MF: [After taped quote from Feely explaining that the process contains no hate or vitriol, unlike 1987.] “It’s now March 14, Jay Feely is back, circumstances have changed in the last three weeks and six days. Jay you heard that quote, do you think there is hate and vitriol now that wasn’t there nearly four weeks ago?
JF: No, I don’t think so. I think emotions have obviously been heightened, but I think both sides at the end of the day understand that they’re making business decisions and that obviously the fans are the ones that suffer as a result of those business decisions and both sides are trying to do what’s in their best interests and I don’t think if we come to an agreement, that when we get back to playing football, there’s going to be hard feelings.
MF: Michael Silver of Yahoo! had a summary of the events that occurred last week, primarily from the players’ perspective, and his take was that at some point this business issue became personal for the players. They felt disrespected in several different regards, whether it was the Jerry Richardson’s alleged actions at the meeting the day before Super Bowl XLV, the “lockout insurance” case and the revelations that the NFL was feathering its nest at a time when the NFL should have been maximizing shared revenue. Do you agree with that take that even though there may not be hate and vitriol, that it’s crossed over from being business to personal for some of the players that are on the front lines of this?
JF: All emotions aside we went to the negotiations last week, and I was up there, with the intent of negotiating a deal and getting a deal done. And whatever the NFL wants to say contrary to that, I know because I was in those meetings every day, how hard the players worked to come up with models and ideas that would best address the problems the NFL said they had, while trying to still represent the players and get a deal done that both sides could live with, you know. And I do think Michael Silver did a good job of explain what went on, the frustration that existed with the players. And I don’t know whether it was a legal strategy that the owners had to not really negotiate with us throughout the week and then at the end of the day come back with an offer that hopefully we would take because we were so frustrated all along.
And really, Mike, that mirrors what happens when you negotiate individually with a team, you know, whether it’s a superstar player or a kicker like myself, when you go into negotiations, so many times the first offer is so low that it almost insults you and you don’t know why they would even give you that offer. And then they wait and wait and down the road they come back with an offer that’s a little bit more reasonable. But because that first offer was so off the charts unreasonable that you’re more likely to be inclined to accept that offer.
I think that’s what their thinking was this week to come back on Friday, right before the deadline, with an offer that moved a little bit towards where we were, but the process was so convoluted along the way and there was so much frustration along the way, by that time the players were at the point where we said, “Well, we’re going to utilize our legal opportunities and our legal options as well.” Because had the NFL come to us at the beginning of the week with that offer and said here’s where we’re going to start, I’d understand, because first of all, we came to them with the offer first. Their offer was a counter to our offer, although they didn’t say that, they just promoted it as if that was the offer they came to us with. We provided two different models. A model based on the giving back of the credit, the additional billion that they wanted, trying to come to an agreement on that model. And then we came to them with another model, that “pegged cap” system. So at the end they came back to us on Friday, late on Friday, with that response to the “pegged cap” system. But had they come back with that at the beginning of the week then I think we could have made progress, by that time it was just too late.
MF: And just so the listeners understand, the “pegged capped” offer entails determining the team-by-team salary cap and then kind of working backwards to determine what the percentages are and how the money is being shared. But you negotiated per team and my understanding is, and correct me if I’m wrong, that the union wanted $151 million per year, salary plus benefits. The league had been offering $131 million per year, or at least for 2011, salary plus benefits. And this whole “splitting the difference” concept came from the league saying on Friday we’ll go to $141 [million] salary plus benefits for 2011. Is that accurate, or at least close to being accurate?
JF: That is very accurate and let me make this point. We had moved from the old CBA , 2011 was supposed to be $154 [million], so we had moved down to $151 [million] with the ability to move a little bit closer. Now, that give back in that first year, that’s $500 million dollars, a $500 million dollar give back in the first year, that we were looking at possibly giving back to the owners in that first year, addressing what they said was the problem of not having enough cash up front to make the investments they needed to make in the NFL model to grow the game. Tied to that capped system was the growth like you laid out in your article today, that you did a good job with, of the four percent, four percent, two-and-a-half percent, two-and-a-half percent growth of the next four years. What the NFL didn’t have in their offer, which was a huge thing to cut out of our offer, was the idea that if the growth of the NFL grew at a greater rate than their conservative estimates of four percent, four percent, two-and-a-half percent, two-and-a-half percent, then after that fourth year and thereafter we would go back to a fifty-fifty split of all revenue. And that number could be enormous because it was a conservative estimate that they used. So by excluding that and taking that out of the equation that changed the whole dynamics of that offer. But obviously they didn’t include that in what they released to the public.
