SBD/February 4, 2011/Leagues and Governing Bodies

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  • De Smith Says Union Has "Fundamental Disagreements" With NFL Owners

    Smith responds to questions during an "often-combative" Q&A session

    NFLPA Exec Dir DeMaurice Smith Thursday, in an "often-combative question-and-answer session," said that the union "had 'fundamental disagreements' with the league and that a proposal that players should make $1 billion in concessions made no sense while revenues were at record highs," according to Ken Belson of the N.Y. TIMES. Smith: "The business of football is probably the best economic business model in the country because that $9 billion was generated during the worst recession in our lives. At the height of the economic viability and success of the league, you're now asking the players to give back $1 billion for the next seven years. ... There has not been any indication that any team has lost a dime. No one has said that profits are down, no one has said that we are on the verge of losing money, no one has said we are in economic duress." Belson writes Smith's 30-minute news conference was "in stark contrast to the more conciliatory comments on Wednesday" by NFL Exec VP & General Counsel Jeff Pash. Smith several times said that the players "want to reach a deal before" the March 4 deadline to avoid a potential lockout. But he added that he "did not have grand hopes for the meeting on Saturday, the first full-fledged negotiations between the two sides since Thanksgiving" (N.Y. TIMES, 2/4). Smith said that 40 discussions "have taken place with league management" since he took office in '09. NFLPA outside counsel Jeffrey Kessler indicated that the owners to date "have not made a major concession while insisting on a salary rollback that would reduce the players percentage to what it was when former NFLPA executive director Gene Upshaw was seeking '55 percent of the gross' in the mid-1970s" (BOSTON HERALD, 2/4).

    DECERTIFICATION STILL ON THE TABLE
    : In DC, Mark Maske reported Smith "left open the possibility Thursday that the players will decertify the union in a bid to prevent a lockout by the sport's franchise owners beginning next month." Smith: "In the past when our union had to decertify to achieve free agency, that's what it did. When the union decertified, historically it was a decision based upon protecting the interests of players of tomorrow, players of the day and players that played this game. So we will always take the steps that we need to protect our players and protect our interests." Maske noted experts have said that decertification of the union by the players "potentially could lead the owners to abandon plans for a lockout." Should owners proceed with a lockout "under those circumstances, it could be cited in any antitrust litigation by the players." However, it is "not certain ... how the owners would react to decertification." Smith "called the disagreements between the union and the owners over the economics of the sport 'fundamental.'" He said that it "would be 'irresponsible' for the owners to lock out the players with the league financially healthy" (WASHINGTONPOST.com, 2/3).

    FIGHT BREWING OVER FRANCHISE TAGS: In Boston, Greg Bedard reported the NFLPA, "in response to the league's decision to allow teams to use franchise and transition tags starting Feb. 10 for the 2011 season," sent out a memo Thursday "telling all agents that they would file court challenges on behalf of any players who want to challenge the tag." NFLPA General Counsel Richard Berthelsen: "There's no franchise tag without a new CBA, it's as simple as that. We have a lot of things in the agreement that say 'in each year covered by this agreement.' ... But when the agreement ends, those rights don't survive. It's very simple. This isn't rocket science." But NFL Management Council Senior VP/Labor Relations Peter Ruocco said, "The CBA hasn't expired and the CBA has the right to franchise players so we are telling clubs that you have the right to franchise players and then depending on what the new agreement says, that will take into account" (BOSTON.com, 2/3). YAHOO SPORTS' Jason Cole wrote if the union is "successful at gaining unrestricted free agency -- through arbitration or the courts" -- for a player like Colts QB Peyton Manning, that "could send shockwaves through the NFL" (SPORTS.YAHOO.com, 2/3).

    STICKING TO THE MESSAGE: NFLPA President Kevin Mawae said at the end of the union's press conference Thursday, "It's unfortunate that we have a $9 billion business with a bunch of owners that don't understand that it's just about the business for them, and it's not. It's about the fans that come together as a community. … They don't come to watch a shield. They don't come to watch a logo. They come to watch their stars perform so that they can be happy and draw together as a community. That’s what it’s about. All we ask for is financial transparency and justification and let us play." Following Mawae's statement, NFL Network’s Rich Eisen rhetorically asked whether Mawae was inferring that "owners don’t care about the fans.” Eisen: “That’s some of the rhetoric that will probably stick in the craw of the management side for sure. Maybe that was the intent.” National Football Post President Andrew Brandt said, "That was very choreographed. After De goes through his business approach, bring the player up and make the impassioned speech to the fans” (NFL Network, 2/3).

