On three prior occasions, we’ve provided a snapshot of the labor dispute by pressing pause and taking a look at 10 issues and/or dynamics arising from the situation.
Though the latest look came only four days ago, enough has changed since Friday to justify a fresh assessment of the situation.
1. Brace yourself for another possible extension.
As of Friday, when the two sides had agreed to a 24-hour extension of the expiration of the labor deal and then agreed on a seven-day extension, the prevailing thought was that the deal would get done, if at all, before the following Friday. Now, there’s talk (as Ross Tucker of Sirius NFL Radio pointed out during a Tuesday visit with PFT Live) of another extension.
Though most NFL observers would prefer that the two sides reach an agreement not on an extension but on an agreement, the next best thing to a full-blown deal is more time to reach one. Of course, they likely wouldn’t need it if they’d spent more time last week at the bargaining table — and if they’d devoted more than four hours Monday to the negotiations.
At some point, the extensions will have to end. For now, though, it continues to make sense to keep talking. Especially since the alternative remains litigating.
2. The lockout already has started.
In January, NFL outside counsel Bob Batterman explained that the league’s options as of March 4 were simple — lock out the players or declare impasse and impose the terms of the last, best offer. The other alternative, of course, was to extend the deadline so that talks can continue. And that’s precisely what happened.
So what’s really going on right now? As best we can tell, it’s a lockout without a lockout being declared.
March 4 has come and gone, and free agency hasn’t started. All business has come to a halt.
Yes, the lockout has begun. The only thing that has been delayed is the date on which the storm of litigation may commence.
3. League, union need to reach a deal on financial information.
The league and the union continue to stare at each other regarding the question of whether the books will be opened. Despite optimism that an agreement regarding financial disclosure will be made, multiple reports indicate that the union wants audited financial statements, and that the league will give only more limited information regarding profits.
For months, we believed that the union should drop its persistent request for financial information because the NFL never would open the books, and because the union had no vehicle for forcing them to do so. In the wake of last week’s ruling in the “lockout insurance” case, however, we realized that the NFLPA can’t — and shouldn’t — accept the league’s claims regarding reduced profits and other financial challenges at face value.
Really, how can the league justify demanding financial concessions in the absence of proof that concessions are necessary? If the numbers support the league’s position, the union will realize that. If the union chooses to scoff at the numbers or otherwise refuse to acknowledge their validity, then the union will bear the blame for the deal not being finalized.
The challenge becomes identifying the specific amount of information that needs to be disclosed. Do the players need complete, audited financial statements, or is something less than that necessary. Whether the parties can reach an accord on this point will determine whether they can strike a broader deal.
4. League needs to be sure the owners don’t see the numbers.
Given the manner in which NFLPA executive director DeMaurice Smith scoffed at significant reductions in the Packers’ profits (Green Bay is publicly traded, making their financial information available by law), the league surely is concerned that nothing the union sees will persuade the union to make financial concessions. Moreover, the owners likely aren’t thrilled with the prospect of having the NFLPA micromanage expenditures made by the various teams, especially if the records show six-figure salaries being paid to family members who make only cameo appearances in the workplace.
But there’s a bigger problem. As we’ve mentioned more than a few times over the past few years, Cowboys owner Jerry Jones doesn’t want Patriots owner Robert Kraft to know how much money Jones is making, and how he’s spending it. In turn, Kraft doesn’t want Redskins owner Daniel Snyder to know Kraft’s business. And Snyder doesn’t want Eagles owner Jeffrey Lurie to know Snyder’s business. And so on.
It’s more than petty rivalries and jealousies. When it comes to the issue of revenue sharing, proof that certain low-earning teams are highly profitable undermines the case for revamping the current system. Thus, once the books are open, steps must be taken to ensure that each owner doesn’t get his hands on the financial information relating to the other 31 teams.
5. The union makes a wise P.R. move on financials.
Isn’t it odd that reports have emerged regarding the union’s retention of auditors and other financial experts to assess financial information that the league has yet to agree to provide? It’s definitely odd, and it may be brilliant.
With the owners still reluctant to surrender comprehensive financial information, there’s nothing like a little old-fashioned public pressure to get them to finally do it. And so with the union now ready to receive and analyze the information and with the public now assuming that the information will be coming, the league has two choices — give the information or risk the P.R. fallout that comes from continuing to insist on givebacks without giving any financial data to the union.
If that’s what the union is doing, there’s a chance that the tactic could backfire. But with the NFL apparently reluctant to see the litigation option unfold, the risk of the worst-case scenario could be low — and the reward will be great, if the financial information is provided.
