Analysts: NFL lockout
will be brief
Players and team owners are now headed to court
By Bill Cromwell
Mar 14, 2011
What was feared has happened. The National Football League is officially in lockout mode, and relations between the owners and players have deteriorated over the past three days.
After negotiations broke off on Friday, leading team owners to declare a lockout, the players promptly decertified their union and filed a lawsuit against the league.
But while the rancor is intense and the two sides are still miles apart in terms of reaching an agreement, many analysts still believe that the lockout will be brief.
Simply put, both sides have far too much at stake to risk missing a season or even part of a season.
"We see headline risk for those companies involved but believe that the suspension of football a) will be temporary, b) will not impact the long-term health of the game or the media industry and c) could actually benefit primetime given the dislocation of ad dollars," said Marci Ryvicker, director of broadcast and cable equity research at Wells Fargo Securities, in a note sent out this morning.
The lockout comes after several extensions in negotiations, the most recent one ending on Friday. With no agreement in place, the owners had little choice but to declare the lockout.
But in doing so, they well knew, and by all accounts dreaded, what would follow, a likely court battle with the players. In addition to being costly and time-consuming, court battles are always a craps shoot, with a real risk that the decision goes to the other side.
The fight is over money, as is usually the case between sports owners and players. The owners want to increase their cut of the $9 billion in revenue generated by the league each year. That bigger slice would come at the expense of players, which is why the players are opposing it.
When on Friday owners declared a lockout, the players voted to decertify the union, and immediately a cadre of 10 players sued the NFL, accusing owners of conspiracy and anti-competitive practices and asking the court to issue an injunction to end the lockout.
It's a case some analysts think the players have a good chance of winning.
But regardless of how the judge rules, the NFL has every reason to end the dispute quickly.
For one, the league is at an all-time high in popularity, with the Super Bowl smashing the record for most-watched show of all time two years in a row and regular-season ratings rising the past few years.
Sports fans dislike lockouts, and it can take years for a league to recover, a lesson learned all too well by Major League Baseball and the National Hockey League.
For another, the owners will be denied the life blood of pro football, the millions of dollars the teams receive from broadcasters to air their games.
In a recent decision, a court ruled that the monies broadcasters pay in rights fees would go into escrow until the lockout ends.
The players also have every reason to end the lockout. They need to be paid, and they also want to be playing.
And the league itself is under pressure from everyone from fans to Congress to broadcasters to get the lockout over with quickly.
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