Last year the NFL earned over $9 billion in revenue, half of witch was from television rights. Prior to this month, the NFL was set to receive their share of television revenue next season, even if there was no football season. Because of the way the contracts were structured, networks such as CBS, FOX, NBC and ESPN were still going to have to shell out over $4 billion combined, without receiving a football season in return to broadcast. However, this past month judge David Doty ruled in court that the terms of the television contract violated rules of the CBA between the NFL and NFL Player's Union. The ruling said an agreement for networks to pay the NFL in the case of a lockout violated the CBA agreement to negotiate broadcasting terms "in good faith." The television networks will not have to pay the NFL if the lockout continues and games are lost.
This dilemma raises other questions. How will this affect the television networks as well as advertisers? For most of the television networks that air football, it is their biggest draw for both ratings and advertising dollars. Most networks already have advertising campaigns in place, so it will be interesting to see how already agreed to commercial deals play out in the event of no football season. Being that sports themselves bring in some of the biggest television revenue, stations such as FOX and ESPN who have a number of other sports should be able to weather the storm. NBC, however, could take a larger hit. Their Sunday Night Football received tremendous ratings, but was also one of the very few large draws for the network.
Another question that is being raised is the possibility of replacement players. Although a little early for serious speculation, the NFL did have three weeks of replacement player games in 1987. This would give the networks football to show, however I am not sure the revenue would be the same for a sub par product.
For the businesses who have media and advertising rights with the NFL, their advertising campaigns are typically the most well funded and most integral to their overall marketing strategy. Advertisers are also set to take a major hit if there is no football. Just as the television networks are trying to figure out what to air incase of no football, businesses are also trying to find other outlets to invest in for their advertising campaigns.
If the lockout goes into next football season, many more than just the NFL teams and its fans are affected. All of the networks, advertisers, and those who have bought into the NFL in some form of media rights will have to look elsewhere. Currently, it is a waiting game for everyone.
Sources
NFL Lockout Hits Media Giants
http://www.cnbc.com/id/42074000/
What Will the Networks Show if Their is No Football
http://www.dailyfinance.com/story/media/what-will-the-networks-show-if-theres-no-football/19880281/
Networks, Advertisers Call New Plays Amid NFL Strife
http://online.wsj.com/article/SB10001424052748703576204576226562745064154.html
Sunday, March 27, 2011
Sunday, March 20, 2011
NFL Wars
With the NFL at the peak of its popularity, the current NFL lockout is quickly becoming one of the most famous sports law and labor related issues. Collective Bargaining Agreements, more commonly known as a CBA, are what govern the relationship between athletes and the sport they play. Just as employees of another job may have a union, NFL players have the NFL Players Association, also known as the NFLPA or Player’s Union. The NFLPA acts as the representing body for the players in negotiations with the League, which consists of all team owners and the NFL Commissioner. The CBA is the agreement between the two parties on topics of wages and structure, such as games and practices.
Just like any contract, the CBA between the Player’s Union and the League has a set duration. The current agreement was set to last through the 2011-12 season, but the owners decided to opt out of the final year per an opt out clause in the agreement. With no new agreement in place, the NFL and its players are on the verge of not having a 2011 football season, also known as a lockout. For the NFL to go on, the two sides must come to an agreement on such issues as how much revenue goes to player salaries, which is currently around 50% (“NFLPA Lockout,” 2011). The main issues include revenue and salaries, a potential 18-game season (currently 16), a rookie wage scale, and pensions for former players (“NFLPA Files,” 2011).
Still nowhere close to a deal, the NFLPA has decertified and NFL players are preparing to sue to the NFL for antitrust violations. The player’s are hoping a federal ruling could force a 2011 season, but even if so what would happen after that time? What about a CBA past 2012?
The players seem to be most frustrated with the NFL for wanting to change anything when the sports seems to be doing so well; “The players haven’t asked for anything more and literally don’t want anything more. They have asked simply to play under the existing agreement,” said NFLPA Spokesmen Gorge Atallah (2011). One thing is for sure, this topic is only getting hotter as star NFL players are about to sue their bosses!
Resources
Atallah, George. (2011). Players Case For Football in 2011. ESPN. Retrieved from sports.espn.go.com/espn/commentary/news/story?id=5995362
“NFLPA Files Collusion Claim.” (2011, January 18). Associated Press. Retrieved from sports.espn.go.com/nfl/news/story?id=6033492
“NFLPA Lockout Central.” (2011). NFL Players Association. Retrieved from www.nflplayers.com/about-us/2011-Lockout-Central/
Just like any contract, the CBA between the Player’s Union and the League has a set duration. The current agreement was set to last through the 2011-12 season, but the owners decided to opt out of the final year per an opt out clause in the agreement. With no new agreement in place, the NFL and its players are on the verge of not having a 2011 football season, also known as a lockout. For the NFL to go on, the two sides must come to an agreement on such issues as how much revenue goes to player salaries, which is currently around 50% (“NFLPA Lockout,” 2011). The main issues include revenue and salaries, a potential 18-game season (currently 16), a rookie wage scale, and pensions for former players (“NFLPA Files,” 2011).
