SBD/Issue 100/Leagues & Governing Bodies

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  • NFLPA Reiterates Stance League Wants Players To Take 18% Cut

    Smith Not Agreeing To An
    18% Cut To Players' Salaries
    The NFLPA, in a heated rhetoric war with the NFL, laid out its financial case to the media Thursday, saying that the league has asked players to take an 18% pay cut without providing any proof of why such a measure is necessary. The NFL immediately responded with a conference call with a select group of reporters, rebutting the union’s statements. “I guess the reason we’re not closer together in negotiations is I haven’t said yes to an 18% (rollback of players’ salaries),” said NFLPA Exec Dir DeMaurice Smith in his first Super Bowl press conference. He also said that players are receiving about 52% of the NFL’s $8B of revenues --not the 60% commonly reported -- and that $1B was taken off the top of all revenues before determining the salary cap. At one point in the press conference, Smith said that players were already giving the league a $1B gift and that the league wanted another $1B in cost credits on top of that in the ongoing CBA negotiation. The NFL, in an unusual move, held a conference call with Exec VP & General Counsel and chief negotiator Jeff Pash, and about a half dozen reporters, 15 minutes after the NFLPA press conference ended. Usually, the league waits until the commissioner’s address 18 hours later to respond. “The notion, which I believe was said several times during (Smith’s) press conference, that the clubs get a $1B write off -- or at one point it was even called a $1B gift -- suggested there was almost something tawdry about this,” Pash said. The billions of dollars are expenses like stadium costs that are approved as deductions by the union, he said. He also again slammed the door on the union’s request for the league to open its books, saying the union has all the revenue information and most of the cost data. Smith rejects that he has enough information, saying he cannot endorse a cutback of player costs when he does not know if clubs are making or losing money. Pash and the league have argued the current economic system chokes off revenue generation by diverting too much money to the players. The union has rejected that publicly. But privately, Pash told reporters, the union acknowledges the league has shrinking profit margins. 

    HOW LIKELY IS A LOCKOUT? If a new CBA is not reached by March 5, the '10 season will be played without a salary cap. And if no deal is reached by March '11, the owners could lock the players out. NFLPA President Kevin Mawae said the players are expecting that to happen. The question and answer session of the NFLPA press conference Thursday was kicked off by Bengals WR Chad Ochocinco, who asked how serious the threat of a lockout was in '11. Smith responded on a scale of 1 to 10, "I'd call it a 14." Smith also proposed that NFL clubs donate 2% of their profits to a legacy fund to be distributed to retired players. Pash said that the NFL was the first to propose increasing retired players benefits (Daniel Kaplan & Liz Mullen, SportsBusiness Journal).

    DARK CLOUDS AHEAD: The AP’s Tim Reynolds wrote the NFLPA Thursday “painted perhaps the bleakest picture yet regarding prospects of labor strife in the league.” Smith: “I keep coming back to an economic model in America that is unparalleled. And that makes it incredibly difficult to then come to players and say, on average, each of you needs to take a $340,000 pay cut to save the National Football League. Tough Sell” (AP, 2/4). However, Pash, referring to claims players are being asked to take an 18% pay cut, said, “The change is nowhere close to 18%. It’s probably half that. But more important -- our proposal should not result, and we have never said it would result, in players having to take a reduction.” Responding to a comment by Smith that the league is a nonprofit organization under the tax code, Pash said, “It’s a nonprofit organization in the same way that De Smith’s old law firm is a nonprofit organization -- the owners or partners pay taxes on what their earnings are. The partnership doesn’t pay the taxes. He knows this” (N.Y. TIMES, 2/5). Meanwhile, in Pittsburgh, Ed Bouchette notes in an “unusual move, the NFLPA issued a list of prospective restricted free agents Thursday and did so assuming no new collective bargaining agreement [will be] in place, resulting in an uncapped year.” Based on that, “new rules take place, including a measure that extends from four to six years the length of time a player needs to serve before he can become an unrestricted free agent” (PITTSBURGH POST-GAZETTE, 2/5).

    Writer Says Smith "Almost Too Slick"
    SMOOTH TALKER: In San Diego, Kevin Acee writes in “contrast to past NFLPA gatherings, which featured senior citizen leadership behind a table, this was a performance.” Once Smith took the stage Thursday, it “was clear the union had … gotten slicker.” Smith “can talk,” and he is “almost too slick” (SAN DIEGO UNION-TRIBUNE, 2/5). In N.Y., Alan Schwarz writes, “More ebullient and wry than his predecessor, Gene Upshaw, Smith said ‘I dig it’ several times to imply he was on to management’s tactics” (N.Y. TIMES, 2/5). In St. Louis, Jim Thomas writes Thursday’s NFLPA press conference “was as much a position statement by the union as a question-and-answer session.” The union “handed out information sheets to the media that included a listing of what it called ‘the league's’ steps to prepare for a lockout,’ as well as a look at the success of the league” (ST. LOUIS POST-DISPATCH, 2/5).

