Vast gap in how NFL, players see revenue (AP)

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    Figures obtained by The Associated Press underscore the substantial divide
    between the NFL and the locked-out players on a core issue: What portion of
    additional revenue goes to players.

    Players’ share of incremental increases to all revenues under the NFL’s
    expired contract was about 53 percent from 2006-09, according to calculations by
    the accounting firm that audited the collective bargaining agreement for both
    sides.

    The NFL has repeatedly said that 70 percent of extra revenue went to
    players, a main justification for changing the sport’s economic system. The
    league’s numbers remove the portion of revenues—about $1 billion a year—
    taken off the top for owners to spend on expenses.

    Data prepared in 2010 by PricewaterhouseCoopers and obtained Monday by the
    AP show that about $3.8 billion of the $7.2 billion in incremental revenue over
    those four years—52.9 percent—went toward players’ salaries and benefits.

    The league and players agree on the $3.8 billion; they disagree on how to
    look at revenues. Setting aside the off-the-top expense credits—for things
    such as stadium improvements or NFL Network—makes the players’ take a higher
    percentage.

    The figures from PricewaterhouseCoopers—calculated last year at the
    request of the NFL Players Association—include that upfront money, because it
    is part of the league’s gross revenue.

    “The NFL wants to artificially inflate the percentage of incremental
    revenue going to players by excluding revenues that never go to players,” NFLPA
    spokesman George Atallah said. “League officials … have been selling a
    lockout to owners based on misleading and incomplete financial information. They
    excluded the cost credits to be able to tell owners that player costs are rising
    faster than all revenues. This is not true.”

    NFL spokesman Greg Aiello wrote in an e-mail to AP: “Expense credits were
    used in the last agreements by agreement with the union to cover certain
    expenses needed to put on the games. The NFL did not exclude anything
    unilaterally.”

    Owners locked out the players more than a week ago, creating the NFL’s first
    work stoppage since 1987. That came hours after the NFLPA renounced its status
    as a union, allowing players to file a class-action antitrust lawsuit in federal
    court.

    The main sticking point throughout CBA negotiations was how to divide the
    NFL’s more than $9 billion in annual revenues. All along, the league has said it
    needed to rework the CBA because too large a portion of new revenues have been
    devoted to players’ salaries and benefits.

    Just before last month’s Super Bowl, NFL general counsel Jeff Pash—the
    league’s lead labor negotiator—said: “The players have gotten 70 percent of
    the incremental revenue that the NFL clubs have generated since 2006. They know
    that’s not a sustainable model.”

    A year earlier, Commissioner Roger Goodell made a similar point during his
    annual Super Bowl news conference.

    That 70 percent figure not only made an impression on owners—it also made
    players wonder whether there was, indeed, an adjustment that needed to be made.

    “One of the owners’ big problems with the deal, as they reported from 2006
    forward, is they had the argument that player cost was north of 70 percent, say.
    When that number was first presented, it caused everyone on our side of the
    table to sit down. It caught our attention: ‘If it is 70 percent, we need to
    address it,”’ said former player Pete Kendall(notes), who has been advising the NFLPA
    during negotiations.

    “It also spurred some discussion and research, and we had
    PricewaterhouseCoopers look at the numbers,” Kendall said last week while at
    the players’ meetings at Marco Island, Fla. “And what they came back with is,
    the only way the NFL could arrive at that was if they excluded the deductions
    they take (at the outset). But that is money that came into the league.”

    According to the figures obtained by the AP:

    — In 2005, player costs were $3.32 billion, and all revenue was $6.49
    billion;

    — In 2006, the first year under the just-expired CBA, player costs rose to
    $4.1 billion, an increase of $780 million, which is 61 percent of that year’s
    $1.28 billion increase in all revenue to $7.77 billion;

    — By 2009, player costs were $4.5 billion, while all revenues were $8.88
    billion.

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    Vast gap in how NFL, players see revenue (AP)