Even if NFL players and owners were to reach an agreement in time to play the full slate of games next season, the league could still face $1 billion in losses, the Wall Street Journal reports. And it’s already started.EA Sports already requested a $30 million reduction in its scheduled payments because of the labour uncertainty. As negotiations continue into the season, more sponsorship deals will likely fall through. By March 1st, the league could lose $125 million.
But that’s nothing compared to what the league stands to lose should the labour wars rage on through the end of that month. In March, the NFL schedules its lucrative international games, and fans begin to renew their season tickets. Without those revenue channels the league stands to lose $400 million in March alone.
As the dispute continues into August and preseason games become jeopardized, the losses will amount to an additional $500 million.
All told that’s $1.025 billion before any regular season games are canceled.
Hopefully this report expedites the negotiations. It’s clear the owners have $400 million of incentive to reach some kind of agreement by March 1st. Then again, the union undoubtedly saw this report as well, and they’ll be wise to leverage this to their advantage. Presumably, they’ll stick to their guns knowing the league faces pressure to agree to terms by March.
As with every sports labour negotiation, much of this dispute comes down to revenue sharing. Based on the WSJ’s projected revenue of $9 billion for the league in 2011, the owners want the players to take $900 million less than the $4.8 billion they’d be due under the current agreement.
So the extra income the owners are pushing for would be negated—and then some—before any regular season games are locked out. The pressure is on.
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