    ALL FOR ONE, ONE FOR ALL: Mawae yesterday responded to comments Jets CB Antonio Cromartie made last month in which he "ripped the union's leadership." Mawae responded by saying, "I don't recall him being at one CBA bargaining session or him on one conference call with the player reps." Mawae added that he is "not worried about players breaking rank with the union and said Cromartie is entitled to his opinion." Mawae: "He might not understand all the issues. I understand everybody can take different points of view, but at the end of the day he's one of us" (Paul Schwartz, N.Y. POST, 2/4). Mawae: "Am I worried that more players will come out like that? Look, I represent 1,900 active players and thousands of former players. I have four brothers, we fight all the time, but at the end of the day, we're still family. With Cromartie, it's the same way" (NEWSDAY, 2/4).

    BRINGING THE HEAT
    : In Chicago, David Haugh writes of Smith's news conference Thursday, "The more the skilled former trial lawyer talked, the more I wondered if Smith wanted to find a compromise position as badly as he wanted to be right. If Smith sought to turn down the heat on the rhetoric with the March 4 expiration of the Collective Bargaining Agreement looming, then he should have left his matches at home" (CHICAGO TRIBUNE, 2/4). In Philadelphia, Paul Domowitch writes, "If you strictly use Pash's and Smith's news conferences as a barometer, you'd walk away wondering whether the two sides will be able to get a new deal done by March 3, 2015, let alone 4 weeks from now." National Football Post's Andrew Brandt "thinks the most optimistic news of this week was the fact Smith and NFL commissioner Roger Goodell met briefly in New York on Monday." Brandt: "Even if they talked about the weather and their kids, it's progress. Because those two have to have a relationship" (PHILADELPHIA DAILY NEWS, 2/4).

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  • Relationship Between Goodell And Smith Could Be Key To Reaching New CBA

    Upshaw (l) and Tagliabue (r) were known for having close relationship

    NFL Commissioner Roger Goodell and NFLPA Exec Dir DeMaurice Smith have "much at stake" during the ongoing CBA negotiations, as they have "never gone down this road together before," according to Clifton Brown of SPORTING NEWS. Smith during the union's press conference Thursday indicated his "relationship with Goodell was good enough to get a deal done." Smith said, "I've got a great relationship with Roger. Without a good relationship between the two of us, this is not going to happen." Brown notes former NFL Commissioner Paul Tagliabue and late NFLPA Exec Dir Gene Upshaw, who negotiated the current CBA in '06, were "often criticized for being too close." Brown: "But at least that relationship helped broker an agreement" (SPORTING NEWS TODAY, 2/4 issue). Packers President & CEO Mark Murphy said, "Gene and Paul had really developed a great relationship and trust with each other. Hopefully De and Roger can have a similar relationship over time. ... It just takes time." In DC, Mark Maske notes "no two people loom larger in the sport right now" than Goodell and Smith (WASHINGTON POST, 2/4). National Football Post President Andrew Brandt said the relationship between Goodell and Smith is the "key" to reaching an agreement, as they are "trying to have some trust" with each other (NFL Network, 2/3). In a USA TODAY cover story, Jarrett Bell notes the "current negotiations are a test of the leadership of the NFL's Goodell and the NFLPA's Smith, both of whom are leading labor talks for the first time." While "many key players remain on both sides, including union attorneys Richard Berthelsen and Jeffrey Kessler, other roles have changed." On the ownership side, the absence of Steelers Chair Emeritus Dan Rooney "adds intrigue to the talks." NFL player agent Tom Condon, a former NFLPA official, said, "For a long time, Dan Rooney was the bell cow." But Cowboys Owner Jerry Jones suggests that history "has run its course." He said, "We're in different times now. We're not dealing with the same dynamics" (USA TODAY, 2/4).

