SBD/March 21, 2011/Leagues and Governing Bodies

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  • NFL Lockout Watch, Day 10: Pegged Salary Cap System Was Key Part Of Talks

    Fujita says union suggested pegged cap to try to address owners' concerns

    The concept of a pegged salary cap system was not only at the forefront of negotiations between the NFL and players when their CBA talks broke down earlier this month, it had been a key part of talks since Feb. 1, with the concept proposed even earlier than that, sources said. Recent reports have noted that CBA talks broke down in part after a league proposal on a system that would have delinked the salary cap from overall revenue. Such a system was first proposed last year. "That was our proposal and it was a way to legitimately try to address some of their economic concerns," said Browns LB and NFLPA Exec Committee member Scott Fujita, speaking this past weekend in Marco Island, Fla., where the NFLPA held its annual meeting. Leading up to the NFLPA’s March 11 decertification and the NFL’s subsequent lockout, reports on the talks between the two sides included the narrowing of the gap between the league and players, presumably relating to the 18% credit the league had been asking for. However, the narrowing was the difference between the two sides’ pegged salary caps. The proposal that the players rejected on the last day of CBA talks, which the new NFLPA trade association has since denounced as robbing them of excess revenue growth, was the latest iteration of cap-related proposals. Fujita said that after the players first issued a cap-related proposal last year, the idea was then set aside, but it was brought up again when the players and owners met during Super Bowl week.

    TIPPING THEIR CAP: It was at a Feb. 1 meeting when the NFL for the first time agreed to cut the cord between the cap and the amount of revenues, sources said, a fundamental tenet of relations between owners and players since '93. “We first started talking about the pegged cap the better part of a year ago,” one source said. “The union said it preferred it to an expense credit approach and that it was better because it was simpler, with less heavy-duty auditing and fewer disputes. They wanted to get away from arguing over … expense allocations and percentages of revenue. That was the whole point of the meeting at the Super Bowl, where (owners) 'reluctantly' … agree[d] to move off an expense credit approach and bargain within their pegged cap concept.” The players’ plan would have pegged the cap at a certain number based on a revenue projection, allowed the owners to keep 100% of the first 1.5% of revenues that came in above that number, and then allowed for players and owners to share the revenues above that number. The players and owners talked about different ways to split the amount above the 1.5% players were willing to give to owners, including a 50-50 split and a 60-40 split, but they never came to an agreement on that issue, said Pete Kendall, permanent player rep for the NFLPA. After the concept of a pegged cap was discussed in the weeks that followed Feb. 1, the players say they were stunned when the owners came in with a new pegged cap proposal on March 11, different apparently from what had been discussed since Feb. 1. While this new proposal had a cap closer to the union’s proposal, it cut off any sharing with them of excess revenue until at least '15.

    TRUE INTENTIONS: Kendall on Friday said NFL owners on the last day of their mediation talks with players took off the table the players’ ability to share in the growth of future revenue by making the NFL salary cap a fixed cost. The NFL and NFLPA had been talking about a pegged cap, but it would include a “true-up,” a mechanism that would have allowed players to share in the future growth of the league. The “true-up” would have allowed the NFL to increase the salary cap to reflect actual revenues, if they came in above projected revenues in the following year. Kendall said the owners took the “true-up” off the table on the final day of talks. “That was a game-changer,” Kendall said. Kendall said the owners also, on the last day of the talks, changed the deal term from seven years to 10 years. “A 10-year fair deal might be something worth considering," Kendall said. “A 10-year deal where players don’t participate in any of the upside is … not a deal that I think is ... something that the players should have taken.”  NFL Senior VP/PR Greg Aiello said via e-mail in response to Kendall’s comments, “The facts are that our proposal was for a fixed sum for both sides for four years. ... The ‘true up’ concept was designed to occur after the league received credit for a range of expenses. But we were not asking for those credits from 2011-14 in the proposal. Also, we made it clear that there would be a ‘true up’ beginning in 2015 to reflect revenue growth generated from new stadiums, new television contracts, a possible shift to an 18-game season, and other potential opportunities. What the union is saying now is that the cap didn’t go up by enough” (Kaplan & Mullen, SportsBusiness Journal).

