CFL/CFLPA Labour Negotiations -- Deal reached

[JohnHenry]

Revenue sharing with the players will never work because of the disparity in revenue amongst the teams. Unlike other pro leagues, the CFL is not an entity unto itself but a group of 9 small businesses. While some teams turn a small profit, most others barely break-even or lose money. Trying to find an "average" revenue base is problematic. Regina and Winnipeg might be able to absorb increased labour costs, while Toronto and Hamilton will just sink deeper in debt.

So the league is probably right. Revenue sharing with the players will never work unless there is revenue sharing amongst the teams. That's just too big of step for the CFL during these labour negotiations. Do the players really expect that Rider's fans should subsidize the entire league so the players can get a bigger raise?

The reality is the player's are expendable. Simple supply and demand. They could lower the minimum salary back to $30,000 and have no trouble finding 22 imports who were willing to play...and not just playground scrubs, but qualified players with NFL aspirations, who see the CFL as a stepping stone back to the big leagues. That is basically the foundation of the league.

The player's union said they're using the NFL has their model during negotiations. That's an admirable goal but not very practical when one owner owns 1/4 of the league...and not by choice.

[Shi Zi Mi]

Arash Madani ‏@ArashMadani 33m

BREAKING: A work stoppage in the #CFL will not be initiated by the owners locking out players. "We will not lockout,” said a league source.

MORE - #CFL position on a possible work stoppage: “Only the PA can answer if the players will report to training camp,” said a league source

Just spoke w/ Scott Flory. Will there be a #CFL strike? “The players will speak through their votes,” he said. Expects final tally next week

Flory: “Our proposal still allows for teams to (each) be making a million dollars more than they previously were making.” #CFL

A labour lawyer, not involved with this, said the expiring #CFL CBA can continue under its current terms if there is no strike or lockout.

There are presently no talks scheduled between the players and the owners, nine days removed from the scheduled start of training camp. #CFL

Key point in #CFL TV money: It's not *actually* $40 million. The fair figure is $42.5 million because it goes up a million/year for 5 years.

[Shi Zi Mi]

Definitely a PR move by the league.......they want to remove all perception of being "the bad guy" in this.....if there is a work stoppage, it will ALL be on the players.

As the current CBA remains in effect, the league has no intention of forcing the issue......as far as they are concerned, they don't need a new CBA.

IMHO, my idea of postponing the strike vote until just before the regular season.......makes even more sense now.

[Hambone]

Flory: “Our proposal still allows for teams to (each) be making a million dollars more than they previously were making.” #CFL

Or in some cases losing a million dollars less?

[MikeAK]

Flory: “Our proposal still allows for teams to (each) be making a million dollars more than they previously were making.” #CFL

Comments like this make me think the players don't care about the health or future of the league and just want as big a piece as they can get until they ride off into the sunset. CFL stability be dammed.

No matter what PR spins we keep reading in the news I'm still finding it hard to get behind the players here. I'm a CFL fan first and foremost, don't like any deal that puts the stability of the league, or the interest of it's owners, at risk.

I just wish saner heads would prevail and we can get back to hearing about the game on the field.

[B.C.FAN]

Flory: “Our proposal still allows for teams to (each) be making a million dollars more than they previously were making.” #CFL

Comments like this make me think the players don't care about the health or future of the league and just want as big a piece as they can get until they ride off into the sunset. CFL stability be dammed.

No matter what PR spins we keep reading in the news I'm still finding it hard to get behind the players here. I'm a CFL fan first and foremost, don't like any deal that puts the stability of the league, or the interest of it's owners, at risk.

I just wish saner heads would prevail and we can get back to hearing about the game on the field.

I'm with Flory on this one. Players made sacrifices to help keep the league afloat in the past. No matter how you spin it, teams will be making a minimum of $2 million more annually under the new TV contract. Giving half that money to the players in the form of a $5.4-million cap or equivalent salary and benefits seems fair, and probably would be enough to settle the dispute and avoid a strike. Teams still get an extra $1 million for themselves, plus added gate revenues from new stadiums in several markets.

