In an interview with 790 the Zone in Atlanta, NFL outside labor counsel Bob Batterman reviewed several of the current issues in the CBA conundrum.
Here’s a quick summary on where things stand: (1) the union still wants to examine the books; (2) the league still says no; (3) the union at some point proposed a 50-50 split of all revenue, which is roughly what the players currently get; (4) it remains unclear whether the union proposed a 50-50 split as an opening offer or a bottom-line demand.
As to the issue of the books, Batterman continued to recite the financial information that the players have: all revenue information, player costs, and expenses for which the league gets a credit under the current revenue-sharing system.
The key is that, without looking at the rest of the costs, there’s no way that the players can determine the amount of profit. Batterman concedes this point.
“Basically, the only thing left is profitability,” Batterman said, “which no league has ever been able to get a union to deal with in a legitimate context. If it shows the Green Bay Packers are making $9 million a year and they used to make $34 million a year, it shows they are making fewer profits and less money, but what does it show in terms of whether $9 million is too much, too little or just the right number? It doesn’t show anything.”
That’s not entirely correct. Appropriate profits can be determined in light of the size and value of the business. For a billion-dollar operation, $9 million in profit represents a return-on-investment of less than one percent.
Clearly, that’s not enough.
The problem is that the union will be inclined to sell $9 million per year to the average person as enough, and that the average person will be inclined to agree, since $9 million to the average person is a very large chunk of change. Indeed, that’s what the union has done in conjunction with the Packers’ profits, with NFLPA executive director De Smith essentially scoffing at recent drops in the margin without acknowledging that reduced profits will shrink the value of the business and, eventually, will persuade the owner of a shrinking business to invest his or her money elsewhere.
Batterman also said that there has been no suggestion that the league has “cooked the books,” but the league undoubtedly is concerned that, if the union gets access to the books, the union will look for evidence of book-cooking and any other stones that could be thrown at the numbers in order to suggest that the profit is bigger than the books suggest.
Batterman said the league understands that the fans will be upset with both sides if regular-season games are lost, and that the two sides are trying to make something happen. He brushed off recent disputes as part of “the nature of collective bargaining,” calling it “deadline bargaining.”
He then reiterated the argument that, under the current deal, the pendulum has swung too far to the players.
“In typical collective bargaining negotiations, the union is looking for more, whether it is more benefits, another dollar an hour or whatever it may be in normal collective bargaining, and the employer is sitting there saying, ‘We are happy with where we are,’” Batterman said. “But the world doesn’t work that way. There are changes. Every once in awhile you have to recognize that collective bargaining is a two-way street and the balance has to be re-struck. That’s what we are saying here. . . .
“The deal in ’06 gave the players a great deal. We analyzed it. The owners have analyzed it. They are sophisticated businessmen. With the growth in expenses over the past decade or so with the number of privately financed stadiums that didn’t exist at the time this deal was originally structured in 1993, there are expenses that are not properly taken into account that need to be taken into account.
“We are talking about righting this sport so that we can have the kind of growth for the next 15 years that we had for the past 15 years. We are not looking to turn this back in time for purposes of sticking it to the players. We don’t want the players to be unhappy going forward. We don’t want them to be in the position we are in today saying that the deal has now swung too far back the other way. We are trying to strike a balance. That is all we want.”
It sounds good, but without information regarding current profitability — and, frankly, without clear and reliable projections regarding future profitability — the players are being expected to take the owners at their word, and to overlook the possibility that this entire effort arises from a belief that the players are simply getting too much money, that they have no other way to make that kind of money, and that they can be squeezed into taking less because they have no leverage and because they have shown in past disputes that they can go only so long without getting paid.
So where is this heading? Until the two sides find a way to get past the stare down over financial information, it won’t be going anywhere.
That’s why the union’s proposal to take 50 cents of every dollar has so much appeal. If it was an opener and not a bottom line, it means that the union will eventually move toward a number less than what they currently get.
Though we’ve yet to hear anything definitive, we have reason to believe it was an opener, and that the discussions could continue along the lines of a formula based on all revenue.
“We made a proposal to take additional cost credits because of the change in the business,” Batterman said. “We are now looking at a totally different approach at the union’s request. The negotiations have moved to a different place.”
In other words, it’s entirely possible that the league and the union have decided to focus on the all-revenue model, and that someone from the owners’ side of the table has realized that 50 cents on the dollar is a fair and reasonable opener for the union.
On closer review, it’s more than fair.
NFLPA spokesman George Atallah told PFT last year that the players received 51.87 percent of all revenue in 2002. In 2003, it dropped to 50.23 percent. In 2004, it was 52.18 percent. In 2005, 50.52 percent. In 2006, it was 52.74 percent. In 2008, it was 50.96 percent. In 2007, it was 51.84 percent. In 2008, it was 50.96 percent. In 2009, it was 50.06 percent.
If the union offered to take 50 cents per dollar, that’s less of a cut than anything the union has gotten in the past decade.
Even if it wasn’t an opener, the league should assume it was an opener and make a response. Then, the two sides can chip away at the difference until a number is reached. And once a number is reached all the other issues can be resolved fairly quickly; indeed, solutions to the other key issues will be included within the offers and counteroffers as the circles of the Venn diagram get closer and closer to pecking each other on the cheek.
For now, there’s reason to think that some progress is being made, even without formal talks.
“When there are no meetings, it is because there is a reason for no meetings,” Batterman said. “When there are meetings, it is because there is a reason to have meetings. We still have several weeks and the parties are in communication.”
That’s always a good thing. Unless the communications involve profanity.