Well, it looks like the powder keg finally is about to blow.
As the NFL and the players’ union continue to stare each other down (while gently caressing the button of the nuclear option) regarding the question of whether the two sides can agree on the terms of a financial disclosure, the league and the union have dramatically different views regarding whether the NFL’s offer of data meshes with the NFLPA’s past requests.
The league, we’re told, believes it currently is offering precisely what the union privately has been requesting for an extended period of time. A league source claims that, as recently as last week, the union requested information regarding profitability, and regarding whether and to what extent teams have experienced a decrease in profits.
On Tuesday, the league offered to provide combined profit information for all teams, to identify the number of teams experiencing a decline in profits, and to have the information verified by an outside firm. The league believes, we’re told, that it has offered to give the union specifically what it had been requesting. We’re also told that the union refused to accept the information, even though the offer was made with no strings attached.
These circumstances have triggered concern that the union is shifting from a strategy of negotiation to a strategy of litigation, and that the flat demand for audited financial statements provides cover for an eventual decision to decertify as a union and to pursue a cocktail of legal proceedings, presumably in the hopes of getting a better deal via the courts than the union can get at the bargaining table.
But there’s another side to the story. The union, we’re told, believes it consistently has been asking for much more than what the NFL is offering. In a May 18, 2009 letter from NFLPA executive director DeMaurice Smith to NFL Commissioner Roger Goodell, a copy of which PFT has obtained, Smith requests “audited financial statements concerning the operations of the 32 clubs and the league.”
Attached to the letter is a list of specific information that Smith requested: total operating income, total operating expenses (including player costs, team expenses, sales and marketing expenses, operations/maintenance expenses, salaries/payments to owners, other general and administrative expenses), profit from operations, other income/expenses, income before provision for income taxes, provision for income taxes, net income, cash and investment assets, dividends and other distributions to owners and their families, financial statement notes (including descriptions of transactions with owners and their families and related entities).
Unless Smith later rescinded that letter, it supersedes any extemporaneous or general comments made by Smith to the media, including three of Smith’s quotes posted this afternoon by ESPN’s Adam Schefter.
Per Schefter, Smith told WGR in Buffalo in September 2010: “If there is anything wrong with this deal, if any team is losing money, if any team has lost money over the last five years, if profits are trending down over the past five years, show me and I’ll change the CBA.”
In August 2010, Smith told 106.7 the Fan in D.C.: “What we need to see in order for it to be right is how much profit they make. That’s it.”
Heck, Schefter even pointed out comments Smith made to a certain Internet hack who was guest-hosting The Dan Patrick Show in July. “Now, they want to do that, and they still want to not give us the same financial information that everybody would want,” Smith said. “The players have simply asked one simple question. One. If you want $1 billion back from us, why? And if you want $1 billion back from us, shouldn’t you be obligated to at least show us whether profits are up, profits are down or profits are flat? To me that is not an unreasonable request.”
In our view, these remarks shouldn’t prevent the union from reiterating its prior demands.
That said, we still don’t believe the union needs audited financial statements. While profit information alone possibly isn’t enough (as our friend Ross Tucker pointed out via e-mail, profit data doesn’t reveal the salary payments made to family members), full-blown financial statements are too much. The challenge for the two sides will be to find an appropriate middle ground.
The problem is that tempers are flaring. The players, we’re told, weren’t pleased with the comments NFL general counsel Jeff Pash made to the media this morning, and the two sides are dangerously close to having the situation spiral out of control.