RUSH: In the meantime we go to Chicago. This is Matt. Great to have you on the EIB Network, sir. Hello.
CALLER: Mega Rush dittos.
RUSH: Thank you, sir.
CALLER: Hey, so… (sigh) Okay, so I got a question. So the NFL may be going into a lockout here.
CALLER: Now… (sigh) I’m an NHL fan actually I’m more partial to hockey, so I’ve already lived through a lockout. Now, can you describe to me the parallels between the NFL’s potential lockout and the Wisconsin mess?
RUSH: The parallels between the NFL’s potential lockout and the Wisconsin mess. Now, clearly if you have this question you must see some parallels. I had not made the association yet.
CALLER: Well —
RUSH: ‘Cause I’m not sure there’s going to be a lockout. I… (sigh) I know, and have spoken to a lot of people — owners and so forth — and they are uniform in their story, and they have been to me for a year and a half. ‘There ain’t gonna be a lockout, there ain’t gonna be a lockout,’ and it isn’t about… Everybody misunderstands, I think, what this is about, including the sports media covering this. Let me say some things, and you tell me if I’m getting close to your parallel.
RUSH: The sports media is reporting here that you got a $9 billion pie, the NFL gets the first billion off the top and the owners now want the second billion. Right now the owners get a billion, the players and owners split it basically 60-40, and the sports media’s running around saying, ‘The owners, they’ve got enough money. They think they don’t have enough, they want more money, and I keep saying, ‘It’s not really so much about the money, it’s the 60-40 split they can’t live with. They can’t live with, long-term, this thing they got saddled with in 2006 with Tagliabue, with the players getting 60% and the owners getting 40. There’s talk, ‘Well, Rush, you gotta understand here these NFL players are partners.’ They’re not partners.
RUSH: They don’t invest anything.
RUSH: They are employees.
RUSH: I got nothing against them. The league wouldn’t exist without ’em, I don’t want anybody to misunderstand here. The strict business definition is they’re not in ‘partnership’ here. They don’t make any investment unless you want to say allowing the NFL to take its billion off the top of the pie is their contribution, but there’s no personal investment from these guys into the infrastructure that makes the game possible.
RUSH: Okay? Now, I think the owners, all this talk about a lockout? Pshew. Everybody in this games knows that they’re sitting on top of the biggest golden goose ever.
CALLER: Oh, yeah.
RUSH: Most popular golden goose there’s ever been and they’re in the midst of some bad PR from the Super Bowl, they made some moves there that looked like pure greed, selling seats that eventually weren’t available because they weren’t safe. This lockout business, you know, the one thing the owners know, it does them no good for the public to side with the owners. Does them no good, it does them no good. I remember being with the Kansas City Royals during a threatened strike, and I remember sitting around listening some of the management people, and they were loving the fact that the public was blaming greedy players. And I said ‘Gang, this is not helping us. That’s who we sell. We don’t want ’em hating the players. It would be better if they hated us, ’cause they’re still gonna come out and see our product, then, but we don’t want ’em hating the players.’
RUSH: That’s why I say, the NFL does not want the public hating the players if there’s a contest there. But the owners don’t want to be hated, either. It’s — it’s —
CALLER: Well, but the owners, they’re the ones that, quote, unquote, ‘have skin in the game,’ since they’re the investor.
RUSH: Yeah. Yeah, they do. In a strict definitional sense, yes.
CALLER: Yeah. I mean, not to say that they’re the ones out there, you know, getting beat up in the game. That’s the players. But the players don’t invest anything. They’re just getting paid to provide entertainment.
RUSH: AND to take huge physical risks.
CALLER: Right, and not to diminish that, because they do things I wish I could do on the field, but at the same time the owners are the ones that are gonna, you know, be in the poorhouse if things go belly up. The players, they can just go find another team.
RUSH: Ahhhhhhh. Well, now, wait a minute, that’s interesting. You say if an owner goes belly up —
CALLER: Right. They’re gonna go in the poorhouse.
RUSH: Well, if that happens they’ll sell the team; there’s gonna be a new owner. That’s not gonna affect the player.
CALLER: No. No.
RUSH: I mean, a team is not gonna cease to exist because an owner hits the poorhouse.
CALLER: No. But if the team went belly up and they had to sell it then, you know, they have to sell it. The player, they can just go to another team.
RUSH: Well, theoretically. That’s not all that easy.
CALLER: No, no.
RUSH: Moving around, what with free agency and —
CALLER: No —
RUSH: — there’s a limited number of slots available. But what is your parallel here? What do you see as a parallel to Wisconsin in this?
CALLER: So in Wisconsin you have teachers who are getting paid basically benefits that in the private sector they could never, ever even get. I mean no company would ever give them, you know, free health care or, you know, all the — I don’t even know what’s really true out there, but the teachers are essentially similar to the players, in my opinion. And the people in Wisconsin are essentially like the owners in the NFL.
RUSH: Okay, the owners —
RUSH: — are paying the teachers; i.e., the owners are paying the players.
CALLER: Right. And — and —
RUSH: In the NFL the owners are not paying their players lifetime salaries, lifetime health care, lifetime pensions.
CALLER: Right, right.
RUSH: Although they do contribute. They are trying to build up that retired players pension fund, and there are arguments over the contributions to it.
