Economics Of The NFL Apparent In New CBA

by John Unrein

​     According to the Green Bay Packers’ 2018 annual report, the National Football League earned over $8.1 billion in national revenue during 2017. The Packers are owned by their fans through the public sale of stock. Therefore, their franchise information is largely accessible to the public for transparency reasons.
     Darren Rovell of Action Network reported in the summer of 2019 that the NFL disbursed $8.78 billion in revenue to its clubs from the money it made during 2018. Under the former collective bargaining agreement between the league and the players association in 2011, the owners got 53 percent of football related income and the players got 47 percent.
     This means that the total revenue gained by the NFL before it was split two ways in 2018 was approximately $17 billion.
     The NFL makes its money in a variety of ways. The two biggest sources of its national revenue come from large and lucrative television deals along with selling companies the rights to sell items that represent the NFL. It’s safe to say that professional football is alive and well in the United States.
     Statista cited on their website in 2019 that the average player’s career in the NFL is 3.3 years in length. That statistic explains why collective bargaining is so important to the players association each time a new agreement must be reached. The approximate 1,700 players who’ve made up the active rosters for the 32 NFL teams in the past know their window to earn income is limited.
     NFL franchise owners are also aware that labor disputes have the potential to lead to strikes by the players union, and as a result, the loss of revenue. This was apparent after the four and half month player lockout in 2011 prior to a new agreement being reached. It’s in both parties’ best interest to compromise and maintain peace through a collective bargaining agreement that benefits both sides.
     A new collective bargaining agreement that will start in 2020 and run through 2030 was approved earlier this year by league owners and the NFL Players Association. NFL Football Operations recently shared some major parts of the agreement via their website.
 
     Highlights include:
 
     14 team playoff: Starting in the 2020 season, seven teams from each conference will make the playoffs. Adding two playoff teams was not part of the bargaining process, but the owners were able to do so without union approval. Only the top team in each conference will get a wild-card round bye.
 
     17 game schedule starting during the 2021 season: An extra regular season game will be added to the current 16 game schedule played by teams in the league. A reduction of the preseason will happen to offset the extra regular season game. The mechanics for an uneven number of games – neutral sites, or which teams get nine home games – will be worked out in the interim.
 
     Increased gameday active roster: The number of active players on gameday will increase to 48 players from 46. Teams must have at least eight offensive linemen on their active gameday roster.
 
     Improved health and safety: guaranteed funding for research on training methods, equipment, field surfaces, and medical care; the formation of a new committee to design safety standards for equipment; the extension of training camp acclimation periods; further strengthened credentialing standards for teaching medical and training staffs; enhanced enforcement of the concussion protocol; and additional joint research funding.
 
     NFL Commissioner Roger Goodell released a statement in March on the agreed upon new collective bargaining agreement.
     “We are pleased that the players have voted to ratify the proposed new CBA, which will provide substantial benefits to all current and retired players, increase jobs, ensure continued progress on player safety, and give our fans more and better football,” Goodell said.
     “We appreciate the tireless efforts of the members of the Management Council Executive Committee and the NFLPA leadership, both of whom devoted nearly a year to detailed, good faith negotiations to reach this comprehensive, transformative agreement.”
     NFLPA Executive Director DeMaurice Smith posted to Twitter in March his thoughts on the new agreement as well.
     “The current proposal contains increases across almost every category for wages, hours, working conditions, and benefits for former and current players,” Smith said.
     “This proposal was a contested negotiation that reflects trades with the counterparty which have to be carefully weighed and assessed across the entirety of the deal. Please be confident that I hear – loudly and clearly – those of you who have passionately expressed their perspective that these gains are not enough when weighted against, for example, adding another game. That position reflects how some members have chosen to weigh what aspect of the deal is important to them.
     Smith continued, “The fact is, however, that there are literally hundreds of issues in any collective bargaining agreement that affect thousands of circumstances and impact thousands of current and former players which we must consider carefully.”
     The NFLPA has reported on their website and through outgoing NFLPA President Eric Winston the gains made on behalf of the players through the agreement.
 
     Highlights include:
 
     An increase from the 47 percent of league revenues given to the players, with that percentage dependent on the length of the season.
 
     A reduction of the preseason, initially from four games to three. More time off during training camps.
 
     Upgraded pensions, with the addition of groups of previous players not included in past agreements.
 
     Two more roster spots per a team’s practice squad, with players having more freedom to move up to the regular roster and back. Two more will added later in the agreement.
 
     Narrowing the testing period for players for marijuana use, plus lowered discipline for using it; and a reduction in on-field fines.
 
     The avoidance of labor consternation for the next ten years means professional football will carry on uninterrupted. Negotiations will focus on a new topic. The NFL may continue discussions for new television deals with broadcasting partners. That has the potential to increase the financial windfall for owners and players alike.
 
 

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