I’m Not Rich Enough!

NFL Owners to Players: Build Me More Stadiums

Ken Gude explores the incredible self-aggrandizement of NFL owners in their collective bargaining negotiations with the players’ union.

If the already exceedingly wealthy owners of 32 National Football League teams were trying to create sympathy for NFL players in their current labor dispute, they would be hard pressed to do more than they have over the past several weeks.

Despite being the undisputed top sport in America today, racking up unprecedented earnings and ratings, NFL owners are threatening to cancel next season because they feel they aren’t getting enough of the $9 billion annual take. They want NFL players to accept less so they can have more—the justification being, well, they need it more than the players. A number of players, of course, are fabulously wealthy themselves, but many of them earn around the minimum salary for several years before being cut or suffering a career-ending injury.

So why do the owners think they need more? Yesterday, NFL commissioner Roger Goodell, the owners’ guy, actually said publicly that the taxpayer well has run dry for financing the new stadiums the owners feel they are entitled to, so now it’s the players’ turn to finance the owners’ shiny new monuments to themselves. With Americans still facing near double-digit unemployment, and with state and local governments and the federal government all gripped with budget-cutting mania, what planet are these guys on?

As all NFL fans know—and that means most Americans as more than half the country watched at least part of the Super Bowl—the owners are about to lock out the players if the two sides can’t come to an agreement before March 4th. We are at this point because the owners decided in 2008 (I’ll tell you why that date is critical later) to back out of the existing labor agreement with the players well before it was set to expire.

The owners claimed that the players were getting too much money under the terms of a collective bargaining agreement they had signed up to just two years earlier. They wanted to renegotiate.

Fine; that’s their prerogative. But it does seem odd that the owners would risk harming the goose that keeps laying golden eggs. The long run of labor peace has coincided with the explosion of revenue and popularity for the NFL. And it’s not like a work stoppage would create any genuine hardship for the well-paid players who are central to the popularity of the game. Obviously, those players on the lower end of the scale would take a hit, but still they’re earning $200,000 a year and can probably make it through a prolonged strike if necessary. Certainly the players and other employees of the NFL would not face anything like the serious difficulties that so many American workers are suffering now. The only real losers here will be the fans.

The owners, of course, will make much of the wealth of their employees—not noting that the players’ careers are short compared to the owners’ longevity of ownership—but one thing after another keeps piling up on the owners’ side of the ledger that forces you to support the players’ cause.

Washington Redskins owner Dan Snyder (full disclosure, I used to work for him at the Redskins and everything you’ve heard about him is true) files a groundless lawsuit against a local paper because they hurt his feelings and throws around ridiculous claims of anti-Semitism. Then he gets his lawyer to threaten the paper’s owner with dragging out the suit so long that it will bankrupt the paper unless they agree to fire the reporter.

Then Dallas Cowboys owner Jerry Jones engages in a purely vanity-filled escapade to have the largest attendance at a Super Bowl by adding temporary seats to his stadium. Only problem is city safety inspectors never cleared the extra seats and on game day hundreds of fans were left out in the cold unable to watch the Super Bowl.

On Valentine’s Day the NFL’s lead negotiator filed a formal complaint with the National Labor Relations Board claiming that the players’ were not negotiating in good faith. This coming from the side that reneged on the existing agreement and will only accept terms that gives the players less money at a time when the league is making more money than ever. If the players don’t agree, the owners will forcibly prevent them from working.

At least Goodell’s comments yesterday were straightforward. He exposed the real motives behind why the owners feel they need more money from the players: “The status quo means failing to recognize the many costs of financing, building, maintaining and operating stadiums. We need new stadiums in Los Angeles, Minneapolis, San Francisco, Oakland and San Diego.”

Let’s start with the small fact that the NFL doesn’t have a team in Los Angeles. Owners want a team in the nation’s second-largest television market because it would make all of them extra money in its broadcast contracts. NFL owners share national television revenue equally—remember the NFL is the most successful socialist enterprise since the Soviet Union put Yuri Gagarin into space. But the owners only have themselves to blame for this particular predicament because they allowed both the Raiders and the Rams to leave L.A. in the same offseason.

Now back to 2008, when the seeds of the current dispute were sown. Before then, NFL teams routinely blackmailed local governments with the threat of running off to another city (like the Rams) if they didn’t use taxpayer money to finance a new stadium. Since 1990, NFL clubs have received more than $7 billion in taxpayer subsidies to build or renovate stadiums with 10 being 100 percent publicly financed and 19 of the remaining 21 at least 75 percent publicly financed. Then the financial crisis destroyed the economy and blew massive holes in state and local governments’ budgets. That was the end of the publicly financed stadium so the owners needed to find a new sucker to finance their stadiums.

But why is it so egregious that the owners are demanding money from the players to pay for new stadiums? Because stadium improvements have nothing to do with making football teams better and everything to do with further enriching the owners. New or renovated stadiums with luxury boxes and more seats mean more revenues for the teams. But NFL rules equally limit the amount any one team can spend on player salaries—a figure that is set by measuring NFL earnings that are shared among the owners and does not include much of the additional earnings from luxury boxes—so any extra money made from enhanced stadium revenue goes straight into the owners’ pockets.

And we’re not talking about chump change as the cash literally pours in with new stadiums. The average NFL team with a new stadium will make roughly $20 million more per year than teams without new stadiums. And the franchise value of teams with new stadiums increases $84 million on average in the first year alone. That’s a lot of money.

This labor dispute is not about league survival as under the previous deal the NFL made an enormous amount of money. It’s plan and simple: This labor dispute is about the owners wanting even more money for themselves and they are willing to risk cancelling the season in order to get it.

Ken Gude is managing director of the National Security and International Policy program at the Center for American Progress and a former employee of the Washington Redskins. To read more about labor negotiations, including those involving the NFL players and owners, go to the American Worker Project over at our sister organization, the Center for American Progress Action Fund.

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Ken Gude

Senior Fellow