SRS ruling: a win for the players

The other shoe dropped Monday on the revenue sharing issue that had been the subject of a bitter debate between the NFL and the NFL Player Association, ending up in front of Special Master Stephen Burbank. Burbank, who’s in charge of interpreting the Collective Bargaining Agreement (CBA), ruled in favor of the NFLPA, accepting their interpretation of the language of the CBA rather than the owners’ interpretation.

The plan

Since the advent of the 2006 CBA -- a negotiation with the players that the owners continue to regret -- there has been in place a Supplemental Revenue Sharing (SRS) program that effectively takes from the rich and gives to the poor. It provides funding from the top-revenue clubs to the lower third of revenue producers. It has taken $3 million from the five highest revenue clubs, $2 million from the next five revenue producers, and $1 million from the next five. That amount -- combined with other SRS funding sources -- has produced and will produce SRS funding in the following ranges:

2006: $100M
2007: $105M
2008: $120M
2009: $140M
2010: $210M
2011: $240M

At that fateful meeting in Dallas in March 2006, there was a special committee commissioned to study what the qualifiers would be and how the money would be distributed. Indeed, it was this discussion that dominated the day rather than the discussion of the player deal, a deal now causing so much angst among ownership.

The positions

With the owners opting out of the agreement after the 2010 league year, the question was whether the SRS funds would apply. The league's position was that without a salary cap there was no need for SRS funding into 2011, as it was designed as another "balancer" along with the cap.

The union's position was that the SRS continued through the length of the agreement, which runs through this season. And the language of the document was not entirely clear.

The ruling

Burbank ruled that although the CBA did not directly answer the question, there was no difference in his interpretation of the SRS for capped or uncapped years, and that the CBA does require union approval of any material changes to the SRS (and scrapping the program is as material as it gets). It’s certainly a win for the players’ side and will be appealed to Judge Doty, the ubiquitous judicial presence lording over the CBA.

What it means

This will not affect 2010. The SRS funds for spending in 2010 are from the 2009 season and are in the books. It will potentially affect 2011, as SRS funding from 2010 will continue with an amount over $200M. However, with no agreement currently in place for 2011, all bets are off. Having said that, the ruling does allow teams to potentially spend more -- on their own players and others -- in 2010, knowing that SRS funds are still in place as they plan their future allocations on player costs and budgeting of contracts.

The bottom line

This is a nice win for the players, but it doesn't change the bottom line. Both sides need to make a deal, and for the NFL, the deal needs to be better than the one it was led into in 2006. The NFLPA needs some savvy negotiating and understanding of the system to preserve its status quo. Although it’s important for low-revenue clubs to receive these funds, the union must ensure that the money is actually used on players rather than other uses.

Hopefully, progress toward a deal begins Saturday with another meeting between the two sides in Miami.

Tomorrow, I’ll address some myths and realities about the labor situation, and I’ll go through all the facts and fiction in our just-announced Webinar on Feb. 17.

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