Deadline Day

So now it comes down to the wire. 

The fact that the CBA fight between owners and players appears to collapsing at the last minute isn’t necessarily a huge surprise.  It was always going to be a last minute, hotly contested struggle to piece together a livable peace for both sides.

I had been planning an open letter to Jim Irsay, begging him to open his books as a sign of solidarity with the people of Indiana who helped pay for his stadium, but rumors leaked that some owners were already willing to open their books. I’ll give Irsay the benefit of the doubt and just assume he’s doing everything humanly possible to avoid a work stoppage.  No owner has more to lose than him. He only has so many guaranteed sell outs left in the career of Peyton Manning, and I’m sure he knows that he can’t afford to lose several of them to a lockout.

No, in the end the entire mess will have to be sorted out by the courts.  Many of us continue to be amazed that so seemingly simple a tactic as opening financial records could derail a $9 billion business, but as the city of Glendale, AZ is discovering there are secrets worth paying to protect.  The NFL plays in stadiums largely financed by tax payers, and the political dirty pool and shady economics that have gone into procuring those facilities could prove embarrassing or even borderline criminal.

Why are the owners willing to risk a protracted legal fight rather than reveal documents.  Ask the Florida Marlins and Tampa Bay Rays.  When their financial records were revealed, the result was devastating.

Every cent from inside the stadium will end up on the Marlins’ balance sheets. Come 2012, they’ll be free to reap their revenue-sharing, Central Fund and ballpark profits while the county prays enough tourism-tax dollars pour in to help pay off the loans.

“[Owners] simply don’t tell the truth about the finances,” deMause said. “Or if they do, it’s in such a narrow way.”

Take a January 2008 luncheon Tampa Bay Rays president Matt Silverman spoke at in St. Petersburg. According to the St. Petersburg Times, in front of a crowd of businesspeople, Silverman declared: “We’re cash-flow negative.”

The Deadspin documents show the Rays were anything but in the red. In fiscal 2007, which had ended exactly 26 days before Silverman spoke, the Rays’ operating income was $21.7 million. And, if Silverman cares to quibble, the Rays listed $37,626 on the line of “cash and cash equivalents.” While in 2008 the Rays’ earnings dropped to $14,202,206, they didn’t have any kind of a cash-flow problem: Their cash and cash equivalents were $32,521,742.

It brings to mind the famous quote from Paul Beeston, the former president of MLB who now runs the Toronto Blue Jays: “Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me.”

I have no doubt the release of NFL records would reveal similar accounting tricks.  The owners slap up a revenue chart and whine about declining profits while asking the players to take a massive pay cut, and there is absolutely no way any of us can trust their calculations.

Unless 32 men take a sanity pill today, the owners will let the courts hash this all out.  My prediction is that like almost every major sports labor versus management case in the last 30 years, the owners will be soundly defeated.  The end result of this will be an ugly bloodbath for the NFL owners, but it will be one of their own choosing.

Is it possible the courts will reverse course and suddenly find in favor of management?  Yes. Is it likely?  No, given the owners already established deceptions regarding the TV contracts, I don’t believe it is.  Exactly half the owners in the NFL took control AFTER the 1993 fight (I’m counting Irsay as being around before that).  They don’t remember what it was like.  For half the owners, this is their first go around with work stoppages in the NFL.  They don’t remember the strikes.  They don’t remember McNeil/White.

They are about to get a refresher course.

Quantcast