League, union dispute the contents of the players’ past information demands


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.

35 responses to “League, union dispute the contents of the players’ past information demands

  1. The Players need to hire the guy who negotiated Albert Haynesworth’s contract.

  2. The “Nuclear Option” analogy is tired at this point, and really, it’s kind of akin to the players that say they are “going to war” referencing a game.

    This, after all is a sport, and as much as we all love it, these labor negotiations are not even in the same neighborhood as some of the serious issues of war, poverty, oppression and suffering that many in the world are enduring.

    I have a feeling that if both sides don’t wise up they will soon find out how superfluous they are in people’s lives.

  3. NFLPA is particularly concerned with extravagent sums paid out by owners to family members simply identified as “Buster”, “Winky”,
    “Old Shep”, “One Ear”, “Budgykins”, “Cuddles”, etc.

  4. There is no reason outside auditors should be constrained to GAAP. They could certainly take into account salaries paid to family members in any number of ways.

  5. I guess its time the fans come to terms with the situation-we’ll all be getting our football fix next fall with the other professional league-NCAA. Hopefully they can move so of the good games to Sunday and maybe the National Championship can be played in Indianapolis.

  6. This Demaurice Smith is going to singlehandedly ruin the game of football….who put this IDIOT in charge?!?!?!

  7. One offer put forth by the owners that the union is considering….”65% of all revenues in exchange for Kessler, bound, gagged, and naked, but still alive.”.

  8. This makes the players look TERRIBLE and makes me worry about having a season next year. I can already tell who will lose this negotiation – the fans.

  9. the player are going to lose if they take it to court. And there will be no football next year

  10. Smith’s statements which conflict with the letter he wrote shine the light on why almost 100% of the time the less you say the better it is. The fact he is a lawyer and isn’t able to do this is not a good thing for the union side.

    As I have said since the beginning, the more EITHER side does to try to WIN the less they are doing to try to SETTLE THIS.


  11. “full-blown financial statements are too much”

    Why are they too much?

    I don’t particularly care for either side in this whole mess, but disclosing full-blown financial statements doesn’t sound too unreasonable considering that every publicly traded company has to do the same. While I understand that these teams are privately held (with the exception of Green Bay), the fact that most of these teams use millions of dollars of public money to subsidize their stadiums should warrant at least some openness in their books.

  12. There will be union free football this year. Next year, a dozen or some teams will go belly up as they won’t be able to make any money without a unionized labor force.

  13. “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.””

    “if profits are trending down over the past five eyars, show me and I’ll change the CBA”


    Green Bay’s latest financials, audited by the way, have been available since March 31st of 2010, and each March 31st every year prior to that. The Packers profit number has been going over a cliff ever since the current CBA was put into place.

    Smith is a liar.

  14. Not sure I understand the relevance of profitability here. the players get a percentage of revenue, not profits. Yes, I get that the owners are crying about not making enough, but do the players really want to go down that road? What happens when the league goes through the inevitable downturn? Will they lower their piece of the pie? No, they won’t. And I think they’re making a huge mistake if they go nuclear. What do they think will happen if they decertify and go anti-trust? Let’s say it works, and the system goes to true free agency. You may have some owners go out and pay huge for the best players, but there will be more teams that take advantage of no salary floor and pay absolute bottom dollar. they may turn off their fan base, but they’ll still make huge profits off the TV contract, at least for a few years, because their payroll will be $20 million. This will make the league look like European soccer – a few good teams, with all the best players. Is that what the players want? Is that what the fans want?

  15. Of course the players aren’t pleased with NFL general counsel Jeff Pash’s comments this morning. He’s effectively claimed the public relations high ground for the league and owners—at least for now.

    Let’s assume that the sides eventually agree to a $550MM additional “cost credit” over the existing $1Bn off the top. What the union is entitled to, in my opinion, is full financial disclosure on a going-forward basis re: how those funds are being used to “grow the game” (e.g., stadium construction/improvements, overseas expansion, etc.) to, in turn, grow revenue for both sides. But this notion that the union should be allowed to claw back for full audited financials is, in my mind, a reach. Moreover, it smacks of a fishing expedition. That’s counterproductive to promoting labor peace.

  16. “Not sure I understand the relevance of profitability here”

    Of course, business isn’t about making a profit, it’s simply about supplying jobs and benefits.

    Good grief.

  17. mick,

    Duh. My point was that profitability shouldn’t hold any relevance TO THE UNION. Their piece of the pie comes from REVENUES, not profits. If they’re that hung up on it, they should ask for a deal that works off of profits. Ask for a salary pool that is, say, 75% of profits – this way, they’re taking some of the risk, and the owners have a guaranteed profit. they want to act like partners in this venture, but not assuming the risk. when the NFL goes through a downturn (and it will eventually – nothing grows forever), the owners will be losing money, but the players will still be on the same salary structure.

