The NFLPA Refrain: Open The Books

DeMaurice Smith takes to the media again (USA Today this time) with a plea for the NFL to make its first proposal and to justify its claims that NFL teams are losing money:

“The time was ripe two months ago,” Smith said of the minimal progress on CBA talks during an hour-long interview at union headquarters. “We’re still waiting for the first proposal from the NFL.”

…

“It takes two people to negotiate. I’m hoping they will respect the process and begin negotiating. I’m willing and able to meet anytime.”

Smith, who has spent extensive time visiting players across the league since taking office . . . said he is seeking to understand why league owners opted out of the CBA. He points to the $8 billion in league revenue last year and contentions that no NFL teams are losing money as reasons the deal works. When owners opted out, several cited rising costs as an overriding factor, including capital for new stadiums

“Saying that stadium costs means that we need to change the CBA ignores the fact that the players have been a part of the stadium growth over the last decade,” Smith said.

“And if there is an economic reason to change the CBA, why not turn over the audited financial statements and we’ll find out if the owners are hurting?”

…

“The league is making a determination of how much information I need,” said Smith, who had lunch with Goodell last week. “Philosophically, that starts off in a bizarre place.”

…

“If the information the league provides is so detailed and complete, how much did all of the teams make in profit last year?” Smith said. “Is it a question of whether the players need to give back? Or is it that the owners need to make more money?

“Which is it?”

Filed under: DeMaurice Smith, NFL revenue, Roger Goodell, stadium financing

Jerry Jones: Revenue Sharing Sux

One of the biggest issues consuming the end of the last 2006 CBA negotiations wasn’t necessarily between the players and the owners, but between the owners themselves: revenue sharing.  You may recall that the two owners to vote against the last deal were two small market teams (Jack Wilson of the Buffalo Bills and Mike Brown of the Cincinnati Bengals) who wanted more of the revenue from new stadiums and local marketing deals.

Well, the issue is rearing its head thanks to Jerry Jones:

“Right now, we are subsidizing this market,” Jones said, according to Sean Jensen of the St. Paul Pioneer Press.  “It’s unthinkable to think that you’ve got the market you got here — 3 ½ million people — and have teams like Kansas City and Green Bay subsidizing the market.  That will stop.

“That’s going to stop.  That’s on its way out.”

This is a major issue that we’re going to explore and explain a lot over the next several months/years.

Filed under: NFL revenue, revenue sharing, Buffalo Bills, Cincinnati Bengals, Jack Wilson, Jerry Jones, Mike Brown, ProFootballTalk

The Forbes List

Last week, Forbes came out with their annual list of NFL Team valuations.  I’m sure you’ve seen them, and we have discussed them before, but here are they are.  Yeah, tough time to be an NFL owner.

Filed under: NFL revenue, Forbes

NFL ALSO Flush with Cash for Fight

It’s not only the NFLPA who’s saving up.  We’ve only mentioned it briefly before, but Michael Silver over at Yahoo Sports notes that the renegotiated television deals with FOX, CBS, and NBC, will keep the league floating (on golden clouds) throughout any labor lockout or strike.

In negotiating two-year extensions with FOX, CBS and NBC through the 2013 season – and with NFL Sunday Ticket provider DirecTV through 2014 – [Bob] Kraft and [Roger] Goodell successfully manipulated the deals to give the league a serious edge in its impending labor fight with the NFLPA.

According to terms of the extensions, if there’s no new collective bargaining agreement after the 2010 season and the owners, as expected, lock out the players, the lucrative weekly checks from the networks that are the league’s lifeblood will still keep streaming in as scheduled throughout what would have been the 2011 campaign.

This wouldn’t be money for nothing; for each week without football, the networks would receive a credit toward a free week in a future season. But the ability to sustain a large share of their usual cash flow will be an enormous benefit for the owners as they try to get the players – who’ll presumably have a much lower percentage of their normal income flowing in – to blink first in the standoff.

Filed under: NFL revenue, Roger Goodell

Time for New Stadium Talk?

We saw a few weeks ago that one of the big financial “changes” that took place since the last CBA expansion was the financing of new stadiums, specifically in New Jersey and Dallas.  Now, the commissioner has come out in support of building new stadiums in San Diego and Minneapolis.   The rationale for building a new stadium is it helps the team become more competitive due to increased revenues, right?  But how do you square that with the league’s cries of poverty due to all that money they need to shell out to build a new stadium?

Who’s got the answer?