[MikeAK]

I'm with Flory on this one. Players made sacrifices to help keep the league afloat in the past. No matter how you spin it, teams will be making a minimum of $2 million more annually under the new TV contract. Giving half that money to the players in the form of a $5.4-million cap or equivalent salary and benefits seems fair, and probably would be enough to settle the dispute and avoid a strike. Teams still get an extra $1 million for themselves, plus added gate revenues from new stadiums in several markets.

But what does a deal like that do for those owners whose teams lose money, or barely break even? In any other sports league I would be with you every step of the way but the CFL is unlike any other. Like I said before, I'm finding it very hard to understand and support the players position when their proposal is only OK for 2 or 3 teams while the rest have to fend for themselves. The players should be compensated no doubt about that. But not at the expense of the financial health and long term success of the majority of the CFL. Guys like Braley are a dieing breed and won't always be there. We need a financially stable CFL moving forward for long term success. That too me is the most important thing. These players come and go, it's the league I worry about most of all.

[WestCoastJoe]

•    Increase the salary cap by 9% this season from $4,400,000 to $4,800,000 per team (and further increasing by $50,000 each year over the following five years to $5,050,000)
•    Effectively increase the average player salary up to 12% this season from $82,904 to $92,917 (and further increasing over the following five years)
•    Increase the minimum player salary by 11% this season from $45,000 to $50,000 (and further increasing to $55,000 over the following five years)
•    A further increase to the salary cap of $100,000 per team if the CFL receives more television revenue from TSN under a renegotiated broadcast agreement for each remaining year on the CBA
•    Maintain the $450,000 annual payment to the CFLPA for Player marketing and other rights

This has been a long and difficult process for all involved.  And when it comes right down to it, we just want to play.  So, we have also offered to pay a ratification bonus of $3,000 to veteran Players and $1,000 to rookie Players (on a team roster as at June 22, 2014) if this agreement is ratified on or before June 2, 2014.

Gate receipts are the lifeblood of the CFL revenue, I would suggest.

Salary increase of 11 and 12% would be satisfactory to workers in most industries.

Bonus of $3000 or $1000 is very significant.

And, as Cohon suggests, one could consider some of the increase as coming from TV revenue without direct linking. Revenue is revenue. But TV revenue, it seems to me, is not a source of revenue one can count on into the distant future, as in a booming, historically thriving business. I would suggest that this increased TV revenue is a test, a business prospect, and not much more than that at this point.

.........

So, I guess it comes down to the players sensing a windfall in TV revenue. I would not count on that into perpetuity. Even TSN would be wondering if they have jumped on board a listing ship, it seems to me. I don't think it is as if TSN fought off a competitive bid for the rights. This is not the Olympics.

[WestCoastJoe]

TSN CFL TV deal

2013, March

CFL commissioner Mark Cohon believes the road to profitability for the league’s two troubled southern Ontario teams is now significantly easier thanks to a lucrative new broadcast agreement.

The deal with TSN, which runs from 2014 through 2018, is worth in the neighbourhood of $40 million per season, according to a league source.

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That’s more than 2 1/2 times the previous five-year agreement, which was worth $15 million a year. That means starting in 2014, CFL teams can expect to receive more money from the league.

That’s good news for the Toronto Argonauts and Hamilton Tiger-Cats, the CFL’s only money-losing teams. Cohon said the new deal should allow clubs that struggled financially in the past to become profitable while also enhancing franchise values.

“Absolutely it does,” he said. “The biggest chunk of revenues still comes from ticket sales . . . however this gives teams the ability to recoup any historic losses but also invest in improving their franchises.”

It’s a strong foundation to build on, said Cohon.

“When you think about the new stadiums that are being built, this helps some of our owners invest in those,” he said. “It allows us to invest in fan experience in the game. It allows us to start thinking about new businesses like fantasy football. The past was about building a strong foundation . . . now it’s about investing in the future.”

Senator David Braley, who owns the Argos and B.C. Lions, was pleased with the deal.

“When you look at it, we have to be almost ecstatic about the agreement we’ve signed with TSN,” he said from Ottawa. “The strength of today’s CFL and our future at this point look extremely bright.

“We have a very good contract.”

