Writers of Pro Football Prospectus 2008

01 Sep 2005

Owners Cancel Meeting, Cite CBA

I can't imagine an NFL labor stoppage. There's just too much money to be made for the sides not to come together on a deal. Having said that, it sure seems like the current collective bargaining agreement talks are hitting a lot of stumbling blocks. The latest is that the owners have cancelled their upcoming meeting because there's no CBA progress to discuss.

Note: One of the many things I like about Len Pasquarelli is that he breaks a lot of stories himself, but when other news outlets break the news first, he credits them. "League vice president of public relations Greg Aiello confirmed the cancellation, which was first reported by Bloomberg News," Pasquarelli writes. I often read other Web sites and publications that repeat contract numbers Pasquarelli reported without giving him credit.

Posted by: Michael David Smith on 01 Sep 2005

36 comments, Last at 03 Sep 2005, 1:36am by IzzionSona

Comments

1
by B (not verified) :: Thu, 09/01/2005 - 3:26pm

Or, in the case of MMQ, report the wrong contract numbers.

2
by marc (not verified) :: Thu, 09/01/2005 - 3:36pm

It's obvious you're not a Redskins fan, because then you'd have a moronic anti-Pasquarelli agenda. "Oh no, he mentioned the salary cap, he just hates dan snyder, wah wah wah I wish we had a freakin QB"

3
by Trogdor (not verified) :: Thu, 09/01/2005 - 3:41pm

Or, as I like to do, report the wrong numbers and cite a source. As in:

Corey Simon today signed a 7-year, $48 million contract with the Indianapolis Colts, reports ESPN's Len Pasquarelli. The deal contains a $16 million signing bonus, a record for a defensive tackle, according to Pasquarelli. The deal also contains a $4 million roster bonus due June 2, 2006, and incentives for keeping his playing weight below 295 pounds that could total another $2 million per season, Pasquarelli wrote earlier today.

4
by jds (not verified) :: Thu, 09/01/2005 - 3:50pm

MDS, don't worry about a work stoppage. This is an intermural battle, owners against owners, not owners against players.

Once the owners settle their differences, they will talk with the players and I expect they will quickly reach a deal. Football players aren't as dumb as hockey players.

But what this might show is how dumb the owners really are. If they can't get their act together, they go to an uncapped year (and if that happens, the cap won't go back on until we have the Replacements, Part II). I don't think any owner wants to go there, but that is where they are going unless they resolve their differences.

5
by B (not verified) :: Thu, 09/01/2005 - 3:54pm

The wonderful thing about Trogdor's strategy is when I come up with the actual numbers and dispute his post, he can just blame his sources.

6
by geoff (not verified) :: Thu, 09/01/2005 - 4:52pm

I thought the most disturbing thing about the cancellation is that the owners think the CBA can get done without a new revenue sharing agreement, and I don't think that's true.

Also, don't forget that if a deal doesn't get done the first result isn't a work stoppage, but an uncapped year in 2007. While I agree that a work stoppage seems unlikely, an uncapped year is not so unlikely IMO (although it would be harmful to the league, I think).

7
by Pat (not verified) :: Thu, 09/01/2005 - 5:49pm

But what this might show is how dumb the owners really are.

Absolutely. They've taken over as the top sports league in America, and it's all due to revenue sharing, in my opinion. The salary cap is just a safety net for franchises - as I've noted elsewhere, if all revenue was shared, you have an automatic salary cap anyway. Sticking on a "real" salary cap on top of that is equivalent to baseball's rule of a maximum debt/value ratio for a team.

And now they're stuck because some owners don't want to share more revenue? Give me a break. They'll get the money back, many times over. The other franchises need it more than they do in the short term, and with better revenue sharing, there will probably be less extremely loud contract wrangling. Plus you'll probably have fewer of the salary cap hell years, I'd imagine. All of which will lead to even more fan interest.

8
by Mike (not verified) :: Thu, 09/01/2005 - 6:11pm

Two things.

