Colin Quinn
NCM 501 SLP 2
Trident University
BACKGROUND AND SETTINGS The National Football League (NFL) experienced its first work stoppage since 1987 when the owners locked out the players that make up the National Football League Players Association (NFLPA) on March 12, 2011 (Judge, 2011.) The lockout was set in motion when the owners exercised there option to opt out of the collective bargaining agreement (CBA) on May 20, 2008 causing the CBA to expire on March 3, 2011 (NFL, 2008.) The Intra-organizational conflict the owners had was the revenue sharing of $9.3 billion the league generated annually. The owners claimed that because of inflation and the increased costs of utilities that the $1 billion credit off the top of the revenue was just not enough to sustain revenue growth and wanted the credit to be increased to $2.4 billion. This meant that the players needed to take an 18% cut of the revenue share to give the owners what they want. In addition the owners wanted to increase the regular season by two games by decreasing the preseason from four games to two games, which the players clearly did not want. Finally, both sides wanted to implement a rookie wage scale but disagreed on how to redistribute the money saved on rookie wages (Oestmann, 2011.) These conflicts in negotiations, along with the owners and NFLPA’s inability to come to a new agreement before the expiration of the CBA forced the owners to lockout their players from the workplace. This national level conflict escalated because of the popularity of the sport in the United States (Shachar, 2011.)
CONFLICT SOURCES The first major source of conflict in negotiation was the economics of revenue sharing. Neither side could agree on how to split up over $9 billion in annual revenue. The CBA a $1 billion credit was taken off the revenue by the owners for expenditure purposes, while the remaining revenue was split 60/40 in favor of the players via the way of the salary cap. The owners proposed that the new CBA allow for $2.4 billion in expenditures, but would leave the 60/40 split of the remaining revenue. This meant a decrease of 18% of the players share from the previous CBA. Players under contract now would not feel the 18% decrease but it would be felt by future free agents and NFL draft picks. The salary cap was approximately $150 million per team, if the players were to agree to the owners proposed credit the salary cap would shrink to $122 million per team. Each owner/team would receive an extra $44 million dollars, which the owners are asking for to help pay for operational expenses such as maintaining and/or building a new stadium. The owners are asking for this additional credit because local governments are no longer chipping in to help build billion dollar stadiums (Masud, 2011.) The owners believe the players should assume a portion of the risk in stadium investment because the money will trickle down to the players. The players do not share this philosophy as they are employees of the team and not stockholders. They do not want to share in the risk associated with decisions that ownership makes. The players would like to finish out the agreed CBA that had two years remaining before the owners opted out. The owners claim that the current model of the CBA will lead each owner to financial ruin and change is necessary. The players have asked that the owners open up the books and prove that point. The owners have refused which leaves major doubt in the players’ minds that the owners are actually losing money (Oestmann, 2011.) A secondary source of conflict that ties back into the revenue sharing is the desire to implement a rookie wage scale. Both the players and the owners share the belief that rookie salaries are out of control and no one deserves the high priced contracts before stepping on the field in a professional game. The players want the money reallocated to proven veterans, while the owners are refusing to guarantee that the money saved with a rookie wage scale would go back into veteran salaries or at least to a Legacy fund to help those retired players that have ongoing medical problems from there playing days (Oestmann, 2011.) The final major conflict source involves the owners wanting to expand the regular season to 18 games. The owners want it and the players want no part of it. The owners would cut the preseason from four games to two, which will increase revenue from gate receipts, broadcasting contracts, and possibly sponsorship. The players find this stance very hypocritical by the owners with the increased attention of player safety in the sport (McGinnis, 2011.) The longer season increases the health risks for each player. The NFLPA has been trying to increase the benefits for retired players already. The players see the longer season as increase risk factor as well as decreasing career earnings. The owners would make more money adding two regular season games and decrease the income of players. Players’ contracts and game day pay checks are divided by 16 games. An increase to 18 games means that players would be making less per game while substantially increasing injury risk with two extra games (Oestmann, 2011.) The NFL’s owners and players certainly had many issues to overcome to reach a new CBA. There were many Intra-organizational conflicts in negotiations when dealing with the issue of revenue sharing. The NFL Lockout escalated in scope because of the popularity of the sport in the United States. The socioeconomic differences between the owners and players lead to many disagreements to reach a new CBA and how to split revenues for the NFL (Shachar, 2011.) There is plenty of money to go around with a $9 billion revenue, but the issues on how to split the money to make sure both sides would continue to make more revenue had many road blocks with the issues presented.
Bibliography
Judge, C. (2011, July 24). Lockout Judgements: Winners, Losers, Turning Points: NFL: CBSSports. Retrieved September 2, 2011, from CBS Sports.com: www.cbssports.com
Masud, L. (2011, April 16). NFL Lockout: An In-Depth Analysis of the Lockout Situation. Retrieved September 29, 2011, from HouseofSpears.net: http://www.thehouseofspears.net
McGinnis, H. (2011, February 12). NFL Lockout for Dummies: Articles: Bleach Report. Retrieved September 2, 2011, from Bleachreport.com: http://www.bleachreport.com
NFL. (2008). NFL Owners Opt Out of CBA: News: NFL.com. Retrieved September 2, 2011, from NFL.Com: http://www.nfl.com/news/story?id=09000d5d80868b78&template=without-video&confirm=true
Oestmann, A. (2011, March 3). NFL Lockout for Dummies: The 2011 Labor Dispute Explained. Retrieved September 16, 2011, from Chicagonow.com: http://www.chicagonow.com/chicago-bears-huddle/2011/03/nfl-lockout-for-dummies-the-2011-labor-dispute-explained
Shachar, M. (2011). Conflict Resolution Management.