The TSN agreement should also help ease the Ticats’ move into their new facility in 2014. Hamilton will play at the University of Guelph this year — with the CFL helping financially to cover those costs —while its new home is being built.

Next year, not only will the Ticats benefit from playing in a new state-of-the-art stadium, but also be buoyed by increased CFL disbursement payments.

The new deal is also good news for the Winnipeg Blue Bombers, who are scheduled to move into Investors Group Field this year. The increased CFL cash should make it easier for the club to handle the annual $4.5-million mortgage payment for its new facility.

The previous TV agreement between the CFL and TSN included an option clause the broadcaster exercised for the upcoming season.

The new agreement gives TSN and RDS exclusive media rights to all CFL exhibition, regular-season and playoff games — including the Grey Cup — as well as the league’s annual draft and combine.

In addition to broadcast and digital rights, the agreement also includes exclusive radio rights to the Grey Cup to TSN and TEAM radio stations.

The 2014 CFL broadcast schedule will expand to 84 games in 2014 with the addition of the Ottawa expansion franchise.

The financial bonanza is heady stuff for the CFL, which in the late 1990s nearly folded and endured several lean years despite signing a then-record $15.6-million, three-year TV deal with Carling O’Keefe (1981-’83).

Cohon said past history has shown the CFL can’t afford to be financially irresponsible.

“It’s about how smart you spend that money,” Cohon said. “All this hard work we’ve done to build this great foundation, I don’t want this new money coming in and us not investing it in the right places.

“Those are the types of conversations we’re having with our owners. The discipline we used to get here has to continue in the future.”

CFL players took to Twitter to express their satisfaction with the deal.

“I just want to say thank you to @TSN—Sports for all they have done and continue 2do for us players...We’re all in this 2gether #cfl #Riders,” Saskatchewan defensive end Ricky Foley tweeted, then later added “@CFL—News Knock knock, ‘who’s there?’...salary cap...’Salary cap who’...Salary cap better go the hell up!”

Montreal Alouettes defensive back Jeff Hecht tweeted, “@CFLonTSN doing an unreal job with the @CFL and promoting the Canadian game nation wide. As a player and a fan I’m pumped for 5 more years.”

Added retired offensive lineman Rob Murphy: “New TV deal??? More money?? Salary cap headed up???? .... On my way to the gym now.....The bear has awoken from his slumber lol!!! #Reboot.”

While the players are hoping the deal results in the $4.4-million salary cap increasing, the reality is that won’t be up for discussion until the current collective agreement expires in 2014.

TSN began broadcasting CFL games in 1986, with its French affiliate starting three years later. In 2008, TSN became the exclusive broadcaster of the CFL and Grey Cup.

TSN retained that exclusivity by reaching an agreement in principle with the CFL before Jan. 31. Had the two sides been unable to do so, other broadcasters could have starting bidding Feb. 1.

TSN president Stewart Johnston said the CFL is a valuable entity for the cable sports broadcaster.

“It’s an awful lot of highly rated, high-interest Canadian content that TSN hangs its hat on,” he said.

The CFL has prospered more than financially from its exclusive partnership with TSN since 2008.

Last year, the regular-season average audience on CFL broadcasts was 674,000 compared to 346,000 in 2007. In the playoffs, viewership increased 11 per cent from 2011.

And Toronto’s 35-22 win over the Calgary Stampeders in the historic 100th Grey Cup averaged 5.4 million viewers on TSN, making it the most-watched ever on English-language television.

“They’ve been such a part of our growth over the last five-to-10 years,” Cohon said. “We wanted to take it to the next level and that’s why we did a new deal with them.”

TSN has also carved a niche for the CFL with its Friday Night Football telecasts. Johnston said the network plans to continue being innovative.

“I think you might see us try and develop a second marquee night or a second marquee game, something to talk about each week that goes above and beyond Friday Night Football,” Johnston said. “We push the envelope each year.”

[WestCoastJoe]

From Cohon's letter ...

You may hear a lot in the media about revenue sharing. Our offer would share increased revenue with our players. But we cannot agree to an approach that would focus solely on our teams’ revenues while ignoring their costs and the investments we must make to modernize, stabilize and maximize the CFL.

