The NFL: Salary Cap and Labor Battles

The National Football League was the first major professional sports league to institute a hard salary cap. Throughout the 1960s to the 1980s, players and owners participated in back-and-forth strikes and lockouts that ultimately contributed to a salary cap. Across this time period, the National Football League  Players’ Association, NFLPA, was involved with five strikes and lockouts. The first, in 1968, was one of the first labor strikes in all of professional sports, leading the way for other leagues to follow suit. While the first strike was over disputes with players’ pensions, it set the groundwork for labor stoppages to be an effective way of protest for the NFL. Throughout the five different strikes and subsequent lockouts, relations between the NFLPA and the league had more emphasis on conflict than a cooperative partnership. This proved to make negotiations extremely difficult, with the players’ union losing out on their requests. 

One of the main requests and the biggest issue on the table for the players’ union was free agency. This request was continually denied from 1974 to 1987, with the hardest-hitting blow coming in the 1987 strike. With this being the fifth strike in recent years, the owners were well prepared when the union called the strike. Owners and teams signed replacement players to continue games during the strike, taking down the player support within the union and making the lockout outcome completely in favor of the league. Following the lockout, the NFLPA filed an antitrust lawsuit that included the hold the league had on free agency. This led to the league opting into “Plan B” which allowed some opportunities for players to change teams. However, a U.S. District Court jury ruled that the league’s “Plan B” was in violation of antitrust laws. This forced the league’s hand for cooperative negotiations with the NFLPA. In 1993, the NFL and NFLPA reached a collective bargaining agreement with a give-and-take between the two parties; players would become free agents after 4 years of service time, and the league would enact a salary cap for teams. The first hard salary cap in major professional sports was set at $34.6 million for the NFL. 

The induction of the salary cap in the NFL has proved beneficial for the league and players alike. The salary cap has made the league more competitive and abolished heavier spending for the more profitable teams across the league. This effectiveness is also contributed to the revenue sharing across the NFL, with teams sharing up to 60 percent of league revenue. This agreement boosts small-market teams and is a highlight of the sharing nature of the NFL. The NFL has also instituted a salary floor, a requirement of spending a certain percentage of the league’s cap,  which benefits engagement for fans of the NFL, as it ensures a competitive nature for all. The salary cap and floor are tied to the overall revenue of the league and are adjusted every year. Since the salary cap’s initial entry into the league in 1993, it has been on a steady increase each year, growing spending for teams and providing more opportunities for players. The NFL  has proved a hard salary cap to be a worthwhile mark of competitive fairness and engagement.