Friday, May 27, 2011
Economist: NFL furloughs likely symbolic
By Mike Sando
The Arizona Cardinals wanted quarterback Kurt Warner to return last season.
They tried to keep safety Antrel Rolle and linebacker Karlos Dansby. Ideally, they would have kept receiver Anquan Boldin as well.
With those players leaving the payroll, Arizona spent an NFC West-low $89.9 million on player compensation last season, down from $119.7 million in 2009, according to salary numbers ESPN's John Clayton maintains.
The year-over-year reduction did not stop the Cardinals from forcing one-week furloughs upon employees this week.
It's easy for those of us without a stake in these matters to criticize wealthy owners for protecting their financial interests.
On the other hand, a team forcing one-week furloughs upon 150 employees would save $288,461 even if those employees averaged $100,000 per year in salary (and many earn far less). To what degree would such savings secure long-term financial stability for NFL franchises?
"My guess is they are not looking at this long term," University of Chicago economist Allen Sanderson said by phone Friday. "One way is just sort of short term -- we need to make the payroll this month and don’t have money coming in. The other is either politically, psychologically or from a public-relations basis, it shows some suffering on the part of one side."
Owners clearly have an interest in demonstrating hardship.
"I suspect that is what is going on," Sanderson said.
The money saved through furloughs wouldn't be enough to significantly impact NFL teams, in his estimation.
"It's like saying you'll switch to Dunkin' Donuts instead of Starbucks for coffee in the office," he said. "You cannot save enough money from that kind of switch. Part of it is symbolic."
Arizona faces challenges selling season-ticket packages during a lockout and following a 5-11 season. Failing to secure as many deposits affects cash flow. Team owners might be worth hundreds of millions or more, but businesses operate within budgets that exist separately from their owners' personal finances.
Still, NFL teams have known for years a lockout was likely. Those that saw significant reductions in payroll last season would seemingly enjoy at least some flexibility in May, particularly if these moves are as symbolic as Sanderson suggested.
Miami Dolphins owner Stephen Ross defended owners Wednesday. His team spent $119.9 million on players in 2010, according to Clayton. That was slightly below the NFL average. The Dolphins have cut salaries and promised to pay back employees or give them extra days off if the season proceeds as normal.
"We all have our problems, and we're trying to minimize them as much as possible, and as fairly and equitably as we can," Ross told USA Today. "We recognize that people affected are working for us. They don't have all the upside, so they shouldn't have all the downside. We're just kind of delaying cash payments. We all know the position that we're in."