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Doug Farrar

Will there be NFL football in 2011?

Doug Farrar
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Having experienced the thrill of one of the most competitive Super Bowls ever -- the Green Bay Packers' 31-25 win over the Pittsburgh Steelers in Super Bowl XLV was one of the most watched shows in television history -- the NFL, the players and their fans must now turn to the unfortunate reality that there may not be football for a considerable part of the 2011 season. Both the owners and the players' union argue they need to get a new collective bargaining agreement ratified before the current one expires March 3, but the chasm between what the two sides view as fair presents a bleak picture. And if the owners do lock the players out upon the CBA's expiration, those differences could make for a difficult road back.

The current labor situation is fraught with complications, but the schism can be primarily tied to the number 18 -- the 18-game regular-season schedule the owners want as a way of increasing revenue, and the 18 percent revenue giveback the owners also want to offset operational costs. The players, wholly realizing that revenue-generating expenditures are worth a giveback on their end, don't see the point of losing even more off the top when the owners already get the first $1 billion of the pie every year. On their end, such a giveback is the equivalent of playing more games for less money than since free agency was implemented in 1993.

Meanwhile, the owners -- at least the most well-funded of them -- are willing to play chicken with a full season if that's what it takes to break the union and get things back to where they want them. They cry about their operational losses, yet refuse to open the books, leading to widespread speculation that the current NFL is a license to print money, and only the world's dumbest businessmen could turn such a golden goose into a loss leader.

The real problem seems to be that the owners are still making money, but not as much as they were when overall revenue shot ahead of player costs in a six-year stretch from 2003 to 2008. At least, that's the picture painted by the financial records of the current Super Bowl champion Green Bay Packers, who must release financial statements every year as the NFL's only publicly owned franchise. According to their numbers, the Packers averaged a net profit of $5,050,868 per year from 1998 through 2002.

The huge bump from 2003-08 saw an average in per-season (and pre-expansion revenue) net profit of $20,853,817, and the corresponding drop in net revenue in 2009 and 2010 still saw a per-season average of $4,612,861. The owners and commissioner Roger Goodell are correct when they say that player costs have risen drastically in the last few seasons (for the Packers alone, from $48,457,457 in 1998 to $160,839,497 in 2010), but they tend to understate the enormous increase in revenue.

In 1998, the Packers stated that they brought in $82,821,299 in total operating income. By 2010, that number had risen to $257,989,447. What the Packers listed as "Other Operating Income" alone in 2010 ($115,064,991) came reasonably close to matching total player costs. It's enough to make any "average Joe" wonder what all the fuss is about.

Both sides made definitive statements during Super Bowl week as they promised to increase the frequency and intensity of negotiating sessions. Goodell hammered two points last week in his annual address: 1) Team owners can't get stadium renovations off the ground, and 2) If the players like the current CBA, it can't possibly be equitable.

"If you want to deal with facts, the president of the union just in the last week said that the players got a great deal in 2006, and that clearly is indicating that the pendulum has shifted too far in one direction," Goodell said. "And in any agreement, you want to have a fair agreement. You want to make sure that it's fair to the clubs. You want to make sure it's fair to the players, but allow our great game to grow.

"Since 2006, we have not built a new stadium, and that is an issue for us. You will point to Dallas. You will point to New York. You'll point to the renovations in Kansas City, but those were all in the ground or on their way. This agreement needs to be addressed so we can make the kinds of investments that grow this game and make it great for our fans."

DeMaurice Smith, the president of the NFLPA referenced by Goodell, had his own two primary points when he talked to the media on Thursday: 1) The NFL is enjoying unprecedented prosperity, and 2) The owners won't open their books (with one legally required exception) to prove their losses.

"Did anyone of you think when you started covering that game right after the merger between those two conferences, that football would be America's No. 1 sport and not baseball?" Smith asked. "Did any of you believe that the [annual] revenue generated for the National Football League would probably exceed $9 billion?

"The disagreements that we have are fundamental. Because we believe that every economic indicator that we have, everything that we can look at, whether it's Forbes magazine, whether it's Bloomberg, anybody who independently looks at this agrees with the players' perspective. The business of football is not only exciting and tremendous. The business of football is probably the best business economic model in the country. Because that $9 billion was generated during the worst recession of our lives.

"So our problem and fundamental disagreement remains at the height of the economic viability and success of football. You're now asking the players to give back a billion dollars a year for the next seven years, and our simple question is before anyone would want to write a $7 billion check, what financial information would you think is relevant? It's that simple."

Well, no part of this is simple, and that's the problem. Several things could break the logjam, and anything could happen -- anything from the NFLPA decertifying to force an antitrust suit, to the increasingly unlikely concept that the two sides will find a fair and quick compromise.

It's a rough thing to face so soon after one of the most competitive and prosperous seasons in the league's history, but the threats are real -- Super Bowl XLV may be the last bit of NFL football you see for a good, long time.

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