MF: So it was more than just “splitting the difference” then. It was “splitting the difference” on the 2011 base cap number but taking off the table any opportunity to share in the upside the money earned over and above that projection. And a 2.5 [percent] projection for 2013 seems to be awfully conservative because that’s going to be the first year of a new TV deal.
JF: Right. And I just read a Moody report this morning that estimated that by 2020 the TV contracts of the NFL would double by that time. So you see the growth could potentially grow exponentially. And it you look at what the owners said to us originally, we’re the problem with the system. They said that economics had changed, that they needed to redo the system, that it was a broken system. That the players didn’t share in the risk, that the owners share all the risk, and that the players were getting too great a percentage of the revenue. So, this system that we presented to them gave them cash back, like I said, almost $500 million in the first year, that gave them the ability to have the cash they said they needed to have to grow the game. It allowed the players then to share in that risk, saying, “OK, we’re going to trust your model and we’re going to share in that risk.” And then if it grows better than you expect it to grow, then the players then should share going forward in the growth of that game because they’ve done exactly what you asked them to do.
MF: There were a lot of other terms in that offer and the full summary is at nfllabor.com and we have posted item on it, we posted the full statement. A lot of the other non-economic terms, [the offer] looked very enticing. And Jay, my reaction when I, and I try to look at all this stuff objectively and dispassionately, I looked at the proposal, the summary of the proposal, and it looks to me like the NFL really glossed over the financial side of it, almost hoping that the non-economics would cause the fish to bite. And that when you saw no 18-game season for at least two years and it would be on the table and you’d have to agree to it later, and some of the other things, the reduction in offseason workouts, the potential for remaining in the player medical plan for life, third-party arbitration for drug and steroid suspensions is a very big concession. Did the players have that same perception, that they’re loading up a lot of non-economic terms just to soften us up to take a financial deal that maybe we’re not interested in?
JF: Well no, not really, because all of those things were in our proposal that we gave to them originally. So they’re coming back to us and agreeing to some of those proposals. Obviously, we made a lot of progress in mediation on the health and safety issues, and the offseason program, and you know, Sean Morey who heads that up for our Executive Committee did a tremendous amount of work trying to come up with a system that both the owners and the coaches, keeping the coaches, you should have seen, Mike, this whole system, all day long going back and forth, debating all the different ways it would work and not work, and whether it would help veterans as well as rookies, whether the coaches could do the job that they need to do. I mean, the public has this perception that the players sat there and had no desire to get a deal done. So far from the truth. The frustration came from the fact that, I’ll give you an example, I sat up there Tuesday and Wednesday, all day and I spent thirty minutes total in front of the owners. So we’re spending all day up there yet not having the dialogue, not having the communication with the owners. We’re up there for what, 17 days or so, in the total mediation process we may have spent an aggregate total of twenty hours in front of the owners in that entire time. Now I don’t know if that was the owners’ desire to not be there. I do know that they’d tell us we’re going to meet at two o’clock and then five o’clock would roll around and we’re still waiting there to meet and then come down and say well they broke for dinner so we’re not going to meet now. That’s where a lot of the frustration came from on the players’ side, not that they were not giving us what we want, that they weren’t meeting with us and dialoguing with us and trying to come up with solutions and answers. And we sat in our room, our mediation room the entire time trying to come up with answers, trying to come up with all different kinds of models that they could possibly work with. In the end, they agreed somewhat with the model we presented them but didn’t do so in a timely enough fashion that we could actually have dialogue going forward on the negotiation process.
MF: Well, Jay, help us understand what was actually going on during the mediation process because I’ve been involved in many mediations [in] civil litigation, where the only time one side sees the other side is in an initial meeting and then people retreat to separate rooms and the mediator goes back and forth and exchanges offers and talks about strengths and weaknesses and tries to get the two sides to come together. What were you doing, what was happening when you weren’t meeting with the owners? Were you talking to the mediator, were you strategizing, did the mediator keep you apprised of what to expect next? Help us understand what was going on.
JF: Well, you summed it up pretty well as far as what the process was like. We just didn’t feel like there was near enough dialogue between the owners and the players. Had there been more dialogue on a face-to-face basis then we could have made more progress. When there was that dialogue that obviously it’s not just numbers anymore, it’s not just words on paper, you can exchange ideas and you can help enlighten them and they can help enlighten you. You know, so that’s where I think opportunity existed and wasn’t taken advantage of. And as I went through and looked at their proposal that they released to the public and looked at our proposal, you know, I think there’s room to get a deal done, I really do. I don’t see that as a hindrance, just because we chose to decertify. And I know that they’ve tried to present that to the public, that we decertified and I listened to Jeff Pash, he said players quote forced the lockout by decertifying. You asked him that question and Pash said yes. But that’s so far from the truth. If you look at the Judge Doty ruling, the NFL and their TV lawsuit before Judge Doty, used as their justification of their position that imminent lockout of the players. They were planning to lock the players out the whole time whether we decertified or not, it was just a legal maneuver that the NFL believed gave them the most leverage locking us out. Conversely, decertification for us was a legal maneuver that we knew we had to take, not because we thought we could get a better deal that way but because that was the only way we could ensure hopefully that games weren’t missed.