One, the players must be getting kind of worried too, and they can't control the negotiations because the owners are the ones squabbling among themselves. Everyone throws around that 2007 is an uncapped year, but what a lot of people don't seem to realize is that the current CBA has a lot of incentives for BOTH the players and the owners to come to an agreement. The uncapped season is an incentive for the owners to get moving, but if the uncapped season occurs, other provisions in the CBA kick in that (1) free agency gets delayed by a year or two (the players would hate that), and (2) other rules kick in that effectively bar the richest and most successful teams from signing free agents. So all of a sudden, yes, the league is uncapped, but players have to wait longer before becoming free agents, and when they do the richest and the most successful teams are not allowed to sign them, so competitive signing bonuses go down the tubes.

Two, regarding the comment "why are the owners squabbling over a few dollars; they'll get it back if they just agree. The owner's disagreement isn't just about greed and money grubbing (if you leave out Al Davis and Dan Snyder). The small market teams are legitimately concerned that if the players get their way and ALL revenue is counted towards the cap, paying to the cap could become prohibitively expensive for them. And the large market owners have a legitimate point that if all of their ancillary revenues are shared, then there is no incentive for the small market owners to work to increase their own revenue streams. Plus some of the extra revenue going to the large market team is not profit--it's repaying for stadium construction that the owners used their own money to build, because they did not use public funds to build them (Bob Kraft, Bob McNair? Is that the Texan's owner?).

So both sides of the owners have legitimate points, and the players have incentive to avoid the uncapped year, too. There is a middle ground, the three sides just have to find it.

9
by Carl (not verified) :: Thu, 09/01/2005 - 7:00pm

As the lawyers have told me, Mike, the issues you raised go away when the NFLPA does one thing, which is decertify itself. That's something the leadership of the union said they would do.

So, from their perspective, the CBA is no longer binding. It's a free market for talent.

10
by Mike (not verified) :: Thu, 09/01/2005 - 7:05pm

I hadn't heard that. But once the NFLPA de-certifies itself, doesn't that effectively disband the union? Hence then there's nothing to stop the owners from dictating whatever terms they want to the players, and if a player won't go along, hiring all the scabs they want with no union to contend with?

11
by Carl (not verified) :: Thu, 09/01/2005 - 7:14pm

Yes. The Bengals could then go out and hire scrubs. But they would have to square off with the Patriots, who wouldn't.

Right now, under the requirements of the salary cap, teams can underspend each other now, or hire players less talented than those chosen, trained and retained by others.

For examples of this, see Miami, Cleveland and San Francisco.

The feeling of the NFLPA is that the players would immediately benefit greatly from going to an uncapped market, which is exactly why the owners will never allow it.

12
by Mike (not verified) :: Thu, 09/01/2005 - 7:22pm

By that logic, why doesn't the NFLPA just disband right now, essentially invalidating the CBA and eliminating the current salary cap, along with all the restrictive regulations on free agency and the like?

But then teams can start colluding, and refusing to hire players unless they committ to super-long term contracts, and basically muscling the players around like the baseball owners did back around the turn of last century.

Oh wait, it used to be like that before the the NFLPA formed. It seems like a union choosing to disband in order to get out of a contract that it has agreed to with some negative terms is a little like trying to cure a broken finger by cutting off a patient's arm.

13
by Carl (not verified) :: Thu, 09/01/2005 - 7:52pm

Under the terms of the present contract, they can't. Once the CBA runs its course to the deadline, they can disband.

That invalidates the other clauses.

They can't give up the ghost until the CBA terminates. But Upshaw said they would when it does.

If he doesn't decertify, then the other clauses kick in.

In 1993, the owners made this agreement believing the NFLPA leadership would never commit hari kari. But Upshaw says they will.

It doesn't matter becase the owners will come to an agreement with each other, then with the players. I have no doubt that the deal will be struck.

But that's the way it was told to me. Decertification is the key.

14
by Carl (not verified) :: Thu, 09/01/2005 - 7:53pm

As I've said before, the only reason I'd favor an uncapped season is because of what it would do to Madden07.

I want to see Brady backing up Manning on the NY Jets.

15
by Pittsburgh Phil (not verified) :: Thu, 09/01/2005 - 8:04pm

Pasquarelli is the best.

And post #2 is right on the money.

16
by Ruben (not verified) :: Thu, 09/01/2005 - 8:27pm

I'm just going to throw this out there; do with it what you will, but I imagine others will have comments.

