Why won't NFL owners open their books to players?
Friday, March 11, 2011; 12:46 AM
As the NFL's labor dispute drags on, the league's owners face the increasing threat of billions of dollars in lost revenue, the tarnishing of the NFL's gold-plated brand and a lengthy fight in federal court.
Yet they have remained unwilling to open their financial books to scrutiny by the NFL Players Association, despite the union's pleas as talks neared an impasse Thursday that such information is critical to reaching a deal.
Instead of full financials, NFL owners have offered what they say are sufficient data and an unprecedented level of financial information to support their key claims: that the NFL is operating an unsustainable business model, and that players should relinquish about $800 million annually to stave off dire financial consequences for the league.
The owners contend that as private businesses, they are not obligated to lay out all their financial data. Experts say, however, their reticence is likely driven at least in part by a desire to avoid the controversy or embarrassment that could result from giving players access to detailed and specific data on how each team spends its money.
That concern may have increased after detailed financial records from seven Major League Baseball teams became public last year, revealing questionable expenditures and apparent accounting tricks by team owners.
"The details in some of the books from some of the clubs could result in some embarrassment," said Andrew Zimbalist, a noted author on sports economics and a professor of economics at Smith College. "They might be paying themselves or their consulting companies healthy salaries, or maybe they're paying their sons and daughters or aunts and uncles and first-cousins some good money, too.
"There's just going to be some dirty laundry, and they don't want to have it revealed."
Because of the league's current revenue-sharing agreement with the players, the union receives data on all the league's revenue streams, and the collective bargaining agreement defines how revenue can be counted. But players have no access to the figures that sit on the expense side of the ledger for each team.
Only the publicly owned Green Bay Packers release their financial data annually; much remains unknown about the other 31 teams.
"You're making the claim that you're losing money," said David J. Berri, an associate professor of economics at Southern Utah University. "You have to establish that. You are obviously not required to do that, but the players are not required to give you a billion dollars either."
Yet some question whether full disclosure is necessary or appropriate.
"If you get everything, does that mean you get to question how much to pay the coaches?" asked Marc Ganis, president and founder of the Chicago-based sports consulting firm SportsCorp. "Or how much to pay the marketing people? Do they then have the right to start questioning every expense?"