[DeMaurice Smith, executive director of the NFLPA, joined ProFootballTalk Live on Monday for an extended interview regarding the current labor dispute. Part one of the transcript of the interview appears below.]
MF (after clip from March 14, 2011 PFT Live): That was NFL general counsel Jeff Pash one week ago on ProFootballTalk Live and I talked to him right out of the gates about the dropping of his salary down to one dollar. What that means from the standpoint of his benefits, whether it’s a PR move. And I thought it would be appropriate to play that sound because now we’re joined by NFLPA executive director DeMaurice Smith and he underwent a similar reduction in his salary – actually hr saw Jeff Pash and raised him a dollar, or dropped him a dollar as the case may be, and went all the way down to zero and we’re going to hit that topic right out of the gates with DeMaurice Smith who joins us now, De thank you very much for your time how are you?
DS: Hey Mike how are you, doing well.
MF: I’m doing great and, tell me first of all, dropping down to zero dollars — does that cause you to be ineligible for benefits or do you still get your benefits package with the NFLPA?
DS: I’ll figure out some way to pay for my benefits – but, Mike, come on, I mean, isn’t the real issue here that you have about 1,900 players and their wives, and their families who have no benefits and no salary. So, with all due respect to Jeff, I mean, I know I heard a little bit of the clip about selling antiques. Isn’t the real issue that 1,900 players have lost their benefits, 1,900 hundred players and their families have lost their healthcare, which is fine, but the reality of it is that’s what the NFL chose, so, I think the real discussion is less about how much Jess Pash is making or how much Roger Goodell was making, or how much De Smith is making. The real issue is we want to play football, we’ve filed an injunction to try to get football back in homes again and get our guys back working and get our guys back playing the game that they love.
MF: Well De, I’ll agree with you that that is the real issue and that leads to my next question, why did you then drop your salary down to zero if that’s really not the issue? Was it a P.R. move? Or, or is there some plan for that money that the NFLPA’s going to save?
DS: Well, there’s always plans for how we’re going to take care of our guys. And that’s going to be something that I’ll make a decision about, but the real gravamen of the issue is where we started. Our players and their families have lost their salaries and lost their benefits and I think it was important for me to show and demonstrate with them that while they’re out of work and they’re not getting a salary that I’ll stand with them and I’m proud to stand with them and their families every day of the week.
MF: Well, you and I share one very important objective right now and that is to end this lockout as soon as possible. I’d like to see it happen through negotiations — not necessarily at the bargaining table because that implies collective bargaining, I don’t care how it happens, I would just like to see negotiations occur, can you give us an update on where this stands, because it seems like there’s some tiptoeing going around on both sides, nobody really wants to make the first move. Where does it stand right now for any negotiations between now and April 6th?
DS: Well, there’s really no tiptoeing, and you know me, just cut through the noise, cut through the games, the reality of it is about 30 seconds ago, maybe five minutes ago, we sent a letter to the National Football League reminding them of something that they know better than anybody else: that discussions on the settlement can occur any time at their convenience, that they can occur between representatives of the class and representatives of the National Football League, so I made sure that just in case the National Football League forgot or Jeff Pash forgot that he was a lawyer for the National Football League in 1993 during the Reggie White settlement, we sent a letter out to him just to remind him that those settlement discussions, or in your words negotiations, can occur at just about anytime.
MF: And De, when you say “we,” who is it that actually signed off on the letter?
DS: I’m sure it came from probably Jim Quinn and Jeff Kessler who are outside lawyers who are counsel for the class, of which obviously I am one as well.
MF: And that was going to be something I planned to ask you later on: Are you going to be a member of the class counsel? Are you someone who can wear two hats and negotiate as a member of class counsel while still being the NFLPA executive director?
DS: Well, obviously you know what my background is and I don’t nearly practice as much law as I used to before I took this job but, look, it’s my job to give guidance and direction and advice as well as getting that advice from the Executive Committee that is an official advisor to the class and the Players Association is also an official advisor to the class so, the advice that I give sometimes falls into the category of legal issues, sometimes it falls into the category of business and regular settlement negotiations, but my job is to get our players back on the field as quickly as possible, serve their interests, and do our best to make sure that our fans enjoy the game that they love.
MF: So, De, to the extent there was a report last week that there’s no chance of any settlement discussions before the hearing to lift the lockout on April 6th, that report’s incorrect, the NFLPA, the players, want to negotiate between now and April 6th, is that what you’re saying?
