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Two economic issues facing the NFL today

Recently in the news were two different economic issues that the NFL is facing.  One is more of an issue among the players while the second issue is a direct attack on the fans' loyalty to their team.

The contracts that rookies are signing continues to be a growing problem.  Take this year for example.  Jake Long's 5 year, $57.5 million ($30 million guaranteed) makes him the league's highest paid offensive lineman.  Matt Ryan's deal of $72 million of 6 years ($34.5 million guaranteed) represents an increase over JaMarcus Russell's contract last year despite the fact that Russell went #1 overall and Ryan was picked 3rd.  And Darren McFadden's deal that includes $26 million in guaranteed money represents a 40% increase over the guaranteed money that 2007 4th overall pick Gaines Adams received.

At the rate we're going, it's not crazy to think that a rookie will sign a deal worth $100+ million within a couple of years from now.  Clearly, something has to give.

Luckily, commissioner Roger Goodell also sees that as an issue that must be resolved.  He says:

"[Jake Long] doesn't have to play a down in the NFL and he already has his money. Now, with the economics where they are, the consequences if you don't evaluate that player, you can lose a significant amount of money. And that money is not going to players that are performing. It's going to a player that never makes it in the NFL. And I think that's ridiculous."

And he's right.  It is ridiculous.  The problem here, though, is that the Players' Association would also have to support any kind of rookie pay structure if that's the route the NFL wants to go.  And even though there are whispers that the NFLPA might actually not be totally against this idea, Gene Upshaw, the voice of the Players' Association, is not likely to give in to the demands of the owners.  After all, this next CBA will likely be his last as the head of the PA and he's not going to want this to be his legacy.

Therefore, this is going to be something to keep a close eye on as we inch closer towards a labor dispute following the 2010 season, unless of course a new CBA can be reached.

And for those that wondering what a rookie pay scale would be like, look no further than the NBA.  Here's a chart that lays out the NBA rookie pay scale.  As you can see, it's a nice, neat way to handle the rookie contracts.  It would basically eliminate any potential rookie hold-outs and seems like a fair way to compensate unproven players who haven't earned anything at the professional level.  After all, can anyone name me a job where, right out of college, you earn more than most coworkers?  Didn't think so.

Ah yes, the dreaded "personal seat license," or PSL.  For those that don't know what a PSL is, you're lucky.  It means you, as a fan, haven't had to pay one.  In a nutshell, it's a payment that a season ticket holder must pay for the right to purchase their season tickets, which generally occurs when new stadiums are being built.  It's a revenue generator to help pay for the new facility.  But it's a total crock to those fans who have been long-time season ticket holders.

The latest case of this is with the New York Giants.  Their new stadium in the Meadowlands is scheduled to open in 2010.  And to help pay for it, they are forcing their season ticket holders to pay PSLs, meaning that, depending on where their tickets are, they must pay anywhere between $1,000 and $20,000 per seat just for the right to purchase their season tickets - tickets that may have been in their family for decades.  And this is happening despite the fact that they are splitting the costs of the new stadium with the Jets, who will also be playing at this stadium.

It goes without saying that fans are, of course, outraged.  And they should be.  This idea of PSLs is just ridiculous.  Think about this: what about the fan who doesn't have too much money, works hard, and his one simple pleasure in life (his pride and joy) are the 6 season tickets that he has in the lower level of Giants Stadium around the 45 yard line?  This is the guy who might not have a big house or anything, but likes taking his friends and family to see the Giants each week from very good seats.  Say his seats are in the $20,000 range of PSLs.  This guy will now have to pay a lump sum fee of $120,000 just for the right to buy his season tickets.  Odds are that "this guy" won't be able to come up with that kind of cash.  Instead, he'll likely have to give up these tickets.

The problem here?  The Giants could care less.  Because they know that there are thousands of more fans on the season ticket waiting list who would do anything to finally get their hands on some season tickets.

So, unfortunately for Giants fans (and likely Jets fans, though they haven't announced it yet), they will be forced to bow down to the power of the NFL and dish out the cash needed to pay for their PSL if they want to remain season ticket holders.  And perhaps the lesson learned here is that NFL fans are insanely loyal - perhaps too loyal.  Truth is, though, that the NFL knows this and will always use it to their benefit, no matter how many fans get stepped on in the process.