For example, our teams are directly investing $175 million in new stadiums and stadium improvements. Like your mortgage, these costs have to be financed over several years. We also need to invest in our digital properties, our social media, marketing and ticketing, and the fan experience in our stadiums. We need to serve you better to continue to earn your support and attract new fans.

Lots of money going into new stadiums.

Could this be a case of killing the goose that laid the golden egg? TSN won't be happy with a strike. Braley wants to retire. Finding new owners for the Argonauts and the Lions just got harder.

I don't perceive greed on the part of the owners. Players want more money. Understandable. But don't injure your league.

Owners won't lockout. If players strike, I expect the league has a plan in place for that (They must have, when they announce that they will not lockout). I think the season has to go on. Then it gets really scary and really messy. Fans love their players, but I think (could be wrong) that fans love the league more. Think so but dunno. Fans love games. Fans love continuity. Fans want their family-priced sports entertainment. Much is at risk here. If the league were to close down, owenrs would be unhappy, but in some cases those owners would be lessening their financial headaches, which they endure for love of the game. If the ultimate guys' toy (a pro sports team) becomes a pain in the neck, why bother? If the league closes down, the players lose their present livelihood. These are the realities, at least as I see them.

If one forgets the linkage of TV revenue, for a minute, but is including it as general revenue, how much of an increase in salaries do the players want? 25% 20% 15% ... They have been offered 12%, without linkage. More than 12% when one includes the one-time offer of bonuses.

I will be surprised if the players strike. If they strike during TC, the fallout will be massive, it seems to me. For the league and the players.

A ... Players put their bodies at risk. Yes, by choice. 6 month season.

B ... Owners put their money at risk. By choice. And the league has had trouble finding willing, capable owners. The owner of two teams wants to retire. Can we expect to find any owner remotely near his level of commitment and deep pockets? He came to the rescue of the Lions. He came to the rescue of the Argonauts. The league was so desperate that it endures the image problem associated with one owner of two teams.

Worst case scenario: Players strike. Braley speeds up his retirement. No CFL? Sad, but life goes on.

If TSN knew the new TV deal would cause a strike, hurting their investment, would they have done the deal? I have doubts. Good faith business deal by TSN back in 2013. Would they think twice if they had to do it again?

It is going to come down to the strike vote. Yikes ...

[Hawkballer 14]

A "Yes" strike vote by the players would be bad.

An actual players strike would be catastrophic, would completely undo the progress made over the last 3-5 years. Would put the league back on life support.

[KnowItAll]

I'm with Flory on this one. Players made sacrifices to help keep the league afloat in the past. .

yeah, but when teams lose money, the players still got a pay cheque didn't they. When teams or the league loses money, who loses the money, the owner and not the players. How about the owners get back everything they lost in the past before the players start getting more.

[Toppy Vann]

I'm not in one way surprised that the players aren't getting love from the fans when their employers and our gov'ts have done their share to ensure that real incomes in Canada haven't rose for 30 years now, but to characterize the players as greedy is ridiculous. Hamilton losing money - yes but they had really no home stadium last year. Toronto needs to do a ton of work including I guess get out of their current stadium to get sound again. But the gap between revenues and player salaries is huge and I do think the league can do better with the players as that was the players opening offer. Negotiations don't settle on the opening offer. The owners just walked out.

[David]

Cohon's contention that teams are losing money seems a bit fishy to me. Sure, the Argos? I buy that. Hamilton, well yea, they played in a 15,000 seat college stadium in Guelph last year for cripes sakes. Of course they lost money. But they're about to move into shiny new digs with suites etc., and will do very well for themselves. The community owned teams? They're making money hand over fist. Regina's a money making machine unto itself, but the players only want an average of 7 teams (highest and lowest wouldn't factor into the rev. share model). That seems fair and reasonable.

