Philosopher George Santayana best articulated the didactic merits of a sound understanding of history in his The Life of Reason: “Those who cannot remember the past are condemned to repeat it.” For the professional sports leagues in America and the people with vested interests in them, that philosophy should ring as true now as it ever has. Yet at present, Santayana’s insight seems to be completely lost on the NFL and seemingly all interested parties: its owners, players, media, and fans.

If ESPN, Fox Sports, CBS Sportsline.com, and other standard sports news mediums were your primary source of updates on the sports world, until Thursday you’d probably have known little to nothing of the current impasse on negotiations to extend the NFL’s Collective Bargaining Agreement (CBA). You wouldn’t know about the short - and long-term shockwaves not coming to a responsible agreement by March 6 would send rippling throughout the league. You wouldn’t know why the current state of NFL is as “dire as dire can be.”

The CBA is the contract to which the NFL’s players union – the NFL Players Association, in this case – and the owners of each of its thirty-two franchises have agreed. Its terms regulate wages, working conditions, and grievances procedures, among other rights and responsibilities of the players and owners. Perhaps most notably, the CBA allows for a salary cap, tied closely to which is the league’s revenue-sharing plan among all the franchises. Revenue-sharing and the cap are the foremost mechanisms that have permitted professional football to maintain the league’s competitive parity, which in turn has allowed small-market teams such as the Carolina Panthers and Seattle Seahawks to make appearances in recent Super Bowls and the Pittsburgh Steelers, St. Louis Rams, and Baltimore Ravens to win three of the last seven.

That parity and the relative labor harmony the CBA has afforded have been two of the primary catalysts for the NFL’s unparalleled prosperity and popularity of recent history. NFL franchise valuations have skyrocketed over the past decade, directly correlating with the 1993 CBA’s advent of the salary cap and revision of the league’s revenue-sharing plan. That year, the NFL sold the Jacksonville Jaguars and Carolina Panthers to their respective owners for $200 million apiece. Forbes now values the two teams at $691 million and $878 million, respectively. The Minnesota Vikings, whose $658 million valuation is worst in the NFL, out-value every American professional sports franchise outside of the NFL other than the New York Yankees. In fact, Forbes values only four celebrated European soccer clubs – Manchester United, Real Madrid, Juventus, and AC Milan – above the Vikings.

Nowadays, though, the NFL has a very tenuous hold on that prosperity, as talks on a new CBA deal are reportedly stagnant at best. Gene Upshaw, executive director of the NFL Players Association, said last week to a host of player agents at the NFL Combine in Indianapolis, “I'm taking the position now that it won't get done…We're running out of time. You might as well prepare as if we are heading for an uncapped year.” Talks at a February 22 meeting in Indianapolis had allegedly degenerated into little more than a repetition of points from parties on both sides, at which point Upshaw cut short the meeting and, finding nothing but futility in the discussions, decided to return to Washington. Even still, there were reports that an eleventh-hour agreement might be reached at a February 28 meeting. However, Upshaw ended that meeting and told reporters, “We're deadlocked. There's nowhere to go. There's no reason to continue meeting.” That position was reaffirmed on Thursday morning. 12:01 AM on Friday morning was the deadline to extend the CBA before the free agent market opened. After meeting for just 57 minutes, the 32 owners voted unanimously to reject the latest proposal from the union. A few hours later, the league delayed the opening of the free agent market for 72 hours. Negotiations were stalled, but at least the league had bought itself some time.

If a new deal isn’t reached in time, the NFL will begin operations without a salary cap in the 2007 season. Beginning March 6, though, several provisions in the CBA will have immediate ramifications throughout the league in free agency, in the signing of new draftees, and – most immediately and possibly most significantly – in the ability of teams to stay within the salary cap during this final capped season. The current CBA requires that a team’s payroll be under the 2006 salary cap at midnight of the start of the new league year, March 6. Without a new CBA, the salary cap figure of $94.5 million is about $10 million less than it will be if the two sides are able to come to an agreement.

