A Question of Layoffs vs. Payoffs

Wednesday, March 4, 2009; Page E01

As long as the Washington Redskins go by the motto "why pay less?" it will be difficult to defend them. Spreadsheets to them apparently mean table linens. Obviously, my own bookkeeping is not to be trusted, because just a few weeks ago, I assumed the team was distressed. Otherwise, why would it have laid off so many people? Turns out I made an accounting error.

It's baffling: One day a team lays off dozens of employees in the legal, marketing, information technology, public relations, game-day operations, television and even the cheerleading staffs. Then, suddenly, it shells out huge sums for free agents. In one 24-hour spending binge, the Redskins extended $182 million in contracts to just three players, including that whopping $100 million over seven years to defensive tackle Albert Haynesworth, while offering a bust like Jason Taylor a $500,000 bonus just to work out.

Can someone help me with the math?

What to make of this combination of layoffs and big spending? Is it a question of lousy addition -- or just an outrage?

The question of those laid-off workers lies underneath all the player salary numbers, like something moving at the bottom of a pile. Surely there is a rationale. Michael Josephson, founder of the Josephson Institute of Ethics, cautions against knee-jerk reaction. "The challenge is to overcome that immediate instinct of saying, 'How can you cut here and spend here?' " Josephson said. "We have the responsibility to look a little deeper than that. For any organization to survive they have to be solvent, and so management has that responsibility of knowing where to pay and where to cut."

Let's look deeper, then. The Redskins are not the only team to pay large while cutting jobs. A dozen NFL teams have shed administrative staff. The Denver Broncos have laid off workers while paying off former coach Mike Shanahan to the tune of $20 million. The Carolina Panthers have shed 20 employees, the Cleveland Browns 18, the Tampa Bay Buccaneers 12. The NFL itself has reduced its headquarters staff by 169. Meanwhile, the league's labor agreement mandates that each team spend at least $111 million on player salaries, for a total of about $4.5 billion.

Although it's unpalatable to say so, some people are simply far more valuable than others. Players are revenue producers, while administrative assistants and seasonal security guards are not. "Some people can generate income, and some can't," Josephson said. "That's inherent in business. I may have to lay off 10 janitors, but I still have to pay my top salesmen a bonus, because if I lose my salesmen I lose everything." It's the responsibility of the Redskins' front office to put the most competitive players on the field, and to control costs and efficiency in a bad economy without harming the essential product: the team.

"There's no getting around the fact that there's symbolism involved on both ends," said Peter Roby, athletic director at Northeastern and head of the Center for the Study of Sport in Society. "If you don't sign a free agent of the magnitude of Haynesworth, can you compete in the marketplace and justify the ticket prices and sponsorship packages that you require and target for fans, if they don't think you are making decisions that allow you to compete for a Super Bowl? On other hand, you also want to send a signal to staff that you're trying to be as fiscally prudent and responsible as you can."

Something else to understand is that the Redskins won't actually spend $182 million. The Haynesworth contract is worth less than it appears to be: $100 million over seven years doesn't really mean $100 million; it actually means about half that. Haynesworth's agreement has a "poison pill" in the fifth year that makes it closer to a four-year deal worth $48 million.

Still, these explanations aren't entirely satisfactory when it comes to the Redskins. The fact remains that the team has spent heedlessly compared with its NFL peers. The binge, while less than the numbers indicate, nevertheless will mean guaranteed payouts of $72.5 million to Haynesworth, cornerback DeAngelo Hall and guard Derrick Dockery -- at a time when the team has undergone not one but two rounds of staff cuts.

It is difficult to defend the team, given its history of high-cost, low-yield player decisions. Record payouts to stars have often as not resulted in sub-par, unmotivated performances. Just Monday, the Redskins released Taylor, a supposed difference-maker at defensive end for whom they gave up second- and sixth-round draft picks, and who was due $8.5 million this year -- after one season in burgundy and gold that was a career low point. He was made so rich by the Redskins that he could afford to decline a $500,000 incentive to attend offseason workouts. Taylor's departure, combined with the release of Marcus Washington and Shawn Springs, allowed the Redskins to offset $18.5 million in costs.

The only thing Redskins fans have consistently received for these expenditures is a sense of annual anticipation. The Redskins sell faint hope. Each offseason, they do something gaudy in an effort to revive fans' paying interest in the team. The Redskins have become one of the great money producers in the NFL -- valued at $1.5 billion, with annual revenues of $327 million -- without being one of the great winners. Meanwhile, the average ticket price of $79 was rated the ninth-most expensive in the league in 2008, and the overall in-stadium cost index ranks sixth, at around $441 for a family of four.

Ultimately, it's hard to get past that fundamental incongruity in values. "On the face of it, it's absurd," said William J. Morgan, author of "Why Sports Morally Matter" and professor of occupational therapy at the University of Southern California. "The problem is there doesn't seem to be any limit on player salaries vis-a-vis laying off others." It's simply difficult to see how the Redskins' job cuts could have made much of a difference to their efficiency and bottom line, compared with some wiser player expenditures over the last few years.

Fans have always accepted and even colluded in the compensation of great stars: The fact is, we all value athletes more than ordinary people, or we wouldn't pay $300 for their jerseys. But fans do require some small concessions to a sense of moral balance. NFL Commissioner Roger Goodell intuited as much and took a 20 to 25 percent pay cut from his $11 million salary. Will Goodell remain overpaid? Yes. But will his gesture save a few jobs and make the ordinary wage-earning fan feel considered by the league? Certainly.

That the Redskins would cut lower-level employees as nonessential to the organization, while rewarding Haynesworth as vital to the tune of $48 million, betrays something fundamental about the team. In a league with a skewed reward system, the Redskins always manage to be at the far end of the skew. There is a certain tone-deaf profligacy at work. No, lower-wage staffers aren't as valuable to a team as a Haynesworth -- they don't come close to resembling his worth. But they resemble the sorts of people who actually watch the Redskins, and buy their gear: the paying public.

It's the relationship to ordinary people that seems missing here, the average citizen who really foots the bill and pays the freight, from buying $7 beers to paying $40 to park. The Haynesworth signing might be justifiable by itself, and it's likely to have a high impact on the team. But in combination with lower-wage layoffs, it's as troubling as it is exciting, and it sends a poor message. "In terms of public message, it's that we'll just wipe people out and continue to pay these outlandish salaries and we don't have to justify it, we don't owe anything to the commonweal at all," Morgan said. "There is a moral problem of what you're giving to the community, and what you are taking."

One good that could possibly come out of all this is that if Haynesworth, Hall and Dockery live up to their pay, if they perform and win, there is a chance some of those laid-off and seasonal workers can be rehired. Which should give every working stiff a rooting interest.

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