For now, the reward is limited. NFL Network and the Associated Press have reported that Browns linebacker Scott Fujita, a member of the Executive Committee, said the information provided to date “hasn’t been sufficient,” and Colts center Jeff Saturday, another member of the Executive Committee, said that the outside experts would “judge how help the material” the NFL is offering would be.
Thus, more information is coming. The question is whether it will be enough.
6. Whatever happened to the vow of silence?
The union’s announcement of the hiring of a firm to review financial information and the decision of members of the Executive Committee to comment publicly on the financial information that has been or will be disclosed represents the clearest proof yet that the vow of silence taken by both sides at the outset of mediation has gone out the window.
The cracks first appeared last week, when reports began to emerge regarding the dynamics in the room at mediation. Clearly, someone has been talking, whether on the league side, the union side, or both.
To date, the parties have refrained for disclosing many specifics regarding the issues that the parties are tackling. With the exception of multiple reports pegging the financial divide at $750 million to $800 million per year, there hasn’t been anything specific.
Still, one or both of the parties has violated mediator George Cohen’s directive, and we’ve got a feeling it will only get worse as further progress toward a deal is made.
7. 18 games could still be coming.
When the league identified an 18-game regular season as the primary tool for growing the pie after shrinking the union’s cut of it, the proposal didn’t quite have its intended impact. Plenty of players spoke out about the idea, and the league has struggled to reconcile in persuasive fashion a desire to grow the pie with the task of enhancing player safety.
Given the estimates of $500 million per year flowing from a shift in the season from four preseason games and 16 regular-season games to two and 18, there’s a growing sense that 18 eventually will happen. But the union should insist on real reductions in contact during the offseason, training camp, preseason, and in-season practice, while still permitting enough contact to allow the wheat to be separated from the weaklings.
The union also should push the league to find other ways to expand the pie, including the marketing of a full-season Thursday night package, the addition of two teams per conference to the playoff field (and in turn the elimination of the postseason bye), and expansion, not relocation, by two teams in Los Angeles, along with the $2 billion in new money that would go along with it.
8. Litigation wouldn’t necessarily delay the start of the season.
Some believe that decertification by the union and the storm of litigation that would go along with it inevitably would prevent the season from starting on time. We see it differently.
Promptly upon decertifying, the union would file a motion to prevent the league from locking out a non-union workforce. Since the NFL doesn’t consist of one business but 32 separate ones, the league would be committing a clear violation of antitrust law by deciding collectively to shut down. It’s an easy decision for a court to reach, and it would be a shock if the league is permitted to proceed with this specific type of a lockout.
Though it’s possible that the appeals process could linger into September or beyond, the injunction preventing the league from locking out a non-union workforce would likely remain in effect pending appeal (as in the StarCaps case), which means that football would continue while the other legal skirmishes play out.
In other words, litigation may not be so bad for the fans, after all.
9. The league should consider a world without rules.
The decertification strategy, if successful, eventually would force the NFL’s franchises to impose common rules for the draft, free agency, salary cap, and other player acquisition and retention devices. Once the league’s team adopt such measures, the stage would be set for an antitrust action challenging the decision of 32 businesses to apply across-the-board rules.
But what if the league decides to let the 32 separate businesses operate that way? There would be no draft; NFL teams would recruit players like colleges do. Players would sign contracts and become free agents once those contracts expire. With no minimum salaries, owners could pay as much — or as little — as they want for any and all players, limited only by the minimum wage.
The question becomes whether such an approach would screw up the competitive balance of the league. When considering that several franchises hovering well below what would have been the salary floor for 2010 had successful seasons, teams may realize that overspending for a football team carries little or no guarantee of success on the field.
Though the league surely would never do it, a commitment to the same fiscal discipline that was seen in 2010 would prevent a situation in which only a handful of teams have a chance of winning the Super Bowl — and in which a handful of franchises would never be competitive.
10. Squeezing the spread between the cap and the floor could help.
Despite the fact that the absence of a salary cap and a salary floor prompted most teams to tighten the belt (and, in turn, to use the money not spent on players as a partial lockout fund), it’s likely that a salary cap will return — along with a salary floor.
And when the cap and the floor return, one way to ensure that the players get as much of their slice of the pie was possible will be to shrink the spread between the spending minimum and the spending maximum.
Prior to 2006, teams consistently found themselves bumping up against the maximum, often using the concept of “cash over cap” to spend more than the limit in a given year, and to pay the piper later. From 2006 to 2009, fewer and fewer teams had cap issues, and more moved toward the spending minimum.
Pulling the top and the bottom together will result in fewer teams cutting corners, and it will place more money in the players’ pockets.