Thursday, October 14, 2010

The potential lockout

The Wall Street Journal had an article about the NFL, and how it stands to potentially lose $1 billion dollars in the event of a lockout.

The number is staggering, and when I heard it, I balked. How could that be? But if we consider there are 32 teams, that's about $31 million per team. And that number I can at least understand.

You've got staff employee salaries. There are loans to be repaid, taxes (on property and so forth), leases on facilities, and other overhead expenses that you'll have even if there is no team to field. That's real money that has to be paid, no matter what.

Corporate sponsors and partners are asking for reductions in fees paid. Some of that will be real money re-paid to some partners, and reduced income in others.

The TV deal allows the NFL to essentially break-even next year if there are no games, but that ultimately means the owners pay back the networks out of future profits. So there's a long-term implication, but that doesn't really contribute to the losses in 2011.

And then there's advertising. Some sponsorship deals will essentially end in litigation if there is no CBA, with the sponsors asking for their money back because they won't be an official sponsor of anything. Others will want a reduction in what they pay, hoping for the NFL to return. Its a mix of real money and less income.

Of course there would be no real income from games to offset the losses, so it has to come from the owners' pockets, or a general fund from the NFL (where they have set aside some money for a rainy day).

Think about it. Some owners will struggle to cover it.

And the ramifications go larger. Its entirely possible that many teams will choose to furlough the non-football-operations staff, essentially leaving them unemployed. And then you also have people who would normally be employed (even as hourly workers) at the stadiums around the country who no longer have that as a potential source of income. There are thousands of people - from food vendors to policemen to grounds crew - who won't be working on Sundays.

Not to mention the effects on media people, chartered airlines, bars and restaurants, sports books, etc, etc who would also be impacted, because they don't get to drink from the trough.

And as I think about it, I realize that the owners (and really the wealthy players) are putting greed first, ahead of the thoughts of the damage they do to their own sport, and the economy in general.

So, owners, its up to you....fix this now, or we all suffer in some way.
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2 comments

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owners??? wow, that's pretty one sided. You dont think greedy players and greedy agents have anything to do with it as well? How about rookie salary caps like the nba, that would help a lot!

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Fair enough Mike. Its not just the owners, its all of the greedy bastards.

I pinned it on the owners, because they need to "blink" first, stop being so narrow minded, and start the ball rolling. But all sides need to give in.