NFL reportedly on brink of making big changes

With roughly thirteen months left in the current NFL Collective Bargaining Agreement, there is no true rush for the players and the NFL owners to come to an agreement on an extension. However, due to the significant difficulties that would arise if an extension is not agreed to prior to the start of the new league year on March 18, both sides appear to be working hard to reach an agreement. Specifically, reports have emerged in recent days that there is a very real possibility that the two sides could realistically reach agreement very soon.

In addition, according to reports, the changes that could come to the league under the new CBA would not be insignificant. Perhaps the largest projected change is the expansion of the regular season. Once 14 games, then 16 games, it could be on the brink of growing again.

Personally, I don’t think the players should accept a 17th game in exchange for an extra 0.5% of revenue because it’s simply not worth it. That 17th game represents an increase of 6.25% of snaps for most players, while the revenue only increases by 1.04%, from 48% to 48.5%.

To put hard numbers behind the difference between 48% and 48.5%, it’s first important to understand this is simply a revenue split. So, for every billion the league earns in revenues, 48% or 48.5% goes to the players, with the rest going to the owners. Thus, with the league expected to generate around $15B in revenues in 2020, the difference between the two splits is somewhere in the ballpark of the following:

• 48%: $7.2B
• 48.5%: $7.275B

That’s a difference of about $75M to the players. Taking that a step further in the analysis, only about 80% of the money that goes to the players goes towards the salary cap, with the other 20% getting allocated to cover other benefits. Those benefits include retirement, future healthcare and other, non-salary related items. Cutting 20% off of $75M to figure out how much extra money that seventeenth game would mean for player salaries, the remainder is about $60M.

Then, cutting that $60M into 32 pieces to allocate to all the teams means that accepting the 17th game in exchange for the extra 0.5% of revenue would mean roughly an extra $1.875M for each of the 32 teams on their salary cap in 2020. That’s not nothing, but it’s really not much at all. In short, taking that extra half a percent of revenue in exchange for an entire extra week and extra game of work appears to be an absolutely horrendous deal for the players in financial terms.

Now, that’s not the only major change that is being reported. In addition, league insiders expect the next CBA to include an expansion of the playoffs as well, with a seventh team making the postseason each year. Specifically, there will be one extra Wild Card game for each conference, creating two extra playoff games each season.

This, again, is yet another way for the owners to come out ahead in terms of the players because of the way players are compensated for the postseason. The short version is, as I covered late last summer, players don’t get paid their regular salaries for the postseason, they get paid postseason shares. This means that two extra games are being created each season, with each game carrying the potential to generate tens of millions in new revenue, while players in Wild Card games made $28,000 or $31,000 per game.

Just as an example, let’s say that the Seattle Seahawks are a Wild Card team in the NFC in 2020, as they have been in three of the past five years. During the course of the 2020 season, assuming a 16 game schedule, Russell Wilson will be paid $1.125M per game. However, once he makes the postseason, he’ll be paid exactly the same as every other player on the team, somewhere in the neighborhood of $30,000. That’s a cost savings of $1,095,000 on a single player for a game that will generate greater revenues.

Putting it all together means the following: Paying all 53 players on a Wild Card team’s playoff roster costs less than $1.5M, which is far, far, far less money that the league would stand to make by adding an additional playoff game. Yes, I realize there are other players and other costs, but there’s no need to make the math difficult. By adding two Wild Card games, the owners are adding two games that are guaranteed to be among the most watched television broadcasts of the year, while paying basically nothing in terms of player salaries. Here’s where the four Wild Card games from 2019 ranked in terms of being the most watched broadcasts for the entirety of the 2019 calendar year:

• 7th most watched broadcast: Philadelphia Eagles at Chicago Bears (35.9M viewers)
• 12th most watched broadcast: Seattle Seahawks at Dallas Cowboys (29.4M viewers)
• 17th most watched broadcast: Los Angeles Chargers at Baltimore Ravens (25.4M viewers)
• 30th most watched broadcast: Indianapolis Colts at Houston Texans (22.8M viewers)

To put those numbers in perspective, the four 2019 Wild Card games combined for 113.5M viewers, which is more than the 98.2M viewers that Super Bowl LIII, in which the Los Angeles Rams lost to the New England Patriots by only scoring three points. Adding two more Wild Card games is a huge revenue boost to the league, but owners would see an outsized return relative to the increased money that would go to the players.

Long story short, I’ve long stated that the owners obliterated the players in the last round of CBA negotiations in 2011, and with things looking the way they are, I’m starting to believe that the same thing is happening yet again. Gene Upshaw led the union to amazing gains during his decades of overseeing the group, and while the players have certainly seen their piece of the pie grow over the past ten years, it appears as though that has more to do with the simple fact that the pie is getting much bigger, rather than anything DeMaurice Smith is doing leading the union.