The common misconception about unions is that they universally act with the members' best interests in mind. This is rarely the case; unions act in the union's best interest (hope I got that html correct...). Often, this intersects with what would be in the interest of the members, but not always.

Example: The UAW would very well serve its members by supplying opportunities for its members to learn new trades, in order to compete in a global market where the members' services can no longer be competitively maintained. Instead, the UAW has used its collective bargaining might (and the companies have equally acquiesced) to garner salaries and benefits that are not sustainable for the auto industry; hence, the auto companies are slowly being forced to fold to meet these impossible demands. If the UAW cared about its members, it would be doing what it can to ease this burden, in order to keep its employees employed AT ALL, instead of employed in a dying American industry at impossibly high salaries and benefits.

My point relating to football? Maybe the players would be better served without a union, or better, without compulsory membership? (Legal question: How does the NFLPA square with right-to-work states, like AZ, where one cannot be compelled to join a union?...insert joke about how no Cardinals player has ever "worked"...) I'm asking this not as a debating point, but an honest question. What does the NFLPA get the players, that actually benefits and protects the players? Furthermore, why shouldn't players be able to sign whatever contracts under whatever terms they want (eg: not the league minimum)?

Yes, this would lead to some bottom-dwelling by teams, but no one will pay to see crummy play, and the next logical step would be the elimination of across-the-board revenue sharing, encouraging good management to fill seats. Yes, the NFL would become the MLB. Where the Pirates and Rockies suck every year, and the Yankees inexplicably make the playoffs. So? Does the "parity" of the NFL add that much to its entertainment value?

Does this also mean there would be no salary cap, and players would be bound to the contracts they signed? Should/would said contracts require buy-out clauses, making them near-guaranteed? Mostly posing these to generate chatter, and get people talking on these boards.

Thanks!

17
by Carl (not verified) :: Thu, 09/01/2005 - 8:39pm

"My point relating to football? Maybe the players would be better served without a union, or better, without compulsory membership? (Legal question: How does the NFLPA square with right-to-work states, like AZ, where one cannot be compelled to join a union?"

Actually, that was litigated to a point between a group of disgruntled Redskins players and the NFLPA. The 'Skins, you see, are headquartered in Virginia, where they practice and hold camps, although they play eight games every year in DC.

Virginia is a right to work state.

The full substance of the complaint was never heard due to legal issues that had nothing to do with the substance of the lawsuit.

18
by Pat (not verified) :: Thu, 09/01/2005 - 9:04pm

Redskins don't play in DC. They play in Maryland. Fedex Field is in Prince George County, Maryland in an area called Landover.

It is not in Washington, DC.

Hence TMQ's "Potomac Drainage Basin Indigenous Persons" cognomen. They practice in Virginia, and play in Maryland.

19
by Carl (not verified) :: Thu, 09/01/2005 - 9:20pm

I should have been more specific. The lawsuit dated to before the move to FedEx in 1996.

Then they played in RFK.

20
by Carl (not verified) :: Thu, 09/01/2005 - 9:42pm

Mike asked a good question, and now I'm painfully reliving my law school days. Ugggh.

Let's see how I can explain this in a meaningful way.

Any collection of workers has two options on wage agreements under federal law. They can seek regulatory shelter under New Deal's NLRA or the Sherman Act.

If you pick the Sherman Act, you can make agreements without union help. In fact, you can even decertify the union and go from there.

There's an 8th Circuit decision to this effect involving the players and their union (known in the NFL simply as "Powell"). I've explained this in another post.

If they choose to confect a CBA with the owners, then they need the NLRA. That's what recognizes the NFLPA as the only bargaining unit, defines what will be bargained, gives them the right to strike and provides an arbitrated grievance system in the event of a lockout or walkout.

It also mandates responsibilities for the owners/employers. If they fail to follow them, the NLRB can step in.

So, if you're a player, how do you want to win? At the bargaining table, before the NLRB or after a strike? Or before a judge with an anti-trust lawsuit?

There has been some discussion over the years whether players could ever be successful arguing the Sherman side of the matter. It's not exactly as if they're products; they sell talent.

I've always thought this notion was rather antiquated, and they should be allowed to pursue NLRB protections AND fight anti-competitive labor practices.

