Ten more things to know, right now, about the labor situation

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.

32 responses to “Ten more things to know, right now, about the labor situation

  1. I still want to see a rookie wage cap.

    When a team misses on a high pick, it kills them for years. Look how many teams try trading out of the top pick now because they don’t want to commit all that guaranteed money to an unproven player, unly to be stuck with the pick because other teams won’t take on the same risk. The Raiders might have dumped Jamarcus Russell earlier and turned the corner before this last season if they weren’t in the hole for all that money paid up front to Russell.

    Imagine if you’re a fan of the Panthers — wouldn’t you rather see them parlay the top pick in this year’s draft for a slew of later picks in rounds 1 throug 3 to fill as many holes as possible, while possibly still getting a shot at Andrew Luck next year?

    What about veterans? It can’t make some Pro Bowl player happy seeing some rookie come in and get a better deal before he even suits up to play, and that might cause dissension that makes those veterans want to shop for a new team.

  2. Do owners genuinely believe what they might gain in a new CBA is worth risking their personal financial information going public? Or will they drop demands if forced to make more records available?

    In suggesting the league consider “expansion, not relocation, by two teams in Los Angeles,” you meant expanding by two teams, not two in L.A., correct? How can the league keep expanding when more than half the current teams can’t find QBs capable of competing at an elite level?

    Do you believe the NFL–an organization in many ways more bureaucratic and controlling than the federal government–would eliminate the Draft and let each team make its own rules?

  3. “The union also should push the league to find other ways to expand the pie, including…the addition of two teams per conference to the playoff field…”

    16/32 teams would make the playoffs. Great, now we can have .500 teams in the playoffs every year in addition to the 7-9 division winner from the NFC west. That’s what all fans want to see.

    And I’m sure the 2010 fiscal responsibility of teams in an uncapped year had nothing to due to the likelihood that there will a new cap with a new CBA.

  4. The longer the extension the more it hurts bad teams that aren’t looking to retain certain players.
    However, it is good for those who are in limbo with a lot of FAs and needs time to work out the deals to keep them on the team.

    Talk about fair right? Just like how teams that have to pick #1 overall is usually screwed especially when you have such a weak draft class where Gabbert, Newton, Fairley, etc. Guys who had 1 decent/good season can be considered #1 overall picks.
    Honestly if any of those top 10 guys came out any other year with deeper talents like last years draft, many of them would’ve been possible 3rd/4th round picks.

  5. 18 games may happen? If Cutler plays into his late 30’s/early 40’s Brent Favre might have to worry about his interception record. I thought that was untouchable.

  6. 3. Since when do employees – and that’s exactly what the players are, EMPLOYEES – have the right to dictate how much of a profit their employers make? Until about 20 years ago in Russia, workers’ councils actually asserted this “right.” The councils were known as “soviets.” Need I say more?

    7. There should be 18 games – and beyond merely reducing off-season contact, etc., every player under contract when it goes into effect should receive an automatic 12.5% base salary increase. But only one team should be added to the playoffs in each conference, not two – creating a situation under which only the 1 seed gets a first-round bye, the 2 seed does not get a first-round bye but is guaranteed home field in the second round providing they win their first-round game, while the 3 seed does not get home field in the second round unless they win and the 2 seed gets upset. This is a far more natural progression than the current format, under which the difference between being a 2 seed and a 3 seed is more crucial than the difference between being a 1 seed and a 2 seed, in that the 1 and 2 seeds get both a first-round bye and home field in the second round, while the 3 seed gets neither. 16 teams making the playoffs in a 32-team league dilutes the playoff field too much – but in the event of future expansion, it can be considered.

    9. Salvatore Sollazzo – GOOGLE IT!

  7. I am so excited about the NFL post-decertification, post-CBA and I don’t understand why more people don’t appreciated how fun and interesting it will be. A few of its best features:
    – The 2011 season will be played – you can’t lock out a group of employees, you can only lock out a union.
    – Players will now be able to say exactly what they think about sports writers and broadcasters. Tell me the prospects of that aren’t juicy. They’ll also be able to live and on-air challenge these sports reporters knowledge of football.
    – Players will be able to criticize other teams ownership, coaches and players without constraint.
    – There will only be individual employee contracts. There will be no franchise tags, restricted fee agents, transition tags or any other mechanism that extends the life of the employee contracts. All that stuff is CBA only.
    – Roger Goodell’s individual personal conduct penalties will just be a joke that won’t hold up in court.
    – Teams that adapt to the new world order most quickly will be most successful. Thus has it ever been. A team like SF will be smart to go to UCLA and made Jake Locker an offer to play this year. Jim Irsay is going to be furious when it finally penetrates his skull that Peyton is an unrestricted free agent available to whatever team can convince Peyton that they can help him get another ring. Overnight someone can fill in their week side O-line for 2 years with Mankins and Light. What top 5 draft pick accepts an offer from a team that didn’t draft him? That one’s a legal case and a half.

