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CBA Update from Washington DC

Posted by Jaboner at 1:50 am EST (10:50 am PST).  Reporting from Washington D.C. Don’t be fooled.  The 24-hour extension for the CBA that went into effect tonight means nothing.  Sources from both the NFLPA and NFL have told me that the two sides remain “several miles” apart on several key issues and neither side is optimistic about a new CBA any time soon.

At the heart of the conflict is a $1 or $2 billion revenue ‘credit’ that the NFL wants and the NFLPA does not.  A credit would enable the NFL to finance new stadiums in Los Angeles, San Francisco, Oakland, San Diego, and Minnesota by making it so that the NFL does not pay out the first $1 or $2 billion dollars in revenues to the players.  The NFL sees this as necessary for teams to make interest payments on new stadiums.

For those of you who like math, here is an example (Raiders fans can stop reading now and continue doing pushups) using AEG’s proposed downtown LA stadium, Farmer’s Field.

Farmer’s Field will cost $1 billion to construct.  The construction loan on the stadium will be $160 million dollars a year.  Under the proposed CBA by the NFLPA, in which players will receive 50% of revenues (down from 60% in the current CBA), AEG can expect to pay $141 million out in salaries to the players on a total revenue of $282 million a year.  Add in other expenses and AEG will actually lose money in the proposed plan by the NFLPA.  Ditto for the 49ers, Raiders, Chargers, and Vikings and anyone else looking to build a new stadium.  If you like equations (Raiders fans, you’re not supposed to be reading), here it is:

TEAM REVENUE UNDER PROPOSED NFLPA PLAN  $282 million

(minus)

STADIUM LOAN $160 million

(minus)

PAYROLL $141 million

(minus)

OTHER EXPENSES $10 million

(equals)

-$29 million.

With a $1 billion credit, the NFL will not pay out salaries on the first $1 billion in revenue earned.  This money will go straight to the owners, which in turn will be used to pay the loans on new stadiums.

For this reason, the NFL has not budged.  The owners view the current success of the NFL as being directly due to decisions made ten years ago.  And they see the future of the league being tied to decisions being made now.  And the future for the NFL means brand spanking new arenas for all.

So don’t believe the BSPN hype that a deal is imminent.  You just saw the numbers.  Tell Adam Schefter to put that in his pipe and smoke it.  We’re more likely to see a Three’s Company reunion than a new CBA any time soon.

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