They did what? They signed a $700million 30-year naming right’s deal for a stadium that doesn’t exist, which is home to a ‘team to be named later‘.
And that team … they’re really going to be playing in a farmer’s field? Oh yeah!
It is – or may become – the largest naming rights deal in history. The fact that Farmers Insurance Group were willing to enter into that commitment with the Anschutz Entertainment Group is testament to the strength of the NFL brand; and to the untapped revenue stream that is the Los Angeles conurbation.
NFL Commissioner, Roger Goodell, welcomed the deal as a ‘positive development’ adding:
“… it’s an important revenue stream, but even with that positive development the financing of the stadium in Los Angeles is still a very difficult proposition.
“We have to get the Collective Bargaining Agreement (CBA) addressed in such a way as to make it so that it is a smart investment that that can be financed so that we can create the kind of economic activity in Los Angeles that I believe can happen if we’re successful, whether it be in downtown or out in the City of Industry.
“There are some great opportunities for us to continue to grow the game, but we have to recognize that cost is associated with that and address it in a way that incentivizes everyone to make those kind of investments.
“I think this is a positive thing for the league, for the players, for the game, and for, most importantly, our fans in Southern California.”
Encouraging words for LA denizens then. But mixed in there is the real stumbling block for NFL fans the world over, the lack of a CBA (definition). The pending player lockout (March 3rd) threatens to polarise the two parties further and once emotions kick in there is a real chance that there will be no NFL football come Labour Day (for more on CBA).
I don’t pretend to understand the complexities of the current CBA; my understanding is that it splits the revenue pie 60/40 in favour of the players, which the owners’ now say is untenable if they are to invest in the game’s future development.
Logically you have to say there’a case for that. With the recession freezing the public purse the reduced revenues from this deal have seen a distinct stall in the building of new NFL stadia; ironic given that tomorrows’ Super Bowl will be played in the newest NFL stadia, Cowboys Stadium, a temple to the game and the ego of its financier Jerry Johnson. Nonetheless it’s a fact that no stadia has been built that was not underway in 2006.
You’d also have to say they’d be crazy to risk damaging the brand, which has seen a procession of record TV viewing figures throughout the season. Why open the door for dissent, maybe for another sport to capitalize? Whisper ‘soccer‘ quietly now.
Speaking on Boston’s WEEI yesterday New England Patriots‘ owner, Robert Kraft, spoke candidly about the CBA from a businessman’s perspective (Listen here). He’s adamant it would be ‘criminal’ if a deal were not worked out before the March 3rd deadline.
“We have something we can grow and build on, and it can benefit all parties. It would be really criminal if we can’t find a way to close the deal out in the next month.”
“We have too many lawyers on each side. We have to move them aside and get business people at the table.”
Kraft clearly believes that a deal that works for both owners and for players can be worked out; unlike the 2006 CBA, which owners clearly believe gave too many concessions to the players.
Other elements in reaching agreement include thorny decisions on rationalising the Draft pay structure avoid doling out millions of dollars to untested ‘talent’ and the proposed expansion to an 18 game regular season.
Myself, I wouldn’t be surprised to see the 18-game season turn out to be a whopping bargaining chip; the owners already get the revenue from those two ‘extra’ games now, so slapping a regular season tag on two preseason games of itself does nothing for them. Although I accept that TV would cough-up a premium for the games, would it cover the additional roster places owners would have to fund to allay player fears of increased physical wear-and-tear?
It’s never an easy thing to win back a concession made in previous negotiations though, why would the players willingly give up and revert to anything less than the 60% they currently get?
According to Kraft they league stands to lose $1billion between March 3rd and Labour Day if the CBA isn’t signed. I think the players have to ask themselves: “How long will it take us to earn that $600million back?”. I suspect the answer is ‘never’.
Like fans across the world I can only hope that come Labour Day 2011 I’m kicking back to watch the NFL Kickoff; come on guys ‘Play Ball!’