    UNDER REVIEW: In N.Y., Judy Battista reports National Labor Relations Board acting General Counsel Lafe Solomon is "investigating the owners' allegation that players failed to bargain in good faith and that the union's decision to dissolve itself was nothing more than a negotiating strategy." His decision on whether the owners' charge has merit "could undermine or support the union's decertification and swing more leverage to one side, perhaps forcing the losing side back to the bargaining table." It "may not come for weeks, perhaps months, even as the players' antitrust lawsuit against owners begins its journey through federal courts on April 6" (N.Y. TIMES, 3/21). Although the NFLPA cannot bargain, its lawyers can engage in settlement discussions. But the NFL and the NFLPA are not expected to engage in those discussions without an agreement preserving both sides' legal rights. The NFLPA wants the right to pursue its antitrust litigation against the league, which it can only do if it is not a union. The league, meanwhile, wants to pursue its claim filed before the NLRB (Mullen). In L.A., Sam Farmer noted there is "nothing stopping the sides from sitting down as plaintiff (players) and defendant (NFL) and trying to negotiate a settlement before the case gets to court" (L.A. TIMES, 3/20).   

    OPEN & SHUT CASE: In Green Bay, Rob Demovsky reported the NFL Management Council Exec Committee at the owners meetings in New Orleans yesterday was expected to discuss "whether to provide more audited financial information that the NFL players" have requested (GREEN BAY PRESS GAZETTE, 3/20). NFL Commissioner Roger Goodell in an online chat with fans Friday said, "We offered more financial information than we've ever given before. In fact, we offered information that we do not even share with the 32 clubs that the union requested. They turned it down without looking at the information" (NFL.com, 3/18). Former Chiefs President Carl Peterson said, "A number of owners have intertwined some of their football business with some of their other businesses. They're not interested in getting into that. They feel they've opened their books for years to their partners (other teams and the NFLPA). They've showed them all of their revenue and many of their costs. They don't know why they should have to open them more than that" (PHILADELPHIA DAILY NEWS, 3/21). 

    Foxworth said that players are ready
    to begin settlement talks at any time
    READY TO GET BACK TO THE TABLE? Ravens CB and NFLPA Exec Committee member Domonique Foxworth Saturday said that players are "ready to begin settlement negotiations with NFL owners as soon as possible." Foxworth: "We've expressed that we're ready to begin talks as soon as they're ready." Foxworth said that he "doesn't think the players will re-form as a union any time soon, even though he knows the league will request that in any court settlement." Foxworth: "We're fine with decertifying, we're fine with never being a union again. That's our complete intention. Whenever we come to a settlement, they'll ask that we certify. (But) I don't know that that's what we want to do. It's in our best interests to be an association" (Baltimore SUN, 3/19). Packers President & CEO Mark Murphy said that owners "would rather negotiate than go to court." Murphy: "Absolutely, we think that's the best way to get this resolved." Giants President & CEO John Mara, when asked if there is any chance of negotiations before an April 6 court date, said, "You'd have to ask the players that" (GREEN BAY PRESS GAZETTE, 3/20). But he added, "We're still optimistic that there's going to be a 2011 season. We're preparing as if there will be one" (BUFFALO NEWS, 3/21).

    MATTER OF TRUST:  In Boston, Ron Borges noted once it was "revealed in the court of Judge David Doty last month that the owners cut a deal with DirecTV to receive more money if games were not played next year, trust went out the window." The "aftershock of that revelation continued to reverberate throughout the negotiations until they totally broke down March 11." Chiefs LB and NFLPA Exec Committee member Mike Vrabel said, "That opened a lot of eyes. When you make a deal for more money if we don't play games than if we do, you don't have to be real smart to see that doesn't make a lot of sense." Steelers S and player rep Ryan Clark: "It's not only a sign of not being trustworthy but also illegal. It's about 'you went back on the agreement'" (BOSTON HERALD. 3/19).  

    TAKING SIDES: ESPN.com's John Clayton wrote under the header, "Owners' Math Simply Doesn't Add Up." Before the NFLPA decertified, NFL team owners "increased their offer from $131 million in player costs in 2011 to $141 million, with hopes of getting a negotiating extension." But that number "doesn't work." Because benefits count for $27M of the $141M offer, the salary cap number "came to $114 million." That means the salary cap "would be a salary choke" (ESPN.com, 3/19). In Pittsburgh, Bob Cohn wrote under the header, "NFL Players On Right Side Of Cause." Cohn: "The owners have their arguments, and some are even valid. ... But the playing field looks tilted" (Pittsburgh TRIBUNE REVIEW, 3/19). But in Charlotte, Tom Sorensen wrote, "There are legitimate, adult issues to resolve. Why aren't owners and players entitled to resolve them without being accused of greed?" This is about owners and players "getting their share." No matter "how much you have, you’re entitled to your share" (CHARLOTTE OBSERVER, 3/19). 

