This past Friday there was an intriguing article at Time.com discussing the current NFL-NFLPA labor dispute. A potential NFL lockout is on the horizon in 2011 in part because of differences of opinion over the financial state of the NFL and its member teams. The focus of this Time article was on the idea that the it might be reasonable for the players, and even the fans, to demand the owners be more forthcoming when it comes to their financial situations.
The owners have argued for a reduction in the percentage of revenue going to the players. They’ve argued the financial model has changed and they cannot be pinned down by such significant costs. Whether one sides with the owners or not in this dispute, Time columnist Sean Gregory makes a solid enough point:
If costs are so high, and teams are not making as much money as they used to, why can’t the NFL show the players each team’s full audited financial statements, which would include a bottom-line item — net income, or profit (or loss) — that gives both sides a fuller accounting of the league’s financial state?
The NFL has reportedly turned over a lot of financial information linked primarily to revenues.
“They know more about our revenues than most unions know about the revenues of the businesses they work in,” Jeff Pash, the NFL’s lead negotiator, recently said in an interview with Politico about the transparency issue.
As important as it is to know revenues, aren’t the costs what are really at issue? Only one team has revealed their total financial picture, and that is the Green Bay Packers who are a publicly owned team and thus required to provide such information to the public. That information revealed the Packers saw their operating profit drop from $20.1 million the previous year to $9.8 million this past year. That’s certainly significant, but NFLPA President Kevin Mawae did make a good point when these numbers were released this past summer:
“It’s 1/32nd of the financial information we’ve requested in response to their demand that we give back $1 billion and increase our risk of injury by playing two additional games.”
Although the Packers information can be considered significant, Mawae makes a good point. It would be foolish for the players to make decisions based on the information of only one team.
Aside from the Packers, the NFL is a private organization that is technically under no obligation to provide this kind of information. However, Gregory’s article makes a good point in this regard:
But then again, the NFL isn’t your typical private company. If a lawyer, say, isn’t happy with his salary or thinks his bosses are hoarding too much cash, the free market lets him go work at another firm. But in football, there’s simply no other league where players can be similarly compensated for their specialized skills.
Again, this is merely one reason for the owners to reveal more cost-related information. There are no requirements for them to do so, and holding back such information might very well simply be part of their negotiating strategy. Although the players might certainly argue revealed numbers are bogus, such information would still be a chip in the owners favor. Now if the owners revealed this information and it was later proven to be false that would certainly be a major issue. But for now revelation of such information that would prove the financial woes would be a major argument in favor of their argument for a reduction in player costs.