Once again the attorrney's re-entry into negotiations fans the flames anew. I've highlighted some pertinent issues that appear to be among the stumbling blocks.
After claiming that they had reached a simple 52-48 split of all revenues now they are still arguing again over whether or not the owners are entitled to a large exclusion or credit from those revenues. Apparently neither side either speaks or understands plain English.
There is also the matter of players wanting revenue from non-football events included (this sounds more like it's coming from the lawyers than the players) and also wanting sales tax revenue included. This I can't believe at all. If this isn't a mis-statement of fact then someone on the players side of things is an idiot.
All together it seems that they're a lot farther away from a simple hammering out of the details than previous reports have indicated. I don't see anyway that this will be solved by July 4th and quite possibly not by July 15th which is what we are being told is the absolute "drop dead date" for saving the pre-season. After that happens who knows what direction this thing will takes next.
It seems whatever goodwill and trust that has been generated lately has just flown the coop.
Three weeks ago, as Roger Goodell and DeMaurice Smith broke bread in a midtown Manhattan restaurant, the leaders of the NFL’s warring labor factions projected a sense of mutual optimism. During a negotiation session earlier that day at a Long Island hotel, Smith and player representatives had suggested a new, “all-revenue” model for splitting up the billions of dollars generated annually by America’s most profitable professional sports league, and Goodell and the owners across the table seemed to embrace the idea enthusiastically. Commissioner Roger Goodell (left) and NFLPA head DeMaurice Smith address the media in Florida on Wednesday.
Late Thursday afternoon, after another frustrating interchange between the two negotiating teams at a Minneapolis-area law firm that ultimately lasted past midnight, it was clear that labor peace – and an end to the lockout imposed by the owners on March 12 – won’t be achieved anywhere close to as seamlessly as numerous reports in recent weeks have suggested. Not only is the very definition of total revenue being debated, but each side also believes the other has tried to manipulate the negotiation process in its favor, and any semblance of trust has all but disappeared.
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A little more than two months before the scheduled start of the 2011 regular season, the players and owners are still fighting over money, and quarreling over who deserves the brunt of the blame. One side is speaking Russian, the other Japanese, and that sense of mutual optimism once enjoyed by the NFL commissioner and NFL Players Association executive director has been lost in translation.
“It’s just bizarre right now,” one source on the players’ side said Thursday. “Two weeks ago, I was optimistic. I didn’t realize that we weren’t even close to close. It’s disheartening.”
I’ve talked to key figures from both camps, and others who are more neutral while familiar with the state of negotiations, and I’m still trying to figure out how what one source described as a verbal handshake between players and owners regarding a total-revenue formula earlier this month has degenerated into a montage of mutual finger-pointing.
Those on the players’ negotiating team are convinced that owners have played “bait-and-switch” games with them, belatedly asking for certain items to be excluded from the total-revenue pool after seemingly having agreed to a straight split. They view the recent wave of public optimism suspiciously, believing that owners have purposely tried to create an impression that a deal is near in order to persuade players to accept an offer in the next couple of weeks, thus ensuring that the entire preseason would be saved.
Conversely, owners continue to regard NFLPA attorneys Jeffrey Kessler and James Quinn as divisive forces intent on blowing up any prospective settlement in favor of continuing to pursue legal remedies, including the Brady v. NFL antitrust lawsuit, that could create monumental leverage for the players in the future. The owners trace recent player demands that they regard as unrealistic – i.e. an insistence upon counting sales taxes on tickets as part of total league revenue – to the two attorneys and charge that the players are the ones who’ve attempted to extract extra concessions in recent days.
The heart of the dispute remains how to split up the annual revenue pool, which in 2010 – the final year of the expired collective bargaining agreement – totaled approximately $9.3 billion. Under last year’s formula, the owners took $1 billion off the top in “expense credits,” and the players received 58 percent of the remaining money in salary distributed via a league-wide salary cap.