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  • NFL Lockout Watch, Day 10: NFLPA Exec Committee Sends Letter To Goodell

    NFL players contend Goodell's letter was aimed at dividing the decertified NFLPA

    Locked-out NFL players penned a letter to Commissioner Roger Goodell on Saturday, responding to an e-mail he sent last week to all players and telling him, "Your statements are false," according to Howard Fendrich of the AP. In a four-page letter, the 11-member NFLPA Exec Committee told Goodell that during CBA negotiations the owners did not justify "their demands for a massive giveback which would have resulted in the worst economic deal for players in major pro sports." In the letter, the players "went through various parts of the last NFL offer, including saying that the league's salary-cap proposals 'were based on unrealistically low revenue projections.'" Browns LB and NFLPA Exec Committee member Scott Fujita said, "The letter gives a true testament to what went on, what the offer was, and what it meant to the players." In the final paragraph, the Exec Committee wrote, "We no longer have the authority to collectively bargain on behalf of the NFL players." In response, NFL Exec VP & General Counsel Jeff Pash said, "Debating the merits of the offer in this fashion is what collective bargaining is all about. ... This letter again proves that the most sensible step for everyone is to get back to bargaining" (AP, 3/19). In N.Y., Gary Myers noted the letter outlines 14 points of contention and said the owners' last proposal contained "an economic framework that was unjustified and unfair." The Exec Committee wrote in part, "Your proposal would have resulted in a league-wide giveback by the players of 576M in 2011 increasing to 1.2 BILLION in 2014, for a total of more than 3.6 BILLION for just the first four years. Even if revenues increased at a slower rate of only 5%, the players would still have lost over 2 BILLION over the next four years" (N.Y. DAILY NEWS, 3/20).

    TENSION GROWS: When asked if Goodell's letter last week was sent in good faith, NFLPA Exec Dir DeMaurice Smith said, "No." He later added, "They know the proper way to engage in the discussion" (NFL.com, 3/18). “Let’s not kid ourselves,” Smith said. “Jeff Pash was one of the lawyers who worked in the league in 1993. He knows that class counsel can always engage in discussions with class counsel for the National Football League relating to a settlement. He knows what letter should have been sent.” Meanwhile players expressed anger at public comments and statements from the NFL calling the NFLPA a union and calling for collective bargaining to resume. Some said they saw it as an effort to divide players across the league, or to trick the group into acting like a union to help the NFL prove its argument that the decertification was a sham. "It's all bait and we're smarter than that," said Fujita. "Bait to play that game we're not going to play. We're not stupid. Spelled s-t-o-o-p-i-d." Chiefs LB and NFLPA Exec Committee member Mike Vrabel said, "Any negotiations from this point forward will be with the class and with our representatives. What they don’t need to do is they don’t need to send a letter to every current player urging them to ask their 'union' -- to use Roger Goodell’s language. … Until he refers to us as a class and as an association, it’s going to be tough for us to move forward.” Cowboys LB and player rep Bradie James said he saw the purpose of Goodell’s letter as a way to divide players. Steelers S and player rep Ryan Clark said he saw it as a way to create confusion and dissension among the 1,900 players. Clark said the letter listed all the things that the NFL would give to the players under their proposal, but it did not say "it was the worst deal in the history of sports" (Liz Mullen, SportsBusiness Journal).

    DIVIDE & CONQUER? Asked what he thought the purpose of Goodell's letter was, James said, "To divide us. It's that simple" (ESPNDALLAS.com, 3/19). Colts WR and player rep Anthony Gonzalez said, "To say there are half-truths in that letter is ambitious. They're like quarter-to-less truths. We're trying to fill in the gaps." He added, "Honestly, Roger Goodell has a huge voice. I don't have that platform. We have to be more personal where he can be more public and get the message out." Redskins DE and player rep Vonnie Holliday: "When you just look at the email itself, it's really a joke" (FOXSPORTS.com, 3/18). Lions DE and player rep Kyle Vanden Bosch: "I didn’t expect it. I think it was the first email I got from Mr. Goodell. It was shocking and there was just a lot of things in that email that didn’t seem to be accurate with the things we had been talking about in our meetings and the information that we received. It seems likes there’s a lot of misinformation out there and I think it’s just important that the players, especially, understand the facts" (DETROIT FREE PRESS, 3/19).

    LEADER OF THE FREE WORLD: NFL.com's Albert Breer cited NFLPA sources as saying that Smith told players on Friday that he "will cut his salary to $0 until the labor dispute" over a new CBA is settled. This move comes after Goodell and Pash cut their salaries to $1 each during the work stoppage. Goodell and Pash earn about $10M and $5.5M per year, respectively, while Smith is said to earn about $1.8M from the NFLPA (NFL.com, 3/18).

