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Well-Thought-Out CBA Negotiation Article


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Players usually lose big in these CBA deals. That's why they went to litigation with a judge supposedely in their back pocket. I assumed they "won" the last CBA negotiation and that's why the owners decided to open it up when they did. I think they are all just a bunch of spoiled rich people that live in a different reality that the fans ultimately pay for. The fans lose in this case. Now everything is tied up in court. We can argue all summer long who is right and what is fair or unfair. They don't care. They all know that we will all come running back with wallets open once it's eventually settled. always has been and always will be about one thing- your money and how they can get more of it.

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Now that the union doesn't exist - cant the NFL start paying the players whatever they want? Like this years rookies? I know they will have to honor their existing contracts, but new contracts really dont have any bargaining power. The NFL can establish a rookie scale and force the players to abide. Change the rules to give teams 4 years of rights to all draft picks, rather than 1.

 

I also dont buy the anti trust lawsuit. All teams are in fierce competition with each other. no different than directTV v Time Warner V Dish Network IMO.

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The owners, in the end, were not asking for "an extra billion dollars"--they had brought down that number to $325 million. Also, as predicted, they took the 16 game schedule off the table.

 

The owners took the brutally insane 16 game schedule off the table because it wasn't on the union's table. They gave up something they never hade. How generous can you get!!!!!

 

The union had planned all along to decertify if they weren't able to satisfy their only goal of their "negotiations" with the league--to see the books. The decertification, as in the past, is a sham move to allow "antitrust" suits to move forward. No matter how friendly Judge Doty is to the players, any decision he makes will only be the first on these actions by Brady, et al. Endless litigation will follow.

 

Is the sham decertification any more of a sham than the fraudulent TV deal the owners coerced the networks to sign in order to bankroll their lockout? The owners were so brazen in making the self-serving deal that it didn't take make judicious ability to determine the illegality of such an obvious scam.

 

Jerry Jones has never seen Ralphs books-and I can guarantee you that Wilson doesn't want to share that info.

 

Are you sugesting that the cagey elderly owner is involved in something that is questionable???

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PR spin control. The main issue is money. Always has been. Always will be. And the owners decided to create a system where they pay their employees a percentage of the total revenue. When they did that they created a partnership. But they expect the players to take their word on what that total number actually is. On trust alone. Now, there isn't a business in the world that would agree to sign a new deal based on this principle without seeing the books. The fact that the NFL is insisting that they met the players' finical demands is a bold faced lie since the desired number is a percentage of a number the owners refuse to acknlowdge.

 

If the owners didn't have anything to hide they would show the books. If the leave was really not making record profits and generating record revenues, they'd show their books because it would take whatever leverage the players have away.

 

The 18 game schedule and rookie cap are side shows. It's about the money.

 

Funny I share in my companies PROFIT not revenue. Because I contribute to their ability to make a profit, but I also play a part in their expenses. Maybe the owners do not want to share the books, because they do not want the line details to become public or there are individual organizations that are struggling and that would weaken them.

 

I have a huge problem with the word revenue, because it is meaningless to organization stability. Yes increasing is always good, unless your expenses increased more. The point of this argument is future earnings and the players want to see the past 10 years, they are meaningless in todays world of increased exepneses for travel, facilities and health care. What the owners are looking for is a partner in potential increased expenses going forward, not just revenue.

 

So, the agreement should be a percent of profit and the books will determine each years payout (or cap). It's not hard if both sides want to be honest with each other.

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Is there anything more ridiculous than unions for pro athletes and hollywood actors?

 

I think not. Get to work, you leeches. The players will soon find out that the owners will put something else on the field, much like the studios did creating the reality TV business when the writers decided they weren't rich enough.

Yes! The antitrust collusion between the NFL team owners is even more ridiculous than the players and actors unions.

 

The mistake you make in understanding this is that while there is no justification for the NFLPA in terms of these men somehow "deserve" to be even better compensated for playing a boys game. However, there is total justification for the union to exist as a check and balance against the rampant greed of the NFL team owners.

 

The only thing more ridiculous than the players making way too much money off of the game is the owners making even more money off these men playing a boys game.