MF: Because if you decertify and you sue and the lockout is prevented then football continues while the lawsuit plays out just like it did from ’90 to ’93.
JF: Correct.
MF: And let’s face it Jay, in that setting, you guys are better positioned to get the kind of deal that you would prefer than if you’re locked out and the owners are basically waiting for you to cry, “Uncle.”
JF: And if we didn’t decertify then we were going to be locked out whether they, now in retrospect they want to say that, you go back and look at the Judge Doty ruling and what their lawyers said in that ruling and it’s very clear they were always planning on locking us out, that if we didn’t decertify that we couldn’t decertify for six months. And now there’s almost certainty that we’re going to miss games.
MF: I want to take you back to the dynamics going on in the room. I hope the listeners care about this, I’m interested and I’m kind of confused. If there was a sense of frustration throughout the week, what was the mediator doing? And I’ve already been, not accused, but I don’t want to denigrate the mediator, Jeff Pash used that word earlier, but at the same time I want to get to the truth of what happened. And if you guys were sending signals that you were frustrated, that there wasn’t enough face time with the mediator, or not the mediator but with the owners, the mediator’s go to be sensitive to that and the mediator’s got to say, “Hey owners, we’ve got to get together.” Did you guys say to the mediator, “we want more time with the owners” and he said that the owners said, “No”? Or did the mediator just not realize there was any frustration going on in your room?
JF: No, I think George Cohen did as good a job as he could possibly attempt to do in that situation and because it wasn’t binding arbitration, he didn’t have a ton of power and control to make parties do anything they don’t want to do. Obviously, he knew we were frustrated, obviously he knew, you know, when he would come to us and say a meeting was going to start at “X” time and two hours later that meeting hadn’t started and then he come back to tell us, “Well now it’s not going to happen,” of course he knew that we were frustrated. He could only do as much as he could do. And obviously the owners had a strategy for how they wanted to approach those mediations, part of it was not having their full committee there throughout the process, and the owners in the room. Obviously, Mr. Mara was the only owner there most of the time, where we had almost all of out Executive Committee as well as myself and other members who came up, flew in, took time away from their families to try and be engaged in the process. So they had a strategy for how they wanted to proceed through the mediation process and in the end they wanted to bring us a deal that bridged the gap a little bit hoping that we would then accept that deal. And I just think it was a miscalculation on their part of what was the best way to get a deal done. If you wanted to get a deal done, if you brought us that deal in the beginning we could have negotiated through the week and probably found common ground and gotten at least close enough to get a deal done.
MF: And you mentioned earlier that maybe the sides are closer than folks realize. Are the players willing to sit down and finish discussion either before George Cohen or someone else?
JF: Yeah, I don’t know the exact legal ramifications for how and when we would have to negotiate and continue to negotiate, we’re always willing to negotiate so, we have no desire to be stagnant in a litigation system and our desire is to play football. And we made that very clear throughout the process and I know that fans see the players right now as being responsible a little bit, but make no, have no question about it that the players want to play, that we want to continue to play, that we know how blessed we are to play this game. Mike, I told you last time, I’ve played in the NFL for ten years as a kicker, I never thought I’d get into the NFL. I spent two years as a financial advisor after college, working before I got into the NFL, I was happy to get one year in the NFL. So I think every player has that same understanding of how blessed they are to play this game, how blessed they are to be a part of the NFL. And we want to play, but at the same time, when a player blows his money, people look back and say, “How can you be so stupid? How could you not be more of a businessman and approach your job and career in a businesslike manner and be smart and have a financial advisor and have someone who help make financial decisions?” Conversely, when we do that in this process, when we bring in financial advisors and we bring in an auditor and we ask them to help us make good, prudent financial decisions, then we’re criticized for being antagonists and trying to create a lockout when that’s not at all the case. We’re trying to make an educated decision and when you talk about the financials, if you’re only going to give us two numbers a year and you’re not going to allow us to look into the profitability of teams, even if the names of the teams are stricken, then we can’t make a prudent decision. When you’re only going to give us aggregate profit numbers and show us whether the profits when up or down, but not allow us to look at whether the subsidiaries of the company that are below the line, they got the revenue and the costs went to the numbers that we’re going to get, then we can’t make a decision. And when you’re asking us to give a billion dollars back you’re creating a situation where we don’t have a choice.
