SBD/Issue 100/Leagues & Governing Bodies

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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