    Like I said – How could you not want this?

  8. If the salary cap max consistently went up from 2006-09 then the owners may not of ‘moved’ toward the minimum but just kept their payroll the same as the cap went up. I think instead of lowering the max and raising the minimum to shorten the spread, the players should just try raise the minimum. Why would they want to lower the total max a team can spend if some teams are willing to go to the max? By just raising the floor it would force teams to pay more while not reducing the total that teams are allowed to pay.

  9. So, does being a lawyer also make you a union hack? If the owners are smart they will focus on the issues that are killing the league, rookie salaries, player discipline, player reporting after week 9 and getting a full years credit. The owners are forced to pay for travel, pay for food, pay for uniforms, pay for health insurance and have to give half of every cent they make to the players?

    I will never understand how a court system can force an NFL owner to give his business away because of some antiquated idea that the opressed player isn’t being treated fairly.

  10. People who think it would be “fun and exciting” to do away with all the structure the NFL has in place to force more competitive balance must be fans of large market teams who are in the best position to benefit.

    I think it’s a nightmare that would ruin the NFL as we know it. And I happen to love the NFL as we know it.

    It’s the only major professional sport where preseason predictions are practically useless. That’s what makes it fun and exciting for me.

  11. I ‘love’ the pro-owners comments. Consider this: if an owner’s investment goes completely down the toilet, the owner is still left with a substantial amount of money to live on. These folks are wealthy coming INTO the purchase of a franchise. So they get wallet burn, but there’s more in the wallet.
    The players, conversely, risk serious injury every day they are at work. They risk being permanently disabled. Disagree? Go look at the roster of ex-NFL’ers starting with Mike Webster.
    The owners complain about spending too much money on free agents and rookies. Who pays the money? If money was such a concern why do the Daniel Snyders continually throw money around like confetti. The overspending is a problem THEY created.
    The owners want some givebacks from the union because of their financial “model” not looking good. Most of the ones complaining have spent themselves silly on fancy stadiums, etc. So instead of not spending, they want the players to give back some of their cash to finance their overly aggressive spending.

    Sorry, the balance of power in this argument is with the players. I don’t feel sorry for one owner. Not one.
    By the way, a league without rules means this year’s Super Bowl champ within 10 years will have their franchise in some other city. As much as Green Bay is a shining star, it is based on revenue sharing. No revenue sharing, no Green Bay. You don’t care? Then you don’t care about the NFL.

  12. hey jc1958cool….Are you kidding? The players would have to use their college education to find a job. Wait a minute isn’t that what they went to college for? As for another comment…The Players are employees, exactly. But, thats why we have the Socialist Unions. Why don’t we go straight to communism and pay everybody the same? That would include the owners. See where this is heading???????????

  13. Nice sarcasm, thartnine. I almost missed it, until I got to your line about what the owners are forced to pay for.

    What seems to be forgotten in all of this is the plight of the poor owners. Judging by on-field results, many (most) of them are perfectly happy to continue to produce .500 or below seasons year-in and year-out. They just want to continue to make a lot of money doing it.

    If you can’t seem to make money owning one of 32 franchises in the most successful sports league in the world, then sell it to someone who can.

  14. Of course the 18-game schedule itself would force more competitive balance, for two reasons: First, the two new games would match first-place teams (from the year before) against other first-place teams, and last-place teams against other last-place teams, by means of adding two interconference games to each team’s schedule; and second, with only two preseason games, coaching staffs would inevitably get squeezed and cut some good players, who will then get snapped up by the weaker teams under the league’s waiver procedures.

    And it is interesting to note that since the last CBA was signed there has been both a 16-0 team (the ’07 Patriots) and an 0-16 team (the ’08 Lions) when there had never been either under previous CBAs; and there has also been a 7-9 team who made the playoffs (the ’10 Seahawks) and an 11-5 team that didn’t (the ’08 Patriots).

    So clearly, competitive balance is out of whack in the NFL.

  15. covercorner says: Mar 9, 2011 1:48 AM

    I would love to see the league go lawless; no draft, no franchise tags, no restricted free agents.


    You must be a Yankees fan.

