The current labor agreement wasn’t magically created, it was signed in 1993. The Collective Bargaining Agreement (CBA) as we know it now was the culmination of player strikes, antitrust lawsuits and all sorts of other league turmoil. Eventually, the players agreed to a salary cap in return for free agency and an enhanced share of league revenues.
Since then, the CBA has been extended several times, most recently in 2006. Seeing as how the 2006 extension passed by an overwhelming 30-2 vote among league owners, you’d think they would be fine with just extending the current agreement as it stands now. That couldn’t be further from the truth. In fact, the reason we’re even talking about this now is because in 2008, a mere two years after the extension was signed, the owners unanimously voted to opt out of the agreement two years early (Brown).
The concrete agreement might have seemed like a great idea at the time, but now the owner’s feel like the they were cheated. The theory is that former NFLPA executive director, Gene Upshaw caught the NFL Commissioner Paul Tagliabue in a moment of weakness and capitalized on the situation to push through an extension that would be feasible for the players only (Brown). Tagliabue was preparing to step down from his 17-year tenure as NFL Commissioner, which was marked by an unprecedented lack of labor strife. Not wanting to tarnish that legacy of harmonious relations between players and owners, Tagliabue was allegedly persuaded by Upshaw to sell the owners on a deal that gave players a 59.6% cut of revenues (Brown).
The owners were given a new revenue sharing plan with the new deal, which would make the league’s 15 most profitable franchises make payments to help subsidize the 17 least profitable franchises (Brown). In the present time the negotiation seemed feasible to accept, but once the owners really analyzed the cost and loss of revenue it would cause, is what made them uncomfortable with going forward. With that said, the owners had their franchises to maintain and renovate, while still supporting the lower revenue franchises, who also needed new images as well as new stadiums. That was one of the major issues in the agreement as some team owners not being able to get funded to remodel or built a stadium. In some cases owners could be funded by the local government from taxpayer dollars or some were too wealthy they had to fund their own. The major issue is the risk taken to make a profit and maintain their fans involved with their franchise, while having peace of mind that their business plan is still feasible to pursue.
The main issue between the two parties is trust. The NFL owners have refused to open their financial books to the NFLPA to prove that there really is financial distress among the league owners. The player’s aren’t opposed to chipping in to help out, but they want to take a look at the owner’s financial records to verify if the owners aren’t making it up and lying to the players. The player’s doubt the financial distress, due to reports indicating how the league is seeing record profits and how franchise values have increased significantly. So the question is the where is the financial concern coming from? The players state that in order for them to consider the owners situation they need to take a look at the financial books.
Despite two extensions to the collective bargaining agreement during 16 days of talks overseen by a federal mediator and previous months of stop-and-start negotiating. The sides could not agree on a new deal. The league said it hadn’t decided as of Friday evening whether to lock out the players, who, meanwhile, went to court to request an injunction to block such a move. As was clear all along, the dispute came down to money. In the end, it appeared the sides were about $185 million apart on how much owners should get up front each season for certain operating expenses before splitting the rest of the revenues with players (Brown).

What are the issues?
NFL Commissioner Roger Goodell has insisted that player salaries are increasing at a rate faster than the league’s revenues. It’s not necessarily a dire issue now, but Goodell and team owners maintain that the rising salaries and other costs will create an unsustainable business model in the future. These are notions the NFL Players Association disputes, and therein is the crux of the disagreement between the two sides. Players currently receive roughly 59 percent of the league’s revenue but the NFL and owners want to reduce salaries by taking a larger chunk of revenue off the top. As it stands now, the NFL reportedly takes about $1 billion off the top of the league’s $9 billion in revenues. Though the NFLPA is happy with the current deal, the players would like better health-care benefits for life after football. Players are also against the idea of moving to an 18-game schedule, which they argue would shorten careers and lead to more injuries. Owners maintain it would create more revenue.
Player’s Desired Outcome
The players have conceded that they would be willing to take a smaller cut of the NFL’s total revenue. Their initial proposal to the owners was a complete 50-50 split of revenue, eliminating the one billion given to the owners before the money is divided. Their proposal would still allow owners to apply for money to cover expenses, but there would be no money guaranteed. The players want to eliminate the guaranteed money because they have accused the owners of using these funds for things like team travel, rather than investment. Covering expenses like team travel saves the owners money, but doesn’t improve the overall health of the league like it is supposed to.
From the player’s perspective, this offer has a few benefits. Owners would still be able to invest in their teams by applying for credits, it would give the owners a larger total share of the money, and it would eliminate the need for expensive, time consuming audits. Under the current system, each team is audited to make sure they are sharing revenue 60-40 like they are supposed to. In a 50-50 split, both sides could be sure they were getting their fair share, since both sides would be given the same amount. Not only did the owners dismiss this plan as ridiculous and reject it outright, they submitted a complaint to the National Labor Relations Board that accused the players of not bargaining in good faith (O’Clair).