 

Funny I share in my companies PROFIT not revenue. Because I contribute to their ability to make a profit, but I also play a part in their expenses. Maybe the owners do not want to share the books, because they do not want the line details to become public or there are individual organizations that are struggling and that would weaken them.

 

I have a huge problem with the word revenue, because it is meaningless to organization stability. Yes increasing is always good, unless your expenses increased more. The point of this argument is future earnings and the players want to see the past 10 years, they are meaningless in todays world of increased exepneses for travel, facilities and health care. What the owners are looking for is a partner in potential increased expenses going forward, not just revenue.

 

So, the agreement should be a percent of profit and the books will determine each years payout (or cap). It's not hard if both sides want to be honest with each other.

This gets at the real issue. Where the NFLPA is headed on this is an effort to replace the team owners as the recipient of the profits and managers of the revenues from the game.

 

I have little problem with this as I see the owners simply being a middle man who add little or nothing to the game I love.

 

The original owners did take a risk with their capital and reasonably receive compensation for this risk taking. However, the original owners which are pretty much down to Mr. Ralph walking around this planet have been outragously compensated for the risk taken. The fact they have pushed the envelope even further by re-opening what is a sweetheart deal for them makes any taking from them also reasonable.

 

The issue here is that really all the BFL team owners provide is capital and there are simply tons of sources of capital (including the players with their share of the revenue/profits from the game THEY play. In fact the real source of capital in the game now are the TV networks.

 

The game needs the owners like a fish needs a bicycle and I would be happy to see them cut out of the process.

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The union had planned all along to decertify if they weren't able to satisfy their only goal of their "negotiations" with the league--to see the books. The decertification, as in the past, is a sham move to allow "antitrust" suits to move forward. No matter how friendly Judge Doty is to the players, any decision he makes will only be the first on these actions by Brady, et al. Endless litigation will follow.

 

 

Agreed that it appears to me that the union has choreographed this dance for a while. I think the owners stepped in it when they beat the crap out of the Ed Garvey led AFL-CIO old style union organizing when the owners launched the replacement player gambit as part of the last lockout.

 

The owners have been trailing behind the players (led by Gene Upshaw and the talented tenth of players and reinforced by the NYC lawyers who are the heirs of Pete Rozelle who suggested the decert strategy to the NFLPA) since the lockout.

 

We have seen this in the NFLPA using the fact this is a free country to force the team owners to accept this as partners when they threatened to decert.

 

In the negotiation over the next CBA they forced the team owners to accept the NFLPA not only as partners but arguably majority partners in the NFL as the NFLPA got on paper a clear majority of the total revenues.

 

My sense is here that the team owners may have really stepped in it by asserting their contractual right to re-open the deal as I think signs point to an outcome where the NFLPA makes a stand for increased competition by suing the league as anti-trust violators and ultimately starts a NEWFL where the team owners are actually the players who play the game.

 

Who knows for sure what will happen as the team owners have a lot of cash and cash rules in this society.

 

However, I think the team owners have probably gone a bridge too far on this one.

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Cold hard numbers...

 

http://blogs.forbes.com/sportsmoney/2011/01/10/numbers-show-nfls-economic-realities-for-lockout-unwarranted/

 

"What is Goodell basing his “economic realities” on?

The league has pointed to the only financial info made available to the public, the Green Bay Packers. The “economic realities” are that in the worst economy since The Great Depression, the Packers saw reduced profits last year. The club pulled in $9.8 million in profits for the fiscal year that ended March 31. That was a decrease from $20.1 million from the year prior."

 

Also...

http://blogs.forbes.com/sportsmoney/2011/01/12/more-numbers-show-labor-issue-in-nfl-far-from-cut-and-dry/

 

 

I disagree with the writer's assertion that it's unwarranted, the Packers numbers (the only ones available since they're publicly owned) actually tells me that the owners should be concerned. Profit dropping 50% in one year? Increased blackouts throughout the league?…

 

http://www.usatoday.com/sports/football/nfl/2011-01-28-nfl-ticket-prices_N.htm

 

 

But then there's the whole not showing the financial books of the other 31 clubs that thwarts the owners plee for sympathy. Anyways, I just wanted to share these articles I found on the subject.