    Print | Tags: NFL, Leagues and Governing Bodies, Football
  • NFL Lockout Watch, Day 10: NFLPA Wants More Ownership Participation

    Kraft absent from this week's meetings after also missing mediated CBA talks

    NFL players in their letter to Commissioner Roger Goodell on Saturday cited a "lack of ownership participation in the mediation," according to Albert Breer of NFL.com. The letter read in part, "At all times during the mediation session we had representatives at the table with the authority to make a deal. The NFL representatives at the mediation did not" (NFL.com, 3/19). While the NFL has accused the NFLPA of failing to bargain in good faith, players gathered at meetings of the now-decertified NFLPA accused the league of the same thing, adding that the NFL did not have decision makers at the federally mediated bargaining sessions, which resulted in the labor stalemate. Browns LB and NFLPA Exec Committee member Scott Fujita said, "I was there for a number of days and I was there to negotiate with people on the other side who could make decisions. And in my time spent there, it was almost like a staring contest with their representation. At no point did I feel they could pull the trigger on anything" (Liz Mullen, SportsBusiness Journal). NFL Exec VP & General Counsel Jeff Pash agreed with a suggestion by Chiefs LB and NFLPA Exec Committee member Mike Vrabel that Patriots Owner Robert Kraft, Panthers Owner Jerry Richardson and Cowboys Owner Jerry Jones "become more involved." Pash: "If Mike will let us know when and where he and his colleagues would like to meet, we will be there. We are ready" (NEWSDAY, 3/20).

    WHERE'S ROBERT KRAFT? In Boston, Shalise Manza Young noted Kraft is "one of the 10 owners who serve on the league’s Labor Committee, and while his nine colleagues were in Washington in the days leading up to the expiration of the collective bargaining agreement, Kraft was on a trade mission to Israel and the United Kingdom with Massachusetts Gov. Deval Patrick and other business leaders." Patriots OT and player rep Matt Light on Saturday "expressed disappointment" about Kraft's absence. Light: "No doubt, 100 percent. I’m not going to lie to you. We had people in that room that could get a deal done at any point. Do I know how they’re structured within the league? No, I have no clue. But I can tell you one thing: (league negotiators) didn’t seem to have the ability to do any of that when they had to leave the room" (BOSTON GLOBE, 3/20). In Boston, Ian Rapoport reports Kraft also is missing the owners meetings in New Orleans this week for what the team deemed a "private family medical matter." Giants President & CEO John Mara said, "His presence is certain to be missed for sure. He’s somebody, when he gets up to speak, people listen to him." But Mara added, "I don’t know that there are any critical matters being voted on." Kraft's son, Patriots President Jonathan Kraft, will have the team's vote at the meetings (BOSTON HERALD, 3/21).

    HOUSTON, WE HAVE A PROBLEM: Texans LB DeMeco Ryans and OT Eric Winston "would like for Owner Bob McNair to become involved in negotiations." Winston, one of the team's alternate player reps, said, "Mr. McNair's a good businessman who's a voice of reason, and I'd love to see him get involved. He's a moderate voice. When we were negotiating, Roger Goodell and Jeff Pash couldn't make a deal. They'd have to leave the room and check with the owners" (HOUSTON CHRONICLE, 3/20). McNair on Friday said, “I think we’re going to get it resolved before too much damage is done. ... I’m disappointed that the players’ representatives walked away from the negotiating sessions. I thought it was a very fair proposal, very generous" (HOUSTON CHRONICLE, 3/19).

    JERRY CLARIFIES REPORT: Jones on Friday night for the first time discussed a recent SI report that singled him out "as a symbol of the perceived disrespect of the owners by the players." Jones was "accused of trying to intimidate the players and walking out of a mediation session two weeks ago," and on Friday he did not "deny making gestures with his hands because that's how he talks nor walking away." But he said that the sources who told their account to SI for the report "had their timing wrong." Jones said that he "didn't up and walk away until at least 15 minutes after he finished talking," adding that he "never left the room" (STAR-TELEGRAM.com, 3/20).