Filed under: NFL revenue, stadium financing

Goodell’s National Media Meeting

The league office convened several national NFL reporters yesterday to discuss the state of the CBA negotiations, as well as issues as varied as Vick’s suspension and the Cowboy’s goofy video boards.  The big news was the commissioner’s statements that there will likely be no CBA in place before the salary cap disappears in 2010.  The Associated Press breaks it down:

”I told De, ‘Let’s start negotiating,”’ Goodell said, ”and that’s our intent.”

But there is no timetable for beginning significant talks, and the union says the onus is on the owners to present an offer.

According to league figures, the players have received about 75 percent of revenues since 2006, while the other 25 percent has gone to costs, plus another 6 percent over that which owners have absorbed because of rising costs.

The union disputes those numbers.

”The CBA explicitly restricts player costs to just under 60 percent,” NFLPA spokesman George Atallah told The Associated Press. ”That is fixed. They’d have to provide relevant information to support that wild claim, because we certainly don’t have it.”

So, the questions coming out of this:

1. Was it the owners’ intent to get rid of the salary cap figure in the first place?  They have made no proposal for a new agreement since opting out.  This seems to me to be a media offensive to shift the blame, a poor offensive though the “national media” at the event ate it up.
2. What does the union have in terms of numbers?  Has the league acknowledged the Forbes numbers?  The 75% number was put forward by NFL general counsel Jeff Pash — is there supporting documentation?
3. This negotiation is clearly going to take place in the media.  I think it is the responsibility of the media to ascertain whether these numbers are right.   It is not enough for any of them to swallow either the NFL’s or the NFLPA’s claims outright.  If there aren’t public facts to back it up, demand it.  Did any of the “national media” ask for background facts besides Goodell’s word?  We’ll do our best to get what we can.

George Atallah, the NFLPA’s external affairs guy, shares that the union will respond:

Mr. Goodell and Mr. Pash hosted a group of reporters. Interesting to see what they shared. We will respond.

Filed under: DeMaurice Smith, NFL revenue, salary cap, George Atallah, Jeff Pash

NFLPA Lockout Summit

DeMaurice Smith and the NFLPA have seen the writing on the wall and are digging in already.  From the NFLPA website yesterday:

NFL Players Association Executive Director DeMaurice Smith met Wednesday with a group of economists, lawyers and business advisors at NFLPA headquarters to discuss strategies for countering a potential lockout by the NFL owners.

Since March 2009, there have been only two formal negotiating sessions. Smith and NFL Commissioner Roger Goodell briefly met over lunch Tuesday in Washington, D.C. after the Commissioner paid a visit to Redskins Park in Ashburn, Va.

According to the Washington Post’s coverage of Tuesday’s visit, Goodell said, “We’re communicating, we’re trying to get information to the union leadership, make sure they understand the challenges we’re facing as a system and as a business. And make sure they understand that so we can design a system that addresses the issues for the players, the coaches and the game.”

When Goodell’s comment in Wednesday’s newspaper was raised during the morning’s strategy meeting, Smith reminded NFLPLAYERS.COM that numerous written and public requests have been made for precisely that information, including profit and loss figures, details of television contracts and, above all, a formal proposal to negotiate a new Collective Bargaining Agreement.

“If they need to use our copy machines or printers to get us this information,” Smith said, “the door to our office is always open.”

It’s on.

Filed under: NFL revenue, NFLPA, Roger Goodell, DeMaurice Smith

Pash: 75% of New Revenue Goes to Players

The National Post (Canada) reports on the CBA, quoting Jeff Pash, NFL general counsel, and Roger Goodell:

The owners claim revenues are not growing fast enough to keep up with the payments they make to the players. Jeff Pash, the league’s chief counsel, says 75 percent of new revenues have gone to the players since a new CBA was reached in 2006, and the owners opted out of that agreement last year.

Meanwhile, the players say the system isn’t broken because the 32 teams aren’t losing money – 19 of them are worth at least US$1-billion, according to Forbes magazine’s annual survey, and the estimated annual revenues approach $8-billion.

“When the issue is dollars, economics, and one side is saying economics are not good, it’s up to them to give evidence that those economics have changed and there is reason for concern,” says NFLPA general counsel Richard Berthelsen. “But that has not happened.”

Berthelesen also addresses the point that Florio made in our last post: what will happen to the players in an uncapped system?

“If a team wants to win, there would be no limit on spending dollars to bring in players to get to the Super Bowl, and we all think we know who those teams are,” Berthelsen says. “If an owner is not interested in competing, he can go on the cheap. But I think that would be the exception rather than the rule.

