Economics

During the year of 1987 several memorable things happened.  Living on a prayer by Bon Jovi was a hit.  The Giants had won the super bowl the Hiesman Trophy was awarded to Tim Brown from Notre Dame.  Another important thing that happened was the NFL strike of 1987.  This strike was the basis of several movies, including the replacements, which mocked the replacement teams that were brought into play for the striking NFL players.  People have often wondered why the strike happened.  The reason why the NFL strike of 1987 happened, and looms closely again, was because of revenue sharing, money, and security.

The NFL is a revenue sharing company.  What that means is that in one company, the NFL, there are several companies, such as the Colts, Bills, Cowboys, and the Seahawks.  Revenue sharing is where the owner of each team shares a percentage of his or her revenues with the NFL and the players.  Revenues come from things like ticket sales, jersey sales, season tickets, TV contracts, and from stocks.  The revenues from 1987 werent even close to what they are now, but thats because the recent addition of the Internet market, which makes each teams target market a global market.  About 23 of the NFLs money comes from TV deals.  The players get about 23 of team revenue. So, more or less, the TV contract goes to pay the players. These contracts are typically for about 5 years, and every time they are renegotiated the price goes up. So do players salaries.  (Lawrence, 2005)  The strike of 1987 happened because the players felt like they werent receiving enough money for their efforts.  Many people thought the NFL players were being greedy, because they werealready getting paid millions of dollars to play a game, but it was the NFL owners who were being greedy.  They were not sharing their massive profits with the players.  The players receive escalating contracts.  That means that their contract is worth more each year than the preceding year.  For example, lets say John Doe made 8,000,000 at quarterback this year, then next year he will make 9,000,000.  This is because the salary cap went up.  The salary cap is a percentage of what the NFL teams earn.  Lets say the Cowboys earned 150 million in revenue this year.  That means the player salary cap is going to be around 120 million.  The players ear a little less than 80 of what the team makes.  Dont think that this means each year the teams spend 120 million on its players.  The truth is that most teams give themselves a cushion under the salary cap.  This way the owners save money.

Speaking of money, it makes the NFL players happy.  But what is money and how is it made  Money is produced by sales.  Teams can sell anything they want to make money.  Bobble heads, towels, helmets, footballs, seats, autographs, shoes, clothing, jerseys, snack foods, beer, hot dogs, nachos, stickers, license plates, or anything.  The NFL is one of the worlds most successful marketers because it is everywhere.  It makes money with TV, endorsements, advertising, goods, and games.  What decides how much the salary cap is, is how much money is made.  Everything counts.  This is called the collective bargaining agreement.  So when the NFL makes 150 million dollars in revenue for each team, its not just in tickets for the games, but the sale of everything.  The players in 1987 saw this and decided that they wanted more money, because they were getting the short end of the stick.  During the strike replacement teams were hired during the season with mock names of the real teams, and they played a total of 3 games. During these games the amount of money made, revenue, dropped by a fifth, which is what the NFL expected.  Luckily for the NFL and for the fans the collective bargaining agreement was made and the NFL season resumed.

Security is a big issue for NFL players.  The NFL players spend 10 to 15, and maybe 20 years on the field and make lots of money.  They can make anywhere from 10 million if they are a career journeyman to well over 100 million dollars if they are perennial pro bowlers.  With endorsements from companies like Nike and Gatorade, players can make even more.  Tiger Woods recently went over the 1 billion dollar earning mark because of his earnings and endorsements.  But the reason why security is so important is because these NFL players destroy their bodies and sometimes their brains with all of the jarring hard hits, and constant impacts.  Tackles in the NFL are like small car collisions.  Some linebackers can get as many as 100 tackles in a season.  With that many collisions over the span of a career its a wonder that these players can even walk after they retire.  The NFL players want security for their future medical issues.  They also want security for their families, so they can remain living the lifestyle that theyve grown accustom to.  Concussions are on high priority in the NFL these days, because of the consequences and side effects they cause down the road.  Some former players have become suicidal just from the concussions, so the NFL players want security.

The NFL strike of 1987 happened because the players felt like they did receive the proper revenue share, money, or security for their hard work.  The worst athletes in the NFL are still some of the best athletes in the world.  The fastest player in the NFL can run just under 30 mph.  This kind of speed and physicality make for a great and entertaining game of strategy and brute force.  With the uncapped season coming next year, there is a looking lock out expected for 2011.  Hopefully the owners and players learned from the strike of 1987 and dont let it happen again.