Edited by 1billsfan
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Tgregg99 is either a former player with a stake in this or a state worker p*ssed off about Wisconsen. Every one who works has a boss. Freaking deal with it.

I love my boss, because I am my best employee!

 

If anyone wnats to look at a messed up labor situation look at the WWE who's wrestlers are all contract employees.

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If anyone wnats to look at a messed up labor situation look at the WWE who's wrestlers are all contract employees.

That's very common anymore.

I am a software contract worker for a fortune 500 company and 75% (maybe more actually) of my organization is contract.

Easier for the company to hire and fire without worrying about any union or lawsuit bull ****.

Edited by CodeMonkey
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Yeah, the whole "investment" thing is pure BS. Same could be said of any employee of any company. I'm sorry, I have a hard time feeling sorry for Tom Brady, Peyton Manning, and Drew Brees because the brothers can't catch a break a the pay window. Call a spade a spade - players want more money and owners don't wanna give it up. It's not rocket science.

 

I wonder if either side is concerned about what I wonder about in regards to the NFL and ever escalating salaries. Where do hit the saturation point where teams can no longer raise enough money from fans and sponsors and municiplaites etc. to pay the salaries and all the other overhead like JJ's stadium mortgage? I think we're getting close. I wonder if they do?

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I agree the article is lucid, well-written, and interesting. Even thought-provoking. It is not, however, balanced. It was written by a man who'd apparently been in line for being the head of the NFLPA; and who at times sounded a lot like a spokesman for the players.

 

The NFL players are employees. They typically arrive in the NFL with little or no money, are paid handsome salaries, and then retire. But to read Cornwell's article, you'd think the players were "investors" in the league. Consider the following sentence: "NFL players make a $596 million investment ($1 billion of current credits multiplied by 59.6%) in the business every year." Compare those words to the underlying reality that statement is intended to represent. The first $1 billion of annual revenues the NFL receives does not count towards the salary cap so that owners can pay for their non-player expenses. That is not an "investment" being made in the NFL by the players.

 

Suppose a restaurant owner has ten employees, each of whom makes $25,000 a year. His annual revenues from the restaurant are $350,000 a year. The gap between his annual revenues (of $350K) and his annual employee expenses (of $250K) does not represent a $100K a year "investment" in the business by those ten employees. That $100K a year is money that the owner can use to pay non-employee expenses, invest in the business (advertising, building renovations, etc.), or keep for his own personal use.

 

His argument that players are "partners" is similarly weak. He argues that NFL players are partners with the owners because of the NFL's strict off-field conduct policy. However, similar rules exist for other employees in other businesses, without those employees being designated partners. For example, winners of the Miss America pageant are asked to avoid embarrassing incidents, and are subjected to strict personal conduct rules. The existence of such rules does not make them "partners" with whoever it is that sponsors the Miss America pageant. If NFL cheerleaders were subjected to strict off-field conduct policies (which for all I know they are), no one could reasonably point to that as evidence they'd somehow become business partners with guys like Jerry Jones and Robert Kraft.

 

Cornwell uses his argument that NFL players are partners and "investors" in the NFL as a springboard for his next suggestion: stock options for NFL players. This, despite the fact that he points out the following: "Delayed revenues, i.e., revenues generated by today’s investment but not realized within 3.5 years (the average length of an NFL player’s career), are not shared with some the NFL players who actually make the investment."

 

[----remainder of post omitted------]

 

 

I think you are missing his point when it comes to why he is treating the players as partners. In prior labor disputes, the players have asked for a percentage of revenue based on the argument that their talent, hard work and risk (injury, short careers, etc) is responsible for generating the lion's share of those revenues. The NFL has conceded that point previously which is why they agreed to cut players in for a cut of revenues, 56.9% is what was agreed upon. The owners then roped off a part of their revenue on the notion that they needed money set aside to use to grow revenues which benefits the players through an increased salary cap. 56.9% of that money is revenue generated by the players based on the principals and agreements the parties have long ago accepted. That is what the author means by the players investing money in to the league. The owner's want to increase the revenue contributed to the players by 100%, by doubling it from $1 Billion to 2 Billion though I am sure their "real" number is not what they lead off with, its probably closer to half that or maybe a third of that.