After opting out of the CBA two years early, the owners demanded an extra $1 billion off the top to cover rising costs such as stadium construction. The players balked, insisting that the owners open their books to convince them that they were struggling economically. The owners refused, and though the two sides made some progress on the expense-credit issue in the days leading up to the CBA’s expiration in March, it was not enough to forestall union decertification, the owner-imposed lockout and the players’ filing of the antitrust lawsuit.
Three weeks ago, shortly before that much ballyhooed Manhattan dinner between Smith and Goodell, a breakthrough occurred. Revisiting a concept they’d proposed shortly after Super Bowl XLV,the players suggested that instead of arguing over expense credits, the two sides should focus on a simple, equitable split of total, unadjusted revenue, or all revenue.
Back in February, the players had proposed a 50-50 all-revenue split, one which would have mirrored their haul from the previous CBA. The players received slightly more than 50 percent of total revenue in 2009 and an average of nearly 52 percent between 2002 and ’09.
At that meeting in Long Island, in an obvious concession, the players offered to accept 48 percent of “all revenue,” a development first reported by ESPN’s Chris Mortensen. In exchange, according to the proposal, they would receive a more favorable salary-cap formula with higher per-team spending minimums than in the past and a provision that actual salary dollars must be spent toward achieving that figure, rather than “dead money” from contracts of players no longer on the team.
And unlike the owners’ final offer before the players walked away from the bargaining table on March 11, the “true up,” or back-end potential of the deal, was also addressed: If league revenues were to exceed projections during the term of the proposed CBA, the players’ split would drop as low as 46.5 percent, but they would still share in the windfall.
Sources on both sides say the owners indicated a willingness to work within that general framework, and there was a sense that other remaining issues, such as a rookie wage scale, a reduction in offseason workouts and a continued desire by owners to expand the regular season to 18 games, would be settled quickly once the revenue-split was solved. Beginning last week, however, the momentum began to evaporate. What happened? Each side gives a very different story.
The players blame the owners for suddenly insisting upon “expense credits” that would reduce the all-revenue total by a significant margin (described by one source as “several hundred million dollars”), effectively reducing their share to 45 percent. The players also balked at the owners’ insistence that the proposed “legacy fund” to aid retired players would come out of the salary cap – essentially meaning that the players, and not the league, would be responsible for those costs. Owners also clung to the possibility of adding two games to the regular season as early as 2014, a move to which most players are adamantly opposed.
Owners, meanwhile, claim that certain expense credits were part of the “all revenue” understanding achieved earlier this month and charge that the players are the ones attempting to change the terms. They are also frustrated by players’ insistence that “all revenue” should include a share of money generated by non-football events (such as rock concerts) at team-owned stadiums.
As for the notion that government taxes on game tickets should be included as revenue under the formula, rather than taken off the top, the owners are downright aghast. They claim that such sales-tax payments were not included among the revenue split in the previous CBA and that an accounting miscalculation by Price Waterhouse Coopers, the firm which monitors the salary cap (and which was commissioned by the NFLPA to calculate projected NFL revenues during the current negotiation), has misled the players into demanding the inclusion of those dollars into the formula.
NFLPA counsel Jeffrey Kessler.
Further, owners see a direct correlation between last week’s reappearances of Kessler (who was absent for Thursday’s sessions) and Quinn in the negotiating room and the negative turn the talks have taken.
Players, meanwhile, view NFL senior vice president and general counsel Peter Rucco as a divisive force who has played games with the revenue numbers in recent days. As things have degenerated, Goodell and Smith have once again been caught in the crossfire.
Players believe that Goodell lacks deal-making authority and hasn’t displayed the necessary leadership to build a consensus among the owners, his de facto employers. Owners see Smith as someone unable to exert control over Kessler and Quinn, even though, according to a source familiar with negotiations, the NFLPA executive director conspicuously silenced Kessler during a session with owners two weeks ago, ordering him to “stand down.”
For his part Goodell, according to a source, screamed at owners during a meeting in Rosemont, Ill., early last week ago after his update to the group on the progress of negotiations was leaked to Mortensen, telling them such breaches in confidentiality were hurting the negotiation process.