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  • Air Canada Says NHL's Five-Point Plan Is Improvement, But More Needs To Be Done

    Air Canada calls NHL's five-point plan for head injuries a step in right direction

    Air Canada Friday said that the NHL's five-point plan to deal with head injuries is "an improvement, but that more has to be done," according to the CP. The airline "threatened to pull its sponsorship of the league" after Bruins D Zdeno Chara "escaped suspension for his March 8 hit on Montreal's Max Pacioretty that sent the Canadiens forward to [the] hospital with a concussion and a broken vertebra." Air Canada said of the league's new five-point plan, "It is a step in the right direction to get our national game to where it needs to be and to permit Air Canada to continue supporting NHL hockey." The airline "came under fire in some hockey circles for its threat, but the airline adds the response has been mostly positive." Air Canada said, "The overwhelming majority view is that while hockey is a physical sport, the devastating consequences of dangerous head shots and career or life threatening concussions must, and can, be avoided" (CP, 3/18).

    STEP IN THE RIGHT DIRECTION? In Minneapolis, Michael Russo wrote of the new policy for dealing with head injuries, "You've got to commend the NHL for trying to get ahead of the curve. The problem with the new protocol is there are a lot of gray areas. First, concussion symptoms often arise well after the initial blow." Another problem is that "having the other team's paid doctors deciding whether another team's player can return to a game opens the door to an appearance of impropriety" (Minneapolis STAR TRIBUNE, 3/20). In Toronto, Dave Perkins wrote, "Despite vows of sincerity on the issue, there apparently is no climate for someone in authority to stand up and say, 'Enough is enough.' ... When it comes to head shots and injuries, the NHL talks the talk, but doesn't walk at all" (TORONTO STAR, 3/20). In Montreal, Stu Cowan wrote under the header, "NHL's Inaction Is Beyond Puzzling" (Montreal GAZETTE, 3/20). In N.Y., Larry Brooks wrote, "We don't question that the league and team personnel care about the safety of their players, but using the 'Fabric of the Game' card to avoid making the singular change of outlawing all direct blows to the head that is inevitable, is a bit insulting six years after the post-lockout rules dramatically changed its fabric" (N.Y. POST, 3/20). But in Toronto, Cathal Kelly wrote NHL Commissioner Gary Bettman, "faced with a wave of panic emanating," decided the "right sort of change was very little change at all." Kelly: "And in this instance at least, he got it right. ... Right now, by his actions, no one is proving a better defender of the NHL's century old traditions than Bettman" (TORONTO STAR, 3/20).

    ZERO TOLERANCE: The GLOBE & MAIL's Roy MacGregor noted Sabres GM Darcy Regier is the NHL's "leading dove, one of three general managers who speak openly of banning all hits to the head," along with the Penguins' Ray Shero and the Hurricanes' Jim Rutherford. Regier is "one of a larger group who argued, successfully, for the steps taken so far: last year's Rule 48, which banned blindside hits, and this year's decision to have a doctor rather than a trainer determine the seriousness of a hit to the head." They also "led the push" for last week's decision to "begin calling more boarding and charging penalties next season." Regier: "For me, the goal is to eliminate concussions. I could say, 'Reduce those 100 to 20, or to 10,' but the goal should be to eliminate entirely. I think ultimately we have to take a 360 approach (full protection from all sides) to protect the head" (GLOBE & MAIL, 3/19). A PITTSBURGH POST-GAZETTE editorial states, "We believe a zero tolerance approach is necessary." NHL hockey is a "tough game played by tougher men, but that doesn't mean risky practices should be tolerated. League officials need to do the right thing" (PITTSBURGH POST-GAZETTE, 3/21).

    Print | Tags: Air Canada, NHL, Leagues and Governing Bodies
  • ATP Asks Court To Make Two Tourneys Pay Legal Fees As Part Of Antitrust Lawsuit

    The ATP World Tour Friday asked the Third Circuit Court of Appeals to force two of its tournaments to pay the circuit roughly $20M in legal fees and costs associated with their failed antitrust lawsuit against the tour. The German tournament, partially owned by the Qatari Tennis Federation, which owns the Doha stop, sued the Tour in '07 for demoting the Hamburg event as part of a new calendar restructuring. A jury ruled in '08 against the tournaments, as did the Third Circuit on appeal. The Supreme Court declined to hear an appeal. But the original district court in Delaware turned down the ATP’s request for fees. The ATP passed a bylaw a month before the lawsuit was filed requiring members to pay legal fees for failed legal actions. In its brief Friday, the tour said the district court had no right to overturn the tour’s own bylaws. Noting that the tournaments had pointed out that the award of fees was usually not done in antitrust cases, the ATP disagreed, but said not all of the charges were antitrust so at least some of the fees should be able to be recouped. The fees were a major drain on ATP coffers, and the circuit had told its tournaments that the bylaws would allow the tennis group to recover them. The tour likely also has to go through every effort possible to recover the fees before seeking insurance that might cover some of the costs.

    Print | Tags: Leagues and Governing Bodies, ATP, Tennis
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