DS: Yeah, I’m not familiar with the report or who said it certainly didn’t come from us. Like I said, a letter went out to them because I wanted to make sure they weren’t under any sort of misimpression and certainly wanted to make sure they hadn’t forgot what role they served in 1993 when the same guy that, you know, was talking about selling antiques, was the lawyer who represented the National Football League in the Reggie White settlement.
MF: Why has Jeff Pash become such a lightning rod for criticism and controversy? Mike Vrabel from your organization’s Executive Committee said Friday that the players would like to negotiate without Roger Goodell or Jeff Pash or Bob Batterman president, why has Pash become such a focal point? And also, why is there a desire not to negotiate with Roger Goodell or Bob Batterman?
DS: You know what, you see, look: you see players, a guy like Mike Vrabel who is as passionate about the game that he loves as they come. My guess is if you and I sat down and were having a beer, and coming up with a list of guys who play at the level of passion over the last 10 years, Mike Vrabel might be number one and number two. So, what I think is important is this: obviously the two years of negotiation has been intense, it’s drawn a certain level of personal antagonistic thought, comments. I think that the most important way that we can move forward is to sit down as businessmen, approach this with respect to what’s out there, deal with the loss that is pending and if both sides want to sit down and have civil, informative and mutual conversations where we exchange relevant information, isn’t that the way to make sure football is going to be played? Isn’t that a way to make sure that the owner’s interests are served? And isn’t it a way to make sure that the players’ and fan’s interests are served?
MF: It’s absolutely the way to make it happen and it’s a refreshing to hear that. In the past 10 days, there really hasn’t been a clear indication that it can happen. But I guess one thing we’ve established here early on, if the owners are willing, the players are willing, and the players through class counsel have let the NFL know, if you want to do this, here’s how we need to proceed.
DS: Sure. And let’s not also forget that everybody’s been focusing on the mediation and what’s been going on in the past 15 days or 20 days, but if you remember, the letter that we sent out was accompanied by a copy of a letter that I sent to the National Football League that I believe is dated May of 2009. And that was before the first negotiation session. So the two takeaways from that obviously are that it’s been a two-year process of trying to get this deal done and it was a request by the players that said that since you opted out of the deal, it does seem that you bear a financial obligation to justify why the deal was bad. And that was the negotiations and that was the discussions we had in the past. Where we are right now is to have settlement discussions, but I do believe that the mutuality that you talked about revolves around business people sitting down with the right information and making the right decisions about what’s good for the fans, what’s good for the owners, and what’s good for the players.
MF: You’ve mentioned the letter that you sent in May 2009 detailing the financial information that you want to receive, 10 years of audited financial statements. That’s something that was echoed recently by yourself on March 11, right before the 5:00 p.m. Eastern deadline for the union to move forward with the plan that was ultimately implemented. Was there any point between May of 2009 and March of 2011 where you or others within the union led the NFL to possibly believe that the players would accept something less than 10 years of audited financial statements in order to justify the give-backs that the NFL has been asking for?
DS: Absolutely not. I mean, the rollbacks would be monumental, unprecedented and entirely inconsistent with every other economic factor we know about the business of football. If there is some other financial information that would do that, I’d love to see it. But the simple fact was at every turn the National Football League remained consistent in rolling the clock back in a dramatic way. You know, I did read the post that you put out a few days ago that analyzed the request, or I guess comment, that we split the difference and somehow it was an argument from the National Football League that we were only a few dollars apart. Well, your analysis and our analysis in the room demonstrated that that would be a historic and unprecedented rollback and in my view it’d be the worst deal in the history of sports.
So, you know, when business people sit down, and I don’t care whether it’s a merger, whether it’s a takeover, whether it’s a joint venture between parties, I’ve never been in a business deal where the basic most rudimentary level of exchange of financial information didn’t start with basic financial documents. And that what we started asking for in May of 2009 and as you know that’s where we ended up on March 11th of 2011.
MF: De, help us understand exactly what the NFL offered that week before March 11, because there have been mixed signals whether it was basic information, whether it was five years of audited financials. What was it that the NFL specifically offered for the players to look at during that final week of mediation?
DS: Well, let’s first then get one thing absolutely clear. It was not five years of audited financial information, so I don’t know who said that or who alluded to that, but not even the National Football League would say that they were going to turn over five years of audited financial statements. That is just simply blatantly not true. What the National Football League offered to turn over to us was two numbers.
