Free agency opens amid firings, freezes
Expert: Without an economic course correction, 'iceberg' looms for NFL, other sports
He has the pedigree, hailing from a great college and growing up in the business. He excels at what he does. He has the intangibles the National Football League seeks in its employees.
He's the kind of guy who, in a perfect world, you would make certain spends his entire career with your franchise.
But the world is not perfect, the economy continues to slump and this guy got laid off last week.
NFL Commissioner Roger Goodell discusses how the current economy has affected the NFL.
His name isn't important here, but his story is relevant because he's a symbol of something large and troubling.
About the same time the Panthers PR rep was walking out of Bank of America Stadium, the Tampa Bay Buccaneers were laying off one of his counterparts. That PR rep was one of the Bucs' 12 job cuts. The move came the same week the Bucs used a $9 million franchise tag on wide receiver Antonio Bryant, who has given them one good season and has a checkered past, and handed defensive tackle Ryan Sims, who largely has been considered a bust throughout his career, an $8 million contract.
Combined, the two PR reps didn't make anywhere close to $100,000 a year, even if you threw in their benefits. Sadly, they are becoming the faces of today's economic hard times in the NFL.
Downsizing is happening across the league. So far, teams have announced the reduction of more than 200 jobs. On Wednesday, the NFL confirmed commissioner Roger Goodell has taken a 20 to 25 percent pay cut and the league has trimmed its staff by 169 people (15 percent of the work force), including cuts at the league office in New York, NFL Films, NFL Network and NFL.com.
When the iceberg pokes its head, you have to make a course correction, and that's where we are right now.” -- Private Sports Consulting's Max Muhleman, referring to the spate of NFL layoffs and cutbacks in light of the nation's economic woes
Goodell voluntarily took the cut from the $11 million in salary and bonuses he was scheduled to receive in fiscal year 2008, which ends March 31. Salaries for all remaining league employees have been frozen for 2009. Expenses at the league office have been cut by 20 percent in a process that started this past summer.
"There's tremendous uncertainty about the economy,'' NFL spokesman Brian McCarthy said. "There is no way to know what is going to happen in the future. It's going to take a collective sacrifice across the league to get through this.''
But why are the league and teams freezing salaries, firing secretaries and seamstresses and counting paper clips while the teams have committed $115 million to the 14 players designated with the franchise tag?
"When the iceberg pokes its head, you have to make a course correction, and that's where we are right now," said Private Sports Consulting's Max Muhleman, a veteran sports marketing executive who has done work for about 15 teams and the league office. He is widely credited as the inventor of the personal seat license.
"I think there have been ice patches out there for years because there long has been a question of how to balance the increasing costs for fans in line with the increasing cost of players. Now, you throw in a recession, and all that ice becomes one very big iceberg. You'd like to say teams could make one big change in course and not pay those big salaries to players. But they can't, and they are forced to trim in the areas where they can control costs."
It seems the players are not feeling many, if any, effects.
As much as we hear about the NFL's salary cap ($123 million for the 2009 season), there is a tendency to forget there also is a floor for player salaries. In 2009, every NFL team has to have at least $107 million count toward the salary cap, and that's why low-wage office workers are the ones taking the fall. Currently, about 60 percent of team revenues are required to be paid to players.
I just had a player with 61 runs from scrimmage receive a franchise tag that pays him as much as LaDainian Tomlinson. Doesn't sound like anybody's scared about the economy to give him 6.6 million bucks.” -- Agent Gary Wichard, referring to a client, Chargers running back Darren Sproles
Even with that relatively limited wiggle room in player salaries, there still is a question whether teams will try to save a few million on players when the free-agency period starts at 12:01 a.m. ET Friday.
"I just had a player with 61 runs from scrimmage receive a franchise tag that pays him as much as LaDainian Tomlinson,'' agent Gary Wichard said of San Diego Chargers running back Darren Sproles. "Doesn't sound like anybody's scared about the economy to give him 6.6 million bucks."
"I would have thought with the way things are going with the economy that it might hold people back a little bit, but I think the last few days have proven that is not right," San Francisco 49ers general manager Scot McCloughan said.
The coming days of free agency might prove that perception even more correct -- or maybe there will be some hesitancy. Maybe the heavy use of the franchise tag is a sign teams are worried about the economy, and maybe the resulting salaries aren't as gaudy as they might seem. It might be a practical measure.
"Not many [long-term] deals are getting done, right?" Seattle Seahawks general manager Tim Ruskell said. "So, in terms of what the agents believe is happening or going to happen, is different than what the clubs believe, so we have this divide right now, and teams are protecting their guys any way that they possibly can."
But will those teams pay for new guys come Friday? Opinions vary.
"Free agency will be strong this year," agent Drew Rosenhaus said. "I don't believe the economy will hurt NFL contract negotiations because the teams' financial positions are rock solid."
Rock solid, considering all the cuts?
