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-03-08-2006 #1RamsFan16 Guest
Clayton: Who might derail the deal
Updated: March 6, 2006
Tagliabue seeking alignment on low-revenue side
By John Clayton
Sometimes, a good deal is a pact that is hard to swallow for all parties involved.
That is what is being sold to the NFL owners, who will meet in a Dallas airport hotel Tuesday and Wednesday to decide whether to take the NFLPA's latest proposal for a six-year collective bargaining extension. The NFL and NFLPA couldn't come to an agreement Sunday night, other than to take the union's proposal (seeking 59.5 percent of the revenue) to the owners as a take-it-or-leave-it proposition.
If they take it, the owners will have labor peace for six years and a salary cap. If they don't, they can prepare for an economic model without a salary cap in 2007 and a possible lockout of players in 2008.
Owners are already getting word to prepare for a two-day discussion and vote that starts at 3 p.m. ET Tuesday. Commissioner Paul Tagliabue, for the sake of league harmony and security, needs to make sure there are 24 votes to pass. There will be plenty of lobbying and plenty of heated words.
From the business sense, a majority of the owners will be in favor of the format even though many will complain about the percentage. The biggest thing for them is fixed costs. The NFLPA is putting in a "cash over cap" mechanism that gives a degree of certainty what labor costs are going to be.
If the cap is $103 million or $106 million, most owners won't be compelled to go over that number to stay competitive. They can budget the costs knowing that the cap is essentially equivalent to the television revenues per team. That's a plus for the business people.
But there will be arm twisting, and it starts with the high-revenue teams. Tagliabue has to break the block of five negative votes for revenue sharing: Jerry Jones in Dallas, Dan Snyder in Washington, Robert Kraft in New England, Jeff Lurie in Philadelphia and Bob McNair in Houston. Those five have garnered enough support among a handful of owners to block efforts to get a revenue-sharing plan into this deal.
As long as they have four other owners to also oppose it, it's going to be hard for a revenue-sharing plan to be passed. Why is it important? A high-revenue team is generating at least a $100 million more in revenue than a low-revenue counterpart, and it's hard for a low-revenue team to profit much when 70 percent of its revenues are eaten up by labor costs.
Tagliabue will need to break two or three of those votes in favor of this deal for it to pass. Snyder might be tough because he loves to spend and doesn't like restraints. Jones will be a tough sell because he's a maverick who isn't afraid of a non-capped NFL. He's also waiting for the union to sign off on more than $80 million of union- and NFL-approved loans for his new stadium construction.
Plus, it wouldn't be bad if an assurance of a Super Bowl in Dallas could be suggested to make things right. The Super Bowl in Houston was considered a success, and there isn't a reason why Dallas couldn't do the same.
Tagliabue will have to make sure everyone is aligned on the low-revenue side. Wayne Weaver of the Jacksonville Jaguars has been part of a lot of talks with high-revenue teams about sharing the wealth. The commissioner needs to make sure the low-revenue teams feel they aren't being too financially consumed by the proposal to increase the players' percentage of the revenue.
While the numbers will be moderately fixed, the commissioner has to make sure that those low-revenue teams can make a profit and not find themselves in a financial hole with this deal. Sometimes it's hard to count on the Brown family in Cincinnati and the Bidwell family in Arizona to support a system that is expensive.
Weaver has to make sure the votes of the low-revenue clubs are lined up. Plus, it would help to make sure Al Davis of the Raiders doesn't abstain. Unfortunately, the poor salesmanship of the city of Oakland for tickets has left the Raiders among the lower-revenue teams. Davis, who has a history of fighting the league, needs revenue sharing until the Raiders can work their season-ticket magic.
This is the first year since moving back to Oakland the Raiders can sell tickets. That had been the domain of a city-run marketing association that simply didn't do a good job. Davis loves to compete. He has pride in Raiders tradition. Tagliabue needs to make sure the Raiders' vote can be counted on.
Naturally, the teams in the middle of the revenue pool needed to be swayed. That's why Tagliabue needs to make sure he has Jerry Richardson's support. The Carolina Panthers owner has done an exceptional job of maximizing his revenues in Charlotte. The Panthers have become a high-revenue team because of hard work and good marketing.
Richardson has been a league supporter and is among the owners who work the hardest on league committees for the commissioner. Tagliabue must have his vote.
The traditional league family owners such as Dan Rooney of the Steelers, Ralph Wilson of the Bills, Lamar Hunt of the Chiefs and others shouldn't be a problem. They have always supported the NFL model for revenue sharing. They just need to be assured the numbers work.
The NFL is a $6 billion business. The forecast is for the league to be a $10 billion business by 2010 as long there isn't a labor problem. How the next two days go will determine if this is a league moving forward or one moving several steps backwards.
John Clayton is a senior writer for ESPN.com.