NFL approves new six-year collective bargaining agreement
GRAPEVINE, Texas (Ticker) - No more deadlines. The NFL has labor peace.
By an overwhelming 30-2 margin, league owners approved a six-year extension of the collective bargaining agreement that comes at an extremely costly price.
The new agreement includes a revenue-sharing component will cost owners nearly $1 billion over the next six years. Owners essentially chose keeping a salary cap rather than facing life without one by accepting the union’s proposal.
“We were willing to make some sacrifices to get this thing done,” said Dallas Cowboys owner Jerry Jones, a major opponent of revenue sharing. “The proposal from the union was a mean mother.”
NFL commissioner Paul Tagliabue said that between $850 million to $900 million in players’ salary will be spread out over the entire deal because of the revenue-sharing component.
“I’m pleased, and more than pleased. I’m relieved,” Tagliabue said.
Buffalo and Cincinnati, two low-revenue teams, voted against the proposal. The formal announcement of the extension is expected Thursday.
“On behalf of the players, the NFLPA staff and the negotiating team, we are pleased that this process has finally concluded with an agreement,” NFL Players Association executive director Gene Upshaw said in a statement. “This agreement is not about one side winning or losing. Ultimately, it is about what is best for the players, the owners and the fans of the National Football League.
“As caretakers of the game, we have acted in the manner the founders intended. While they could not possibly have predicted the economic growth and revenue streams, they clearly saw the structure. Wellington Mara would be both proud and pleased today. Moving forward, this new agreement gives us the opportunity to continue our unprecedented success and growth.”
The new agreement concludes a week of contentious negotiations between owners and the Players Association which saw free agency twice get pushed back and other deadlines also moved.
The new extension added $7.5 million to the 2006 salary cap, pushing it over $102 million per team. Without an extension to the CBA, the 2006 cap would have been $94.5 million and 2007 would have been uncapped. The 2007 salary cap will be $109 million.
“We want teams to get additional money to re-sign players, rather than cutting them,” Tagliabue said.
“We’re delighted with the new CBA and that a salary cap system was preserved,” Green Bay Packers president Bob Harlan said. “Continuation of the salary cap was our No. 1 goal, because without it, the long-term viability of the Packers would be in doubt.”
Free agency now will start Friday at 12:01 a.m. EST. Owners reportedly are pushing for free agency to be moved to Saturday. Despite all the haggling, there never was any doubt that there would be football in 2006.
The major sticking point throughout the negotiations had been the sharing of “total football revenues.” The union wanted at least 60 percent of revenues that represent a new formula that expands from the television and ticket receipts that largely account for the “designated gross revenues” in the current CBA.
Low-income teams such as Buffalo and Cincinnati were looking for higher-revenue teams such as Dallas and Washington to contribute proportionately to the player pool because they can earn far more in non-football income from elements such as advertising and local radio rights.
Under the new deal, the NFL’s 15 highest-grossing teams will subsidize the other 17, with those making the most also having to give the most.
“Some of us had to give and take a little more than others, but things have a way of working out,” Washington Redskins owner Daniel Snyder said. “We just wanted to get this done for the sake of the league.”
“I didn’t understand it,” Buffalo Bills octogenarian owner Ralph Wilson said. “It is a very complicated issue and I didn’t believe we should be rushing to vote in 45 minutes. I didn’t understand it.”
Had there not been a deal, the biggest obstacle would have been teams scrambling to get under the old salary cap by 11 p.m. No deal would have led to massive cuts and teams being limited in the amount of money they could spend in free agency.
If the sides were unable to agree to an extension, Upshaw had said the union would not accept a salary cap in the future.