Still nowhere close to a deal, the NFLPA has decertified and NFL players are preparing to sue to the NFL for antitrust violations. The player’s are hoping a federal ruling could force a 2011 season, but even if so what would happen after that time? What about a CBA past 2012?
The players seem to be most frustrated with the NFL for wanting to change anything when the sports seems to be doing so well; “The players haven’t asked for anything more and literally don’t want anything more. They have asked simply to play under the existing agreement,” said NFLPA Spokesmen Gorge Atallah (2011). One thing is for sure, this topic is only getting hotter as star NFL players are about to sue their bosses!
Resources
Atallah, George. (2011). Players Case For Football in 2011. ESPN. Retrieved from sports.espn.go.com/espn/commentary/news/story?id=5995362
“NFLPA Files Collusion Claim.” (2011, January 18). Associated Press. Retrieved from sports.espn.go.com/nfl/news/story?id=6033492
“NFLPA Lockout Central.” (2011). NFL Players Association. Retrieved from www.nflplayers.com/about-us/2011-Lockout-Central/
Sunday, March 6, 2011
No CBA Could Change NFL Endorsement Landscape
For Athletes and their agents the most important form of intellectual property is the athlete. His or her name, likeness and brand is extremely valuable. Publicity and performance for athletes results in endorsement opportunities. From pitching a product in a television commercial or endorsing an event by being present, athletes allow companies to use their name and likeness in advertising. The NFL in particular negotiates league wide deals with sponsors such as Verizon and Pepsi. These deals offer both exclusivity and the ability to use NFL players in advertising campaigns.
While these deals are negotiated between businesses and the NFL, the NFLPA is the representing body of NFL players. If the current NFL collective bargaining agreement (CBA) expires, so will the current endorsement deals agreed to by the NFL and its corporate sponsors. No relationship between the NFL and NFLPA means no relationship between the NFL’s sponsors and NFL players, at least not within the current agreements.
“In the absence of a CBA, players will have total freedom to endorse any company or product” (Carpenter, 2010). For example, the NFL has an exclusive deal with Pepsi, but with no collective bargaining agreement, a player could do a commercial ad for Coca-Cola if he wanted too. Also, if Pepsi wants to continue using NFL players outside of a CBA, it will have to negotiate a new and separate deal with the players themselves.
According to AOL News, the NFLPA has attempted to reach an agreement with the NFL that would extend the current sponsorship agreement outside of a CBA (2011). So far they have been denied. For NFL sponsors this whole process is coming as unwelcome news. Many sponsors have current deals with the NFL that go up until 2014, such as Proctor & Gamble, whom witch uses the NFL and its players to help pitch as many as 13 of its own products (Business Courrier). Some have already paid the NFL for these rights, and will be understandably upset if they do not receive their return in the form of NFL and player advertising.
In terms of intellectual property, what this boils down to is that with no agreement between the NFL and NFLPA, the player’s have complete freedom to do what they choose with their name and likeness. Many players could take advantage of this opportunity to create income in the case of a lockout and no football season.
AOL News, 2011 - http://www.aolnews.com/2011/02/16/nflpa-could-deal-directly-with-sponsors-in-event-of-lockout
Business Courrier - http://www.bizjournals.com/cincinnati/stories/2009/08/03/daily27.html
Carpenter, 2010 - http://www.examiner.com/human-resources-in-jackson/the-upcoming-labor-dispute-the-nfl
While these deals are negotiated between businesses and the NFL, the NFLPA is the representing body of NFL players. If the current NFL collective bargaining agreement (CBA) expires, so will the current endorsement deals agreed to by the NFL and its corporate sponsors. No relationship between the NFL and NFLPA means no relationship between the NFL’s sponsors and NFL players, at least not within the current agreements.
“In the absence of a CBA, players will have total freedom to endorse any company or product” (Carpenter, 2010). For example, the NFL has an exclusive deal with Pepsi, but with no collective bargaining agreement, a player could do a commercial ad for Coca-Cola if he wanted too. Also, if Pepsi wants to continue using NFL players outside of a CBA, it will have to negotiate a new and separate deal with the players themselves.
According to AOL News, the NFLPA has attempted to reach an agreement with the NFL that would extend the current sponsorship agreement outside of a CBA (2011). So far they have been denied. For NFL sponsors this whole process is coming as unwelcome news. Many sponsors have current deals with the NFL that go up until 2014, such as Proctor & Gamble, whom witch uses the NFL and its players to help pitch as many as 13 of its own products (Business Courrier). Some have already paid the NFL for these rights, and will be understandably upset if they do not receive their return in the form of NFL and player advertising.
In terms of intellectual property, what this boils down to is that with no agreement between the NFL and NFLPA, the player’s have complete freedom to do what they choose with their name and likeness. Many players could take advantage of this opportunity to create income in the case of a lockout and no football season.
AOL News, 2011 - http://www.aolnews.com/2011/02/16/nflpa-could-deal-directly-with-sponsors-in-event-of-lockout
Business Courrier - http://www.bizjournals.com/cincinnati/stories/2009/08/03/daily27.html
Carpenter, 2010 - http://www.examiner.com/human-resources-in-jackson/the-upcoming-labor-dispute-the-nfl
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