Saturday, March 29, 2008
By Ed Bouchette, Pittsburgh Post-Gazette
The late Art Rooney Sr. told a story about the first time the NFL held its annual meeting at the posh Breakers hotel in snooty and mega-rich Palm Beach, Fla.
The Chief passed a wealthy couple strolling the grounds of the magnificent old-money hotel and overheard the wife ask her husband something like this: "What is all this riff-raff doing here?"
"My darling," Rooney quoted the husband's response, "the hotel has allowed those NFL people to hold their meetings here this week."
The NFL returns to The Breakers for its annual meeting, which opens today, and times have changed. Now, it's the NFL "people" awash in so much money they don't know quite what to do with it. And that has become a problem for the league, again.
Although not on the agenda for any votes, the league's collective bargaining agreement and revenue-sharing plan will serve as the elephant in the room for meetings which last through Wednesday.
Small-market owners are set to end the current arrangement with a vote in November to curtail the CBA and possibly throw the league into chaos by 2010. The CBA, extended in March 2006 in a last-minute compromise, would expire after the 2010 season if at least nine owners vote against it in November -- something that's considered a fait accompli at this point.
If so, the salary cap and revenue sharing could go the way of Major League Baseball, circa 1993, and turn what has been American sports' model pro league into bedlam among the haves and have-nots and those in between.
Despite its success, the NFL and its teams are more than $9 billion in debt, according to a story in SportsBusinessJournal.com March 17. The magazine reported that 25 percent of that debt is tied to stadiums being built in New York and Dallas, each pegged at more than $1 billion to construct. Unlike when the Steelers built their stadium, the NFL has in place a program called G-3 in which the league -- and thus all its teams -- loan money to other teams to build stadiums.
NFL commissioner Roger Goodell wants to reduce the league's debt.
"There's a growing concern in the league about the amount of debt," Steelers president Art Rooney II said. "A lot of it has to do with the stadiums and the cost of stadiums now. The cost of these stadiums has really just gone through the roof. People are building stadiums that are 4, 5, 6 times more expensive than the one we built, which is less than a decade old. It's been skyrocketing and the debt has gone with it and it's a concern."
Couple that concern with teams such as Jacksonville, which is among the bottom revenue generators in the league yet has to pay almost as much as the high-revenue teams such as Washington, Dallas and New England under the salary cap.
Teams like the Jaguars would welcome the elimination of the salary cap because it would mean they no longer were required to pay the salary floor, which is 85.2 percent of the cap -- $116 million vs. $98.8 million. The floor rises 1.2 percent per year until it reaches 90 percent.
Individual teams under the "model" sports league are losing money despite all the wealth in the NFL. If there is no cap, a team such as Jacksonville can stop having $100 million payrolls and go the way of baseball's Pirates if they like in order to survive.
When they vote to opt out of the CBA in November, there would be no cap for the 2010 season and the last draft would be held in 2011. While it's more an owner vs. owner issue, the players are watching intently and, at some point, an ugly labor situation could arise through a lockout or strike.
"I think it's fair to say that the damage a work stoppage does is something that I think both sides always try to work to avoid," Rooney said, "and, hopefully, that will be the case this time around."
Goodell has placed a gag order on NFL employees, forbidding them to enter the debate about the CBA other than in general terms, but it is on everyone's mind.
"A great deal of analysis is going into our CBA," said Ray Anderson, the NFL's vice president of football operations. "Certainly, under circumstances, you would prefer there not be a lot of discussion out there for strategic purposes, but I'd have to leave it to [NFL attorney] Jeff Pash to respond beyond that."