Desperate times sometimes lead to strange bedfellows. That was the case Wednesday when the NFL owners finally ended weeks of negotiations and agreed on a deal that will extend the collective bargaining agreement for six more years.
After failing to reach a compromise on the sharing of local revenue among the so-called high-revenue and low-revenue teams, a pair of clubs noted for their animosity toward one another worked in accordance to come up with a plan that ultimately made everyone happy (almost).
Patriots Vice Chairman and President Jonathan Kraft and Jets owner Woody Johnson collaborated on the proposal that was passed by a 30-2 vote with Cincinnati's Mike Brown and Buffalo's Ralph Wilson the lone dissenters. The agreement ensures labor peace in the NFL for the foreseeable future and avoids the chaos that was sure to ensue in an uncapped 2007, which would have been the case without the extension. The owners OK'd the deal less than 30 minutes before the 8 p.m. deadline set by NFLPA executive director Gene Upshaw.
The main sticking point in this mess was local revenue sharing – money earned through local television and radio contracts, stadium signage, luxury suites and stadium naming rights, etc. Until now, those monies were the individual team's to keep. Only revenue generated through the national television contracts and tickets sales (known as designated gross revenue) were shared equally among the 32 teams.
Now there will be some changes. Under the provisions of the previous CBA, the players received 64 percent of the designated gross revenue. Last year, roughly 87 percent of football revenues were used to set the cap number at roughly $85 million. The new agreement will give the players 59.5 percent of total gross revenues, which means the cap figures can escalate much higher given the increase of new stadiums around the league that have the local revenue totals skyrocketing in recent years.
The agreement will put this year's cap number at roughly $102 million with that total expected to reach $109 million in 2007.
"On behalf of the players, the NFLPA staff and the negotiating team, we are pleased that this process has finally concluded with an agreement," Upshaw told the Associated Press. "This agreement is not about one side winning or losing. Ultimately, it is about what is best for the players, the owners and the fans of the National Football League.
"Moving forward, this new agreement gives us the opportunity to continue our unprecedented success and growth."
According the AP report, commissioner Paul Tagliabue said $850 million to $900 million in players' salary will be added over the life of the deal because of the revenue-sharing component, which the union fought for throughout the on-again, off-again talks.
"We want teams to get additional money to re-sign players, rather than cutting them," Tagliabue said.
The revised proposal was put forth primarily by Kraft and Johnson but was compiled by nine teams and included an innovative plan to appease the lower-revenue clubs on the issue of local revenue sharing. The bottom 17 teams in revenue will not contribute to the pool while the top 15, broken up into three groups of five, will do so proportionately. The top five will contribute the most, the second five less and the third five the least.
Also, there will be qualifiers that the non-contributors must reach in order to receive their share of the pool. In other words, if a team is not doing anything to raise money on its own, then it will not be eligible to receive its share of the pie.
The agreement means the NFL can finally begin its new league year, which was put off twice while negotiations continued to stall over the past two weeks. Free agency is set to begin at 12:01 a.m. Saturday and all teams had to be under the new $102 million cap limit by 11 p.m. Wednesday night.
According the Boston Globe, despite the tenuous nature of the talks, Kraft said he remained confident the deal would get done even through several revisions of the original proposal.
"We needed to make it meaningful but simple," Kraft told the Globe. "Ultimately no system lasts forever. Eventually it's got to be blown up but not at this time. It's always better to have labor peace. My dad and I care deeply about the league. It was important to us to put the time and energy into getting this solved.
"The union put the onus on us. Gene did a great job for his membership. The fact it took this long shows that."