Report: In a lockout, $1B in losses?
CHICAGO -- The NFL could reportedly lose $1 billion if there is a lockout after the March 3 expiration of the collective bargaining agreement -- even if the entire 2011 season is played.
The Wall Street Journal reported the figure Wednesday, citing unidentified senior NFL officials familiar with information presented to the 32 team owners at the league's meeting in Chicago.
"People think we can have a knock-down drag-out fight and settle on March 1 and everything will be fine, and it's not true," Eric Grubman, the league's executive vice president for finance, told the newspaper.
The paper said the NFL could lose $400 million in March alone, when many season tickets are renewed, and another $500 million if preseason games are canceled next summer because of labor unrest.
Though the story said all teams were profitable, a league official told The Associated Press the NFL has never made that claim.
The Journal also said each team could expect to lose about $8 million for every canceled home game.
Asked to comment on the newspaper report, James Quinn, a players' union lawyer, said the league had only itself to blame for any financial woes.
"This is a predicament of the NFL's choosing," Quinn said in a statement issued Wednesday by the NFLPA. "They took a juggernaut business in a challenged economy and then sent a message of a voluntary shutdown. NFL players proposed a 'lock-in' last year to get this done and they said no.
"The owners pocketed over $300 million in cash savings in the uncapped year alone," Quinn said.
NFL owners opted out of the collective bargaining agreement with the players in 2008, resulting in no salary cap this season. Although several of them were optimistic Tuesday that a new deal could be reached by the end of the season, they also emphasized the dangers of not reaching a timely agreement.
"I see history as a teacher," Indianapolis Colts owner Jimmy Irsay said. "I'm thankful to have been through it multiple times and [previous stoppages] stick in your mind. We've had a tremendous growth and building of this league and we don't want to lose that momentum."
NFL revenues are expected to approach $9 billion this year, but owners claim too much (nearly 60 percent) goes to players. They say they have huge debts from building stadiums and starting up the NFL Network and other ventures, making it impossible to be profitable.
Marc Ganis, the president of the Chicago-based consulting company Sports Corp. Ltd., agrees that the league is starting to feel the effects of a potential labor stoppage.
"Although the amount lost by the NFL today is modest, it will grow very significantly as we approach the budget cycle of advertisers and sponsors, which is typically nine months in advance," said Ganis, who said he was aware of at least two teams that were losing money. "What may be a small amount today as we turn the calendar will be a much higher amount and as we go into spring with no CBA a significantly higher amount."
Copyright 2010 by The Associated Press
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