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NFL Lockout Would Hurt Detroit Lions Financially

The NFL's collective bargaining agreement is set to expire at 11:59 p.m. today. While a lot could happen from now until then, including extending the deadline for a new deal, the expectation is that the NFL lockout will begin in less than 12 hours. Roster moves would come to a halt, preventing free agency from starting as originally planned. Also, until a new deal is in place, all plans to play football next season would be suspended. The league would essentially come to a standstill outside of preparing for the draft.

When a lockout appeared imminent a few weeks ago, there was concern over the parties involved because so much money would be lost. Owners were not on the list, however. While players and team employees are set to lose money because of a lockout, originally it looked like owners could fall back on $4 billion from the league's TV deals. This money could be spread around the league, softening the blow of all the lost revenue from games.

Earlier this week, David Doty, a district court judge, overruled a court decision that would have allowed the owners to use the $4 billion. They would have had to pay it back eventually, but it would have helped teams survive the lockout since some expenses will not go away even if there is no football. This was going to be a big help for the Lions, as Forbes' Kurt Badenhausen explains.

"Basically, the Lions borrowed a lot of money to build their stadium and right now are sitting on a big pile of debt," Forbes Magazine senior editor Kurt Badenhausen said. "Just like anyone else who has to make a mortgage payment, that payment doesn't stop just because you lose your job or the revenue stops coming in."

After being split up, the Lions would have received $125 million from the TV deals for 2011. Now, pending an appeal, this money is no longer available. With the Lions having the third-highest debt-to-value ratio (43 percent) and the lowest operating revenue, a lockout could spell trouble for the team. Forbes reports that in 2009 the Lions had a -$2.9 million operating income, so they need the revenue from games and all of the other deals that come along with playing football, especially with interest in an improving team growing amongst fans. Let's hope for everyone's sake that something can be worked out and a lockout can be avoided.