 

I understand your point about revenue vs profit but this argument has already been made and pretty much decided by the parties in prior agreements. The players incur costs as well that are uncompensated. In addition to accepting limits on their off field lives, the risks of permanent injuries and the reality of short careers, consider the all the work out time and effort spent by players already under contract that is not required of them and such as the "voluntary" practices held all off season or QB's and WR's getting together to work on timing on their own. Consider also the years and years of uncompensated training in little league, high school and college and that every practice they have had since little league was an opportunity for a life altering injury. Even those who are able to start careers after the league are entering the job market many years behind their peers.

 

Whether or not you or I agree that these costs are legitimate ones to consider is not really relevant, the owners and the players already have. The payback for the players on that contribution, ie, they get absolutely no share of $1 Billion in revenues that they play a critical role in creating, is that the game grows so that the salary cap is increased which leads to higher salaries for players. Their point would be, that if the league is going to double the amount of their contribution, the league has to share the increased value that investment leads to with the players. The league's response is that the increase is necessary to cover increasing costs which the players have been shielded from having to contribute towrds. The way to figure out who is right and who is wrong is to look at the actual numbers. Certainly team costs have gone up but so has off-the-books revenue, ie, revenue that is reported under the CBA to determine the salary cap each year. All they have to do is look at total revenue fron all sources when the CBA was agreed vs. all costs, including player salaries and compare then with last year's numbers. That would quickly determine whether the owners are gouging players or whether the player are unrealistically in their assessment of team costs.

 

And that is where the negotiations have stalled. The NFL simply will not disclose those numbers, insisting that the deal they are offering is so wonderful that the players are being greedy little jerks for not just accepting it on faith. They have an inherent advantage over the players in negotiations. Player salaries and salary caps are well known, team profits and costs are not. The league isn't going to agree to give that away. It keeps the union in the dark and makes it much easier to lambaste the players as being greedy and themselves as simple businessmen trying to balance their books.

 

I have no doubt that players are greedy. But I also have no doubt that owners are every bit as greedy. I think all any fan wants is a fair and quick resolution of the disupte so that football resumes and that the chance of future labor disputes are lessened. I don't think those goals are at all possible with one side having to show all their cards while the other doesn't. Thus, the lawsuit. There is a thing in the law called "Discovery" which essentially, within certain limits, allows each side to see where the other has buried the bodies. The point of the suit isn't to win some new free agency rights or to destroy the league by having it termed a monopoly. The point of the suit is to force the league to show its hand. Then the parties can negotiate without one side feeling they are flying blind. Once the math is available, a fair resolution should be as easy as adding up number on both sides of the ledger. My assumption is that those numbers will not support the leagues arguments because if they did, the league would already have used them as the ultimate hammer in negotiations.

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I agree the article is lucid, well-written, and interesting. Even thought-provoking. It is not, however, balanced. It was written by a man who'd apparently been in line for being the head of the NFLPA; and who at times sounded a lot like a spokesman for the players.

 

The NFL players are employees. They typically arrive in the NFL with little or no money, are paid handsome salaries, and then retire. But to read Cornwell's article, you'd think the players were "investors" in the league. Consider the following sentence: "NFL players make a $596 million investment ($1 billion of current credits multiplied by 59.6%) in the business every year." Compare those words to the underlying reality that statement is intended to represent. The first $1 billion of annual revenues the NFL receives does not count towards the salary cap so that owners can pay for their non-player expenses. That is not an "investment" being made in the NFL by the players.

 

Suppose a restaurant owner has ten employees, each of whom makes $25,000 a year. His annual revenues from the restaurant are $350,000 a year. The gap between his annual revenues (of $350K) and his annual employee expenses (of $250K) does not represent a $100K a year "investment" in the business by those ten employees. That $100K a year is money that the owner can use to pay non-employee expenses, invest in the business (advertising, building renovations, etc.), or keep for his own personal use.

