Who says owners won’t feel the pain should a lockout of the NFL Players Union and players take place in 2011? According to an article published by the Wall Street Journal, owners stand to lose upwards of $400 million in the loss of season ticket sales alone, when patrons are asked to renew come March.
$1 billion. That’s the estimated value of a number of NFL franchises. $400 million is enough financial backing for the NFL to take you seriously as a prospective owner to an NFL team. The amounts are mind-boggling. However in the end, the final amount could in fact push $2 billion.
This is a predicament of the NFL’s choosing. They took a juggernaut business in a challenged economy and then sent a message of a voluntary shutdown. NFL players proposed a ‘lock-in’ last year to get this done and they said no.The owners pocketed over $300 million in cash savings in the uncapped year alone. –Union Lawyer, James Quinn
Among the ongoing discussions are that owners want to hold more international games and institute a new wage scale for rookies, in addition to expanding the NFL regular season, while wanting all players to take an 18% pay-cut starting next year, so owners can take part in the aforementioned activities, which include stadium improvements.
Proposed Losses the League and Teams Might Incur
- $125 million from existing corporate partners demanding discounted sponsorship deals, while others might pull out of late-season sponsorships such as the Pro Bowl, entirely.
- $400 million in the loss of season ticket revenues from season ticket holders not renewing their contracts.
- $500 million from the months of April through August ($15.625 million per team) for missed preseason games.
- $8 million per team for every canceled home game.
- $750 million if the entire 2011 season becomes a lockout for breach of contract with Verizon Wireless, which paid the NFL for rights to broadcast games on Verizon’s V-Cast, and also for the rights to use NFL players in the company’s telecommunications commercials.*
The final amount adds up to a hefty price of $1.78 billion! However, the deal with Verizon might not be a breach of contract if the league and Players’ Union agree to terms by the NFL’s regular season.
In the meantime, the NFL will continue to receive $4 billion in television rights fees during a potential lockout, which would help cover contract costs, stadium upkeep, and such. However, the sum would eventually have to be repaid to the networks.
Follow Cat Crave on Twitter @THECatCrave.