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  • Goodell Says NFL Owners Are Not Looking To Lock Out Players

    Goodell Says Lockout Not Good For Anybody
    NFL Commissioner Roger Goodell Thursday said that owners are “not aiming to lock out the players” despite implications from NFLPA Exec Dir DeMaurice Smith that the league has been preparing for such a scenario, according to Mark Maske of the WASHINGTON POST. Goodell, on Sirius NFL Radio, said, “You don’t make money by shutting down your business. So the idea that the owners want to lock out and not play football is absolutely not the case. That's just not good for anybody. But when you're going into these negotiations ... both sides are going to be prepared for all the alternatives." Goodell added, “What you have now is the owners’ recognition, when they’ve opted out of this deal almost two years ago, that this deal doesn’t work for them -- it’s clear -- and that an uncapped year is preferable over the current labor agreement.” Smith indicated that the owners’ “measures to prepare for a lockout include negotiating extensions of their television contracts with provisions that the league would receive payments even if games aren’t played.” Smith: “Has any one of the prior deals included $5[B] not to play football? … When you look at every step that has occurred since 2007, is it more of a preparation to play football or a preparation to not play football” (WASHINGTONPOST.com, 2/4). Goodell said, “You could have 50 meetings, but they have to be productive at some point. So it’s not about how many meetings you have, and I think that’s part of the frustration. … The idea here is to get some productive dialogue that leads to an agreement, and that’s what we should all be focusing on” (DETROIT NEWS, 2/5).

    PREPARING FOR A LOCKOUT: Smith, asked during the NFLPA’s annual pre-Super Bowl press conference on Thursday if he “felt the owners bought ‘strike insurance’ with under market priced TV extensions in exchange for guaranteed payments even it there are no games,” said, “It’s not strike insurance. It’s lockout insurance. You can’t interpret the new TV deals as anything but lockout insurance.” Smith added that if next season is an uncapped year, he “believes, as his predecessor Gene Upshaw did, that it will be extremely difficult to convince the players to go back to that system.” NFLPA President Kevin Mawae, who is a free agent this offseason, said that he is “unsure if there will be a free market, hinting the union would be watching for signs of collusion among owners to fix wages that led [MLB] into trouble” (BOSTON HERALD, 2/5).

    Mawae Trying To Educate
    Players On Saving Money
    WHO WILL BLINK FIRST? In Boston, Albert Breer notes, “History shows that in work stoppages in 1974, ’77, ’82 and ’87 the league has been able to break the union as lost paychecks started to affect the players.” And it is “pretty easy to think that the owners will be able to do it again.” Those who “really matter are the rank and file, and there’s a very good chance that’s where this battle will be won or lost.” The career of the average NFLer “lasts about 3½ seasons,” contracts are not guaranteed, and the “median salary is $770,000” (BOSTON GLOBE, 2/5). Mawae said, “We have stepped up our efforts to educate our players on the issue. We can’t make 1,900 players save their money, but we can educate them that they should start saving money” (GLOBE & MAIL, 2/5). In N.Y., Steve Serby reports the union has been “urging players to begin saving 25[%] of their paychecks.” Colts C and player rep Jeff Saturday indicated that he is “optimistic that young players will not cave should Armaggeddon confront them.” Saturday: “We’re not striking. We’re not the ones pulling ourselves out. This’ll be something that the owners don’t let us play, I think that in itself puts us together, it keeps us unified” (N.Y. POST, 2/5).

    BLOODY SUNDAY: YAHOO SPORTS’ Dan Wetzel wrote to miss a single game “would be calamitous.” NFL Sundays “are sacred, dates millions of fans plan around whether it’s to attend a home game, gather with friends in front of a TV or take a pilgrimage to visit a road venue.” With just 16 games, “every one is precious” (SPORTS.YAHOO.com, 2/4).

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  • Michael Whan Forms Advisory Council Of Former Execs, LPGAers

    Whan Has Enlisted Team Of Highly Regarded
    Teachers To Serve As His Advisory Council
    LPGA Commissioner Michael Whan has "enlisted a team of highly regarded teachers to guide his continuing education" and to "serve as his advisory council as he rebuilds the tour," according to Randall Mell of THEGOLFCHANNEL.com. World Golf HOFers Nancy Lopez and Annika Sorenstam, former LPGA Commissioner Charlie Mechem and former JCPenney CEO W.R. Howell are "lending their expertise to the commissioner's cause," and Whan is "actively engaging them with the LPGA season only two weeks away." Lopez said when Whan was hired she "called to let him know I was there for him and the LPGA." Lopez: "He's very personable and approachable, and you need that. You want corporate sponsors welcoming him, not dreading their meetings with him. He's very positive." Whan said that Lopez "may play an integral role in the wooing of a future sponsor, a deal he wouldn't detail but hopes leads to an announcement soon." Meanwhile, Whan described Mechem as a "mentor." Whan: "I told him I'm not sure you want to mentor me, but I'm not leaving you alone." Mell noted Mechem's "connections led to Howell's joining Whan's advisory council." Mechem "introduced Whan to Howell two months ago," and the relationship Whan is "forging with Howell says a lot about Whan's focus as he begins his new job." Meanwhile, Whan's "focus in his first 30 days is rebuilding the LPGA schedule and relationships with title sponsors." Mell wrote the announcement last week that Sybase is "returning and will sponsor the Match Play Championship was good news for a tour that might not be done adding to this year's schedule" (THEGOLFCHANNEL.com, 2/3).

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