Without this ability, multi-employers such as the NFL system of owners can make arbitrary and industrywide demands on players that are anti-competitive. There's some history of this as anyone who understands baseball's "reserve clause" could testify.

The irony is that over the years other sectors of the economy have won the right to fight anti-competitive labor laws.

Able seaman don't have to deal from such a disadvantage as bargainers because they have equal footing in CBAs with ship owners. College coaches won a ruling barring the NCAA from setting uniform wage rates. So have securities brokers.

Why not football players? Sometimes there is a benefit that comes from labor peace and relatively high salaries.

But maybe there's something that can be said for the dignity that comes from deciding where you will live and work, for how much and for how long.

21
by mm (not verified) :: Fri, 09/02/2005 - 12:04am

Am I wrong to ask, "could we please stop calling them a 'union'?"

Seems as ludicrous as letting Yale graduate students seek to 'unionize'. Shames the memory of IWWers everywhere.

22
by marc (not verified) :: Fri, 09/02/2005 - 1:50am

re:#21:"Am I wrong to ask, “could we please stop calling them a ‘union’?�"

Yes you're wrong. The NFL players are a work force that would be shit on by management otherwise, so they have as much right to organize as anyone. Your post seems to indicate some sort of weird class resentment.

23
by Tim (not verified) :: Fri, 09/02/2005 - 2:29am

"What does the NFLPA get the players, that actually benefits and protects the players?"

The incredible amount of benefits that accrue to NFL players that don't get publicized. In 2003 (the latest year I have data on this for) the salary cap was about $75 million, and each team was also forced to set aside an additional $14 million for player benefits. A lot of the readers here know that teams can't cut injured players; I'm pretty sure that the NFLPA bargained them that right (with its attendant salaries).

The NFLPA also operates PLAYERS INC, which operates group licensing of NFL players. It was the revenue from PLAYERS INC that enabled the NFLPA to persist and eventually win in the several lawsuits in the early '90s that earned the players free agency - and skyrocketing salaries. Nowadays PLAYERS INC mostly just works to increase the marketing value of the players, increasing the value of the NFL and thereby increasing player salary by increasing NFL revenues. It also pays the players a (by their standards) small amount of money - a few hundred to a few thousand dollars a year. It's also building a war chest to take the league to antitrust court again - for treble damages - if the CBA does expire and the union decertifies.

Basically all the other benefits the players get were bargained for by the union - termination pay, injury protection benefits, insurance, a wide assortment of rights to fair procedure and acceptable working conditions (eg training camp and workout limits), plus all the services that the NFLPA provides to players and on players' behalf.

24
by Carl (not verified) :: Fri, 09/02/2005 - 2:56am

"and each team was also forced to set aside an additional $14 million for player benefits."

That's not exactly true. In one of the most ironic facets of the CBA, players get a cut off the top. Of that amount (what's called the "benefits cap"), they take another dollop of cash.

In effect, they pay themselves for their own benefits! There's been a great deal of talk about changing that with this CBA.

25
by Carl (not verified) :: Fri, 09/02/2005 - 2:57am

The rest was spot on, Tim. You're now promoted to team rep. We're sending you to Miami.

26
by Ruben (not verified) :: Fri, 09/02/2005 - 8:55am

All of those are interesting, but they don't answer my question: Maybe the players would be better served without a union, or better, without compulsory membership?

Maybe it's just because I'm generally opposed to self-described "professionals" forming compulsory unions, but it seems to me that sports unions tend to ultimately do a disservice to players (see: NHL 2004 season debacle). Ultimately, the union will find something unreasonable to demand, in order to justify its existence, and there will be a lockout/walkout/work stoppage.

Tim: are you kidding? No employer on this planet should be required to provide those kinds of benefits; no player is required to play in the NFL, or in the sport, for that matter. It is a choice to select that career path, and a player then serves at the pleasure of the NFL and its rules. Don't like its rules? Then go be a cardiovascular surgeon.

But more to the point: How many players would rather bank the revenue they would are losing in all of these "benefits" I'm sure many do not collect, and invest it themselves? THAT would give them good retirement prospects.

I just have a tough time swallowing "players rights" in a megabucks entertainment industry that is highly exclusive to begin with; let individuals market their talent as broadly as possible, and allow them to sign binding agreements with their teams (who will undoubtedly and correctly include mandatory performance clauses to avoid the "Mo Vaughn injury effect" or the "NBA lazinesse effect").

