NFL owners opt out of labor contract

ATLANTA (TICKER) —The NFL owners fired the first salvo in a potentially ugly labor war Tuesday, opting out of the league’s current collective bargaining agreement.

The owners voted unanimously to end the agreement with the NFL Players’ Association (NFLPA) in 2011, shortening the deal by two years.

Although the decision opened the possibility of a work stoppage in 2011, it will have minimal impact on the 2008 and 2009 seasons.

“The only message is that we’re guaranteed three more years of football,” commissioner Roger Goodell said during a news conference. “It is our responsibility to work out the issues. That is what we are going to try to do. We are not in dire straits.”

The NFL said in a statement that it will continue negotiating with the players’ union and emphatically stated that football will be played “without threat of interruption for at least the next three seasons.”

“A collective bargaining agreement has to work for both sides,” the NFL said. “If the agreement provides inadequate incentives to invest in the future, it will not work for management or labor.

“And, in the context of a professional sports league, if the agreement does not afford all clubs an opportunity to be competitive, the league can lose its appeal.”

A new deal must be reached by March 2009 in order to avoid playing the 2010 season without a salary cap. NFLPA executive director Gene Upshaw claimed he was anticipating Tuesday’s announcement but did not seem overly concerned.

“We were fully prepared for this,” Upshaw said during a conference call. “We expected this; we started talking to the players last fall. All this means is that we will have football from now until 2010 not until 2012.

“With that being said, we will just move ahead. This will start the clock ticking toward the deadline that is out there.”

Goodell also appeared optimistic during his afternoon news conference.

“It’s important for us to sit down at the table and address the issues that are not working for the owners,” Goodell said. “We don’t need more time to address whether the issues are working. The issues are not working for the owners.”

This year’s deadline for opting out of the agreement, which was struck in March 2006, was November 8. But the owners pulled the trigger immediately, lowering the boom on the NFLPA during the opening day of the league’s annual spring meetings.

Goodell actually commended the owners for the early action, claiming that the extended time period would allow for more thorough negotiations.

“This gives us time to work with the players to understand the issues and work with the players to get a solution,” he said. “We’ve had labor peace for several years, and we hope to continue that.”

According to the league statement, teams are obligated by the CBA to spend “substantially more” than half their revenues - nearly $4.5 billion - on player costs this year.

That mandate has generally has not sat well with owners, who have cited a weak national economy as a chief reason for profit decline. Players received 60 percent of league revenues this past year.

Another major factor in Tuesday’s decision is the growing cost of stadium construction and operation.

“As we have explained to the union, the clubs must spend significant and growing amounts on stadium construction, operations and improvements to respond to the interests and demands of our fans,” the NFL said.

“The current labor agreement does not adequately recognize the costs of generating the revenues of which the players receive the largest share; nor does the agreement recognize that those costs have increased substantially - and at an ever increasing rate - in recent years during a difficult economic climate in our country.”

When owners agreed on the new deal on March 9, 2006, there was animosity between high- and low-revenue teams. Buffalo Bills owner Ralph Wilson and Cincinnati Bengals boss Mike Brown voted against the new deal.

Upshaw, who has been recently criticized by several NFLPA members, has made it clear to owners that the union will not “give back” what it has gained through collective bargaining. At the NFLPA’s annual meeting in mid-March, Upshaw warned of a possible owners’ lockout in 2011.

The NFL has not had a work stoppage since 1987, when a union strike resulted in three regular-season games being played by “replacement players” before the union broke rank.

Upshaw took over as the NFLPA executive director and decertified the union, which led to an anti-trust lawsuit that the players won in federal court. That led to the 1993 labor agreement which led to unrestricted free agency and the salary cap.