SBD/Issue 168/Leagues & Governing Bodies

NFL Owners Meetings: Work Stoppage Unlikely After CBA Opt-Out

Upshaw Says Uncapped Season
Could Be End Of Salary Cap In NFL
The NFL owners yesterday unanimously voted to opt out of the league’s CBA with the NFLPA in 2011, but that decision “does not immediately threaten to disrupt the relatively harmonious coexistence between owners and players that has been a major ingredient in the league’s financial success,” according to Mark Maske of the WASHINGTON POST. However, the owners’ decision to “exercise a reopener clause in the agreement does put a possible labor confrontation back on the horizon.” NFLPA Exec Dir Gene Upshaw “reiterated that if the league plays a season without a salary cap, it’s highly unlikely that the players would allow one to return in the future.” Maske notes a year without a salary cap would “give the owners additional mechanisms to limit players’ salaries.” Upshaw said that he is “convinced the players would receive closer to 70[%] of the revenue in an uncapped season in which owners could spend as they saw fit.” He added that if there is “no deal and the players are in jeopardy of being locked out by owners in 2011 … the players would decertify the union in a bid to avert a lockout, a move that potentially would expose the owners to an antitrust lawsuit by the players.” Cowboys Owner Jerry Jones said of opting out of the CBA, “We obviously feel that the spirit of the agreement was for either side to opt out if it’s not working for them. And it’s not working for us” (WASHINGTON POST, 5/21). Patriots Owner Robert Kraft said of the CBA, “It’s gotten a little out of whack. Any long-term relationship always has to be recalibrated to get back in line” (BOSTON GLOBE, 5/21). NFL Network’s Adam Schefter: “The fact that all the owners are in agreement on this particular matter tells you a lot” (“NFL Total Access,” NFL Network, 5/20).

Rooney Says Revenue Sharing
Must Be Addressed In New CBA
OTHER REASONS: Owners said that they “want to negotiate a rookie wage scale” and to be able to “recoup bonus money from players who are unable to perform under their contracts.” But Upshaw said that the union “would not support either idea.” Steelers Chair Dan Rooney said that revenue sharing also “will have to be addressed again in a new deal, although [NFL Commissioner Roger] Goodell indicated he did not think revenue sharing was a primary issue” (N.Y. TIMES, 5/21). But ESPN's Chris Mortensen said, "When you hear this other stuff about not being able to recoup bonuses ... or rookie wage scales, those are a distraction. I think it’s a publicity gimmick just to distract fans and get the fans on the owners’ side because that’s not the core issue. The core issue is cost-overruns and how do they get the players to work with them on those cost-overruns” (“NFL Live,” ESPN, 5/20).

PREEMPTIVE MOVE: In Green Bay, Pete Dougherty writes the NFL announced the vote to opt out of the CBA as “unanimous, though it’s unlikely every team voted against ratification initially.” There “presumably was a re-vote once the decision was made so they’d have the strength of unanimity” (GREEN BAY PRESS-GAZETTE, 5/21). Labor experts said that the NFL is “taking the unique step of acting before problems become too severe.” Columbia Law School lecturer Robert Kheel: “I have no doubt there’s a proactive aspect to this. Teams may be making money, but if you put your money in a savings account, you might make 4 or 5[%]. The question is whether the return is economically rational” (WASHINGTON TIMES, 5/21). SI.com’s Peter King wrote the owners deciding to opt out of the CBA is “one of the best things that could happen to the process. That isn’t to say that this won’t be a long and arduous fight.” But “timing was a key element here” (SI.com, 5/20). Broncos Owner Pat Bowlen said of opting out of the CBA, “Really, there was no reason not to do it now. We might as well get that part of it out of the way, so we can hopefully get into some serious negotiations and get a deal” (N.Y. TIMES, 5/21).

LOOKING TO 2010: In N.Y., Judy Battista writes, “While rhetoric is sure to fly … the two sides will almost certainly not get serious for another two years” (N.Y. TIMES, 5/21). SI.com’s King wrote there is “no question that the key point, the deadline point that really means something, now comes in March 2010” (SI.com, 5/20). Upshaw: “The point of no return will be the beginning of the league year in 2010; that will push us into an uncapped year. That’s what we see as a realistic deadline” (BOSTON GLOBE, 5/21). In S.F., Nancy Gay writes, "March 2010. That is the new deadline. And when you get past the tough talk, no one, neither owners nor players, wants to envision the NFL in labor disarray beyond that date” (S.F. CHRONICLE, 5/21). Bowlen: “We obviously have three more seasons to play. So I’m sure we’ll be spending lots of time with the NFLPA” (USA TODAY, 5/21).

RAMIFICATIONS OF CAPLESS SEASON: In L.A., Sam Farmer writes assuming no CBA deal gets done, there will be no salary cap for the 2010 season, but “it won’t necessarily be the wild, wild West when it comes to teams signing players.” There are “several rules in place that would limit the ability of notoriously free-spending teams … to snap up the best players.” There would be “additional restrictions on the top eight playoff teams from the previous season," as those clubs would be able "to add free agents only at the rate they lost them” (L.A. TIMES, 5/21). SI.com’s King: “Let’s say the Patriots are one of the top eight and want to sign a free-agent to a five-year, $20[M] contract. They’d have to lose their own player or players to contracts totaling $20[M] before they could sign the free agent they want” (SI.com, 5/20). In N.Y., Gary Myers notes in an uncapped year, there also “would not be a minimum each team would be required to spend” (N.Y. DAILY NEWS, 5/21). The WALL STREET JOURNAL’s Matthew Futterman writes the “likely outcome might be that a few star players reap a windfall, and although the free-agent pool won’t be that big, benchmarks could change and lead to higher salaries later” (WALL STREET JOURNAL, 5/21).