For all of the negativity of recent days, there is still a possibility that the optimistic vibes each side experienced earlier in June can return, and that a deal can be reached in time to allow the league’s preseason opener – the Hall of Fame game between the Chicago Bears and St. Louis Rams in Canton, Ohio – to be played as scheduled on Aug. 7. After all, once preseason games are canceled, the league will experience a loss in revenue that will make the overall deal less valuable for both sides. For this reason, TV network executives shouldn’t be the only ones who are nervous about this prospect; players and owners, too, should feel a sense of urgency.
There is also the possibility that the U.S. Court of Appeals for the Eighth Circuit (which is deciding whether the lockout is legal) and federal judge David Doty (assessing how much players were damaged in the “lockout insurance” case against the owners) could issue rulings which create leverage imbalances that change the negotiation landscape and make a settlement more problematic.
Despite the recent negativity, there is cause to remain hopeful about a settlement. Unlike a few months ago, players no longer feel personally affronted by the owners, and the two sides have remained civil and professional in negotiation sessions.
The relationship between Smith and Goodell has also improved, a welcome development given the frostiness that once existed between the two men. On Tuesday night they flew together to Sarasota, Fla., where Goodell – at Smith’s invitation – addressed incoming rookies the following day at a symposium staged by the NFLPA.
Before Goodell spoke to the rookies, he and Smith had another meal together, a breakfast that one source described as “awkwardly comfortable.” They did not talk business, making a mutual effort to steer clear of controversial topics.
By Thursday night, as a marathon negotiation session between the two sides continued in Minneapolis, it was unclear whether Smith and Goodell were communicating on a higher level – or whether they were even speaking the same language. If their mutual optimism doesn’t return soon, things could start to appear very bleak for anxious NFL fans.
Another article which indicates that it's the owners who may soon be losing their leverage and want to settle sooner than later. As has been previously stated and written about they do fear the courts and beyond Sept. 12th they have no reason to expect that they can maintain their lockout.
Former commissioner Paul Tagliabue (left) and then-NFLPA head Gene Upshaw.
A lesson in the definition of “close” in contract negotiations: In March 2006, the NFL owners and players were in midst of a labor battle that now serves as a backdrop for the current collective bargaining agreement negotiations. At one point, the two sides couldn’t have been further apart. Negotiations on a CBA extension had broken off and then-NFL Players Association executive director Gene Upshaw sat down with his team of advisors and gave a toast to the uncapped year. It was a sign that talks had gone nowhere and he’d given up.
Shortly after the toast, Upshaw received a message from then-NFL Commissioner Paul Tagliabue. Within a couple of hours, the two sides were back at the table and an agreement was hammered out within a few days.
That brings us to today, when the owners and the players are again locked in treacherous talks. A request from one side frequently brings a harsh reaction from the other. The drama could hardly be higher. All the while, both sides are trying to manage expectations. The best example of that was Tuesday when the late Upshaw’s successor, DeMaurice Smith, told a group of players during a conference call that the sides were still far apart, as first reported by Foxsports.com.
By Thursday, Smith’s team and commissioner Roger Goodell’s group spent 15 hours talking. The next morning, they returned to talk at 8 a.m. before wrapping up after a couple of hours and deciding to reconvene next week. If the sides weren’t close, why would they talk so much, particularly on the weekend before the Fourth of July?
The reason is that they are down to hammering out specifics, or “line items” if you’re in the world of accounting. The owners’ side suddenly wants cost credits. The players’ side counters with something else equally absurd. The fight over each percentage point is fierce, but for good reason. Right now, each percentage point of the $9.3 billion pie is worth $93 million. By 2015, each percentage point could be worth $150 million or so, and who wouldn’t fight over that kind of money?
Because the stakes are so high, don’t be surprised if over the next few days one side or the other marches out of the talks and declares, “Let the courts rule and we’ll see what happens.”
At that point, you can cue the apocalyptic talk about how there will be no training camp and preseason, regular season games will be lost, the NFL as we know it will be destroyed and Western Civilization swallowed up by communism.
Sorry, I’m missing Glenn Beck already.
