We are a nation of sports lovers. We love the games of the National Football League, the National Basketball League and Major League Baseball. The national Hockey League has support as well but to a lesser degree.
At the moment followers of the three major sports are keeping a close eye on labor negotiations taking place between the owners and the unions representing the players. In the case of the NFL and NBA there are concerns the parties are headed for shutdowns of those sports. The early reports from the baseball talks are much more positive. In any event, the next few months may well be the season of our discontent.
In these sports labor battles, there are real consequences. The ferocious confrontation in 1994 that shut down baseball and cost us the World Series did considerable harm. Attendance fell as many fans berated both sides and some lost their passion for the game. The precise costs are impossible to measure but a baseball insider remarked to me recently he was confident the owners had learned their lesson.
In baseball there will be labor peace so long as neither side tries to make major changes in the present agreement. And unlike both football and basketball there will not be, and cannot be talk of, a salary cap. Never. It would be an astonishing surprise if there were any disruptions in the baseball peace at the conclusion of the current negotiations.
Not so in the football and basketball talks. Each case is different but each seems to be facing a potential crisis. The NBA has the advantage of a veteran commissioner whose skills, longevity and public relations brilliance may overcome, as they have in the past, some serious problems with the economic health of his league. David Stern usually makes peace with his players on sensible terms for each side and one has to expect him to lead his troubled sport to what Churchill called” the broad sunlit uplands.” He just has a way of getting things done.
On the other hand, the NFL talks-- in which a brand new union leader faces off against an untested commissioner --seem dangerously intense.
The football players union has long been behind their baseball union colleagues in taking care of their members. One example will suffice. In football an NFL player must play in three consecutive games for three consecutive years to have his health benefits vest, and then those benefits last for only five years after the player leaves the league. In baseball, a player with four years of service –being on the 40 man roster not actually playing is the test--can extend his health coverage when he retires until Medicare kicks in and the union benefit plan will pay one third of the cost. It is no wonder the football players want improvements in a sport where injuries are common and the residual effects can be permanent. There are other serious issues in the football talks but the health coverage limitations are a priority for the players and one can see why.
The real football issue is the size and share of total revenues each side wants to secure. The NFL is a $9.5 billion business. Baseball by comparison is about $6.5 in total annual revenue. Under the current NFL labor agreement, the owners get $1 billion off the top to provide their return on capital and the balance of the revenues is then shared 60-40 with the players getting the larger share. In this negotiation the NFL owners want $2 billion off the top and the split reduced to 50-50. That is the gut issue. Who knows what will happen but the NFL has never been stronger or more successful. Some ask why fight now when things are so good.
My guess is the owners see this as a good time to fight. With their projections of an even brighter future, they want back some of the pie they believe they foolishly gave away. As the NFL business grows and the rest of the world continues to respond to their game, the owners realize they soon will be sharing a much larger pie and they want to try to get a better deal before matters get too far out of control. In essence this is a fight over which is more vital—the players or the NFL franchise.
One hopes the football participants have absorbed the lesson baseball learned in 1994. The costs of that labor fight were significant and the owners made virtually no gains. In the eyes of many the bitter fight was a waste of time for the owners. One hopes this football negotiation produces some progress in areas like player health benefits, where there is merit. In basketball and baseball, there is reason to hope smart people will avoid even rocking the golden laden boats.
Fay Vincent is a former CEO of Columbia Pictures Industries and from 1989-92 served as the Commissioner of Baseball.