Cowboys Sign Barber To Six-
Year, $45M Contract Extension
TEAMS ALREADY ACTING: In Dallas, Archer & Breer report the Cowboys yesterday signed CB Terence Newman to a six-year, $50.2M extension and RB Marion Barber to a seven-year, $45M extension. While the NFL and NFLPA will “have labor peace at least through 2010, the uncertainty of what might happen beyond that led to a flurry of action.” The Cowboys “wanted to get the deals done before the end of business [yesterday] because of future changes to the salary cap” (DALLAS MORNING NEWS, 5/21). Meanwhile, the AP’s Charles Odum reported the Falcons yesterday signed first-round draft pick QB Matt Ryan to a six-year, $72M deal. Ryan’s agent, Tom Condon, and the Falcons “already had agreed on six years as the basis for their deal, and to make that happen they needed to complete the negotiations by Tuesday.” Falcons Owner Arthur Blank said the team "couldn’t have gotten a six-year contract if [it] didn’t get this deal done" before 4:00pm ET yesterday (AP, 5/20).

PLANNING AHEAD: PROFOOTBALLTALK.com’s Mike Florio wrote moving forward, NFL front offices “will have to come up with contracts that comply with the 2008 cap rules, the rules of the last capped year in 2009, and the realities of the uncapped year.” They also will have to “account for the presently unknown terms of an extension, if an extension is eventually reached” (PROFOOTBALLTALK.com, 5/20). ESPN's Mortensen: "Even new contracts that are going to be negotiated going forward, those first three years are going to be more important than ever because obviously, we don’t know what the future holds after 2010" ("NFL Live," ESPN, 5/20). 

IMPACT ON SMALL MARKET TEAMS: In Milwaukee, Greg Bedard writes the NFL’s “much-celebrated parity … could be on a death march.” Packers President & CEO Mark Murphy: “I think a salary cap is good for the game, it’s good for the owners and I’m hopeful that we don’t get to that point (without a cap) and that we can reach an agreement before then” (MILWAUKEE JOURNAL SENTINEL, 5/21). Redskins TE Chris Cooley on his blog wrote small-market owners “are about to opt out of an agreement that would help their teams in the future. How much of a fighting change do small-market teams have in 2011 of getting either top-ranked college prospects with no draft, or legitimate free agents with no money?” (SPORTS.YAHOO.com, 5/20). Washington Post reporter Les Carpenter said an uncapped year "could mean chaos for small-market teams if someone like [Redskins Owner] Dan Snyder has a checkbook that he could just write and write and write and write checks with no limits” ("Washington Post Live," CSN, 5/20).

Goodell Raises Possibility Of Adding
Another Game To Regular-Season Schedule
ADDING A GAME: Goodell “raised the possibility of having a 17th regular-season game as an option to help settle some of the league’s future labor problems.” Goodell: “We think that may have an impact on some of the things we would want to talk to the players about. It’s on the table.” ESPN.com's John Clayton reported a 17th regular-season game would replace the fourth preseason game, meaning “more revenue could be created to help” in CBA negotiations. However, Upshaw “didn’t seem thrilled with the possibility.” Upshaw: “Any discussion we’ve had with them about playing another game, they’ve always said, they would like to do it, but they don’t want to pay for it. … We’re not going to agree to play an extra game and not get paid for it” (ESPN.com, 5/20). YAHOO SPORTS’ Jason Cole noted a 17th game would “increase the potential for television revenue because the league would have more games to sell” (SPORTS.YAHOO.com, 5/20).

BUILDING BOOM: In San Diego, Tim Sullivan writes with their football revenues increasing “rapidly and their stadium deals increasingly augmented by real estate development, the owners occupy an enviable bargaining position." They “should be able to offer the players significant raises while at the same time gradually slicing their piece of the overall pie” (SAN DIEGO UNION-TRIBUNE, 5/21). However, Chiefs Chair Clark Hunt said, “The cost of building or renovating stadiums has absolutely skyrocketed in the last five years, almost doubled in fact. That has put a lot of stress on teams that have stadium projects. The current labor agreement does not reflect the private cost of stadiums borne by the teams” (K.C. STAR, 5/21).

BARGAINING POSITION: In Philadelphia, Rich Hofmann writes, “The owners cannot lose here unless they get piggish.” The situation is “stacked in the owners’ favor as long as the players continue to have such short careers and high injury risks” (PHILADELPHIA DAILY NEWS, 5/21). In Chicago, Dan Pompei writes players “are not going to be happy when they probably are going to have to give back a portion of their piece of the pie. Some of the less rational ones could point the finger at Upshaw, who did so well last time that this time he can only look bad by comparison” (CHICAGO TRIBUNE, 5/21). However, Upshaw said, “Don’t worry. It’ll get done” (SI.com, 5/20). Steelers coach Mike Tomlin: "From my perspective, it seems like they're just probably bringing it to a head. I don't think anybody wants a work stoppage -- owners and players” (Pittsburgh TRIBUNE-REVIEW, 5/21).

TOO MUCH TO LOSE: CBSSPORTS.com’s Pete Prisco wrote, “In the end, smart minds will come to an agreement. … There’s simply too much to lose. This will pass” (CBSSPORTS.com, 5/21). In Richmond, Paul Woody writes, “Stadiums are full and television ratings are high. Revenue flows from corporate sponsorships, NFL property sales and online opportunities. To risk tarnishing all that with an ugly labor dispute is shortsighted and greedy” (RICHMOND TIMES-DISPATCH, 5/21).

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