Labor pains but no sign of baby
There have been a few developments in the labor battle between the NFL owners and the NFL Players Association, although none seem to be advancing the ball – pun intended -- towards a resolution now five months before a possible lockout. Indeed, there seems to be more effort toward lockout preparations than purposeful negotiations.
Decertification votes streaming in
The NFLPA team visits are continuing, with unanimous votes to authorize decertification streaming in.
The decertification votes allow the NFLPA – prior to being locked out – to cease operations as a union, thus providing NFL players an avenue in antitrust court. Once in that forum, player restraints previously collectively bargained – the college draft, Salary Cap, free agency restraints, etc. – will not be received warmly by judges. The late Gene Upshaw used decertification strategically twenty years ago to bring ownership to the bargaining table to fashion the basics of the deal in place today.
I strongly believe that the NFLPA and Executive Director DeMaurice Smith do not want to decertify the union. I would simply file these team visits and votes under “Lockout Preparation 101.” Smith wants to make a deal. However, the preparation is important, necessary and strategic.
NFL plan in place for a while
On the NFL side, lockout preparations have been underway since 2007 when the league hired Bob Batterman, the attorney who guided the NHL through its 2004 lockout. I was at the meeting in Dallas where Batterman was introduced and spoke of his background in hockey and the new economic system he helped forge with the NHLPA.
The NFL has also negotiated television contracts that pay through a lockout, albeit with later credits, giving it a war chest in the leverage battle with the players. And now there is word that the NFL is reducing compensation for employees should there be no football in 2011, including a pay cut for the Commissioner himself.
On the club side, NFL teams have been drafting employment contracts for the past couple of years that call for reduced pay and/or furloughs for employees in 2011 in the event of a lockout, all in the name of being prepared.
Noto no longer
Another interesting development is the departure of the NFL' s Chief Financial Officer Anthony Noto. Noto came to the league with stellar credentials from Goldman Sachs, the place where he will now return. He was a constant presence in bargaining sessions with the NFLPA, presenting the data showing player costs outpacing incremental league revenue. He will now obviously not be part of these sessions.
Noto was finishing his third year as CFO and had laid the foundation for bringing team debt under control, urging owners to become less leveraged. Noto also was responsible for putting in place a work stoppage plan detailing the preparations discussed above.
Noto’s expertise will be missed; his duties now to be handled by existing league senior executives such as Eric Grubman and Neil Glat, both with backgrounds in banking and finance, as are an increasing number of NFL employees.
What do these recent developments mean? Not much as the bargaining sessions -- including yesterday's -- have produced little to no progress. Without the urgency of the March deadline, there is little negotiating. The NFL continues to request/demand the sharing of the collective risk and a significant rollback from the present deal; the players continue to request/demand financial transparency from the teams.
As to the 18-game schedule -- called a “done deal” by Colts president Bill Polian -- it is an issue that will continue to be a lightning rod but will ultimately be another issue that is part of the give and take that will happen when negotiations get serious.
There is a deal to be made here, based off modest increases from the last Cap figure of $128 million per team in 2009. That deal, however, is nowhere in sight as the urgency to negotiate seriously is not yet upon us.
In sum, we have some labor pains but no sign of a baby yet.
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