One of the current hot topics in the negotiations between the NFL and the NFLPA right now concerns revenue loss. As it becomes increasingly obvious that any games played this season will be conducted in front of audiences that measure up somewhat short of maximum capacity, the owners are wondering how much of the financial burden is theirs to bear.
There has been a report that the owners wanted to take 35 percent of player salaries for the season and hold that money in an escrow account until the league was able to assess the total amount of losses that they suffered. The players and the union strongly opposed this, and told the NFL, in the words of NFLPA senior director of player affairs Don Davis, to “kick rocks”.
He went on WEEI to elaborate on that message, saying that “any time you’re in a contract dispute or you’re asked to take less money, I think that’s your first reaction, all of us”. The owners want to hold on to that money to manage losses during the 2020 season from the loss of gate revenue and in-stadium expenditures, but the players wonder why this is their responsibility.
“I think both sides understand the dynamics that are in play, and neither side could have predicted or prepared for what we are currently experiencing with this novel and emerging virus called COVID-19”, Davis said. “I think it’s in both of our interests to continue to discuss it and figure out ways to mitigate losses to the game. But I think that first and opening ask was a bit outrageous”.
The players, in theory, receive 47 percent of league revenue, as reflected in the mutually agreed upon salary cap figure that is posted every year. This year’s salary cap figure of over $198 million was formally announced on March 15, at which point we already were aware of the coronavirus, but not the extent to which we as a country would be impacted.
“I hope this is not something that the owners were seriously proposing to the players. It’s insulting, quite frankly”, agent Drew Rosenhaus told Sports Business Daily. “Don’t go to the players this year who are putting their careers and lives at risk. The players don’t get the opportunity to go back to the owners when the franchises appreciate, and things of that nature”.
He added that he believes revenue shortfall is something that will have to be addressed in future years, in the form of an adjustment of the salary cap, rather than through the placement of more than a third of player salaries in escrow.
Rosenhaus also suggested that the league to recoup some revenue losses through other means, such as liberalizing advertising policies and practices. They have already agreed to cover the first several rows of seats and sell ads on tarps. “The NFL has to be more aggressive with their advertising in new areas like on-the-field for games”.
The NFL, unlike other major leagues, has no clause in their Collective Bargaining Agreement with the NFLPA concerning emergency situations, which many experts believe favors the case of the players as it concerns loss of revenue.