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July 2011, Week 4

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Mon, 25 Jul 2011 23:46:46 -0400
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NFL, Players Agree on New Deal
by Matthew Futterman and Lauren A.E. Schuker
The Wall Street Journal
July 25, 2011
http://online.wsj.com/article/SB10001424053111903591104576467941192669806.html

The National Football League's 136-day work stoppage
ended Monday, clearing the way for return of the
world's most profitable sports business.

Player representatives for the league's 32 teams voted
unanimously to approve a new collective bargaining
agreement Monday, following approval last week by the
owners. It sets the stage for preseason games to begin
Aug. 11 and the regular season to start on time on
Sept. 8. The deal must still be approved by players,
who are widely expected to back it.


"Football is back," NFL Commissioner Roger Goodell
said.

Owners won a bigger portion of the league's revenues,
projected to be $9.4 billion this season. They will
share at least 47% with the players over the next 10
years, compared with about 51% in the previous
agreement.

But with league revenue expected to rise overall,
actual player compensation should still increase. And
players won some key concessions, establishing higher
minimum levels of compensation and winning new
protections for players whose careers are cut short by
injuries.

Other professional sports organizations, including the
National Basketball Association and National Hockey
League, have been eager to emulate the NFL's business
model, in particular its tight control over
compensation for players. But none has been able to
match its success.

"The NFL is the strongest league that's ever entered a
work stoppage situation," said Michael Cramer,
executive director of the University of Texas Program
in Sports and Media "It was very well positioned going
in, both the players and the owners, and I have no
doubt that helped them get out of it."

The NFL's games are the most popular programs on TV.
While professional baseball and basketball teams hand
out guaranteed multiyear contracts, football teams
don't and are able to ruthlessly cut players who don't
perform, with little financial penalty.

While the NBA says it has about 20 money-losing teams,
every NFL team is profitable. The NBA's current losses
have led owners to lock out their players, and the
November start of the season is in jeopardy. Unlike the
NFL, many NBA teams could be better off financially by
not having a season.

The end of the lockout was a relief to the networks
that air football games. Comcast Corp.'s NBC Sports,
CBS Corp's CBS Sports., News Corp.'s Fox Sports, Walt
Disney Co.'S ESPN and satellite provider DirecTV are
paying the league about $4.2 billion in license fees
this year-almost half the total dollars spent on
national sports rights.

Advertisers pay about $3 billion a year to run TV
commercials during football games. News Corp. also owns
The Wall Street Journal.

"The TV industry can't afford to be without football,"
adds Rich Greenfield, a BTIG media analyst. "We live in
an on-demand world where football is one of the only
live-viewing experiences. It is irreplaceable."

The preservation of football is especially vital to
television networks in a time when audiences have grown
increasingly fragmented. For the second year in a row,
the Super Bowl smashed records to become the most-
watched telecast in U.S. history. About 111 million
people watched the game on Fox Sports, according to
Nielsen Co.

Networks aren't only dependent on football to draw
audiences and advertisers, but to anchor their broader
programming slates as well. "There's a huge halo effect
around the NFL platform," adds Anthony DiClemente, a
media analyst at Barclays Capital. "TV networks use
those games to promote other parts of their primetime
schedules, especially since the ratings success of the
NFL compared to other primetime programming has only
widened in recent years."

In the months during the lockout, the league's
television partners girded themselves for a loss of
games. Although advertisers continued to make strong
commitments to NFL games, networks prepared to allow
advertisers to move their dollars to other "marquee"
programming such as college football, golf or prime-
time dramas and situation-comedies.

Still, there is nothing quite like professional
football. "There are no contingency plans," CBS Chief
Executive Leslie Moonves said at a UBS investor
conference last December. The NFL, he added, "is not
like a prime-time show and you can say, 'OK, I'm
canceling the 10 o'clock on Wednesday and I'm going to
put in this.' "

The vote by player representatives follows a final
flurry of negotiations over the weekend where the
players and the owners reached agreement on the
lingering issues of injury compensation and the length
of the deal.

Gaining more protection for injured players was a key
union goal. While player contracts still won't be
guaranteed, the new labor deal gives players whose
careers are cut short by injury up to $1.5 million in
compensation during the two years after the injuries
occur. Also, retired players as a group will receive up
to $1 billion more in benefits during the next 10
years.

DeMaurice Smith, executive director of the NFL Players
Association, said the league and players still have to
work out rules for health care, player conduct and
disciplinary proceedings.

Kevin Mawae, a former NFL lineman and current president
of the players association, said players will back the
deal because it guarantees more than $40 billion in
player compensation during the next decade.

Jeff Saturday, center for the Indianapolis Colts and a
union leader, said his troops were looking forward to
getting back to the game. "Instead of being in these
meeting rooms we're going to be in football meeting
rooms," Mr. Saturday said outside the union
headquarters in Washington, D.C., after the vote on the
new agreement.

The deal marked the first time NFL players had held
their ground in a labor standoff, giving what has long
been considered the weakest union in sports new
confidence. Owners initially demanded to expand the
season to 18 games from 16 and hit players with an 18%
pay cut. But as owners began to face the prospect of
losing $200 million per week during the preseason and
even more than that come September, their position
began to soften.

For two decades, the leadership of the players union
was haunted by the 1987 strike, which collapsed when
star players crossed picket lines. This time, "our
players stuck together when nobody thought we would,"
Mr. Smith said.

The strategy worked. During the four-month standoff,
the players showed virtually no sign of dissent.

"Neither side got everything they wanted but what we
did achieve is a fair deal that will stand the test of
time," said Giants co-owner John Mara.

____________________________________________

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