Owners, union not focused on bottom line
DALLAS – Think of the labor dispute between the NFL owners and players as a fight among rich divorcees over who gets to keep the Lamborghini and who gets the Ferrari.
Neither side gets any sympathy.
Somehow, in a business that has more than doubled twice in the past 17 years to be worth approximately $9 billion annually, the owners and players can’t find a way to divide $1 billion annually in question. Instead of solving the issues of an 18-game, two-bye week schedule that would stretch the Super Bowl into President’s Day weekend, the owners and players are stuck.
As the March 4 deadline nears, the sides seem as far apart as they have ever been in finding ways to resolve the matter. Attorney Jeff Pash, the league’s lead negotiator, essentially pleaded Wednesday with the NFL Players Association to get an agreement done. Pash also framed the talks with as much positive spin as he could, saying the owners wanted an agreement that both sides could be happy with and “that will allow for growth and allow for more jobs, more benefits and more pay.”
On Thursday, NFLPA executive director DeMaurice Smith said, “My sincere hope is that we get a deal done quickly.” At the same time, Smith portrayed a dire picture of the situation, talking about how he refuses to give up what would be $7 billion total over the proposed seven-year deal.
Behind the scenes, the talk is even more problematic. Or as one union source put it last week: “It seems like every proposal the owners give us is a ‘[expletive] you’ offer, like they don’t want to settle. They want us to take whatever they want to give. If that’s how they want to handle it, maybe we should just let the courts handle it.”
Admittedly, one league source put it two weeks ago, his tone dripping with aggression: “We’re not in a concessionary mode.”
For example, the discussions over an expansion of the regular season to 18 games have been unproductive. According to two sources, the union gave the league a proposal that would allow for 18 games, but limit the offseason program to approximately five weeks so that players would get a chance to rest. The league countered with a complicated system that featured offseason participation based on playing time during the regular season.
When the union ran the numbers on the league’s proposal, the union concluded that players would actually have to do more offseason work than they currently do.
The union has also taken issue with the league’s proposal for additional expenses that would be counted as part of the $1 billion in write-offs. While Pash talked about the league’s desire to help build new stadiums in places like San Francisco, Minnesota and Atlanta, owners apparently also want the union to contribute to the building fees for team practice facilities.
“That’s overhead,” NFLPA spokesman George Atallah said. “That’s the cost of just doing business, not an investment in growing the game.”
Or as another NFLPA source indicated: “They keep calling all this stuff ‘write-offs,’ but how do you know it’s not just the car leases for the team owners. The kind of stuff they’re asking for, it could be anything they want to throw in there. If they want us to agree, make it something where we know they’re actually investing in the game, not just making us pay the bills.”
In response, the union is in full preparation to decertify and file a lawsuit before March 4. If the union doesn’t decertify before the end of the agreement, it must wait at least six months to go to court under the current terms of the CBA.
The bickering is so reminiscent of squabbling divorcees. It makes you wonder if the solution is going to be the equivalent of sawing two cars in half, rendering each useless. Or, in this case, destroying the momentum that has made the NFL so great and profitable. For instance, a long-term labor stoppage would lead to the loss of revenue in sponsorship deals and other agreements for the league and teams.
Still, the problem is that owners and players don’t appear to be in the mood to do a deal yet.
“Neither side is in the right frame of mind to settle the situation,” said a high-profile agent who didn’t want to be identified. “They’re still at the yelling stage, screaming about why they’re right and the other side is wrong. You have to get past that stage to really sit down and talk.”
That fact is obvious whenever you talk to people on both sides. Inevitably, the discussion gets sidetracked onto some issue that’s not at the core of the fight. Instead of stripping away the rhetoric, the two sides argue about minutia, such as the pay for NFL draft picks or the recoupment of signing bonus from players who get in trouble (i.e. the Atlanta Falcons’ situation with Michael Vick(notes)). The two sides lose focus on how to really get an 18-game schedule done.
Or the two sides grandstand, such as the union rolling out its “Let Us Play” ad or NFL Commissioner Roger Goodell saying he’ll drastically cut his salary until an agreement is worked out. Goodell said early in January that he wanted to talk “24/7” to get a deal done, ignoring that the parties have been at this for almost two years with no resolution and that the NFL, like most businesses, is notorious for waiting until the final minute to get a deal done.
The league and union held media sessions earlier this week to answer questions and get the message out. On Saturday, the union and the league will hold a bargaining session. Don’t expect any major developments.
Or as Atallah said last week with no small amount of frustration: “I’ve been saying the same things for 22 months.”
Again, the question is about the focus. Threats of lockouts, decertification, lawsuits and demands that the owners open their books are just posturing. The phrase the owners put out that they are simply “trying to grow the game” is rhetoric. Trying to grow the NFL is like saying you want to feed HGH to an athlete who was nursed on steroids.
In 1994, the owners and players shared a little more than $1.7 billion in revenue. By 2000, that share had doubled to $3.5 billion. By 2007, the total nearly doubled again to just under $7 billion and rose to $7.8 billion in 2009. Those final two figures don’t include $1 billion in expenses that the players allow the owners to take off the top before revenues are shared.
To put it in simpler terms, the NFL grossed almost $8.8 billion in 2009 and reached approximately $9 billion in 2010. From all appearances, the game is growing even without the injection of cash to the owners’ side.
Then again, this is a negotiation, plain and simple. It is about leverage and chess moves designed to amplify that leverage. By the early part of 2008 (and before the economy went south), NFL owners realized that salaries for players couldn’t grow at a pace fast enough to keep up with the growth of the cap. Star money was being spent on average players and even then teams were well below the cap.
That’s when the owners decided to opt out, leading to where we are today. Further complicating the issue is that former NFLPA executive director Gene Upshaw died suddenly in August 2008, eventually leading to the appointment of Smith in 2009.
Smith, an attorney by trade, has been accused by those on the owners’ side of wanting to go to court in order to get leverage. He has also been accused of grandstanding in an effort to raise his profile for whatever his next job will be.
“He’s a litigator,” an NFL source said. “He wants to drag this through the courts … we realized a long time ago when [Upshaw] died that this was going to get a lot harder.”
At the same time, at least one union source who is a former player said: “I’ve watched [Smith] and I don’t believe he’s making this about him. I believe he would do a deal right now if he felt it was right.”
By the same token, those on the union side believe that Goodell doesn’t have the ultimate authority to get a deal done. Rather, they believe that the owners such as Jerry Jones of Dallas, Robert Kraft of New England and Jerry Richardson of Carolina are working to strong-arm the players.
At the end of the day, it’s all part of the angst that goes with a fight over this kind of money.
Like a bad divorce, it’s often an ugly fight.