 

His argument that players are "partners" is similarly weak. He argues that NFL players are partners with the owners because of the NFL's strict off-field conduct policy. However, similar rules exist for other employees in other businesses, without those employees being designated partners. For example, winners of the Miss America pageant are asked to avoid embarrassing incidents, and are subjected to strict personal conduct rules. The existence of such rules does not make them "partners" with whoever it is that sponsors the Miss America pageant. If NFL cheerleaders were subjected to strict off-field conduct policies (which for all I know they are), no one could reasonably point to that as evidence they'd somehow become business partners with guys like Jerry Jones and Robert Kraft.

 

Cornwell uses his argument that NFL players are partners and "investors" in the NFL as a springboard for his next suggestion: stock options for NFL players. This, despite the fact that he points out the following: "Delayed revenues, i.e., revenues generated by today’s investment but not realized within 3.5 years (the average length of an NFL player’s career), are not shared with some the NFL players who actually make the investment."

 

Stock options are typically not given to employees who are only expected to be around 3.5 years. They make the most sense for young, quickly growing companies with a core of elite-level employees who could easily take their talents elsewhere. If a talented young programmer is deciding whether to work for Microsoft or a start-up, Microsoft may well be able to offer him a better salary. But the start-up's stock options will have the higher upside.

 

There is also the problem of dilution. If Microsoft offers stock options to its employees the dilution effect is likely to be minimal, because there's already so much Microsoft stock in existence anyway. If the start-up offers stock options to its most critical employees, the dilution effect will be stronger. But that will presumably be more than balanced out by the fact that those stock options allow it to attract and retain a more talented group of employees than it otherwise could have.

 

Cornwell's proposal would involve a considerable dilution effect. The NFL has a large number of players, and as he pointed out himself they come and go quickly. Think of the long-term effects of giving everyone like that stock options. Suppose you were to give all current players a 5% ownership share in the NFL. 5% ownership may not seem like much. But with the average player career being 3.5 years, that would mean that on average you'd have to give another 5% ownership share to the players every 3.5 years! That's a 28% share over the course of 20 years, and a 43% share over 30 years. Eventually, the NFL would be wholly owned by former players or their heirs. It is clearly not in NFL owners' long-term interests to do that. On the contrary: the NFL owners could cut the salary cap to 20% of shared revenues without the risk of losing very many players to other leagues. (Such as the CFL.) It's in the owners' interests to push as far as they can in that direction; rather than slowly giving away their ownership of the league to the players.

This

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I think you are missing his point when it comes to why he is treating the players as partners.

Sounds like the argument is that the players are special employees ("partners" -- the reason for the usage of this term becomes crystal clear) that deserve to sit in the driver's seat as explained by someone that makes his money as an attorney for player's agents. The article states unequivocally that the all revenue comes from the players when he says that the $1B held back in the old CBA was "the player's investment" in the business. Good to know that the owner, front office, coaches, scouts, medical, trainers, marketing, ticketing, concessions, stadium maintenance, and other employees have no revenue contribution in the NFL business, nor do other corporate and public sponsors that invest your tax money and so forth. It's not hard to see where he is going with this as he says explicitly that the players deserve "stock" in these privately held companies. His argument is that the players are and should be ownership of the league. This is a distinctly different model of ownership and one that has any number of implications that are not considered.

 

PS: I wonder if he'd favor star players sharing the money they make off endorsements back to the league? Certainly they are trading on their status as ownership partners.

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It's not that simple -- but if it came to safety and benefits of retired players it's secondary to total money. That's always been the case. The players are going to take care of themselves first (the active players).

 

 

No ... let me clarify. You're talking about two different points (I think).

 

The owners agreed to pay the players a percentage of total revenue. That's reflected in the salary cap per team. Teams are not required to spend to the max of their cap (and some don't). But it limits the total amount that the players can earn as a group, not individually. The money they're talking about cutting wouldn't be reflected in current contracts, but in the amount of money owners are forced to allocate to their players. It would have a trickle down effect (for lack of a better term since it's Friday and I'm a few beers in) over the course of the league's existence.

 

Right now the owners skim 1B from the total revenue stream and then split the rest roughly 60/40. The Owners want to take another 1B off the top (somewhere in the neighborhood of 22% cut from the players pool -- but that final number is impossible to know because no one knows how much total revenue the owners are making). So that 1B could represent a 22% cut -- or it could represent a 12% cut. What it does is allow the owners to take 2 billion off the top, then set the salary cap for that coming year.

