Sunday Money

March 13, 2011

As we close this issue, Roger Goodell and DeMaurice Smith are working through a negotiation extension of five days (and nights) in search of what both can claim to be a fair deal. Failure by Friday night could mean the first NFL work stoppage since 1987. But so what? Fans are already weary of hearing about it.

The players' strategy has been to court the fans, explaining that they aren't really asking for anything except a peek at the books, and that they don't understand how the owners can cry financial hardship after a season in which revenue and ratings hit alltime highs. They ask how money taken out of their pockets now will benefit them when they are out of the league and say they are willing to decertify and play their hand in court. The league, on the other hand, brings a culture of vast wealth to the table, backed by numerous long-standing, nuanced financial relationships, starting with Goldman Sachs, the voracious investment bank, which is the league's lead strategic financial adviser. (The NFL's EVP for Ventures and Business Operations, Eric Grubman, is a former Goldman partner.) What this means is that the NFL's research, business modeling, understanding of collateral economies, and debt instruments are pointedly sophisticated, with the obvious goal of wealth creation and retention. "The players are too concerned with how you divide the pie," Grubman told Bloomberg News just before the Super Bowl. "We're trying to grow the pie so that there's more money for everybody." It remains to be seen whether, as is taught in business school, culture always trumps strategy.

What is clear is that there is plenty of money to go around: an estimated $9.3 billion. (SI, in partnership with Fortune, tracks the revenue sources of that GFP—gross football product—starting on page 16.) What every fan knows is that a deal is inevitable, and although it may not come this week and it may not be fair to one side or the other, in the end the owners and the players will all still be rich.

PHOTO

HOLE YARDS PAR R1 R2 R3 R4
OUT
HOLE YARDS PAR R1 R2 R3 R4
IN
Eagle (-2)
Birdie (-1)
Bogey (+1)
Double Bogey (+2)