    MILES TO GO BEFORE WE SLEEP
    : YAHOO SPORTS' Jason Cole wrote as the March 4 deadline nears, the sides "seem as far apart as they have ever been in finding ways to resolve the matter." Behind the scenes, the "talk is even more problematic." A union source said, "It seems like every proposal the owners give us is a ‘(expletive) you’ offer, like they don’t want to settle. They want us to take whatever they want to give. If that’s how they want to handle it, maybe we should just let the courts handle it." One league source admitted, "We’re not in a concessionary mode." Sources indicated that the NFLPA "gave the league a proposal that would allow for 18 games, but limit the offseason program to approximately five weeks so that players would get a chance to rest." The league "countered with a complicated system that featured offseason participation based on playing time during the regular season." When the union "ran the numbers on the league’s proposal, the union concluded that players would actually have to do more offseason work than they currently do." Cole wrote, "The bickering is so reminiscent of squabbling divorcees. It makes you wonder if the solution is going to be the equivalent of sawing two cars in half, rendering each useless" (SPORTS.YAHOO.com, 2/3). In New Jersey, Tara Sullivan writes both sides "are entrenched and stubborn and remain so far apart." Neither side is "backing down and neither side is pulling up to a productive negotiating table." Sullivan: "While they hurl insults across the cavern, the fans are the ones getting hit. No one is smiling now" (Bergen RECORD, 2/4).

    UNION NOT FACING URGENCY: SI.com's Don Banks wrote the NFLPA does not seem to have the "same perception when it comes to the urgency of the early March expiration of the CBA" as the owners do. The league is "making a concerted effort to change the players' perception that the real financial pain would only begin once regular-season games (and paychecks) are jeopardized by a work stoppage." Banks added, "Once we get to March 4 without a deal, I'm not sure what the next key deadline will be when it comes to serving as an impetus for an agreement" (SI.com, 2/3).

    UP AGAINST IT: YAHOO SPORTS' Dan Wetzel wrote what NFLPA members "didn't do" during the union's press conference Thursday, and "haven’t yet been able to do, is give fans any reason to support them in what has become a contentious labor battle." The general public "believes NFL players are extremely well compensated -- excessively so in some cases." So the idea that "those same players might have to take a pay cut ... isn't particularly distasteful." Wetzel: "I don’t sense the average fan shares a strong pro-player viewpoint. On the list of problems in America it doesn’t seem like something to rebel over. ... And that’s one of the greatest obstacles for the NFLPA" (SPORTS.YAHOO.com, 2/3). In N.Y., Mike Vaccaro writes NFL players are "led by a couple of passionate men" in Smith and NFLPA President Kevin Mawae, a "gifted orator and a former player who was always one of the most passionate in the league." Once you "spend an hour in a room with them ... you want to grab a picket sign and invent angry chants." Vaccaro: "They are the good guys in this fight. And they are doomed" (N.Y. POST, 2/4). Meanwhile, Oakland Tribune columnist Monte Poole said of both the league and the union, "What they need to understand is that the fans don't care which side wins. They just want their football" ("Chronicle Live," Comcast SportsNet Bay Area, 2/3).

    WILL UNION STAY TOGETHER? The GLOBE & MAIL's Stephen Brunt notes Smith faces the problem that the NFLPA historically "has been known to break ranks." Brunt: "That’s not so surprising given that careers are short and contracts in the NFL are not guaranteed. Go to the barricades to make life better for future generations of players, and by the time they get back, for many there might not be a job" (GLOBE & MAIL, 2/4). In St. Louis, Jim Thomas writes, "This may turn out to be a war of wills. Which side will give? After a few weeks or a few months of a lockout, as the regular season draws near, will players be eager to return to work and avoid missing a paycheck?" (ST. LOUIS POST-DISPATCH, 2/4). In S.F., Ron Kroichick writes, "The players need to stand firm. Don't let the length of the regular season become a bargaining chip in upcoming labor negotiations. Don't let owners use money as incentive to risk debilitating injury in two extra games" (S.F. CHRONICLE, 2/4).