The first number was an added-up number of what they claimed to be the profits of teams over a four- or five-year period. So it wasn’t the cost, it wasn’t where the money went. It wasn’t even an identifier of how much each team made. They would simply, in private, write the profit numbers from the team in one column, add it add up, and give us a number for four years, if that makes sense. So there would be one number for ’06, ’07, ’08, and ’09. The second number that they offered to give us was to simply write down on a sheet of paper how many teams experienced a decline in profit form the previous year. So, for example, and this was an example I gave to the National Football League owners while we were sitting with them, if hypothetically a team made $150 million in ’06, and in ’07, made $149 million, the League would write a number “one” on a sheet of paper and say, “one team showed a decline.” So I ask you, would you make a multibillion dollar investment based on those two numbers written on a sheet of paper?
MF: Probably not. And that’s one of the areas on which we agree. That’s one of the areas on which we agree, and I get it and I understand it and I pressed [Packers president and CEO] Mark Murphy last week on this, De. The idea that Gene Upshaw never needed financials. Well, Gene Upshaw was never faced with having to give anything back, Gene Upshaw was always pushing for more. This is the first time the owners have said “we think that basically we’re not making enough money” or “you’re making too much money”, whatever the case may be, so I understand it.
I’ve just been trying to figure out if there’s some middle ground out there. Do you know of any middle ground between 10 years of audited financial statements and whatever the owners offered that maybe could get this issue resolved and let the process move toward figuring out how to divvy up the revenue?
DS: Well, you know, I think that what you come away with, given where we know we are, isn’t the real issue – what is the financial justification or what you and I agree would be a multibillion dollar giveback by players to owners at a time when every other economic indicator is that the league is at an all-time high. So, if you remember back to when the league opted out of the contract in ’08, it was then executive director Gene Upshaw, who right then and there made the public request and the specific request to the National Football League for the audited financial statements. So, every now and then I’d like to say that I come up with a good idea, every now and then, but in reality, Gene asked for that the day that the National Football League opted out of their contract.
And it still seems to me that that is the most basic and fundamental information that you would want. The deal that they put down for us would on the day that we signed the deal, drop players to making approximately 45% of all revenue, which would be a fundamental change in the shares of revenue since approximately 1987. If the deal continued just in the first four years, you could be down to 40% of all revenue. And my simple question is, let’s just say hypothetically that the league makes its revenue projections in 2027. Does anybody out there think that a fair deal for the players would be their share of all revenue to fall to less than 25%? I don’t think that’s a fair deal. But I also believe that if someone wants to argue that it is a fair deal, than the least that you would ask for them in exchange for considering the deal, is providing the right financial documents to justify it. And that’s what it comes down to.
MF: And that really I think is the core point. We wrote something about this yesterday, I think the question becomes how much money does the NFL want to give to the players? As the pie keeps growing and growing and growing, I believe that the owners look at this and say 50% is too much. We can’t give them fifty cents of every dollar if we’re going to make $25 billion in revenue come 2027. At what point, De, do we look at the refusal to give the financial justification and just conclude there is no justification, [that] they’re just doing this because they can?
DS: Well, I think that we all know that answer because you’ve seen the documents from early 2009, even before I was elected into this job, where the internal NFL documents talk about gaining the TV network contracts in such a way that it was designed for them to achieve their CBA objectives. And you’ve seen that chart where the first in key consideration for that was to give the National Football League cash in a lockout. Now it would be one thing if that document said, “How do we grow the pie for both players and owners?” Now it would be one thing if that document said, “How do we maximize revenues so that we can take care of our former players and make sure that we have a fair deal?” It would be even good if that document said, “How do we work together with the players to achieve a ‘fair collective bargaining agreement’?”
But you’ve seen that document, all it says in the central part of it is, “How do we maximize things so that we get the TV contracts to give us the leverage to get the CBA that we wanted? And how do we end up in a world where we have cash in a lockout?” And that sounds, a lot more to me, of realizing that there is no financial or was no financial justification for their offer. But nonetheless, putting the players in a situation where they simply have to take what the owners want to give them.
MF: You mentioned growing the pie and we’ve got to grow the pie here. We’ve got to take a break. I’m hoping you can stick with us and come back on the air. I’ve got some more to ask you, is that OK? Can you hang for a couple of minutes?
DS: Happy to.
MF: All right we’ll be right back after the break for the final segment of today’s show. This is ProFootballTalk Live. Stick around.