Negotiation Strategy
The NFLPA will have to be really firm with their needs and wants in this negotiation to assure that they don’t lose ground on a new agreement that will come back and haunt them in the future. Their real objective is to come to an agreement that benefits them as much as it does the owners, where the players can be taken care of when they retire or no longer able to play due to career ending injuries. To reach their goal they must use an integrative negotiation strategy. This will allow them to air out all their desires in a formal demeanor and not as a demand. The integrative approach will give both parties to focus on commonalities and not differences, address needs and interest, not positions. The purpose is to reach a feasible agreement where both parties are heard and are able to explain why their objective is a necessity and not a desire and why is it so important to them to achieve this goal. The integrative approach will allow both parties to agree on a win-win outcome instead of a win-lose.
First they have to identify the problem. Second, understand the problem and why it’s happening and air out their interests to the table. Third, they need to generate alternative solutions to the problem or a mid point where both will be comfortable with. Fourth, evaluate the alternatives and select amongst them to find one that benefits both parties. It seems simple to explain but in the negotiation process both parties must have discussed amongst their own party to define a mid point and low point to the negotiation process not to lose ground on what is really needed from it. Once both parties bring their plans to the table they can agree to something that seems fair enough and not like one side is benefiting more than the other. The main goal of using an integrative approach is that both parties feel like they didn’t lose, but got their goal acknowledged and agreed on.
The owner’s desired outcome
The owners feel that owning an NFL team is risky, since owners tend to pay a large part of stadium construction and other costs out of their own pocket. If the team’s revenue suddenly drops, they may be bankrupted by the debt on these investments. The owner’s proposal would expand the investment fund to two billion dollars, taken before the money is split, and the remaining seven billion would be divided using the current 60-40 breakdown.
NFL owners claim that the last two years have been hard for them, that their profits have dropped significantly, and that many of them will be in financial trouble soon if the system is not changed. However, there is no real way for the players or fans to confirm this. Since the teams are privately owned companies (except for the Packers), they do not need to show their financial records to anyone if they don’t want to (O’Clair). The owners have stood by this, saying that because they do not legally need to share than information, they are not going to. So fans, and the players, must take them at their word when they say they are losing money.
The owners have a few other demands as well. Some of them are opposed to the way revenue sharing between the owner’s works. After every season, the top fifteen teams in revenues must send a portion of their income to the bottom seventeen teams. While this is designed to keep teams like Jacksonville and Buffalo from going bankrupt after a few bad seasons, some owners say that the system is broken (O’Clair). The revenue sharing system only looks at revenue, and does not take expenses into account is what owner’s claim.
For example, although Jerry Jones has hundreds of millions of dollars in debt hanging over his head after building his new playground in Arlington, the Cowboys had huge revenues last year, so he will have to send money to another team as part of revenue sharing (O’Clair). If the team getting that check has low overhead costs, like the Cardinals, they may actually end up with more net profit than the Cowboys, but they will get the check anyway. Some owners, like the Bengals Mike Brown, are notorious for being incredibly cheap in order to keep costs as low as possible. He doesn’t care that he makes less money than the Cowboys, because he knows the Cowboys will have to cut him a seven or eight figure check at the end of the year, and this will go into his pocket as pure profit. Even though this is an argument between the owners, the details of revenue sharing are covered in the CBA and must be negotiated with the players union.
The owners have other demands as well. The biggest one is eliminating two preseason games and creating an 18 game regular season. The players object strongly to this demand. Vince Wilfork called the idea “stupid,” James Harrison said it was “ridiculous (O’Clair).” The players are being asked to do more work without being compensated more (the expanded schedule would not come with expanded pay), and are asked to put their bodies at risk for two more games per season. In a league where traumatic injuries, concussions, and severe broken bones happen pretty frequently, expanding the schedule is very risky for the players. If this happens, it will be a huge victory for the owners. Some managers, like the Colts’ Bill Polian, are saying an expanded schedule is definitely going to happen (O’Clair).
The owners have also proposed an NBA-style “slotted” system for rookie contracts, where rookie salaries are predetermined by their draft position. The players probably won’t fight the owners very hard on the addition of a pay scale, since many of them feel the system should be changed as well. The problem both sides have is not with rookie contracts overall, just the players at the very top end. For a few months last summer, Rams QB Sam Bradford was the highest paid player in NFL history despite never taking a snap. A possible pay scale would bring these high-end contracts down, freeing up more money to be given to veteran players and players drafted in later rounds (O’Clair).
Negotiation Strategy The NFL owners are attempting to negotiate the percentage of revenue the player’s are receiving on a yearly basis, since they claim to be losing money. The owners want to achieve this with a distributive strategy, where they aren’t willing to show any proof to support their reasoning. Obviously, the player’s aren’t willing to come to the table until they show something that states they are losing money. The Distributive approach shows the players that the owners want the bigger piece of the pie and not willing to come to a mid-point where everyone reaches their desired outcome. The owners will need to make a 360 degree turn in how they are approaching this negotiation, and find an approach that is feasible for both parties. The players aren’t against a new CBA, but they want to see facts and numbers that allows them to understand the owner’s stance in the negotiation. An integrative strategy would be the best option for both parties to avoid an NFL strike and bring football back to its fans. It also allows both parties to brainstorm on what options are the best for the sake of both parties.