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|03-16-2011, 09:30 AM||#1|
A Son of Martha
Join Date: Oct 2008
Location: Mesa, Arizona
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Labor divide a laborious topic
Labor divide a laborious topic
This story originally published on VikingUpdate.com
The NFL and its players are facing a monumental time that even has lawyers calling it a “complex” issue and saying both sides have areas where they should be uncomfortable. For an in-depth piece on how it all got here, Howard Balzer reviews the history, the rhetoric and the legalese.
There is an eerie silence around the National Football league.
Except for the vitriol that has been heard from both sides as the sport's business shut down at midnight Friday, it is as if the spigot has been turned off and, except for the draft, very little to talk about.
The start of the league year is in limbo, some 500 free agents wonder what the future holds, and teams face the prospect of heading into the April 28-30 draft not having filled needs in free agency and not knowing what needs might be created by failing to sign their own free agents.
Of course, for those of us who have covered the sport for more than 25 years, this is the way it used to be. There was a system of free agency, but the draft-choice compensation required resulted in virtually no movement.
From 1977 through 1988, only three players changed teams: Norm Thompson, St. Louis Cardinals to the Baltimore Colts; John Dutton, Baltimore to Dallas and Wilber Marshall, Chicago to Washington.
The draft was all there was to talk about, and ESPN helped grow that by televising it for the first time in 1980.
There were legal challenges on the free-agency front, but owners stood firm that there would never be unrestricted free agency. Following the strike in 1987, the league implemented Plan B free agency in which each team was able to protect 37 players.
That led to the NFLPA decertifying and filing an antitrust lawsuit, which was won by the players in front of a jury. That eventually led to the free-agency system that was established in 1993 and flourished for almost two decades until the NFL opted out only two years after the extension that had been negotiated in 2006.
Some have yearned for the "good old days," where rosters were stable and player turnover was minimal (at least by the player's choice).
However, the explosive growth of the sport in the last two decades, aside from the game itself, can be credited in large part to the constant barrage of news and stories in the offseason that turned the NFL into a 24/7/365 enterprise.
As the NFL Network has often proclaimed, "There is no offseason." And they are right. Historically, baseball's "Hot Stove League" kept the sport in the news after the World Series. But that had nothing compared to what was created in the NFL.
The NFL has the shortest playing-time calendar in professional sports, lasting just four months in the regular season and another month for the playoffs. Major league baseball is six and one, while the NBA and NHL are essentially six and two.
The NFL satiates its ravenous fans. First there is the Combine, then the start of the league's calendar year with free agency, trades, offseason programs, the draft, minicamps, OTAs, and finally, a bit of down time from the end of June until training camp.
At least for now, most of that is in jeopardy while each side digs in and watches the invoices pile up in billable hours for their attorneys. And they wait to see how the court system rules and how quickly.
Still, it's worthwhile to assess how things got to this point, and analyze the league's claims that the NFLPA's plan all along was to decertify and take their chances in court rather than in collective bargaining.
The CBA extension negotiated in March 2006 came after the start of the league year was pushed back twice. The CBA was set to expire after the 2006 season, but owners wanted to avoid entering an uncapped year, which would have been the case in 2006.
The sea change in the agreement was that rather than having the players share in only designated gross revenues (DGR), which were essentially television money and ticket sales, now all revenue, national and local, was to be included. Also included in this agreement was a mechanism for the owners to receive cost credits; money that would be taken off the top of all revenue before the remainder was shared with the players on a 59.6-percent basis to cover salary and benefits. In 2008 and 2009, the last two years of a salary cap, those cost credits totaled slightly more than $1 billion.
The new deal had a term of seven years. However, because the owners would have to subsequently agree to a supplemental revenue-sharing plan where high-revenue teams would pay out money to lower-revenue teams, the owners had included in the CBA an option for either side to opt out of the final two years (2011 and 2012) by November 2008.
So anxious were the owners to opt out, they notified the NFLPA of their intention in May 2008, after just two years of the new terms. At that time, as has become clear, they also began plans for a lockout, renegotiating contracts with their broadcast partners and pressuring them to include language that would pay the owners their entire $4.4 billion of TV money in 2011 even if no games were played. They also hired Bob Batterman, who had counseled the National Hockey League during its lockout of the players.
Consistently, the league claimed costs had outpaced revenue. At a league meeting last March in Orlando, Carolina Panthers owner Jerry Richardson told his fellow owners that we have "to take back our league."
At the same time, commissioner Roger Goodell consistently championed for an 18-game regular-season schedule, despite the physical toll the current schedule takes on its players.
But, the bottom line was still money. The NFL's goal in taking back their league was to want another $1 billion taken off the top of the revenue before the rest would be shared with the players. The NFL asked for that in mid-2009. The NFLPA's response then, and ever since, was "Why?"
To agree to such a large reduction, which would have led to each team saving, on average, $18.6 million, the NFLPA quickly said, "Show us the books."
As NFLPA executive director DeMaurice Smith said Friday, and as he did frequently, "I would dare any one of you to pull out any economic indicator that would suggest that the National Football League is falling on hard times. The last 14 days, the National Football League has said, 'Trust us.' But when it came time for verification, they told us it was none of our business."
