April through August, the report said losses from a labor deadlock would climb by an additional $500 million as preseason games are missed. NFL officials said each team could expect to lose about $8 million for every canceled home game.

Given the immediate losses and the potential for more in the near future, NFL officials said that if the league can't agree with the players on a new collective-bargaining agreement soon, the league's future proposals to the union are likely to get worse rather than better. "In any negotiation, when there are less revenues on the table, the proposal gets worse for everybody," NFL commissioner Roger Goodell said in an interview Monday.

Eric Grubman, the league's executive vice president for finance, said, "People think we can have a knock-down drag-out fight and settle on March 1, and everything will be fine, and it's not true."

DeMaurice Smith, executive director of the NFL Players Association, and George Atallah, the union's deputy executive director, didn't dispute the report's figures. They acknowledge the prospect of a lockout is already rankling sponsors and causing financial problems for the league. But the officials said the figures wouldn't have any effect on the union's bargaining approach and that the disclosures were an attempt to put the onus on the union and make it look like it's the players' fault that these losses are going to happen.

The central issue that divides the owners and players is the NFL's desire to reduce the share of league revenue set aside for player salaries by roughly 18% or about $1 billion beginning next year, by the union's calculations. Owners said they need to keep more of their profits so they can re-invest in the business by enhancing stadiums and pursuing new ventures, such as improving the NFL Network and holding more international games, moves that would ultimately benefit the players, too. The owners also want to institute a new wage scale for rookies that would reduce the amount that teams are forced to pay to untested players who may not pan out.

Union officials said the players oppose any overall salary cuts. They said they didn't support the argument that the owners should be allowed to keep more of the leagues' profits so they can invest them in business operations. "Players have always understood financial investment and risk; that's why players invested nearly $3 billion towards stadium construction and improvements," Mr. Smith, the union leader, said, referring to credits the union granted owners in recent years to help them pay for certain stadium projects.

Union officials note that the owners will continue to receive some $4 billion in television-rights fees during any potential lockout, a sum that will help teams cover their debts. The league would have to reimburse the networks in later years.

The NFL's statements and disclosures come at a time when progress in negotiations has stalled. They also represent the first time the league has laid bare some of its internal financial estimates. Unlike other labor disputes in sports, which have centered around some franchises that are not making money or need new stadiums, the NFL's teams aren't hitting hard times. More than half of the league's stadiums have opened or undergone significant renovations since 1997. NFL officials confirm that every team is profitable.

The NFL says the losses are mounting quickly because the league is a much more complicated entity than it was in the early 1990s, when the league and the union created the framework of the current labor deal, which is due to expire on March 3. While total revenue is expected to approach $9 billion in 2011, the league has become much more reliant on long-term deals with TV networks and corporate sponsors that are trying to plan their marketing budgets for the next 18 months.

According to league officials, locking in revenue for the long term is essential because the league and its teams are carrying $8.5 billion in debt and are beholden to a group of 20 to 30 insurance companies and financial institutions that are due several hundred million in annual interest payments, whether or not games are played.

Mr. Grubman said debt on stadiums that the league itself is responsible for—as opposed to individual teams—has increased 20 times the past decade, to about $1 billion. Twenty years ago each franchise was limited to $35 million in debt. Today it's $150 million. And while league officials say not every team is at its limit, many are close. The league says individual clubs owe another $2 billion in stadium construction payments.

Owners say the increased costs have forced them to look for ways to boost revenue and roll back salaries. Chief among these strategies is a plan to extend the regular season to 18 games from 16. League projections say adding two regular season games (and eliminating two preseason games) would produce an additional $500 million annually.
New England Patriots owner Robert Kraft, an influential member of the NFL's management council executive committee, said his partners are holding off on new business endeavors such as building new stadiums without government funding or upgrading existing buildings with features like digital access from every seat. "We're not going out and doing things and being entrepreneurial," he said. "So we lose and the players lose." Mr. Kraft urged the players union to try to strike a deal soon or deal with the consequences. "It'll be less of a deal the more time that goes by," he said. "If we go down the road of a lockout and losing games, we all lose."

Some NFL sponsors have a lot invested in the league's success. The NFL earlier this year reached a four-year, $750 million sponsorship deal with Verizon Wireless that gives the telecommunications company the right to carry footage from NFL games on its mobile phones and to use NFL players in its advertising. But union officials point out that if the current CBA expires on March 3, the NFLPA's deal with the league to package the players' marketing rights will end with it, killing a valuable part of the deal with Verizon and giving the company possible grounds to seek recourse. A Verizon spokesman declined to comment.

Union officials say the easiest way to settle these looming questions is for the NFL to stop threatening to lock out the players if they don't capitulate. "There's too much at risk for all of our partners for any type of lockout or interruption in business," Mr. Smith said. "We would love nothing more than to have a new CBA soon."

Originally Posted by Blue Horse-shoe

Not if the refs get there first . Seriously, when you look at all of the RETARDED calls that have been made this year, THAT just might cause people to turn away from the game before any CBA (causes the league to lose money ). Yesterday's Roethlisberger goal-line fumble, and the Shiancoe non-TD end zone catch , are examples of how the RIDICULOUS overly strict interpretation of the " rules " ( and the BS calls it is producing ) is going to RUIN this game. It is really getting DISGUSTING ...... to the point where I ( for the first time in my life ) am starting to lose respect for the integrity of the game and the league.... and I'm considering ignoring the NFL . Who cares right ? Well I've been a HUGE fan for 40yrs . And people who know me are astonished that I'm starting to think like this. I am too. But what I'm seeing is a sick joke. If it's gonna be officiated like THIS .... well it's such a perversion that I can't take it seriously anymore. My 2 cents ( for what it's worth ).

Agree there has been a TOn of head scratching calls, and "interpetation' that really needs to be ironed out in the Competition committee and get some flippin Consistancy.

BUT i think these calls have always happened, but until recently, you didn't have the 24/7 coverage, didn't get to see all the games in minute detail, except for some higlights, now everything is discected to the Nth degree each week on ESPN or the NFL network,, high def and super slow mo mkaes it easy with hindsight to see stuff the naked eye doesn't in that 1/4 second.. and not in the proper sight line. Not excusing The ref's from blame, just saying its a different world than even 10 or 15 years ago- and as such alot more criticism is coming than used to

Originally Posted by Blue Horse-shoe

Shianco's catch was a TD . Don't care what anyone says. Basically ..... if it looks like a duck, walks like a duck, and quacks like a duck ......duh, IT's A DUCK ! If 99.9999 % of the play is good ...... you don't cater to that .0001 % that MIGHT be in question. They're ruining the game with this crap .

same could be said about the Calvin Johnson TD.