NFL Labor pains, Part Seven
First, here is a link to our special Packers-Steelers archived columns this week.
Here are part six, part five, part four, part three, part two, and part one on the series so far on NFL labor. Now on to a busy week before the Super Bowl and some of the many questions about what's going on...
You’ve been one of the few people hopeful about a new CBA being negotiated relatively soon. Now there are meetings. Is that progress?
Obviously, the fact that meetings are scheduled; including a formal bargaining session Saturday at the Super Bowl, is a good sign. The two sides cannot truly make any progress without exchanges of ideas in a group setting.
The most positive sign of the news about the meetings, to me, is that Commissioner Goodell and DeMaurice Smith met privately on Monday in New York. A CBA will happen without an improved relationship between Goodell and Smith. Even if they only talked about the lousy weather or their kids, that is progress. Goodell and Smith don’t have to be buddies but must respect and trust each other, something that has been lacking. Hopefully that is coming.
How far are the sides really apart?
We know that (1) the NFL made an initial offer with an additional $1 billion in offsets to cover their operating costs, beyond the pre-existing $1 billion offset, and (2) the NFLPA is ready and willing to keep the status quo. Thus, the two sides are $1 billion apart.
Of course, this is a negotiation and the NFL has already moved off their opening number. My sense is that the two sides are about $500 million apart and that the gap can be closed significantly with acceptance by the union of the 18-game schedule.
Is March 4th a hard deadline for a new CBA?
Negotiations are fluid; there are no hard deadlines. If progress is truly being made, there could be a mutual agreement to push the deadline back a week or more.
This happened in 2006 when we repeatedly received memorandums from the league telling us to hold off on free agent calls and/or trading, as the start of the new League Year was pushed back a couple of times while final negotiations ensued.
What do you make of the decision by the ruling yesterday in favor of the NFL regarding their television contracts paying through a lockout?
The case– the union alleged that the NFL violated its duty to the players to seek maximum income in its television contracts in exchange for its “lockout language” insuring $4 billion in 2011 rights fees with or without football – preserves these contracts for the NFL and seals in some leverage with the payments. A win for the NFLPA would have put the game on more equal footing.
The NFLPA claimed some positive news out of the ruling, saying that there were violations of the CBA found specifically in the league’s contracts with ESPN and NBC, and that there were damages awarded. However, a damage award of $6.9 million – they were seeking damages of $60 million -- compared to revenue to the NFL of $4 billion in 2011 with or without football is striking.
Also, the fact that the union will appeal the ruling to the federal judge in charge of overseeing CBA issues, David Doty, is a sign that they took a blow here. Doty has been a friend to the players in the past and the union is hoping for similar empathy here. This loss is a psychological blow to the NFLPA, though may spur them to negotiate more purposefully.
To be clear, although these television contracts pay through a potential lockout, the money is credited back to the networks in future years for all of the deals except for the DirecTV deal.
What was the purpose of the press conference by NFL officials painting a gloomy financial picture last week?
Everything done by the NFL at this point is well choreographed and strategic.
The NFL has calculated that it would lose $120 million if there were no deal in place by March 4. If we assume the players will make 50% of revenue – after all the setoffs are calculated in – then that is a $60 million reduction from whatever the players would make in 2011.
The NFL further calculated that it would lose $1 billion if there were no CBA by September, meaning the players would lose approximately $500 million collectively heading into the 2011 season.
And from there the losses would be $400 million a week, thus $200 million a week lost in player payroll.
The message was not for the fans or the media; the message was for the players. It said, in so many words: get a deal done soon or paychecks are going to start getting lighter.
What do you expect from DeMaurice Smith’s press conference on Thursday?
I expect he will harp on the same themes that he has been for months, among them:
- The owners opted out of the CBA, not the players
- The owners would be implementing a work stoppage, not the players
- The owners are claiming the system doesn’t work, not the players
- In this age of financial transparency, the owners refuse to show us their books
- A lockout will cost each NFL market $150 million
- A lockout would affect a total of 150,000 jobs
- Let us play!
I’ll be analyzing Smith’s remarks both here and on NFL Network.
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