  16. Salary floor = greater revenue sharing, so that adds another issue, for the owners, to deal with. As long as the salary and total amount of money going to players is being driven by revenue that’s not shared, then there’s going to be a squeeze on smaller market teams. The Jaguars can’t be forced to spend more because the Cowboys sold more luxury boxes. Smaller market teams will be fine if they can have their spending levels correspond to their revenues but once those spending levels are dictated by other teams local revenue, they have a problem and the need for revenue sharing becomes clear.

  17. You cannot expand this league! There already teams that are perpetual doormats and stand no chance of improving. If anything, contract 2 or 4 teams.

  18. #9 is interesting to contemplate. It’s easy to say that it would allow only a handful of big spenders to compete. But really, when you looks at the list of SB winners, it’s pretty much dominated by a handful of teams already.
    The real problem would be trying to put the genie back in the bottle in the event that it gets really out of whack.

  19. @Deb –

    “How can the league keep expanding when more than half the current teams can’t find QBs capable of competing at an elite level?”


    When Trent Dilfer won a SB ring as the starting QB it pretty much negated any relevance stemming from that question.

    In fact, expanding would only add to the current versatility of the NFL. You’d have more teams relying on defense and the ground game. Which means teams like the Colts who throw all their money at a couple key offensive stars(Manning) would be rivaled by teams who throw a bunch of money at some defensive stars meant to shut out the Mannings of the world.

    Football is a team game, and the more you can highlight that fact, the better the games get. And as much as this is a “QB league” now, defense still matters(See: Houston Texans and Schaub, Matt).

  20. London Fletcher was on TV today and he said they are still allowed right now to go to their facilities and work out…they just aren’t allowed to have any staff members help them (as in strength coaches spotting them in the weight room, etc).
    That must be weird.

    I would love another extension as long as they keep making more progress towards a deal. I think that the closer it runs to the start of the season the more likely one or both parties will have to “give in” and that will again be a situation down the line where there will be acrimony because one side feels “jobbed”. Better to get a deal done now when fewer peoples’ lives are being affected by it which creates less pressure and desperation and both can get certain concessions and a more FAIR deal.

  21. @touchdownroddywhite …

    Oh, if only that were true!! I grew up in a Bama household and fell in love with the Steelers almost 34 years ago, so smashmouth football is my thing. Great defense, great running games. But this has become a QB-driven league and what we see most often is that teams without a top-flight QB can’t compete. And I watched Pittsburgh field great defenses, great o-lines, great running games, receivers, and special teams for the better part of 21 years and fall short until Roethlisberger became heir-apparent to Bradshaw.

    People use the Dilfer example, but let’s be real: Trent was a good journeyman QB. And that was nearly a dozen years ago. How many other examples can you name of teams winning the Super Bowl without a franchise QB? Besides, we’re not just talking about QB talent. How many great centers and tackles are coming out of the NCAA these days?

    Yes, the game will adapt to the talent. But I don’t want to see watered-down football because league greed has led the NFL to expand beyond what’s available.

  22. Every time I see people talk about a rookie wage scale, I can’t help and laugh at their reasoning. Seriously, when money wasn’t as big of an issue, those very same teams were keeping those busts around as long or even longer and they were making the same mistakes in the draft then as they do now. Blaming the salary structure is another red herring that the owners have put forward for years. I think that those that keep advocating this should go back and see how long some guys spent as “busts” with their original teams and how they were reluctant, even back then, to get rid of them quickly.

    anthonyfromstatenisland, by the time that preseason starts, most coaches already have a pretty good idea as to what players are going to make the team and by the end of the second game, they’re not releasing anyone that they wouldn’t end up releasing after the fourth game.

  23. How does the Judge Doty ruling justify the players getting access to team finances? Because the owners tried to protect themselves from a lockout they’d wanted to avoid? People forget the owners SIGNED the previous CBA because they wanted to AVOID labor trouble, this even amid warnings that the deal was too slanted toward players to be affordable – and remember Kevin Mawae’s January 2011 admission that the owners were tricked by the players on that deal? Nowhere have the players shown any proof that that “slush fund” was denying them real money in their paychecks. In fact nowhere have they made any credible case that changing the CBA so more money on top of the $1 billion already set aside for stadium upkeep etc. is put there would cost them real cash – it’s about percentages.

    Here are some more things to know about this labor situation –

    DeMaurice Smith is a fool.
    Kevin Mawae has proven the players are frauds.
    Realworld economics is on the side of the owners.
    There is no such thing as a sports labor issue that happens because the owners are wrong about their league’s finances.

    Sign the new CBA and get back to football.

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