Just understand that covering the day-to-day and hour-to-hour movements of a negotiation is like following a bipolar personality. At one moment, everything is great. At the next, everything is about to crash and burn.
Also understand this: There is a deadline out there, even if it’s hard to pinpoint. By about July 15, the chance of starting training camp and the preseason on time starts to diminish. That means lost money. Furthermore, the more the owners waste time by pushing what the players perceive to be unrealistic terms, the closer and closer it gets to Sept. 12, when the owners will likely no longer be able to fight the players on decertification. That will force the end of the lockout and get the sides back into court, where the owners know they eventually would get crushed.
Current commissioner Roger Goodell (left) and NFLPA head DeMaurice Smith address the media in Florida on Wednesday.
In other words, the owners can only demand so much right now while the players wait to get paid because both sides know how close the owners are to losing leverage. This is why the owners regularly need to be reminded of the presence of attorneys Jeff Kessler and Jim Quinn for the players. Kessler and Quinn are more than happy to guide the players into an antitrust lawsuit because they know how easy it will be to win. Fact is, NFL attorney Paul Clement basically admitted this when he desperately tried to argue at the Eighth Circuit Court of Appeals that the NFL should be allowed to lock out the players for a full year, rather than just until September.
Clement may be brilliant, but that part of his argument was laughable to the three-judge panel. Judge Steven Colloton, a supposedly conservative judge on the panel who has already sided with the owners on the lockout for now, repeatedly asked Clement why the league should be allowed that latitude when the previous CBA allowed the players the right to decertify six months after it expired on March 12 once extension talks broke down.
It’s fair to say Colloton was not moved by Clement’s answer.
Negotiations at the moment are generally positive, if for no other reason than they are happening. Sure, each side may get ticked off at the other over each request. That’s business. After they get done being angry, they go onto the next issue. At some point, the whole thing could get tense enough that it will fall apart. Smith and the players walked once already. It won’t be so hard to do it again.
And if it comes to that, Smith could go to a restaurant with Kessler and Quinn and make a toast to the coming lawsuit … only to get a desperate phone call from Goodell asking to get back together.
It seems the "hardliners" among the owners still want to push for those exemptions from gross revenue even after the consensus earlier in the week seemed to have been to forego that in favor of a simple 52-48 split of all revenues. This would appear to have been more favorable to them than a 52-48 split in favor of the players that still allowed them their $$$ off the top. With the total revenues projected to increase by 50% to 100% over the next 5 to 6 years the higher percentage is far more valuable to whoever receives it.
What's hard to say right now is whether or not this is all about the greed of a few rebel owners with who the majority don't neccessarily agree or do they all feel this way. Or, is it simple a matter of a continued lack of trust and understanding between the owners and the players? What is apparent though is that both sides need to get on the same page quickly if there's going to be a regular preseason.
If that goes by the wayside this may just keep going on until it finally does get to court. It's there that the players attorneys hope to break the owners backs for good. Stay tuned.
I'm getting to that age where a lifetime warranty just doesn't mean as much to me anymore as an afternoon nap.
Honey Badger Don't Care. Honey Badger Don't Give a Shit.
One thing I heard yesterday, was that the biggest road block remaining was the free agency. Owners want six years, players want four.
That should be easy enough to compromise on even if the treat this year differently than they do others going forward. To me I still think the major issue is how they'll agree to split the pie. Like the above article says every percentage point is worth $93 mil now and as much as twice that or more before the end of this new CBA. That's a lot of real dollars that both sides are gonna want in their pocket.
One thing I do agree with though is that the owners can only push so far with this position of theirs before the players say screw the short term and decide to battel it out in court in Minneapolis where the owners already know they don't have an upper hand. A full on challenge to their anti-trust expemption is what they fear most. Up until now they've been depending on the thought that the players would want their paychecks before it got that far. Right now I'm not sure they may not have miscalculated that.
I'm getting to that age where a lifetime warranty just doesn't mean as much to me anymore as an afternoon nap.
Honey Badger Don't Care. Honey Badger Don't Give a Shit.