Tuesday, September 25, 2012

Oh, My

Things just got very interesting.
In case you missed it last night, the NFL's replacement referees utterly botched a call on the final play of the Green Bay-Seattle game. The blatant mistake cost the Packers the game. In addition to that, though, there were 20+ other calls that were botched.

I stopped counting when I hit 20.

This is how bad the call on the final play was:  an official ruled that a play in the end zone was a "simultaneous catch." At no point--for even an instant--was there a simultaneous catch. It was an egregiously bad call, which we can put in a stack of egregiously bad calls that have been made in the last two weeks.

Here's what I find most interesting about this situation: the labor negotiations.  On the one side, you have a business that (in Steve Young's words)  enjoys "inelastic demand." In other words,  no matter what kind of idiot decisions the NFL makes, people will still watch the games.  So even though the league is a laughing stock today--to the point of mockery--the money printing presses are still rolling, and the owners have no reason to settle with the locked out officials.

That's a popular perception right now-- that the NFL is too big to fail-- but I think that perception is questionable.  For one, inelastic demand is not necessarily static and/or permanent.  The NFL is a business, but it's also a brand. Maybe the business isn't visibly eroding because of this fiasco, but the brand has certainly been damaged.

Concussion lawsuits? They certainly have the potential to damage the brand as well, possibly seriously. Giant brands don't erode overnight--just look at Sony--but they can and do erode over time. No one--not Sony, not Apple, not the NFL--is invulnerable.

Most (not all) NFL owners are remarkably arrogant, and why not? They have f--- you money, and that gives them the ability to have respect for no one but their "peers".  So their natural inclination is to never give in during a labor negotiation.

This time, though,  the embarrassment is building.

I always thought the critical factor in labor negotiations was leverage. Employees have leverage when they have unique skills that are difficult to replace. It seems beyond doubt at this point that NFL officials do have unique skills. Yes, the regular officials do make mistakes, but there are generally 3-5 plays a game that are in dispute. With the replacement officials, there are often 20+ in a single game (the Sunday and Monday night games the last two weeks  have been particularly awful). If that doesn't constitute leverage, what does?

This is why I find the situation to be a great popcorn moment. You have this group of incredibly wealthy man, who have egos to match their money, and they are being openly mocked and embarrassed right now. Is that more painful than "caving" on pension plan details and compensation? Where does the line get drawn here?

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