In order to get under the cap the only available mechanisms to managements are cutting players and contract restructuring; teams cannot trade players before March 6. A popular contract-restructuring strategy is to provide a player a lower, but guaranteed salary in the form of bonuses in the present year while significantly inflating his base salary in future years. The NFL, however, foresaw that many teams might “dump” money into the uncapped 2007 year. To preclude this option, the league stipulated in the current CBA that teams may not increase a player’s base salary – which excludes bonuses – by more than 30 percent of his 2006 salary from one year to the next. The provision poses a major threat to teams with unhealthy salary caps, who in the past had relied on that style of contract restructuring to maneuver their payrolls within the confines of the cap. Just this past week, in fact, the Colts believed they had sufficiently absolved themselves of their cap problems by restructuring Marvin Harrison’s and Peyton Manning’s contracts only to find out from the league office a couple of days later that the new contracts violated the “30 percent rule” and that the league had voided them. The Colts will be approximately $11 million over the cap if a new CBA isn’t achieved.

For the Colts and many other over-the-cap teams, massive player cuts will likely be the only available recourse. The Washington Redskins face a particularly complicated situation. As a result of the irresponsibly lucrative bonuses they’ve given their players and the CBA stipulations regarding those bonuses, literally cutting every player on the roster would not allow the team to operate below the cap without a CBA extension.
The Redskins might not be the only ones potentially facing Armageddon on March 6. Many teams well over the cap are going to have to bite the bullet and begin gutting their rosters. With an extended CBA, the Indianapolis Colts could potentially re-sign Pro-Bowl running back Edgerrin James. Without it, he is almost definitely going to be allowed to sign elsewhere and the Colts will likely have to begin gouging their roster, releasing a number of key players.

Even to teams with healthy salary caps, operating under the current CBA could be extremely problematic this off-season. Signing draftees to gaudy, bonus-filled contracts will be trickier than in years past. Given the rule that prohibits bonus money from being amortized beyond the next four years (as opposed to the typical seven years), negotiations are likely to last longer and prove more contentious and complex than usual.

At present, two major obstacles prevent the CBA from being extended, the more daunting of which doesn’t even involve the players. The first issue confronting the negotiations is the impasse in the dialogue towards a new revenue-sharing model between the large-market and small-market owners. The issue is whether or not “total football revenue” – which includes local revenue (revenue from the sale of stadium-naming rights, radio station rights, etc.) in addition to the current “designated gross revenue” model – should be shared among the thirty-two teams. It’s become a foregone conclusion that the “total football revenue” model will be the basis for the salary cap in the new CBA, which would increase the 2006 salary cap by approximately $10 million. As a result, small-market owners feel that if they are to share the increased costs associated with the new “total football revenue” salary cap model, they should also share revenue based on that model.

If the NFL is to continue to experience the same prosperity that competitive equity among its franchises has afforded it, it is imperative that the NFL owners institute a fair revenue-sharing model that incorporates local revenues. Without a sufficient revenue-sharing model, large-market teams like the Redskins and Dallas Cowboys could continue to drive up the cap figure to an unmanageable level for small-market teams. The parity the NFL has enjoyed in recent years could completely dissolve, transforming the league into a tournament of “evil empires” as Major League Baseball has become (see: 2005 playoffs, of whose eight participants, six hailed from the cities of New York, Los Angeles, Chicago, Boston, Houston, and Atlanta). Some small-market franchises already have to commit as much as 70 percent of their revenue to player salaries, while large-market teams spend as little as 40 percent; the disparity between the small- and large-market teams would burgeon without a responsible revenue-sharing model. Within a few years, one poor, “small” city would lose one of its national symbols – if not its only one – as small-market owners trip over themselves to move their franchises to Los Angeles.

