The Wall Street Journal reports the NFL has been ordered to return more than $100 million to the pool of revenue it shares with players.
The ruling found NFL owners mischaracterized $120 million of ticket revenue in the past three years by creating an exemption which kept $50 million of salary away from players. That’s no small chunk of change. The NFLPA filed a grievance back in January after they discovered the revenue when performing an audit of the league’s finances.
“They created an exemption out of a fiction and they got caught,” said DeMaurice Smith, executive director of the NFLPA.”
The NFL said the ruling was a resolution of a “technical accounting issue under the CBA” which seems like code for ‘we tried to take more money from the players, but were caught.’
The initial dispute was over provisions of the CBA that allow NFL teams to exclude certain amounts of money from players’ share of revenue. Players typically generate that pool from local revenue, ticket sales or sponsorship money, among other things. The NFL can exclude money if it’s generated from the sales of personal seat licenses, premium seating and big deals with corporations – money which is then used to finance renovations and construct new stadiums.
According to the Wall Street Journal, the big problem the NFLPA found was the league created another category of excepted money which isn’t part of the CBA. An arbitrator recognized this and ordered the NFL to return the misplaced revenue.
WSJ reports since the money is being returned to the shared revenue pool, the NFL salary cap should increase by about $1.5 million per team.
As the NFL’s revenue continues to soar, you have to wonder what other possible tactics and disputes the league and it’s owners will employ in order to keep the lion-share of the profits.