Recently, it has been discovered by the NFLPA (NFL Players Association) that the NFL has withheld nearly $120 million in ticket revenue from a “shared pool”. This “pool” withheld salary from NFL players in the amount of around $50 million.
The NFL has a collective bargaining agreement with the NFLPA, which determines how money is shared and how it is distributed among the players. Specifically, the agreement determines the distribution of league revenue, sets health and safety standards, and establishes benefits, which include pensions and medical benefits. The CBA has a pool of revenue that includes money from TV contracts, merchandise, intellectual property, and road game tickets (40% goes into the pool) that is equally shared by all 32 NFL teams.
Arbitrator Stephen Burbank found that the NFL owners mischaracterized millions in ticket revenue by creating an improper exception. Frank Schwab, of Yahoo Sports, stated, “(the) dispute came from a provision in the collective bargaining agreement that allows teams to exclude money from the shared pool from personal seat licenses, premium seating and naming rights to stadiums.”
“They created an exemption out of a fiction and they got caught,” NFLPA executive director DeMaurice Smith told Futterman.
The NFL said it was merely a “technical accounting issue under the CBA involving the funding of stadium construction and renovation projects.”
This dispute arose from a term in the CBA, which allows a team to exclude certain amounts from the vat of money that determines the salary cap. Arbitrator Burbank found that the NFL created another category of funds which isn’t included in the CBA. Since the money doesn’t fall under any of the categories listed in the CBA, the money should be included in the pool that determines the salary cap.
This extra money will increase the salary cap approximately $1.5 million for each of the league’s 32 teams. This may allow some veterans to remain with their teams without taking pay cuts.