 

As for the finer points of anti-trust law, I have no clue. I have a background (limited) in contract law but am by no means an expert. I think there are others on here that are and I'd love them to chime in because I'd like to know the answer to your Drew Brees scenario too.

 

And what you fail to understand is that the salary cap si necessary for the health of the league. It ensures that there will be the most money across the board for all teams/players. If the salary cap all of a sudden goes up to $200 million, what good is that if only jerruh and danny-boy can spend to it? That would upset competitive balance and riun the integrity of the league.

 

Why does the NFL do so much better than baseball? Because in the NFL, and its cap and rules, each team has a legit shot to win a title every single year. In the MLB, there are what, maybe 8-10 teams out of 30 that have a realistic chance of winning it all.

 

Sure, let the players, sue and get the cap removed. We'll how well their constituency likes it when there's also no salary floor and the jags spend $30 million total to field a team of 53 players.

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And what you fail to understand is that the salary cap si necessary for the health of the league. It ensures that there will be the most money across the board for all teams/players. If the salary cap all of a sudden goes up to $200 million, what good is that if only jerruh and danny-boy can spend to it? That would upset competitive balance and riun the integrity of the league.

 

Why does the NFL do so much better than baseball? Because in the NFL, and its cap and rules, each team has a legit shot to win a title every single year. In the MLB, there are what, maybe 8-10 teams out of 30 that have a realistic chance of winning it all.

 

Sure, let the players, sue and get the cap removed. We'll how well their constituency likes it when there's also no salary floor and the jags spend $30 million total to field a team of 53 players.

But unless I'm mistaken I don't think anyone in the NFLPA wants the cap removed? The floor is worth more to the majority of their membership than the ceiling is. What's at issue is exactly what story of the building is that floor and ceiling on.

Edited by tgreg99
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This is the start of what will be a very long process..... This actually really sucks for us fans...

 

Couldn't be said any better. I don't think that either side realizes, that it's us the actually pays for this. If we don't care about professional football, then there is no NFL. There is no money made and no one cares about the players...

 

I think us fans should boycott Week 1, once the NFL comes back out of this labor dispute. Maybe that will make them wake up and see things for what they really are.

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Now that the union doesn't exist - cant the NFL start paying the players whatever they want? Like this years rookies? I know they will have to honor their existing contracts, but new contracts really dont have any bargaining power. The NFL can establish a rookie scale and force the players to abide. Change the rules to give teams 4 years of rights to all draft picks, rather than 1.

 

I also dont buy the anti trust lawsuit. All teams are in fierce competition with each other. no different than directTV v Time Warner V Dish Network IMO.

Perhaps.

 

This is essentially how "losing the lawsuit" could be turned into a huge win for the owners, at least in the short term. Let's say that the decertified sham formerly known as the NFLPA wins their anti-trust case. They break the backs of the ownership, right? They force the owners to make them partners in the business so they and their handler agents can make the decisions, right?

 

Not so fast. An anti-trust judgment could spell the death of the NFL as it is currently structured, but it falls short of forcing the owners to sell interest in their private companies to the employees. It could mean the end of the NFL draft, the end of a salary cap, the end of a salary floor, the end of player roster quotas, the end of the pension plan, the end of player's health insurance, the end of NFL brokered TV contracts, and on. Football players become free-agents and part-time employees for 32 independent organizations, where a few stars may (or may not) be paid $100M by either Daniel Snyder or Jerry Jones while 2/3 of the NFL is just happy to put the lowest-cost team on the field and maximize the ROI for its ownership and pay its players $30K a season. The restraint on trade, the anti-trust exemption, is what fuels the ultra-lucrative business of the NFL for both players and ownership. Under an NFL-busting free-for-all scenario such as above, both players and owners would lose in the long run (and the fans would get a non-competitive baseball-style product with most teams becoming wholly irrelevant chumps) but each owner would be free to spend or not spend as he sees fit.

 

On the other hand, one could easily see how the threat of the above scenario and the hugely negative impact it would have on the vast majority of the NFLPA membership could be used to bust the union leadership and force the players to accept a deal favorable to the owners and where the players would willingly give up some ground (which is what the owners are seeking) in order to salvage the situation.

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