Just some thoughts...

27
by Ruben (not verified) :: Fri, 09/02/2005 - 9:01am

The NFL players are a work force that would be shit on by management otherwise, so they have as much right to organize as anyone.

Aaah...yeah, gonna go ahead and disagree on that one. Unlike, say, the shoemaking industry, the players don't "produce" the product, allowing offshoring or an ultimate "race to the bottom;" the players ARE the product, and no one will pay to see crummy games. Therefore, it behooves owners to employ the best talent possible.

If the players want to pool their money to provide retirement/injury/tantrum (TO) insurance, they can do that, but NFL players are about as far from Upton Sinclair as one can get.

Let the Franchises be Franchises, and rise/fall on their own!

28
by Craig B (not verified) :: Fri, 09/02/2005 - 10:06am

re #20 : I’ve always thought this notion was rather antiquated, and they should be allowed to pursue NLRB protections AND fight anti-competitive labor practices.

Without this ability, multi-employers such as the NFL system of owners can make arbitrary and industrywide demands on players that are anti-competitive. There’s some history of this as anyone who understands baseball’s “reserve clause� could testify.

Carl, that's true but so is the converse... the NFLPA could also make arbitrary and industrywide demands on owners that are anti-competitive. The early history of labor unionism was replete with court cases brought by capital seeking to have unions prosecuted for anti-competitive behavior, conspiracy, etc.

Because of this, labor relations laws in most Western countries were devised to get these messes out of the hands of the cops and the courts, where they didn't belong. But in order to do this, both sides had to agree to play nice and give up the right to make competition-law or antitrust claims against each other.

re #26: Ruben, you wouldn't even want to know what the lives of professional hockey players were like before the NHLPA was formed. It was often medieval in its brutality. Ted Lindsay, who stood up to the owners and got the union off the ground, is universally worshipped by his fellow players of the time. The gains they have made don't disappear just because they didn't win the last round of bargaining.

*You* might not like what professional sports unions do, for whatever reason, but that doesn't mean they don't do the players a power of good. Your statement that you don't believe in "players' rights" is telling. Their rights are their rights. Should I not believe in Ruben's rights? Should I place some kind of restriction on the deal you can make with your employer?

Anyway, no professional sport has ever seen the players earn a fair proportion of revenues until a players' union or association is founded. And that's a fact.

As for the benefits question, the vast majority of players wouldn't see a dime of the missing money if the NFLPA's benefits disappeared. If that money went to the players at all, it would go to the small sliver of superstars at the top. Collective bargaining is the only way to improve the lot of the vast majority of players who are at the bottom of the scale.

29
by mistamaxwell (not verified) :: Fri, 09/02/2005 - 11:40am

I'm not sure that letting teams rise/fall on their own is gonna fly in the NFL. Take Jacksonville for instance, Wayne Weaver paid an exorbitant entry fee to gain entry into a league with the promise of competitive balance. Had he known that the economics of the league would change so drastically just a decade later, he probably wouldn't have bought into the league because he would've known he couldn't run a competitive franchise. Letting teams rise/fall on their own would be OK, if there weren't such an exclusive barrier for entry into the league. If you, me and a couple other guys could form a team and compete in some league, and our team had upward/downward class mobility with an ultimate chance to play for the Super Bowl (such as European football (soccer)), then laissez-faire capitalism should apply.

30
by mm (not verified) :: Fri, 09/02/2005 - 12:13pm

re #22 marc, i am impressed by the flexibility of your definition of "worker"...

when millionaires collude to drive up prices, what do we call it? when a small group of agree to act concertedly in restraint of trade what do we call it?

call them a trade association, a guild, a cartel, just don't insult the lives (and, unfortunately, deaths) of the people who fought for the right to organize *laborers*

31
by Tim (not verified) :: Fri, 09/02/2005 - 1:08pm

Carl (#24):

Yes and no. In 2003 they did actually get the $75 million salary cap, plus the $14 million in benefits. Both came out of the players' percentage of the gross (DGR). You're right; the benefits did come off the top of the overall percentage the players receive. But that was built into the CBA, so my understanding (possibly assumption) is that the total percentage is higher than it would have been if benefits were not to be paid out of it.