More than two weeks of mediation did result in the league lowering that $1 billion demand, but only after Judge David Doty ruled that the league had violated terms of the SSA (Settlement and Stipulation Agreement) and resulting CBA by failing to get as much revenue as it could from the TV contracts in the renegotiations that included the lockout pay. Doty's ruling came a few days before the original March 4 expiration of the CBA.
Meanwhile, there was some confusion over what the league offered Friday, but that was traced to discussions that centered around future salary caps rather than the controversial cost credits.
League attorney Jeff Pash said, "We offered today to split the difference and meet the union in the midpoint, with a player compensation number that would have been equivalent to player compensation in 2009 and above player compensation in 2010, and we offered to grow it from there over four years by $20 million a club, to the point where in 2014 the player compensation number was the union's number. It was the number the union proposed to us and we accepted it. That wasn't good enough."
Green Bay Packers president and chief executive officer Mark Murphy, a former NFL player, told reporters the two sides were $640 million apart. That was in reference to the union wanting a $151 million cap in 2011 (salary plus benefits) and the league offering $131. Splitting the difference would have put the total cap at $141 million. However, the players wanted there to be an increase in the cap if the revenue exceeded projections in future years.
In addition to Pash's player compensation claim, in an email to fans, Goodell wrote, "Our clubs offered a deal today that was, among other things, designed to have no adverse financial impact on veteran players in the early years."
The numbers say otherwise. In 2008, the salary cap was $116 million per team and with benefits the total was $138.3 million. In 2009, the figures were $123 million and $149.1 million.
However, the league offer set the cap at $114 million in 2011, although benefits were higher, bringing the total to $141 million, still lower than 2009, while the cap would also be lower than 2008 and cap plus benefits slightly higher.
In 2012, the proposed numbers were $121 million for the cap and $148 million including benefits. That $148 million total was still lower than the total in 2009, although by only $1.1 million.
In its Saturday statement announcing the lockout, the NFL said (apparently with a straight face), "The union's abandonment of bargaining has forced the clubs to take action they very much wanted to avoid. The league has informed the union that it is taking the difficult but necessary step of exercising its right under federal labor law to impose a lockout of the union."
Are they serious? Is the NFL actually attempting to claim there would not have been a lockout had the union not gone through with the steps to decertify and file a new antitrust suit?
It is also disingenuous for those in the league to say they believe the NFLPA's intent all along was to decertify. Yes, the decertification votes were taken during the 2010 season and it does provide the ability for individual players to sue the league.
The reality is that negotiations are about leverage, and the NFL's leverage was a lockout. The decertification threat was simply the NFLPA's leverage. They no more planned for decertification than the league planned for a lockout.
For now, each side waits for what will be important rulings and could quickly affect that leverage.
Gabe Feldman, director of the sports law program, at Tulane University told The New York Times, "The parties are going to get their money's worth out of their lawyers. It's uncharted, complex territory. That's why I think there can be reason for optimism, because neither side can be too comfortable with their positions. There is enough risk on both sides to get them back to the table."
Robert Boland, a professor of antitrust and labor law at New York University told the Washington Post, "This may be the most complex labor battle in American sport history," adding that both sides "are looking for an advantage that becomes a game changer."
Those references are to the NFLPA's decertification and asking for a preliminary injunction to stop the lockout, along with the NFL's claim that the decertification was a sham. Prior to Doty's ruling, the league filed a complaint with the NLRB (National Labor Relations Board), saying the NFLPA had not bargained in good faith, but mostly setting the stage for a challenge of the decertification.
In its releases, the NFL put the word "decertify" in quotes. They still believe the NFLPA is a union. Note the words above where they referred to the lockout as "exercising its right under federal labor law." If the NFLPA isn't a union, federal labor laws would not apply because a lockout of a non-union workforce would be a violation of antitrust laws.
The NFL believes the NLRB ruling should come before a decision on the injunction. Said Murphy, "The NLRB should take precedence over the antitrust law on this. We believe that would force (players) back to the bargaining table."
If that is what the NLRB rules, the players would not have the ability to sue the league.
What gives the NFL hope is that the players decertified prior to the expiration of the CBA. They did that because had they waited until after it expired, no lawsuit could be filed for six months.
Additionally, language in the CBA says the NFL would agree to waive any claims of a sham decertification if the NFLPA decertified after the CBA had expired.
The question for the NLRB is if a decertification prior to the expiration is considered a sham. If that is their ruling, the players will have little choice but to return to the bargaining table, unless they want to wait six months to refile their lawsuit.
If the decertification is upheld, the lockout would likely end, the NFL would institute rules, perhaps those that were in effect in 2010, and the league year would begin. But the antitrust case would continue, something the league certainly wants to avoid, especially as it pertains to the draft.
That much was clear with the inclusion of Texas A&M linebacker Von Miller, who is in the draft this year, as one of the 10 named plaintiffs.
For now, we all just wait and see if something is settled soon or if the clock will also be turned back to a time when we just waited for the draft.
Then again, we will have about a million mock drafts to peruse in the next few weeks while knowing there is one group of people not affected negatively by all this: the attorneys.
Doesn't that warm your hearts?
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