MF: It sounds like there may be some room to move when it comes to those numbers where there’s revenue that ends up being treated as expenses that’s really profits. Do you think there’s a middle ground between ten years of audited financial statement and what the owners have offered to give when maybe both sides would be happy and there would be enough financial transparency to move forward on getting a deal done?
JF: I mean I heard what Jeff Pash said, he wasn’t entirely accurate or true in what he was saying they offered to us. They offered to us that the two numbers, the aggregate profit numbers for five years. They didn’t offer us more than that. We wanted ten years audited financial because we wanted to be able to make an educated financial decision. The numbers they offered to use, out investment firm and out auditors told us that those numbers were not going to help us to determine whether or not teams were being more profitable or less profitable and going forward make an educated decision on whether we should give back a billion dollars. I think there’s room there. I don’t know why if you want to get a deal done you wouldn’t give us the ten years audited statements, because you could do so in a way that doesn’t hurt the team and in a way that protects the individuals. I know that Mr. Mara told us that we’re not going to sit here and allow the players to question the way in which we do business. And that’s not our intent. Our intent is not to leak information about who they’re paying, if they’re paying somebody, but our intent is to have a complete picture of the financial before we make a vast, large decision on so much money. And I think in our proposal to them, saying, “OK, if you’re not going to give us that information then we’ll come up with a system, that pegged cap system, that still accounts for what you’re saying you need, cash up front for investments, players sharing in the risk, as well as in the growth of the game,” I think we accounted for that even though we didn’t have the financials.
MF: Couple more and then we’ll let you go. We still have one more guest today and we’re already at almost an hour but there’s a lot of important stuff that we’re talking about. You mentioned John Mara a couple of times, you’ve mentioned the fact that players have kind of taken a hit in the court of public opinion. We’ve had a poll all weekend – over 45,000 votes – 24.5% as of right now blame the owners, 38.19% blame the players, 36.98% blame both. Jay why have the players been quiet all weekend in response to very strong comments from guys like John Mara and Art Rooney who say that the players wanted to force litigation, didn’t want to negotiate. Why haven’t we heard anything from the players?
JF: Well I think that they have a P.R. machine that’s much larger than ours, and if we were trying to respond to them it was gonna get muted. And I think you’ll see a much more strong and effective approach in response this week. I mean I would quote Judge Doty and his opinion when he said, “The record shows that the NFL undertook contract negotiations to advance its own interests and to harm the interests of the players.” That’s what the fans need to understand. That an independent judge saw what the NFL was doing, that they were planning for a lockout, that they undertook negotiations to advance their own interests and harm the interests of the players and we were trying to understand, under that guide, the financials and how they truly existed before we made such a large give-back to the owners. And if they want to move forward and try to help us to negotiate a deal, then they have to be more willing to change their proposal or allow us more financial transparency. That’s really what it comes down to, and when you look at all the different issues from the rookie wage scale to how much they’re gonna give to former players, you can get agreements on all those different issues if you move forward logically and in a manner that takes emotion out of the negotiating process.
MF: And Jay we’ll wrap it up on this: we do have some breaking news. I’ve just obtained the order from the United States District Court for the District of Minnesota signed by Susan Richard Nelson, United States District Judge. The motion for preliminary injunction will be heard on April 6th, 2011 at 9:30 am. Briefs are due on the 21st from the NFL; a reply brief from the plaintiffs on March 28th; hearing will be on April 6th; no timetable for a decision after that. So, it’s not gonna happen this week, it’s not gonna happen next week, but it’s coming up fairly quickly in the case of Tom Brady, et al v. National Football League. Last question Jay: did you consider putting your name on this lawsuit?
JF: My name doesn’t have the same appeal as Tom Brady, Peyton Manning, and Drew Brees as well as the others. But I think the leaders of our now trade association went about getting the players who have the most to gain and the most to lose, which is why you saw a guy like Von Miller, the rookie, and others that are on that list. And they got the people that they needed to be on that list.
MF: Any concern that Von Miller’s draft stock is going to be affected by being one of the named plaintiffs?
JF: You know, I’m sure that his agents weighed that and I’m sure he was concerned about that, and I’m incredibly impressed that a guy who hasn’t been in the NFL was willing to put his name on something like that with the potential for his draft stock falling. But I think that teams will look at his ability, and if he’s so good that somebody doesn’t want to pass him up, that they’ll overlook that.
MF: Well Jay I appreciate you taking some extra time. We covered a lot of things. And I appreciate your insight and your efforts. And you know we’re trying to stay neutral in this, but we also want to make sure both sides have an opportunity to talk and we want to press and get the stories out that the listeners are interested in, and Jay thanks for helping us get the information out to the folks who watch PFT Live.
JF: Well I enjoy reading all the information on a daily basis, so keep up your good work.