"You will see teams be more prudent in their spending, no different than any other industry,'' Houston Texans general manager Rick Smith said.
Those are the two ends of the spectrum. The reality of how most teams will approach free agency might lie somewhere in between.
"This is total speculation, because we've never been through it before, but I promise you Albert Haynesworth's getting paid," Wichard said of his client, a defensive end who is arguably the top free agent. "The top-end guys, they'll get paid. If I'm a player away [from a championship], the economy isn't going to scare me away."
That's an agent's take, but the consensus around the league is the top free agents will continue to get big money.
"If we're going to spend money, we're going to spend money on acquiring players," Baltimore Ravens general manager Ozzie Newsome said. "That's [owner Steve Biscotti's] philosophy. Because, if you're winning, you have a chance to balance your books, as we did this year getting to the AFC Championship Game."
Yes, winning games will solve a lot of problems, but the consensus is the economy will have some affect on free agency. Most agree Haynesworth and the elite free agents aren't going to suffer.
"I think it hurts the second wave of free agency," Tennessee Titans general manager Mike Reinfeldt said. "I think the door is going to close much quicker. [In the past], all the crazy deals were getting done in two or three weeks. Maybe it's a week now. I think the whole thing shuts down much quicker."
At least one expert on sports economics believes that even though star free agents should continue to find many suitors, not every player without a contract will.
"This manna from heaven that some players are expecting is not likely to occur," said Marc Ganis, co-founder of SportsCorp. He's been a consultant in the development of many recent sports facility projects. "You don't commit to long-term investments when you don't know what the future is going to be like."
The teams' fixed costs associated with the current labor agreement make everyone not covered by the pact vulnerable, Ganis said.
"The NFL is clipped to the bone because every margin has been cut or is being cut except what's given to the players. Everyone, and I mean every person affiliated with the league, is being deeply impacted by this -- except the players."
Players can count on their contracts, but they still feel the pinch when some of their non-playing colleagues lose jobs.
Atlanta Falcons defensive back Domonique Foxworth, who is expected to become a free agent Friday, also has been an NFL Players Association team rep. Foxworth was with the Denver Broncos last spring when they began the NFL trend of cutting employees with eight layoffs.
"Those people are close to the players, and they are as important to the organization as players are," Foxworth said. "It hurt players to see those people go. You really feel for them. I've stayed in touch with some of them. You're a team and everyone is important, and when you see that happen, it really opens your eyes."
That's because the iceberg is still out there. And there might be an even bigger one behind it.
"A lot depends on how long the overall economic malaise remains," Muhleman said. "If it recovers in a year or two at the most, there won't be any major change. You might see fewer amenities or a little less service, but that's about it, and the league and teams will come out of it stronger because they've controlled their costs in the short term."
But suppose the economy continues to drag beyond the short term? And throw in the subject nobody in the NFL really wants to get into -- a doomsday scenario.
The CBA negotiation is going to become a real poker game. We could see holdouts, lockouts and even see pro sports, as we know them, stop altogether for several years.” -- Max Muhleman
That subject is the collective bargaining agreement. Team owners opted out of the current deal last spring. As it stands now, the 2010 season will be played with no salary cap. A lockout in 2011 is possible.
NFLPA president Gene Upshaw died in August and has not been replaced on a full-time basis. Both sides have been tight lipped about any talks about a new deal, but there are no signs any agreement is close to happening.
"The NFL has been strong for years, and that may put it in a better position to weather the economy than baseball, hockey or the NBA,'' Muhleman said. "But the economic situation is putting a whole new light on the CBA negotiation. It doesn't take a visionary to see the position of league is, 'Hey, we're all in this together. We're going to have to tighten belts, and you're going to have to take some hits, too.' That's a very difficult negotiation because, no matter who ends up sitting on the other side of the table, it's his job to get players more money, and I sure can't see him going back to players and asking them to take less money."
Then again, with the economic storm swirling, it might come to something like that. The layoffs of the PR guys and staff around the league might be something players want to look consider.
"The bottom line is, if somebody decides not to pay you, you're not going to have a job," Muhleman said. "I don't think that occurs to these guys because they've always been insulated from that. But the horizon is changing, and it might change more than we could ever imagine if the economy doesn't bounce back soon. It's a percolating, bubbling issue for the entire world. But, for sports fans, the big issue might not be bank failures. It might be that pro leagues could have to shut down the current model.
"The CBA negotiation is going to become a real poker game. We could see holdouts, lockouts and even see pro sports, as we know them, stop altogether for several years. At that point, I don't think it's beyond the realm of possibility to throw out the model and just start all over. That could cause a lot of pain for owners, fans and players. Will it come to a point where you see [Terrell Owens] delivering pizza? No, but maybe popcorn."
Pat Yasinskas covers the NFL for ESPN.com. ESPN.com's Kevin Seifert, Tim Graham, Bill Williamson, Paul Kuharsky and Mike Sando contributed to this report.
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