Labor Pains

Despite months (what's felt like years) of the stalemate between players and owners in the National Football League, the end is surely in sight.

Collective bargaining - or labor negotiations - is as American as apple pie. It gives workers (football players) a voice to sound off to the employers (league owners) if they are unsatisfied with the pay-for-play structure. The current quagmire thrusts workmen's compensation and two lawsuits into the lockout limelight, the most pronounced since 1987. If the last four months of athletic uncertainty have left you frustrated and anticipating soundbites from Roger Goodell and DeMaurice Smith, let's apply some economic theory to the situation for peace of mind.

1. There are 32 owners in the NFL. 24 (75%) are needed to agree on a league-wide labor contract. Constrast this with 1900 players which require a 50.1% unanimous vote (951 men at least).Collective bargaining usually covers issues like hours, wages, benefits, working conditions and the like, so one can understand the player's hesitation to accept a longer regular season. Statistically, more games played increases the liklihood of more injuries. In the world's most protective (in terms of gear) sport, safety is the number one issue! The bid to add two more games was on the table at the owner's meeting, as was an effort to dissuade players from gaining from California's notoriously biased support of employee Workmen's Compensation claims. Economic game theory (pun intended) reveals that owners have it in their best interests to emphasize the number of extra minutes played rather than extra dollars made per season.
2. There's also $9.3 billion in annual revenue at the forefront of negotiations. Owners were able to agree on a supplemental revenue-sharing agreement to take a share of the money back from the players. Under the new CB agreement, players get roughly 46-48% of revenues, down from a 54-59% range in the early 2000s. Oddly enough, the NFL Player's Association had little to say against this measure. But no NFL franchise appears to be unprofitable - a MAJOR incentive to end the insanity - and the new agreement says that while rookies will make less (harder salary caps), retirees will see an increase in benefits (longer pensions), while current players will hardly take notice (Pareto efficient save for the new guys). Any complaints?

Without the profit struggles that the NBA faces - Commissioner David Stern says that 22 of the leagues 30 teams lost money last season!! - the NFL can have a win-win season for players and owners alike if they can simply focus on the game to get along. With the birth of the 2011-2012 pigskin season as early as next Wednesday if the egos can get over themselves, the labor pains never hurt so good.

Cheers,

dls


ESPN.com, the NFL Lockout Facebook page, and the Journal of Sports Economics were the primary sources for this blog.