Wednesday, March 8, 2006
Updated: March 9, 4:36 PM ET
Owners finally come to resolution on revenue sharing
By John Clayton
GRAPEVINE, Texas -- Buffalo Bills owner Ralph Wilson spent two days with his head spinning and he wasn't alone.
After being overwhelmed by hearing endless percentages and terminology spewed at a fast pace, Wilson sided with Mike Brown of the Bengals and voted no on the NFL Players Association's proposal to extend the collective bargaining agreement.
"It's a very complex proposal and I really didn't understand it," Wilson said. "I didn't think I was a dropout but maybe I am. I didn't understand it."
||It's been a long, long process. Halfway through (Wednesday), I didn't think it was going to get done. I think Paul [Tagliabue] did a heck of a job of corralling people who could have gone in a lot of difference directions and built some consensus. ”
||—Redskins owner Daniel Snyder
Fortunately, 30 other owners and a wily commissioner did understand as the NFL agreed to a six-year CBA extension that brings labor peace to the league through 2011. The league was staring at an economic black hole -- and loss of the salary cap -- that only 16 remaining owners from the pre-labor peace days understood. For two years, the parties failed to reach a deal in part because of the revenue-sharing issue that created a greater gap between high and low-revenue teams.
NFLPA executive director Gene Upshaw gave commissioner Paul Tagliabue the hammer to put in place a revenue-sharing agreement Wednesday night, imposing an 8 p.m. ET deadline on accepting a CBA extension that gobbled up 59.5 percent of teams total revenues. Literally 25 minutes before the bewitching hour of potential labor unrest and an uncapped 2007, Tagliabue brought together three diverse factions of owners to craft a revenue-sharing deal that passed 30-2.
The final three hours of owner negotiations were so fast and furious that everyone's heads were spinning. Tagliabue and Upshaw couldn't even finalize a start to free agency. Scheduled to start at 12:01 a.m. Thursday, free agency was pushed back a day upon acceptance of the union proposal. Because of the complications of the deal, Upshaw is expected to agree to push it back again until 12:01 a.m. Saturday.
Terms sheets weren't readily available for general managers, agents and players Wednesday night. This much was known: The cap in 2006 will be $102 million, an increase of $7.5 million over the projected $94.5 million cap for 2006. That's a $16.5 million increase from the $85.5 million cap of 2005. The 2007 cap will be $109 million.
Tagliabue was asked about the proration of signing bonuses, but he joked that he couldn't remember if his granddaughter was six years old or if the proration for signing bonuses was four. Proration will be five years in 2006 instead of the current four. The proration will be six years in 2007 and five in 2008. What that means is it will be easier for teams to structure bigger deals for top five draft choices and the highest paid free agents.
Also confusing is the bottom line figure on the revenue sharing. Tagliabue said $500 million of local team revenue will be put in a pool for the lower-revenue teams in the first four years of the six-year agreement. The incremental revenue-sharing plan, as it is called, will cost high-revenue teams between $850 million and $900 million over the six years. The top five revenue teams will pay the most; teams between six through 10 in revenue will pay the second most and 11 through 15 will pay the lowest third of that revenue-sharing pool.
What all this means for the league, the owners and the players is labor peace. For fans, it means roster peace. The Colts now have extra cap room to try to keep linebacker David Thornton and possibly halfback Edgerrin James. The Seahawks won't lose transition tagged Pro Bowl guard Steve Hutchinson to a team trying to squeeze the Seahawks, who already had ample space under the cap. For close to three dozen players scheduled to be cut Wednesday night, they get a temporary reprieve.
The Raiders have time and cap space to keep quarterback Kerry Collins. The Redskins may eventually cut six players but they'll likely still be players in the free agent market. Now, everyone will be under the cap and have the ability to keep players they want and to bid for players from other teams. Most importantly, they kept the salary cap and have fixed labor costs until 2011.
"It was a compromise by all parties and I think that makes it great," Steelers owner Dan Rooney said.
"I wanted it, and we had to have it," Raiders owner Al Davis said of the deal. "We do have the greatest game in the world, and we got what we wanted."
Davis had an interesting theory about the vulnerability of the NFL had it not reached a deal and had an uncapped 2007 and no CBA in 2008. Understand Davis' background. He was the former commissioner of the American Football League who orchestrated a merger with the NFL after years of fighting to steal their players. Davis feared the NFL could have been challenged by a new league in 2008.
"There's always the possibility of a new league," Davis said. "You have to understand it. I do. I lived it. I coached and was a commissioner of a new league that forced a merger. I know how to do it. I really believe the numbers are there where it would be very simple to have a 10-team league. You see with no cap and no draft and no agreement with the players. They had a problem, too, because they would have anarchy. Gene [Upshaw] would be out eventually and the whole group would have been disbanded eventually because people would go their own way."
A lot was at stake Wednesday and it was fascinating as the revenue-sharing deal came together. Early Wednesday, there was no consensus and it looked as though the owners would blow the deadline and lose the salary cap. The Steelers and the Ravens came up with a plan that caused teams to put 25 percent of the revenue in a pool to be set aside to help low-revenue teams. The Patriots and Jets pushed an already existing supplemental pool that is worth $40 million a year and put big numbers to that.
By mid afternoon, things got hot. Tension built and egos started to flair. Jerry Jones of the Cowboys came out and said things were going backwards. One of the reasons high-echelon clubs generate so much revenue is because they have owners such as Jones, Dan Snyder, Bob McNair and others who wait for deadlines to make the best deals.
Jones worked with Arthur Blank of the Falcons to get sides together. Jerry Richardson of the Panthers, Pat Bowlen of the Broncos and John Mara of the Giants tried to find ways to come up concepts that would fit within the Steelers-Ravens model and the Jets-Patriots model. Tagliabue kept everyone focused on the deal during the final two hours.
Accountants and lawyers sat outside meeting rooms reviewing concepts. Finally, the sides came together and the high-revenue clubs worked out the compromises with the moderates to blend a deal that works.
"It's been a long, long process," Redskins owner Dan Snyder said. "Halfway through today I didn't think it was going to get done. I think Paul did a heck of a job of corralling people who could have gone in a lot of difference directions and built some consensus."
The foundation of the league was how Wellington Mara of the Giants gave up the lucrative New York television market and shared television revenue to get the NFL off to its unparalleled success. Mara passed away last year. In the spirit of Mara, the Snyder, Jones, McNair and others went back to the roots and shared.
Mara would have been smiling Wednesday night. His league stayed true to his spirit. It was a banner day in the NFL.
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John Clayton is a senior writer for ESPN.com.