Figures obtained by The Associated Press underscore the substantial divide between the NFL and the locked-out players on a core issue: What portion of additional revenue goes to players.
Players’ share of incremental increases to all revenues under the NFL’s expired contract was about 53 percent from 2006-09, according to calculations by the accounting firm that audited the collective bargaining agreement for both sides.
The NFL has repeatedly said that 70 percent of extra revenue went to players, a main justification for changing the sport’s economic system. The league’s numbers remove the portion of revenues – about $1 billion a year – taken off the top for owners to spend on expenses.
Data prepared in 2010 by PricewaterhouseCoopers and obtained Monday by the AP show that about $3.8 billion of the $7.2 billion in incremental revenue over those four years – 52.9 percent – went toward players’ salaries and benefits.
The league and players agree on the $3.8 billion; they disagree on how to look at revenues. Setting aside the off-the-top expense credits – for things such as stadium improvements or NFL Network – makes the players’ take a higher percentage.
The figures from PricewaterhouseCoopers – calculated last year at the request of the NFL Players Association – include that upfront money, because it is part of the league’s gross revenue.
“The NFL wants to artificially inflate the percentage of incremental revenue going to players by excluding revenues that never go to players,” NFLPA spokesman George Atallah said. “League officials … have been selling a lockout to owners based on misleading and incomplete financial information. They excluded the cost credits to be able to tell owners that player costs are rising faster than all revenues. This is not true.”
NFL spokesman Greg Aiello wrote in an e-mail to AP: “Expense credits were used in the last agreements by agreement with the union to cover certain expenses needed to put on the games. The NFL did not exclude anything unilaterally.”
Owners locked out the players more than a week ago, creating the NFL’s first work stoppage since 1987. That came hours after the NFLPA renounced its status as a union, allowing players to file a class-action antitrust lawsuit in federal court.
The main sticking point throughout CBA negotiations was how to divide the NFL’s more than $9 billion in annual revenues. All along, the league has said it needed to rework the CBA because too large a portion of new revenues have been devoted to players’ salaries and benefits.
Just before last month’s Super Bowl, NFL general counsel Jeff Pash – the league’s lead labor negotiator – said: “The players have gotten 70 percent of the incremental revenue that the NFL clubs have generated since 2006. They know that’s not a sustainable model.”
A year earlier, Commissioner Roger Goodell made a similar point during his annual Super Bowl news conference.
That 70 percent figure not only made an impression on owners – it also made players wonder whether there was, indeed, an adjustment that needed to be made.
“One of the owners’ big problems with the deal, as they reported from 2006 forward, is they had the argument that player cost was north of 70 percent, say. When that number was first presented, it caused everyone on our side of the table to sit down. It caught our attention: ‘If it is 70 percent, we need to address it,'” said former player Pete Kendall, who has been advising the NFLPA during negotiations.
“It also spurred some discussion and research, and we had PricewaterhouseCoopers look at the numbers,” Kendall said last week while at the players’ meetings at Marco Island, Fla. “And what they came back with is, the only way the NFL could arrive at that was if they excluded the deductions they take (at the outset). But that is money that came into the league.”
According to the figures obtained by the AP:
– In 2005, player costs were $3.32 billion, and all revenue was $6.49 billion;
– In 2006, the first year under the just-expired CBA, player costs rose to $4.1 billion, an increase of $780 million, which is 61 percent of that year’s $1.28 billion increase in all revenue to $7.77 billion;
– By 2009, player costs were $4.5 billion, while all revenues were $8.88 billion.