Lockout directly affects NFL employees
Over the past several years, while the NFL has cemented its position as the pre-eminent American sporting industry, whatever moral legitimacy it once held has been the greatest casualty of its success. In football, the physical toll of weekly violence plays out in slow motion for years after the world-class athletes leave the game and die sooner, on average, than the couch potatoes who watched them.
The game has been set to gallant soundtracks and the mighty voice-overs of Philadelphia legends John Facenda and Harry Kalas, which made the slow-motion artistry of NFL Films a cultural landmark for generations of fans. In actuality, though, the football businessmen did not -- to borrow the Veterans Affairs phrase -- care for those players in retirement that had borne the brunt of battle. The players were discarded with minimal pensions (if they qualified at all) when their playing clocks expired, broke and broken, leaving behind only the Emmy-winning highlight reels.
The current NFL lockout and its cynical details solidify the league's standing as a fearsome and lucrative entity. Indeed, the owners are so rich that they could survive without football for two years by some estimates, and their broadcast partners have proven so fearful of losing the powerhouse sport that, outside of a courtroom, the NFL has run virtually unchecked. As a result of its immense power -- and the roadmap the league has chosen to reach this point of impasse -- the owners and the game are distanced further from credibility.
In locking out the players, the league has forced illegitimate positions. Owners are demanding more games after a season when safety overshadowed the final score. They ask the players to take less money when the sport is flush with cash, while its veterans -- from Jim McMahon to Dave Duerson to Andre Waters -- have shown us that the price of glory is often dementia and premature death. The owners expect the public and the courts to believe the highest-rated, most popular game is losing money, without proving it. They demand that players wait nearly twice as long than the average career length to become a free agent.
Not only is the league challenging the players, but it is also saddling a hungry and loyal fan base with an unnecessary confrontation. In the middle of a massive and prolonged national economic downturn, the NFL is also placing its own rank-and-file employees -- the ones who work in ticket sales and promotions and community relations who aren't in front of the camera on third-and-long and who won't earn in 10 years what Tom Brady earns in 10 minutes -- in serious financial distress.
On Wednesday, the Buffalo Bills announced pay cuts across the organization, calling it a "program of shared sacrifice." As it is, concessionaires and game-day workers get paid only when games are played. Larry Kennan, the president of the NFL Coaches Association, said weeks ago that assistant coaches and other members of coaching staffs leaguewide should brace for layoffs and job losses.
In preparation for the lockout, the NFL negotiated access to $4 billion in rights fees from broadcast partners DirecTV, Fox, NBC, CBS, ESPN, Comcast and Verizon. It also saved additional money in event of a work stoppage. Yet, even with that in hand, the NFL is threatening layoffs and benefit reductions of its employees, the very people who need their jobs the most.
Education, more than muscle, is the root of power, and to understand the immense power of the NFL, its strategy for a potential lockout and the next battlefront for how fans watch football games and who profits from it, it is essential to read U.S. District Court Judge David Doty's 28-page opinion on the NFL's conduct.
In barring the NFL from using fees for games not yet played to finance the lockout, Doty wrote a devastating document, reminding football fans that only by knocking down doors does change occur. The NFL did not grant free agency to players, but was forced 20 years ago by losing an antitrust lawsuit filed by the late Reggie White, Duerson, Hardy Nickerson and other plaintiffs. That lawsuit, settled April 30, 1993, created the foundation for free agency and the current labor agreement, which was extended in 1996 and 1998 and renegotiated for 2006-12.
Anticipating a lockout, the NFL in 2008 opted out of the final two years of the agreement, and soon after approached its broadcast partners to renegotiate its contracts. According to the Doty decision, each individual contract originally contained language that would have forced the NFL to pay substantial penalties to the broadcasters in the event of a lockout.
The NFL first used its muscle on DirecTV, which owns exclusive rights to the NFL Sunday Ticket, the cash cow that separates DirecTV from every other outlet that broadcasts football. If you live in Detroit but are a 49ers fan, you either have DirecTV or rarely, if ever, watch a complete 49ers game. There is no third way.