CALLER: Right. So in the NFL parallel, the viewers, the fans are like the students in the classes that aren’t getting taught. We wouldn’t get to see the NFL. The students wouldn’t be able to have class and be able to get an education.
RUSH: Yeah. Let me ask you a question.
RUSH: What would you rather lose, school or the NFL?
RUSH: Frankly I’d be more depressed if I lost football. (laughing)
CALLER: Depends on the classroom, I guess. I mean if it was any poli-sci class, yeah, I’d rather be watching football.
RUSH: I see how you’re thinking. You can come up with some parallels, I guess. We are the owners in Wisconsin. Maybe we ought to be the ones that do the lockout. We are relying on our ‘negotiators,’ i.e., the governor and the members of Congress, their legislature to do our bidding: Lockout. Fascinating. I’m Today’s D-Day, midnight tonight’s D-Day for a lockout. I’m just not sure there’s gonna be one simply because everybody else is so convinced there’s gonna be one.
RUSH: So the question came from Ben Feller, who is the AP White House correspondent. He asked this long question. The question is longer than Obama’s answer. I’m not gonna read the question to you. I’m just gonna tell you that 90% of the question is about Libya, and then the throwaway second part of the question is about the NFL on the brink of a complete shutdown tonight over the labor dispute. He wants to know if Obama would be willing to personally intervene, and if not why not.
OBAMA: My working assumption at a time when people are having t’cut back, compromise, aaand, uh, worry about making the mortgage aaand paying for their kids’ college education is that the two parties should be able to work it out without the president of the United States intervening. I’m a big football fan, but, uh, I also think that for an industry that’s making $9 BILLION a year in revenue, uh, they can figure out how to divide it up, uh, in a sensible way. My expectation and hope is — is that they will have resolve it, uh, without, uh, me intervening because it turns out I’ve got, uh, a lot of other stuff to do.
RUSH: Ohhhh, yeah, ‘a lot of other stuff to do,’ like wrecking the US economy for everybody else. By the way, that $9 billion is not profit. He said ‘make,’ it’s ‘an industry making $9 billion a year in revenue,’ generating $9 a year in revenue and they’re fighting over how to divvy it up. That’s the gross. That’s the gross. Here’s the problem that the owners have, and I’m not really taking sides in this thing ’cause at some point it’s gonna get settled. Everybody knows this is a big, big business at its peak of popularity and at the end of the day (which is September) they’re not gonna destroy it, all right? It’s gonna get settled at some point. But here’s the deal. These teams are being valuated, on average at a billion dollars, but that’s when you sell it.
One team, the Packers, the Green Bay Packers — the only team, quote, unquote, ‘publicly owned,’ so they release their books. The Packers’ operating profit was $9 million. Now, a $9 million profit on a $1 billion industry is very small. Now, it’s $9 million in profit and that’s nothing to sneeze at, but you’re not buying that business to live off of it. You buy that for resale, and as these things keep escalating in value, the pool of people individually — the NFL does not want corporate ownership. The pool of people that have that kind of money to buy these teams is not all that large. Now, that $9 billion, currently, there’s a billion taken off the top.
The owners get that for stadiums, infrastructure, investment, modernizing facilities. It’s operational money. So that takes it to $8 billion, and they split that 60-40. Players get 60; owners get 40. Now, the owners are asking for another $2 billion off the top and a revision in the 60-40. The players are saying, ‘Wait a minute, it isn’t 60-40! When you take the billion off the top, we’re basically looking at 50-50 of $9 billion. You get the first billion. We’re talking $8 billion we split not nine. So, yeah, we’re getting 60% of the remaining eight but you get the first billion, so it’s really a 51-49 proposition players right now with the owners getting…’
So the owners want an additional billion, so the way that will end up is the owners will get $1.2 to $1.5 billion instead of the two. The owners will probably cave on the 18 games, maybe go to a 17-game schedule with a couple bye weeks. It’s all gonna get worked out. They’re not gonna miss any games that matter. It just isn’t gonna happen. Mark my words. Now, you probably say, ‘Well, Rush, you’re the only guy saying that.’ That’s RIGHT! Conventional wisdom is, of course, otherwise. The conventional wisdom… Look, I’ve talked to people. I’m a powerful, influential member of the media, and over the course of my life, I’ve gotten to know a lot of the players here.
I’ve been told for two years by a number of the owners: ‘Yes, there’s gonna be a lockout. Damn right!’ And I’ve had… (sigh) I’m gonna stop there. But I think a lot of that has been positioning. Today’s the day for the lockout. We’ll see. What do you think the odds are there’s a one-week or two-week extension of the current deal? 11:59 tonight is drop-dead time. I don’t pretend to know — and even if there is a lockout, the players can then decertify their union but they’ve gotta do that today. If they don’t do it today they’ve gotta wait six months. That’s the labor law. (sigh) All the conventional wisdom that you’ve been reading about up ’til now, generally it’s always wrong, especially when the herd is writing the same thing.
You can’t find a different interpretation of events no matter where you go. I don’t care what website you go to, I don’t care what writer you go to, they’re all of the Doom and Gloom Brigade, ‘We’re not gonna see football maybe all of next year. Maybe a shortened season.’ The number of guys that actually think this is all gonna get settled in time for a full season this year is a very small number of people. Now, four years ago, the Green Bay Packers reported a profit of $34 million. Last year it was nine. Some teams make more than that, others don’t, but it’s an expensive business. It is a hugely expensive business to run and to be part of.