The other thing to note is that if the benefits didn't come out of the players' money this way, the owners may have more control over the benefits, which would probably be less advantageous for the players than if the NFLPA, constituted to safeguard the rights of the players, administers them.

32
by Richie (not verified) :: Fri, 09/02/2005 - 3:37pm

As a reader, I couldn't care less WHO breaks a story.

33
by Trogdor (not verified) :: Fri, 09/02/2005 - 4:07pm

"As a reader, I couldn’t care less WHO breaks a story."

Agreed, but in this age of ultra-competitive gotta-get-the-story-first news, it's nice to see a prominent reporter give proper credit to those who did it first. Especially on the internet, where articles have been known to magically re-appear word-for-word on competing sites without a hint of acknowledgement or credit given to the authors. So while I really don't care about who broke the story, it is nice to see the professionalism LP shows by giving proper credit.

34
by Ruben (not verified) :: Fri, 09/02/2005 - 10:02pm

Should I place some kind of restriction on the deal you can make with your employer?

Thanks for making my point for me! The NFLPA (like most other unions) doesn't allow players to work under whatever conditions they choose, but instead require them to serve under the terms of a collective agreement that bans individual empowerment.

Anyway, no professional sport has ever seen the players earn a fair proportion of revenues until a players’ union or association is founded. And that’s a fact.

What is a "fair portion of revenue?" Employees at Mercedes or Guuci don't get a significant cut of the overall revenue of the company, how/why should players?

I am asking these questions to stimulate debate and challenge the easy answers. I maintain that the players should be free to work under conditions of their choosing, and bear responsibility for saving and providing for rainy days no differently than anyone else.

35
by Tim (not verified) :: Fri, 09/02/2005 - 10:56pm

Employees at manufacturing companies, or retail companies, and indeed most industries, are not the single greatest cost to those companies. In both industries most of the cost of operation is the cost of getting the goods that the firm transforms into its finished products.

(Manufacturers transform raw materials into finished products; retailers transform wholesale goods at factories/distribution centers into retail goods at commercial destinations.)

In the NFL, player salaries are the single largest expenditure of a team because they are the raw materials, who transform themselves (with the help of coaches, etc.) into the finished product of entertaining football contests. So an NFL team pays the players what a more traditional firm would pay its raw goods and its employees combined. (Roughly.)

36
by IzzionSona (not verified) :: Sat, 09/03/2005 - 1:36am

Tim: Totally disagree with that. While the on-field players are a significant part of the product, any revenue from the gate receipts must also be attributed to the countless game staff that are responsible for ensuring the smooth operation. No one would go to the stadium at $40+ a ticket if the seats weren't clean, their beverage/food of choice wasn't served, and the atmosphere just wasn't right.

Further, the grounds crew is responsible for providing the environment in which the players can showcase their talent, and there are large numbers of other facility people that maintain the locker rooms, equipment, etc.

Even on the field during the game, there are the referees and other official personnel. Granted, most people assume the only purpose of a ref is to blow a major call and mess up the results of a big game, but in reality, the way the game is called plays a significant role in the way the game turns out.

So, while the players may be the raw materials, they're only a very very small portion of the workforce. And yet, they account for extremely large proportions of the revenues. Another arrow in the quiver of the living wage movement, perhaps.

---

And, as to the stadium, assume a 40,000 seat stadium with a weighted average ticket price of $55/seat. That would provide gate receipts of $2.2 million per game, or $17.6 million per season for 8 home games (assuming, for simplicity's sake, home team keeps all gate receipts... yes, I know that creates inaccuracy). Further, assume that the average fan spends $10-20 per game on concessions, memorabilia, programs, whatever. That's an additional $400,000 to $800,000 per game, or $3.2-$6.4 million per season. And, if the team has its fingers in the parking money...

While the figures certainly aren't overwhelming, especially when compared to the per team value of the current television rights, they're still not chump change. I don't know precisely what TV rights are going for today, but if they were $60 million per team, the stadium receipts would be over 25% of the annual income of the team. So, for the players to soak up 65-70%+ is giving them a very large portion of the money that's not tied to the stadium experience, and, in my opinion, someone else's hard work.