“If past is prologue, the players’ piece of the pie would get larger, which is what happened in 1993.”

Filed under: NFL revenue, NFLPA, salary cap, Jeff Pash, Richard Berthelsen

Goodell’s Gag Order (Unless It’s Positive for the League)

Last week, the Sporting News had an article about the CBA negotiations, quoting lead negotiator, Pat Bowlen, as saying he was optimistic a deal could be reached by March 2010.  He thought the talks would pick up once the season started.  But, the Sporting News also spoke with two other NFL officials whose outlooks were not so rosy:

[T]wo senior NFL sources at the meeting said the league found it difficult to engage with the union during the two negotiating sessions that occurred this summer because representatives on the players’ side, in response to what these sources said were issues presented by the league, kept responding that they did not understand why the owners disliked the deal.

The sources, citing commissioner Roger Goodell’s gag order against discussing the CBA, declined to be identified, but both disagreed with Bowlen’s sentiment that a deal could be struck by March.

The article details the other big issue that has been raised publicly: the secrecy of the league’s finances.

Smith has insisted the league open its books before the union can truly judge the financial health of the teams. Goodell by contrast has said all revenue information already is shared with the union and the historical practice of not opening the books has served the sport well . . . .  [Depsite the league's complaints that the teams' profit margins are shrinking, Smith] points to healthy operating results reported by the Green Bay Packers, the only team that publicly discloses its financials, as evidence that the NFL is far from financial distress.

Not that the NFLPA hasn’t been represented by lawyers before in these negotiations, but it strikes me that the new NFLPA executive director is not a former player, but fully-fledged lawyer who won’t just sit down and discuss whatever issues the NFL thinks are important. He wants the league to put its proposal on the table and work down to details from a framework.  Interesting.

Filed under: NFL revenue, NFLPA, Roger Goodell, DeMaurice Smith, gag order, Green Bay Packers, Pat Bowlen, The Sporting News

Learning about the NFL Management Council

If you’ve been reading along or have read the About page, you know that I’m writing this blog because I’m trying to education educate myself about the collective bargaining process in the NFL.  Well, I’m learning.  Earlier, I posted an entry about whether the NFL should be required to fully open its books for the NFLPA to review.  I tried to distinguish the Silverman v. MLB PRC case, noting that the court found the PRC (MLB’s “Player Relation Committee”) was the negotiating party to the agreement, not the MLB commissioner.

Quick recap: The MLB union had argued that the commissioner had publicly discussed the league’s supposedly poor finances as a rationale for its position in the CBA, which meant that the union should be able to look at the league’s books.  The court, however, held that the Player Relation Committee was the party with whom the union was negotiating, NOT the commissioner.  Because that committee (supposedly) hadn’t invoked the issue of the league’s poor finances, the league was not required to open its books.

SO. That’s a long way of saying that my initial dismissal of this argument isn’t exactly right.  The NFL is represented in the labor negotiations by its own committee, the National Football League Management Council (NFLMC).  The latest information (found at the SportsBusinessJournal) shows that the following team owners and presidents sit on the NFLMC:

• Pat Bowlen (co-chair), owner, Denver Broncos
• Jerry Richardson (co-chair), owner, Carolina Panthers
• Mike Brown, owner, Cincinnati Bengals
• Bill Ford, Jr., owner, Detroit Lions
• Clark Hunt, owner, KC Chiefs
• Jerry Jones, owner, Dallas Cowboys
• Robert Kraft, owner, New England Patriots
• John Mara, owner, New York Giants
• Mark Murphy, president, Green Bay Packers
• Art Rooney II, president, Pittsburgh Steelers

Look for comments from these folks about finances.  We already have Mark Murphy talking about how salaries are rising faster than revenues.  But you’ll notice that Kraft and Bowlen have spoken in very general terms about finances or the process.  We’ll follow these folks, but let us know if you see any interesting comments.

Needless to say, I would have realized this if I went ahead and read the CBA, which states that the NFLMC is “recognized as the sole and exclusive bargaining representative of present and future employer member Clubs of the National Football League . . . .”  Oh well.  I’m digging into the CBA and will be posting about the various provisions.

Also, we’ve added these folks to the RadRev Cast of Characters.

Filed under: labor law, NFL revenue, NFLMC, Art Rooney, Bill Ford, Clark Hunt, Jerry Jones, Jerry Richardson, John Mara, Mark Murphy, Mike Brown, MLB, Pat Bowlen, Robert Kraft, Sports Business Journal