Reportedly, the small-market/large-market voting schism over the new model sits at 18-14. Twenty-four “yes” votes are required to ratify a change in the current revenue-sharing model, while ten “no” votes can block the extension of the CBA. Hence Upshaw’s contention that a new CBA cannot be reached until the owners agree on an appropriate model for the distribution of the league’s total football revenue. For the next several days, though, the small-market owners will have enormous leverage to wield in an attempt to get the fair revenue-sharing plan their franchises need to continue to compete: “Listen, we won’t make you field an expansion franchise next year if you just give us a reasonable portion of local revenue. It’s in your and the league’s best interests.” If March 6 arrives, though, without a new revenue-sharing plan and CBA, the threat of a roster apocalypse won’t be an available weapon for small-market owners, and if Jerry Jones’ and Dan Snyders’ seething avarice continues to blind them and their posse, the entire NFL system that has made it so successful could collapse. The contention exists more among owners than between them and the players.

The second issue is a matter of the percentage of “total football revenue” the players are to earn. The players are demanding that the salary cap be at least 60 percent of the league’s “total football revenue”, while the owners’ current offer is only 56.2 percent. Under the current CBA, the players can earn up to 65 percent of the NFL’s “designted gross revenue”.

For all of the magnitude these extremely sensitive negotiations carry, until Thursday they had gone largely unreported except for a few mentionings about the two late-February talk break-offs. Certainly ESPN, FOX Sports, and all the various talk-radio stations know their audiences better than I do. Perhaps sports fans really would rather keep their heads in the mud and watch Terrell Owens do sit-ups in his driveway while considering for the 100th time if he would be a good or bad addition to their team (most people say bad, in case you’re wondering too). The managers of a FOX Sports Radio talk-show that I listened to last week decided that a discussion of whether or not the two-man luge is “gayer” than men’s figure skating should take precedent over informing its listeners on the complexities and importance of the CBA and the progression (or, regression) of the talks to extend it. ESPN thinks that I want to hear a seemingly (and, quite possibly) coked-up Michael Irvin explain to me why Edgerrin James is a good player and why the Colts should resign him, without ever qualifying his marginally intelligible nonsense by noting that all of his babble were contingent upon a new CBA being extended – of course, that would assume that he even knows what the CBA is and that it exists, which might be a bit presumptive. Even now that the original free agent deadline has come and gone, the coverage of CBA negotiations shortsightedly focuses on which players are being cut and which teams will suffer most. Major sports media is missing the larger importance of the agreement, which is no less than ensuring the continued success of the NFL.

But given the labor dissonance that has plagued professional sports in recent years, by no means should one scoff at the talks and assume that “these things always settle themselves out,” as Michael Freeman, my favorite – but presently mistaken – columnist at the Florida Times-Union said on his radio show last week. Just a few a years ago, there were threats that the World Series would be canceled for the second time in a decade because of seemingly irreconcilable differences between Major League Baseball’s owners and its players union. Seven years ago the NBA owners locked out its players for half of the year. And if those aren’t fresh enough in the mind of sports fans and media, just last year the NHL scrapped its entire season because of the owners’ insistence that a salary cap be implemented.

If a new CBA isn’t reached, Upshaw has said that he would recommend to the players that they decertify the union. Such a tactic would put the NFL and its players squarely in anti-trust court, where Upshaw is apparently comfortable with the players’ chances. Upshaw has also said repeatedly that if the NFL were to reach the uncapped year that the players would never agree to the salary cap system again. Dallas Cowboys owner Jerry Jones, whose franchise is the second-most valuable in the league, responded to Upshaw’s admonition by declaring, “it wouldn’t be the worst thing in the world if we didn’t have a salary cap.” Certainly it wouldn’t be the worst thing in the world, but to make a blindly selfish comment like that is to disregard the path and the history the NFL has written in becoming the most successful sports league in the world; it is to ignore the labor strife that has wrought havoc on the NFL’s baseball, basketball, and hockey counterparts in recent years. For the NFL not to remember that oh-so-recent past is to condemn itself to repeat the bitterly painful history of its contemporaries.