Today at TILE we talked about the possibility of a strike by the National Football League (NFL). But wait… didn’t they just put on one of the most expensive and exciting Super Bowls in recent memory? What about all that post-game hugging and champagne? Aren’t sports by definition supposed to be fun and games?

The NFL is a business, and like most businesses, money is at the center of this disagreement – How big is the pie? How much goes to each person? How will that mix change in the future?

And the NFL is big business – almost $9 billion in revenue in 2009 alone. They make money in lots of different ways – ticket sales (do you know someone who paid $2,000 for a ticket to Dallas?), advertising revenues (advertisers paid more than $200 million to educate football viewers about their cars, shaving cream, and fast food), merchandising (t-shirt sales), and television broadcasting (yes, ESPN, Fox, and CBS pay the NFL upwards of $1.5 billion for the right to air the games on their stations).

Until now, the rules of the road have been guided by something called a “Collective Bargaining Agreement,” which lays out how the company’s money is divided. But this road hits a dead end (i.e. no longer applies) in early March. Now everyone is trying to get their piece of the pie while it’s up for grabs. Take salaries, for example. There are currently maximums (“caps”) and minimums (“floors”) when it comes to the amount that each team can pay its players. These numbers determine how much of the NFL’s profits go automatically to its 32 owners and what is available for player salaries. As you can imagine, the owners want more of the pie… and the players don’t like that idea (they’re in favor of keeping things the way they are). There are 1,700 players in the NFL, each earning an average yearly salary of $770,000. Sounds like a lot, but when you factor in occupational hazards (like broken bones and brain damage) and a really short career (3 years, on average) it may not be quite as much as it seems.

So what would a strike mean? Short-term, it just means the players walk off the field. This is more or less the way strikes everywhere work – workers refuse to do their jobs until they (hopefully) get what they want – higher pay, better work environment, greater job security. But in the longer term, a strike can lead to fundamental shifts in how business is done (i.e. where factories are located, or how much products cost), and how customers view the product. NBA players went on strike in 1998-99, and both Major League Baseball and the NHL refused to play in 1994-95. Each time, the long term impact was that fans didn’t like it – and the whole business suffered. So when it comes to the owners and players of the NFL, both sides should be motivated to make nice and not wait until opening kick-off to come to an agreement. After all, this isn’t a game of chicken – it’s a national pastime!

And what does this mean for the TILE community? Even if you aren’t a fan of professional football, it’s an interesting business story to follow. Strikes are a very high-stakes way to settle disputes. When customers are involved, what does it mean to air your dirty laundry (i.e. talk money) in public? Are there better ways to negotiate… or better ways to spend your Sunday afternoons?

- Amy