Rich and ‘Poor’ Clash in NFL Revenue Dispute

The NFL’s annual meetings began last Sunday with a speech by Michael MacCambridge, author of “America’s Game,” a book about how pro football came to be the nation’s most popular spectator sport.

Then the owners spent the rest of the week in a heated debate about the concept that made that possible: revenue sharing.

It’s a debate that’s not likely to be settled soon. Billionaires didn’t get that way by sharing their money with multimillionaires, which is what a lot of the argument is about.

But it’s a debate that will be settled, largely because the labor peace the NFL has had since 1992 depends on it. Neither side wants to slip into the abyss that other sports have found themselves in since then.

There’s no urgency right now to reach a labor agreement, although the NFL Players Association and the league are trying to get one in place long before the current deal expires in 2008. Both sides want to avoid a 2007 season without a salary cap. The impediment right now seems to be as much the disagreement among the owners as any intransigence by the union.

The debate can be defined by comments from either end of the spectrum.

“If a team like ours works hard to find revenue sources, other teams can do it, too,” said Jerry Jones of the Cowboys, one of five high-revenue teams at one end of the debate. “They just have to be given the incentives to go out and make more rather than get the money others have made.”

That, of course, is the simple theory that some believe helped make America great.

But what made the NFL great is a form of socialism -- the rich sharing with the “poor” -- that has allowed small markets to compete with big ones.

“When the Giants agreed to share the television revenues with the Packers in 1961, it allowed everyone to compete equally,” said Jim Irsay, owner of the Indianapolis Colts. “The Giants didn’t say it was more expensive to live in New York than Wisconsin. What the richer teams want to do now is drifting away from what made this league.”

In the current labor contract, player costs beyond the salary cap -- $15 million per team that goes into benefits -- are divided unequally. Because it’s a fixed number, the lowest-income teams contribute as much as 70 percent of their revenue to that pool; the richest ones just 25 percent.

At the top are Washington, Dallas, Houston, New England and Philadelphia. They are rich in part because all are in major markets where there are marketing opportunities that can bring them far more money than teams in places like Green Bay, Buffalo, Pittsburgh or Jacksonville can attract.

But they also are rich because, other than Dallas, they have new or relatively new stadiums with luxury suites, corporate boxes or other sources of revenue that teams without those stadiums -- including the two in New York -- do not have.

Dallas? Jones indeed has worked hard, but he might remember that the late Tex Schramm, who ran the team for its first 30 years, created “America’s Team” and paved the way for the marketing of Cowboys merchandise all over the world.

The argument of the richest teams, valid to a point, is that the new stadiums mean debt. Just as the average homeowner has monthly mortgage payments, so do the teams building stadiums -- their debt service runs into millions annually.

The poorer teams say that, debt notwithstanding, high earnings are high earnings and the rich teams can afford to contribute more.

None of this is likely to be solved soon, although the owners will meet in Atlanta on April 19 in a last effort to get it resolved before the NFL draft. As the Hawaii meetings began, commissioner Paul Tagliabue said negotiations were at “a dead end,” then said two days later that progress had been made.

But he said that a few minutes after Pittsburgh’s Dan Rooney, the leader of the have-not group, told two reporters that nothing had moved.

“The way we work, nothing will happen until we have a gun to our head,” says Rooney, one of the league’s most respected owners and a man who commissioners have used for a quarter-century to seal labor deals.

That gun may not appear for a year, when the NFL will be approaching the uncapped season. Neither the union nor the owners wants that capless year, which means there is almost sure to be an agreement by then.

Tagliabue and union leader Gene Upshaw brought labor peace to the league after years of turmoil and neither wants it to go away. Three high-earning owners -- Houston’s Bob McNair, New England’s Robert Kraft and Philadelphia’s Jeff Lurie -- have put the good of the league ahead of their own interests in the past.

Jones and Washington’s Daniel Snyder are another story, but few if any of the other owners listen to Snyder anyway.

Dealing with the union is probably the easy part. The differences between Upshaw and the owners are in percentage points.

The union wants 65 percent of a new salary pool that has been expanded to include additional revenues. The league is offering 57 percent, with the owners, including those from low-income teams, contending that stadium construction debt be taken into account. Those are standard negotiating figures and can be compromised, especially with the cordial relationship that’s existed between Tagliabue and Upshaw for nearly two decades.

“We WILL get it done,” Upshaw said this week. “It’s just a matter of when.”

“When” means whenever the owners settle their own debate.