The current Collective Bargaining Agreement, initially negotiated in 1993, has been extended on several occasions, most recently in March 2006.
NFL clubs voted unanimously in May 2008 not to extend the agreement beyond the 2010 season because their costs were rising faster than their revenues. The clubs are committed to negotiating a new agreement, for the 2011 season and beyond that will better serve the clubs, the players and most important, the fans.
What does this mean to fans and games on the field?
If there is no new agreement before March 5, 2010, the 2010 season will be played without a salary cap under rules that also limit the free agency rights of the players. In an uncapped year, there is also no minimum team payroll.
What are the issues?
The principal issue is ensuring that the agreement is structured in a way that provides incentives for the clubs to invest, innovate and improve the game for the benefit of the fans over the long term.
The NFL clubs earn very substantial revenues. But they also have very substantial expenses. The largest of these expenses is player compensation. The clubs have been obligated by the CBA to spend more than half their revenues on player salaries and benefits. In addition, the clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans.
The current labor agreement does not adequately recognize the costs of generating the revenues, the majority of which go to the players; nor does the agreement recognize that those costs have increased substantially — and at an ever increasing rate — in recent years. As a result, under the terms of the current CBA, the clubs’ incentive to invest in the game has been diminished.
There are substantial other elements of the deal that simply are not working. For example, as interpreted by the courts, the current CBA effectively prohibits the clubs from recouping bonuses paid to players who subsequently breach their player contacts or refuse to perform. That is simply irrational and unfair to players who honor their contracts as well as to the clubs who depend on players to peform as they agreed. Also irrational is that in the current system some rookies are able to secure contracts that pay them more than top proven veterans.
The NFL’s objective is to fix these problems in a new CBA, one that will provide adequate incentives to grow the game, ensure the unparalleled competitive balance that has sustained fans’ interest, and afford the players fair and increasing compensation and benefits.