Some Owners Could Sue if Forced to Share
Tuesday, February 21, 2006
The revenue-sharing debate among NFL team owners has become so combative that a group of owners of the most prosperous franchises has threatened to take legal action if a revenue-sharing plan they don't like is forced upon them.
Pittsburgh Steelers owner Dan Rooney said yesterday that the threat has been made by a group of six to nine teams. Rooney said he regards it as "an idle threat" that will not be carried out by the clubs, which he did not identify.
"I think they might vote against revenue-sharing, but what are they going to sue for?" Rooney said in a telephone interview. "They're trying to say if we get the votes [to approve a revenue-sharing plan], they'll sue. I don't see what they can sue about. They have the right to vote no."
The threat is a sign of how fractious revenue-sharing deliberations among owners have become. Commissioner Paul Tagliabue is attempting to get owners to agree to a plan to increase the amount of locally generated revenues that teams would share, but a faction of owners of the wealthiest clubs has resisted.
Revenue-sharing deliberations among owners are taking place as they attempt to negotiate an extension of their labor agreement with the NFL Players Association. Union chief Gene Upshaw said in recent days those talks also were at a standstill and he regards the end of this week as the deadline for agreeing to an extension of the collective bargaining agreement that would keep the current salary-cap system in place beyond the 2006 season. Rooney said yesterday that he took Upshaw's comments as more than a bargaining tactic.
"I think Gene is serious," Rooney said. "I think that [the labor negotiations] is more serious than this [the revenue-sharing deliberations] is. I think it's a little more serious now that we're getting to the wire."
Upshaw said over the weekend his understanding was that nine wealthy teams were threatening to sue if a revenue-sharing plan was forced upon them. Rooney and other league sources yesterday confirmed the threat of litigation but had differing accounts of the number of teams involved. Several other owners declined to comment publicly on the labor and revenue-sharing deliberations or did not return telephone messages.
Any revenue-sharing plan would have to be approved by at least 24 of the 32 teams. It has been widely believed around the league throughout the revenue-sharing debate that a group of eight teams has surpassed the rest of the league in revenue-generating capabilities. Those eight are thought to include the Washington Redskins, New England Patriots, Houston Texans, Dallas Cowboys, Philadelphia Eagles, Denver Broncos, Chicago Bears and Cleveland Browns.
The 32 teams share national revenues, primarily from television contracts, equally. But growing disparities in locally generated revenues -- including those from stadium-naming rights, local TV and radio deals, sponsorships and luxury suites -- have created sizable revenue gaps between teams. The Redskins are the top revenue-generating team and are thought to have annual revenues, at approximately $300 million, that are about twice those of the bottom-dwelling Arizona Cardinals and Minnesota Vikings.
The less-prosperous teams are seeking a system by which a greater portion of the local revenues would be shared, arguing that the NFL always has maintained its competitive balance on the field by keeping franchises on relatively equal footing financially. Owners of the wealthier clubs have argued that they should not be forced to subsidize poorly operated teams.
Upshaw, meantime, is seeking in labor negotiations to expand the pool of revenues from which players are paid at a time when league revenues are burgeoning, with new national TV contracts worth nearly $4 billion per season. The current labor deal keeps the salary-cap system in place through the 2006 season, then expires after a 2007 season that would be played with no salary cap.
Labor-negotiating sessions are scheduled for today and Wednesday. The NFL's free agent market is scheduled to open on March 3, and teams are having trouble planning for the offseason with labor and revenue-sharing debates ongoing.