Nickel-and-dime pay row that turned a $9bn sport into a world laughing stock

As top referees are locked out in a pensions dispute with team owners, their unqualified replacements are wrecking games with comically incorrect calls, writes Rupert Cornwell

Forget the deficit, Iran's nuclear ambitions and the mayhem in the Middle East. The real crisis gripping the US is the National Football League's lockout of referees, and their replacement by unqualified officials, whose botched calls, missed penalties and general floundering are turning America's favourite pro sport into a national laughing stock.

The trouble began in early June, a seemingly minor argument over pay and pensions between the referees' union and the owners of the 32-team NFL. It came to a head on Monday night as a comically incorrect call, deeming a clear end-zone interception a touchdown, handed the Seattle Seahawks an utterly undeserved last-gasp 14-12 victory over the Green Bay Packers.

At that moment, simmering dissatisfaction became national outrage. Cyberspace lit up with indignation – "These games are a joke," tweeted the Hall of Fame quarterback Troy Aikman. Las Vegas gamblers who had bet on a Green Bay win lost $300m (£186m), while the ESPN sports network summed up the fiasco with the headline "Clueless in Seattle".

Such words have put pressure on the NFL and on Tuesday they opened talks with the referees' union. Last night ESPN reported that "an agreement in principle is at hand," however how long it is until the matter is truly resolved it anyone's guess.

Labour disputes are nothing new in US major league sports. A lockout cost the National Basketball Association a fifth of the 2011-12 regular season. The NFL itself narrowly averted a similar shutdown last year, while National Hockey League owners are locked in a dispute with players that could cost all of the upcoming season – just eight years after the entire 2004-05 season was lost to a similar dispute.

Each major league is governed by a multi-year framework contract between owners (mostly billionaires) and the union representing the players (mostly millionaires).

Almost every time one comes up for renewal, there is talk of a lockout (by the former) or a strike (by the latter). Sometimes owners prevail; sometimes, as in the baseball stoppage that wiped out the 1994 World Series, the players do.

In pure dollar terms, however, the NFL referees' dispute is strictly minor league. There are just 119 "zebras" (so named after their black-and-white striped shirts), earning up to $100,000 annually. They want a pay increase, and to retain their fixed final pension schemes, which owners want to replace with payments to a savings account.

For the NFL, whose $9bn of revenues make it the world's richest sports league, the referees' claim is – as Americans would say – "nickel-and-dime" stuff. Settling it would cost a few million dollars at most. They see sport as a lucrative business, and thus far they have been vindicated. Despite the dismal refereeing, television ratings are higher than ever.

But for how much longer? With its complex rulebook, the NFL requires seven referees per game. For three weeks the shortcomings of the replacements, most of whom have officiated only at high school or second-tier college games, have been on display. Players and coaches are becoming more undisciplined. Touchline disputes are multiplying as, more ominously, are dangerous hits on the field. For now the NFL may be a licence to print money. But, even before the referees' lockout, worries about violence inherent in the sport had been growing. Now the sport's basic integrity is at stake. "This is affecting absolutely the competitive landscape of the NFL, and it brings it down," said Steve Young, the great 49ers quarterback, now an analyst for ESPN's Monday Night Football, the single most watched show on all cable TV.

Meanwhile, public sympathy has turned overwhelmingly in favour of the regular referees and against the owners; calls for a player boycott are growing. The debacle in Seattle will surely be the tipping point that brings owners to their senses. The only question is, when.