Monday, March 14, 2011

NFL Lockout Talk [Mondays with Gus]

As soon as I leave the world of finance, labor, and human resources and enter the world of anthropology, labor relations becomes the new cool thing in the news. This makes me feel almost as smart as I did when I made my decision to become a financial advisor five years ago, and my accepting of a job as a public employee in the state of Ohio this past month. In order to help you, the reader, benefit from my awful timing (and expertise) I'm here to give you the skinny on the NFL labor dispute. ESPN's coverage is way to “OMG!!!!” for my liking, and frankly you deserve better.

For starters, this isn't a strike by the players. It's the owners telling the players that they are not allowed to play in the NFL until they come to a specific agreement with the owners. This is huge. If the players are unionized, this action is perfectly legal. When you organize as a union, it gives the employer a right to treat you all the same (in some scenarios). Since the NFL is the only employer in America for professional football players (XFL?? LOL!), the legal situation gets sticky when there is no union.

If they are telling a union to make an agreement, they're legally fine. If they're telling each individual employee that they're not allowed at work, then we get into proving whether or not the NFL is actually acting in it's best interest, or is it using monopolistic practices. I am of the opinion (warning: I'm not a lawyer) that the NFL is using it's status as the only employer of these players in an illegal fashion. You can't tell an employee that he isn't allowed to work anywhere (remember, NFL is the only employer for these guys).

So, let's look at both sides of the coin, here. Who is right and who is wrong? I will argue for each side, though I have written a previous article about why players are underpaid, so you all should already know which side I really believe in. But, I will do my best.

Owners: Owners take income based on the amount of risk associated with the business practices at hand. If the NFL collapses, the owners lose their investment. The owners, using this standard, cannot be acting in an underhanded manner because if the players leave the owners lose all of their money. The players should not be treated like owners (since 31 of the 32 teams are private companies), and as such should only be concerned with the amount they are paid, rather than the amount the owners make. Owners are owners, and players are players. Financial statements should mean nothing to the players, and fair compensation should be the only thing they are concerned with.

Players: The NFL owners do not take on normal business risk, so normal business procedures should be thrown out. Many NFL owners do not pay for the stadiums, and player contracts are not fully guaranteed. So, if they don't have risks with the buildings used, and don't have a risk with the employees, then what risks do they have? Since the players are the focus of the entire business model, it is only logical that the players be given access to financial statements as well as compensation based on the total amount of income generated by those players. Players are the only essential piece to a legitimate NFL franchise. Owners can be replaced, stadiums can be rebuilt, and teams can be relocated.

I'm not going to sit here and guess at how long it will take for this to be resolved, but I can say this: These two views are so conflicting, that taking it to court is probably the most sensible solution right now. These guys can't agree, why make them keep trying?

-Gus Rafeedie

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