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  • NFL Reportedly Would Not Use Media Fees Until Lockout Season Two

    The NFL is not budgeted to use the $4B in media fees that are at the center of a bitter dispute with the players union until a potential second year of a lockout, according to two well-placed sources. The NFLPA said it would appeal to a federal district court judge a special master’s decision this week allowing the NFL to use those funds in the event of a lockout, which could begin as early as March 4. However, the NFL is not planning to tap the media money until March '12, if necessary, the sources said, apparently making the outcome of the appeal largely moot in the context of the heated labor debate. Most observers expect the league and union to reach a new labor deal long before spring '12. The NFL declined to comment for this story, but last month the league’s Exec VP/Business Operations Eric Grubman told reporters, “There are a lot of risks we account for, and to prepare for them, we line up sources of capital. (The TV money) is only one. We have other sources of capital that we lined up to account for any risk that we can think of that might face the league.” The union has aggressively challenged the league’s control of the money, charging that the NFL negotiated below-market rates for the broadcast deals in exchange for a promise that the money would flow whether games are played or not. The league is required to maximize revenue under the CBA. Underlying the charge, of course, is that the money is critical for keeping the owners afloat during a labor disturbance. “Now for the good news: The NFL, until the appeal in Minnesota, has $4 billion to not play football next year. VICTORY!,” union spokesman George Atallah tweeted after the decision on Tuesday. Atallah did not reply for comment for this story. The district court the NFLPA said it would appeal to is in Minnesota.

    UNION DUES: The NFL already is building a $900M lockout fund, seeded with national revenue the league has held back from teams along with savings from teams not paying players non-health care benefits last year. Under terms of the CBA, the teams’ obligation to pay these benefits, such as life insurance or pension-plan payments, ceased with the expiration of the salary cap last March. The union spent heavily to lobby its case with the special master, Stephen Burbank, who under the CBA hears disputes between the sides. The NFL said the union spent twice the more than $6M Burbank awarded the union in his ruling, a penalty tied to what he judged as the mistiming of whether some TV money should have been counted in '10 or '11. The union used two law firms to argue its case, a source said: Dewey & LeBoeuf, its longtime legal adviser, as well as Latham & Watkins, a firm that has previously employed current NFLPA Exec Dir DeMaurice Smith. The NFL has emphasized that the TV money at issue has to be repaid, with interest, after games resume, presuming some of the '11 season is lost. Grubman, speaking last month, said to think of the money as debt. “This is cash money lost we can’t spend,” he said. “We have other sources we can tap, not just the money that is the subject of the (special master).”

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  • League Notes

    The Boston Globe’s Kevin Paul Dupont reported NHLPA Exec Dir Donald Fehr "is going into small group meetings with agents in smaller regions and rather than having the big love fest up in Toronto where he brings all the agents up there and everyone kind of sits around and hits each other with icy dagger stares, he’s moving around." The agents "have been very impressed," though Fehr has "asked them all not to say too much." Dupont: "He is doing, at least by the agents’ impression, a good job of listening to what they think is important and what the players think is important." Versus' Dave Maloney: "You’ve got to give him credit for just kind of coming in quietly and getting an assessment of what his market is" ("NHL Overtime," Versus, 2/2).

    Smith thinks NASCAR still needs to place
    greater emphasis on winning
    BRUTON STRENGTH: NASCAR.com's Mark Aumann noted when it "comes to reviving a sport that has seen significant declines in overall attendance and television ratings," SMI Chair & CEO Bruton Smith "isn't shy about voicing his displeasure with the way drivers are paid to perform." Smith believes that NASCAR officials by changing the Sprint Cup Series points system are "going about it the wrong way." He suggested, "Let's look at these purses. Let's take half of the point fund money, take 75 percent of that, I don't care, but put it on the purse so there's a big difference between first and second place. As a race fan, I'm going to get very interested if there's a $400,000 difference between first and second. You know there's going to be a fight to the finish on that one. These race fans deserve that" (NASCAR.com, 2/2).

    DROPPED CALL: Security personnel at last week's Farmers Insurance Open believe that the PGA Tour's "new acceptance of cell phones on the course will require more fan education if it's going to work." Security officials spent much of last week's tournament "telling spectators to turn off and pocket the devices." Asked whether the Tour's new policy is working, one San Diego police officer said, "No." Mobile phones are "allowed for use only in designated areas, but fans along the ropes at Torrey had their cells out in force, snapping pictures of players as they walked by" (GOLF.com, 2/2).

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