In July 2008, the NFL and DirecTV began to renegotiate their contract. The NFL demanded a "work stoppage clause" that stipulated DirecTV would pay the league if the 2011 season is played and up to 9 percent more if the season was cancelled, with 42 percent of that total sum to be nonrefundable to DirecTV. According to commissioner Roger Goodell's direct testimony, the NFL would receive more money from DirecTV without football in 2011 than if the season were actually played. DirecTV offered more money to the NFL in the 2009 and 2010 seasons in exchange to eliminate the "work-stoppage clause." The NFL refused.
In April 2009, the NFL renegotiated simultaneously with CBS (which broadcasts the AFC) and Fox (which has the NFC). In the event of a 2011 work stoppage, the NFL was obligated to refund all rights fees back to the two networks immediately, but the NFL renegotiated the deal and demanded that the two networks pay rights fees to the league even if no games were played. According to Doty's decision, Fox did not want to pay the NFL if football was not being played, but Doty, wrote "The NFL considered opposition to the work stoppage provision to be a 'deal breaker.' "
The NFL applied the same muscle to NBC, which broadcasts its Sunday night game, and according to the Doty decision, "In extended negotiations, NBC felt that the NFL was 'hosing' it by its rights fees demand.
ESPN's "Monday Night Football" contract, meanwhile, expires in 2013 and contained similar work-stoppage provisions, but with one difference: The NFL was potentially required to pay ESPN damages for subscribers lost because of a work stoppage. Through negotiation, the damage clause disappeared.
How the NFL was able to force each entity into renegotiating huge contracts with often unfavorable terms when the 2011 season was in jeopardy is an example of the NFL's incredible power. The broadcast partners were faced with a choice: risk not having NFL programming or acquiesce to the NFL's demand. Each, in its own way, chose to forego millions of dollars for a potentially better grasp of something more important: the future. Each chose to bet on technology. What all the broadcast partners received in return was to broadcast more of the NFL on different platforms. That's how badly people want to watch the NFL.
The broadcast partners could continue to grow their businesses: ESPN would lose value on its website without the ability to show game highlights online. Without the NFL Sunday Ticket, DirecTV subscribers might switch allegiances to rival Dish Network or cable television. Nobody, it seemed, wanted to get shut out -- the league could have allowed game highlights to be shown only on NFL.com and the NFL Network, for example -- because the NFL is such a popular product.
But by choosing the smart business path, each broadcast partner -- by relinquishing its leverage to force the league to play football in 2011 -- indirectly positioned the owners for a lockout.
"In total, the NFL negotiated access to over $4 billion in rights fees in 2011 if it locks out the Players," Doty wrote on Page 12 of his decision. "Of that sum, it has no obligation to repay $421 million to the broadcasters."
That the broadcast partners would agree to a deal they were clearly offended by, according to Doty, is a harbinger of how broadcasters believe we will watch sports. Digital distribution -- games on cell phones, iPads, PDAs and computers as well as television -- is the future for broadcasters and is worth more than the financial penalties. Nobody wanted to be left out. The NFL chose a fight with its players over the wishes of its audience, and broadcasters chose (if indirectly) obtaining future rights over fighting the NFL to ensure fans wouldn't miss any games in 2011.
The price of the future is the present: The jobs of people are at stake. The NFL positioned itself for a long fight, with little incentive to truly negotiate with the players who play the game, the broadcasters who beam it to America or the fans who buy the tickets. Much has been made about the legitimacy of the NFL's refusing to open its financial books to the players' union, but if the league owes anyone an explanation, it's the person with a family and a mortgage who receives a pink slip from the league when his or her former employer has a warchest for this very moment, money that in part should have been used to keep employees in their jobs. Against massive layoffs, Roger Goodell's $1 salary now looks like a cheap card trick.
Howard Bryant is a senior writer for ESPN.com. He is the author of "The Last Hero: A Life of Henry Aaron," "Shut Out: A Story of Race and Baseball in Boston" and "Juicing the Game: Drugs, Power and the Fight for the Soul of Major League Baseball." He can be reached at Howard.Bryant@espn.com. He can be followed on Twitter at www.twitter.com/hbryant42.
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