  18. After all this…..lockout or not, I’m really not that enthusiastic about the 2011 season anyway.

    It’s almost like this offseason has been a strike.

  19. Anyone else notice that virtually all football writers are hoping for a lockout? It’s obvious.

  20. As Mr. Smith of the NFLPA loves to say “I dig this game”, well you and the owners will be digging something if you cannot agree and the players who are lucky to get a job that agrees with their college education will also be digging to make a living, or asking, do you want fries with your order.

  21. “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.”

    But the NFLPA think it’s okay to make comments? Like: “We’ve conceded a lot already, and we can’t go any further just because they’re asking us to ‘trust’ them. We saw how trustworthy they are with the TV case….They continue to back us into a corner, and it’s just making our guys stronger. The players are tired of the [expletive] and are unwilling to [concede so much].” (see Mike Silver’s yahoo article)

    Talk about the pot calling the kettle black.

  22. mick730 says: Mar 9, 2011 5:04 PM

    “The Packers profit number has been going over a cliff ever since the current CBA was put into place.”

    But … they’re still making a profit.

    They’re not “losing” money as they want the public to believe, they’re profits are only smaller.


    Welcome to the real world the rest of us live in.

  23. The Union needs one number: NOPAT – Net Operating Profit After Taxes. This should be adjusted for payments made to family members (which would be part of SG&A), but would provide he Union with the amount of cash that’s available for debt repayment and dividends to ownership.

  24. At this point, I think the “nuclear” option will probably get things resolved quicker.

  25. One unreasonable request made by th NFLPA was to show them “investment” assets…after they tell them how much they make, the NFLPA now needs to know how owners are investing their profits in non-NFL areas?? Apparently the players seem to think they are doing an IRS audit…if this falls thru, look no further than the “take take take” mentality of those representing the players…they get info they asked for then they need more…and more…and now they are getting WAY too nosy/personal with the Qs…

  26. @wallyballz:

    The union’s piece comes from revenues, true. But the owners are asking for a $1 billion giveback that would come off the top before the revenues are split up. They are claiming that they need this money for infrastructure to grow the game because they are not making enough profit to do so from their own slice of the pie.

    Therefore, the players do have a vested interest in profitability. If it turns out the owners are making tons of profit, then their cry of poormouth is a lie and they are just making a backdoor money grab that reduces the size of the pie and consequently the union’s percentage of it.

  27. wallyballz,

    duh yourself. Here are the words of the leader of the union:

    ““if profits are trending down over the past five eyars, show me and I’ll change the CBA”

    Seems like profits have a relevance to at least one of you labor nitwits.

  28. The player union and Mr. Smith are making me sick. Since when does ANY business that’s not a publicly traded corporation have to open it’s books and disclose it’s business practices, expenses, profits, etc. to it’s employees???

    Yeah, the drawback is that the players can decertify and file an anti-trust case against the league. If they do, I certainly hope there’s some type of legal loophole that can have the teams be viewed as 32 independent franchises of the parent “NFL company”. And as a franchise, you must follow the rules of the parent company. In a perfect world, those rules would include a hard salary cap that would allow each team to have a hard salary cap, preferably with “monetized slots”…say one $3mil slot for who you deem as your best, franchise player, probably your QB. Three slots at $2.5M, three at 2M, and so forth. Each team can decide which players go where based on how valuable they are to the team. So therefore, if you’re a QB and you want a friggin’ job in the NFL…then you take the money that’s offered, or you leave it to someone who will. Simple as that.

    As a middle-class American that is struggling to pay my bills in a horrendous economy, I find the fact that these players are bitching about huge amounts of money a travesty. They are players. They have a shelf life. Where was it ever written that their playing careers had to fund the rest of their lives??? The owners own the teams, and they should be entitled to make the rules. If the players don’t want to abide…then hey…hop in line for that part-time job next to me.

  29. None of the owners to my knowledge have stated that they are losing money. Some of the union lemmings who post here seem to think that as long as a franchise only makes one dollar in profit, that everything is fine and dandy.

    If the Packers franchise goes from making a 35 million dollar profit in 2006 to a 5.2 million dollar profit there is a problem and more importantly, a serious long term problem for not just the NFL but for it’s players and ultimately its fans.

    Elementary economics it seems is something that the union and its supporters cannot grasp.

  30. ‘full-blown financial statements are too much’

    Why is it too much. If the league is telling the truth, there is nothing to hide. It is because they are lying that they will not show the real numbers. Oldest business scam in the world. No open books, no fair deal. Cheers.

  31. What bugs me is that taxpayers fund NFL stadiums – so why aren’t owners and the NFL obligated to make their financial information public? A majority of the information the union is asking for would be in any 10K for a publicly TRADED firm – that doesn’t even begin to touch the tax dollars or nice little anti-trust benefits the NFL has.

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!

This site uses Akismet to reduce spam. Learn how your comment data is processed.