Owners vs. Players in Football’s Labor Dispute : The New Yorker
The past weeks have seen two big labor disputes in the U.S. One is between Republican politicians and public-employee unions in Wisconsin—a fight over profound ideological differences about government spending and the proper role of unions. The other is the clash between N.F.L. owners and players over the owners’ desire for a new collective-bargaining agreement. The reason for this fight is much less complicated: it’s about very rich businessmen thinking that they should be even richer.
With the possible exception of the members of OPEC, N.F.L. owners have pretty much the coziest business arrangement imaginable: they’re effectively members of a cartel—able to limit competition, enhance bargaining power, and hold down costs. Instead of competing against each other for TV money, the owners share it, reducing risk and guaranteeing steady revenue regardless of how well they run their teams. The result of all this was nicely summed up by Richard Walden, head of sports finance at JPMorgan Chase, who said, “I’ve never seen an N.F.L. team lose money.”
So why are the owners unhappy? Well, the downturn has made it harder to raise ticket prices and to get states and cities to subsidize new stadiums. And players are the biggest expense that teams have: they get sixty per cent of whatever the league makes above a billion dollars. The owners think that’s too high and want players to accept sixty per cent of all revenue above
two billion, which works out to be a pay cut of some six hundred million dollars.
Now, modern economies have a very effective mechanism for deciding if salaries are really too high: it’s called the free market. That’s how most people’s salaries are set, after all, including those of major-league baseball players and European soccer players. But N.F.L. owners have never liked the idea of a free labor market, which might cost them more and also threaten the league’s competitive balance. Instead, the league typically caps player salaries, a system that supposedly makes it easier for smaller franchises—like the Super Bowl-winning Green Bay Packers—to contend, and prevents rich teams from dominating, the way rich teams do in baseball and European soccer. The salary cap, the N.F.L. argues, is good for the business as a whole; parity makes the over-all pie bigger, leaving everyone better off.
This is not necessarily true; research shows that salary caps don’t always improve competitive balance, and soccer’s enormous fan base suggests that parity is not a requirement for popularity. But, even if it is true, what’s best for the league isn’t necessarily best for the players. Unlike the rest of us, they don’t get to choose where they want to work—they have to play for the team that drafts them—and they can be traded at will. Free agency is tightly regulated, and careers are short; the average N.F.L. player is in the league for just three and a half years. And, despite the violence of the game, contracts are not guaranteed. It’s not such a raw deal: the players’ share of the league’s revenue is similar to the share that players get in other major professional sports. But it’s almost certainly less than they would ask for (and get) in any free labor market, given the fact that football players have shorter careers than other athletes, less job security, and greater risk of serious injury. In the current arrangement, the players essentially accept a guaranteed share of over-all revenue in exchange for tolerating a status quo that in most other businesses would run afoul of antitrust law. You’d think that the owners would count their blessings. Instead, they are demanding that the players give back some of their income, and are offering little in exchange.
The owners argue that cutting the players’ share will let teams put more money into things like stadiums and new media, and that these investments will, in the long run, make everyone richer. The problem is that owners and players don’t benefit equally when football becomes more profitable. Sure, everyone’s income increases, but the owners also see the value of their teams rise; a 2004 study found that new stadiums increased the value of franchises by an average of thirty-five per cent, an effect that, along with a boom in television revenue, has caused the value of the average franchise to triple in the past twelve years. This increase in value benefits the owners alone, and explains why so many of them are now billionaires. If you work for Google or Apple, stock options give you a chance to share in the increasing value of the company. In the N.F.L., nothing like this happens; the players, though rich, are just working stiffs like the rest of us.
You might say that that’s capitalism—those who provide the capital for an enterprise deserve to reap the profits. But the N.F.L. isn’t capitalist in any traditional sense. The league is much more like the trusts that dominated American business in the late nineteenth century, before they were outlawed. Its goal is not to embrace competition but to tame it, making the owners’ businesses less risky and more profitable. Unions are often attacked for trying to interfere with the natural workings of the market, but in the case of football it’s the owners, not the union, who are the real opponents of the free market. They have created a socialist paradise for themselves that happens to bring with it capitalist-size profits. Bully for them. But in a contest between millionaire athletes and billionaire socialists it’s the guys on the field who deserve to win. ?
.. Yes the greedy players just taking from the poor poor owners.. Breaking their body's and killing themselves. Yea yea i know they don't have to play football. Yea well the owners don't have to own! Sell the team so you won't have to file for food stamps!
