To understand why we now have a lockout with a union that has de-certified, we have to first look at the Collective Bargaining Agreement.
After a long struggle of bickering back and forth, negotiations came together very quickly over a single weekend. Federal Judge Doty put pressure on the league to accept a revised proposal from the union.
The deal was rushed through in a fashion that made the legal (and illegal) back room deals that got Obama Care passed in the Senate look like child’s play. Just like then Speaker Pelosi said of Obama Care, the NFL owners would have to pass the deal to find out what was in it. Just like Obama Care, there were some land mines embedded deep within the agreement.
The biggest one was that the hold back that the league got off the top of the revenue to help defray the expenses of putting on the games was a fixed amount–one billion dollars. As the revenues grew that fixed amount became a smaller and smaller percentage of total revenue. The result was that as revenues grew the players were getting far more than the 59.5% of total revenue that they were designed to receive under the deal.
At the same time, the changes in technology and viewing habits of the fans required the league to develop new outlets for the game. That included the development of the NFL Channel and a much more robust web presence. Those changes cost money. They will eventually be very profitable but like any new venture were operated at a loss at first.
The original CBA was signed with only 2 dissenting votes. Those votes were by two of the least respected owners in the league–The Bengals and the Bills. Everyone else was talked into voting for the deal.
But that deal was signed in a very different financial environment. The economy was booming and state and local governments were ignoring their financial peril cased by unfunded liabilities. Governments could be strong armed to finance all or part of the cost of new stadium construction. At the time there were nearly a dozen teams that needed new facilities. Most of those teams got new digs but were saddled with some very heavy debt. The league was willing to take on the debt because interest rates were low and the revenue was growing.
Now we come to 2006. The league extended the deal for 6 more years but there were more doubts about the percentage of real cash that was going to the players. The original deal was set to expire in 2007 but the league was still willing to extend the deal. This time though the economy was not as stable as it had been when the deal was originally signed. The teams did put in the ability to opt out by May 2008 if they needed to because of changes in their conditions. Again, both the Bills and Bengals voted against the extension.
In May of 2008 the owners voted unanimously to opt out of the CBA. The rest of the league found out that the Bengals and Bills owners were right all along.
In August 2008 long time NFLPA Exec. Dir. Upshaw tragically died. The Hall of Fame former player had a deep love of the game and a level of trust with players and owners alike. The battle to replace him pitted very hard line candidates and DeMaurice Smith who was considered a moderate. In April 2009, Smith won but had to move toward the hard line position to do so.
In the time that followed Smith’s election, his position has continued to evolve toward the hard line position. As a result, the relationship between the union and the league deteriorated. Each side began to miss trust the other more as time went on.
Now everyone is trying to blame the owners or the players. ESPN’s Gene Wojciechowski wrote that he wanted NFL Comm. Goodell to resign because he allowed the lockout. Frankly, that is ridiculous. Goodell’s job is not to bow down to the Union demands. Wojciechowski should do a little more research before jumping into the water. Those that take writing on the Internet seriously know the water is cold and deep if you get it wrong.
The Union believes that the league wanted to get to a lockout all along. The league believes that the union wanted to de-certifiy and get the issue to Judge Doty all along. There is probably some truth in both positions. However, here is what did happen according to my sources.
The union filed the papers necessary to de-certify while their representatives were still pretending to negotiate with the league.
The union wanted financial information on all 31 privately owned teams. Normally, privately owned companies are not required to disclose financial information beyond tax filings with the IRS. The league provided information for several years detailing the profit or loss of each team. This information is not shared between teams. The union then demanded to get 10 years audited profit and loss and balance sheets for each team.
On Friday, the league made a final attempt to reach an agreement before the week extension to the CBA expired. The league issued the following statement:
The union left a very good deal on the table. It included an offer to narrow the player compensation gap that existed in the negotiations by splitting the difference; guarantee reallocation of savings from first-round rookies to veterans and retirees without negatively affecting compensation for rounds 2-7; ensure no compensation reduction for veterans; implement new year-round health and safety rules; retain the current 16-4 season format for at least two years with any subsequent changes subject to the approval of the league and union; and establish a new legacy fund for retired players ($82 million contributed by the owners over the next two years).
I believe that the league made a mistake in locking out the players. Once the union de-certified, the league could have refused to lock out the players. That would have negated the decision of Judge Doty on the issue of putting the TV money in escrow. It would have also blunted the claims of anti-Trust by the players. It could have led to free agency being implemented before the draft. Now the union is even claiming that the draft is a violation of anti-Trust legislation because there is no CBA to permit it. The 2011 draft was permitted by the expired CBA following the uncapped year.
I think we will see NFL football in 2011 but the preseason will be truncated dramatically. That is a shame for all “have not” teams like my Browns.
That’s what I think. Tell me what you think.
Bill Smith is a former coach of several semi-pro teams, has officiated both football and basketball, done color on radio for college football and basketball and has scouted talent. He is a senior writer for and edits https://fryingpansports.com. He has published several novels on
and a non-fiction work at http://www.merriam-press.com/. He edits .
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