Cohon keeps talking about the drag on teams for infrastructure and new stadiums, as if this is a yearly phenomenon. It's more-or-less a one-time hit. With the exception of Calgary, and maybe Toronto, I'm unlikely to see a new CFL stadium again in my lifetime. And with all due respect, West Coast Joe, I actually think the next TV contract in 5 years will be greater than $42MM, which is what this one maxes out to. With all these shiny new stadiums in place, 9 teams (possibly inching closer to 10), and likely improved attendance and viewership that goes with it, I could see a contract in the $50MM range.

Anyway, there's a really good listen HERE. Bob McCown and Steven Brunt take a pretty good swing at the pinata. By the end of it, Cohon seems thoroughly fed up and defeated.


DH

[WestCoastJoe]

Cohon's contention that teams are losing money seems a bit fishy to me. Sure, the Argos? I buy that. Hamilton, well yea, they played in a 15,000 seat college stadium in Guelph last year for cripes sakes. Of course they lost money. But they're about to move into shiny new digs with suites etc., and will do very well for themselves. The community owned teams? They're making money hand over fist. Regina's a money making machine unto itself, but the players only want an average of 7 teams (highest and lowest wouldn't factor into the rev. share model). That seems fair and reasonable.

Cohon keeps talking about the drag on teams for infrastructure and new stadiums, as if this is a yearly phenomenon. It's more-or-less a one-time hit. With the exception of Calgary, and maybe Toronto, I'm unlikely to see a new CFL stadium again in my lifetime. And with all due respect, West Coast Joe, I actually think the next TV contract in 5 years will be greater than $42MM, which is what this one maxes out to. With all these shiny new stadiums in place, 9 teams (possibly inching closer to 10), and likely improved attendance and viewership that goes with it, I could see a contract in the $50MM range.

Anyway, there's a really good listen HERE. Bob McCown and Steven Brunt take a pretty good swing at the pinata. By the end of it, Cohon seems thoroughly fed up and defeated.


DH

Well, David, you are counting on future TV revenue of $50M based on what? If there is a strike, TSN might regret even the $42M contract. It is not as if we have 3 networks throwing money at the CFL in competition for the rights. Can our league count on large TV revenue projected into the future? Our league has not demonstrated robust financial health or stability IMO. We struggle to find solid owners willing to step up. With respect, David.

I don't think we can discount the money being poured into stadiums. I saw something about the mortgage cost for Winnipeg's stadium, without remembering the details at the time of this writing. It was large.

This dispute seems to be about TV revenue linkage. Does that even matter? Without linkage the offer is ... let's say ... 12%. With linkage the league will still offer 12%. The linkage seems irrelevant except that it inspires the players to ask for more money ($40M ... We need higher salaries). How much more of an increase can they expect?

I do not begrudge players trying for their best deal. But our league is not strong financially, nor in its ownership IMO. Having one owner of two teams is a red flag. Is it a bit of an image problem for one man to own two teams in a pro sports league?

A strike would be a terrible wound, and what would it do to TC? Kick the players out of their rooms? Close down TC? Send the players home? Try to rebuild the schedule? Bring in substitute players? Shut down the season? How would TSN feel in the case of a strike? They are the ones coughing up the $42M, let alone $50M in the more distant future.

It comes down to this for me ... How much of an increase do players demand to prevent a strike? A 12% increase seems reasonable to me. How much more can they get? I expect there is some wiggle room. But a strike is a killer.

Could our league survive a shutdown for the season? If the players strike, would the teams consider substitute players? What a mess that would be ... Probably better to just let the season die.

Many positive signs for our league ... But IMO it is fragile and vulnerable. TSN is no guarantee on into the future. This is virtually a windfall TV agreement IMO. If we get two solid replacements for David Braley, if Ottawa is a success on field and off, if Hamilton moves in smoothly into its new stadium in 2015, if ... if ... if ... then IMO the league moves up a bit in its financial strength rating. If the perceived financial strength of the league goes up, and that is a big if, then there might be a $50M TV deal in the distant future. Might.

If Cohon feels defeated, as you say, David, then I would suggest he senses the great risk to the survival of our league (and he probably feels beaten up by McCown). He senses how things can go terribly wrong. And he no doubt feels he, on behalf of the owners, cannot offer a heckuva lot more to the players. If the front man for the owners shows depression and defeat in a disccussion with McCown, that is not good.

Just IMO ...