NFL to end $100M in revenue sharing
Cowboys owner Jerry Jones was fined at least $100,000 in September for violating a gag order by suggesting that revenue sharing was on its way out.
Turns out, he was only tipping the owners' hand.
In a significant move that could impact the flow of money to potential free agents and the competitive balance of teams, the NFL has notified the players' union that effective in March, owners will pull the plug on the $100 million-per-year revenue-sharing program that has subsidized lower-revenue clubs, multiple sources said.
By Tuesday, the NFL Players Association will challenge the move with an NFL arbitrator, special master Stephen Burbank, claiming owners can't terminate the revenue-sharing model without the union's approval because it was adopted into the 2006 labor agreement, which doesn't expire until March 2011.
Management counters that the supplemental model pertained only to salary-capped seasons; 2010 is scheduled to be uncapped.
Burbank is a law professor at the University of Pennsylvania who is responsible for resolving collective bargaining disputes between the NFL and the NFLPA. Approximately eight to 12 lower-revenue teams have qualified on a yearly basis to draw from the supplemental pool. The $100 million fund is part of $6.5 billion in revenues shared by all clubs.
"We are simply going forward on the terms the union approved in March of 2006," NFL spokesman Greg Aiello said.
In the applicable section of the 2006 collective bargaining agreement, it reads: "The revenue sharing program described to the NFLPA by memorandum dated March 10, 2006, has been determined by the NFLPA to be satisfactory. Any material modification to that program must also be reasonably satisfactory to the NFLPA."
A management source said when the owners chose for an early opt-out of the labor deal, triggering an uncapped year in 2010, it opened the door for the supplemental pool to be disbanded.
Lower-revenue clubs that have been subsidized under the supplemental plan will not be subject to the minimum spending rules that exist with the current salary-cap system.
According to NFLPA spokesman George Atallah, "Revenue sharing helps maintain the 'any given Sunday' dynamic in the NFL.
"The amount of money some owners propose to pull out of the system in 2011 could mean the difference between playoffs and blackouts for many teams," he said.
Chris Mortensen is a senior NFL analyst for ESPN.