RIP Irv Cross

Irv Cross died yesterday at the age of 81.  After a career on the field in the NFL with the Eagles and Rams, Irv Cross became a studio anchor for CBS – the first Black man to be in that position.  He, along with Brent Musberger, Jimmy the Greek and Phyllis George created the concept of the modern NFL pregame show – – The NFL Today.

Rest in peace, Irv Cross.

Today, I want to delve into the world of money and NFL football; they do go hand in hand.  For the first aspect of this topic, I need to direct you to this very long piece on ESPN.com by Don Van Natta, Jr. and Seth Wickersham.  This is an example of investigative sports journalism that is well researched and very well written.  The headline here is:

• “Inside the dual legacies of NFL players’ union boss DeMaurice Smith”

Please take about 10 minutes with a cup of coffee – or tea if you prefer – to follow the link above to learn about some of the inner workings of the NFLPA over the last decade or so.  To induce you to take the time to read this, you will find a quote in there by Jerry Jones that almost makes sense in the context of the article even though you may wonder how that can possibly be the case.  Here is the quote:

“The owls are f**king the chickens.”

From this report, it is pretty clear that DeMaurice Smith has not been the firebrand/in-your-face/ take-no-prisoners sort of union leader that people like Marvin Miller or Walter Reuther or John L. Lewis were in the past.  The NFL and the NFLPA have had plenty of confrontations over the past couple of decades but none of them resulted in taking the game off the field and onto a picket line.  There are some folks in this article who believe that Smith and the union have given too much ground over the last decade or so and that they should have driven a harder bargain.  I would argue that will always be the case when a tense negotiation comes to an end.

Rather than look at DeMaurice Smith as a watered-down version of a union leader, I think he has done his part in growing the league – – and growing the league means growing the amount of money that flows through to the players in terms of salaries.  Yes, the split could be further leveraged toward the players but the salary cap until last year with COVID-19 had grown almost 50% in the last decade.  There are not a lot of jobs in the US where that is the case; the NFL players were doing well under the deals orchestrated by Smith and his staff.

From my reading, one of the largest inequities among NFL players is that they have within their ranks a great deal of income inequality.  Star players and QBs make tens of millions of dollars a year; lots more players make the league minimum which is about $600K for now.  Shed no tears for the grunts here; if they hang on in the league for 3 years – about the average for a random NFL player – they will have made $1.8M by the time they are in their mid-20s.  There are lots of folks in the US who would look at that financial situation and wish it had happened to them.

What Smith and the union seem to have done is to bargain in such a way to keep the show on TV because that is where the big bucks that support the salary cap come from.  That is the balancing act he has had to do in his head and on the fly as negotiations ebbed and flowed.  And while I agree that the last deal done by the NFL and the NFLPA extends for an inordinately long time – 10 years – I think that it provides exactly the environment necessary to “grow the game” thereby growing the salary cap.

And that brings me to the next point for this morning – – the negotiations now underway between the NFL and various media outlets for new broadcast rights deals.  Some reports say that the NFL is seeking to double the revenues from the networks and the streaming services in the next deal.  I have no idea if they will get that sort of increase, but two of the provisions of the latest CBA might entice the networks to cough up that kind of money:

• Labor peace for 9 more years = no fears about games being canceled or having to pretend that replacement players make for good television
• The flexibility/virtual certainty of adding a 17^th regular season game to the NFL schedule.

The NFL can portray to its “broadcast partners” that they will have the most popular TV programming in expanded form for the next 9 years without fear of a work-stoppage outside a stochastic event such as a new pandemic.  Moreover, for the right price of course, bidders other than the “Big 3” networks – CBS, FOX and NBC – might be added to the power rotation to televise the Super Bowl.

There are reports of these ongoing media rights negotiations which I take to be informative because the gist of the information appears in various places.  I do not know if they indicate a 100% increase in TV revenues for the NFL, but whatever the new revenue stream turns out to be, it will be significantly more than it has been up until now.

• Reports say that NBC has enjoyed a “sweetheart deal” for Sunday Night Football and that it will have to cough up a lot more to keep that franchise in the new deal.  NBC pays the NFL $950M per year for this programming.  NBC enjoys flex scheduling late in the year to give it meaningful games and it is in the Super Bowl rotation.  Compare that to the ESPN deal for Monday Night Football which is $2B per year without flex scheduling and no Super Bowl participation.
• Thursday Night Football is an interesting negotiation situation.  FOX has been partnered with NFL Network doing the games recently and paying $650M per year for those rights.  Thursday NFL games draw the smallest audiences and reports say that FOX wants out of that package.  There is no benefit to the league to put the games on NFL Network exclusively since the league owns the network and that is not how to leverage revenue increases.  However, reports say that Amazon is interested in that property for its streaming service.  Not only could that be a way to increase revenues for Thursday Night Football but adding Amazon to the mix for a full package of games introduces a new bidder – with deep pockets – to the equation for down the road.  On the other hand, would Amazon want to pony up big money for streaming rights if it had to share the games with NFL Network?  There is a lot to unravel here…

Before anyone points to the decline in ratings for NFL games last year and the Super Bowl audience drop of about 9%, please consider that 2020 is an anomalous year for television, sports and just about everything else in America.  Other sports leagues saw ratings for their championship events plummet last year; the NBA ratings for the Finals were down 49%.  I think it is important to look at longer term trends as well as to 2020 in this situation.

• Sunday Night Football has been the #1 prime time TV series for the last 10 years in a row.
• Football Night in America which leads into SNF has been the highest rated studio show for the last 15 years.
• In 2020, the top 5 TV shows of the year in terms of viewership were NFL games as were 7 of the top 10.
• In 2020, 30 of the top 100 TV shows in terms of viewership were NFL games.
• Eight NFL games drew larger audiences than did the most widely viewed Presidential debate.

That is why networks will pay more for these broadcast rights in the next set of deals and it is why the salary cap for players in the NFL will recover from the decline suffered in 2020 due to the loss of “live gate revenues” caused by COVID-19.  Some argue that DeMaurice Smith and the NFLPA should have gotten a “bigger portion” of the league revenues in exchange for that 17^th game which is unpopular with the players.  Maybe he could have and maybe he should have.  Nevertheless, the outcome here is that NFL salaries will continue to rise for the foreseeable future.  Now, if the NFLPA wants to tackle its internal problem of “income inequality”, that is an issue that only has tangential involvement with the NFL.  If that is a “problem to be solved”, it is one that more directly involves the NFLPA negotiating with player agents and NFLPA members themselves.

Finally, Dwight Perry of the Seattle Times had this item in his column last weekend:

“NFL owners are pushing to implement a 17-game schedule for this coming season.

“’A$ you might $u$pect, we have our rea$ons for playing $eventeen,’ said one.”

But don’t get me wrong, I love sports………