SBD/March 10, 2011/Leagues and Governing Bodies

NFL Labor Watch: De Smith Says NFL Needs To Share More Financials

Smith claims the information NFL is offering would be meaningless
NFLPA Exec Dir DeMaurice Smith last night said that the "financial details the NFL has offered" to the union "are insufficient," according to Saraceno & Mihoces of USA TODAY. Speaking after the two sides finished their 14th day of mediation, Smith said, "The information that was offered wasn't what we asked for." The owners are seeking an $800M annual giveback, and Smith said, "According to our investment bankers and advisers, that information would be utterly meaningless in making a determination about whether to write an $800 million check to the National Football League in the first year (of a new agreement), $800 million in the second year, $800 million in the third year, $800 million in the fourth year and $800 million in the fifth year" (USA TODAY, 3/10). NFL Exec VP & General Counsel Jeff Pash, the league's chief negotiator, responded to Smith's comments "by saying the owners have been more than reasonable when it comes to disclosing their money figures." He added, "It is a fact that the players association has received more detailed financial information in this negotiation than it ever has before" (N.Y. POST, 3/10). More Pash: "The union knows what we’re proposing to do. Has it gotten everything it wants? Evidently not. Have we offered to provide more? Absolutely. Is it a subject we’re prepared to discuss? Absolutely. We’re prepared to continue discussing all the issues we have to discuss." He added, "The differences are significant. No one should be mislead on that. But we’re here" (N.Y. TIMES, 3/10).

NOT ON THE SAME PAGE: NFL.com's Albert Breer cited league and union sources as saying that the NFL "recently offered the NFLPA top-line info -- an aggregate of profitability over a five-year period at the league level." The union "pushed for more information at the individual team level, and union officials believe possessing the numbers for each of the 32 franchises is vital to justifying the additional cost credit the NFL is seeking, because that data contains very specific financial information, such as stadium and overhead costs" (NFL.com, 3/9). The AP's Howard Fendrich reported Smith sent a letter to NFL Commissioner Roger Goodell in May '09, asking the commissioner to "provide audited financial statements concerning the operations of the 32 clubs and the league." Smith "attached a list of 10 categories of information he sought," including total operating income; net income; cash and investment assets; profit from operations; and total operating expenses. A source said that the NFL's proposal to the union this week included "audited league-wide profitability data with dollar figures from 2005-09 that wouldn’t show information on a club-by-club basis," the number of teams that have "seen a shift in profitability in that span" and an independent auditor to examine the data (AP, 3/9).

OWNERS REPORTEDLY SPLIT ON OPENING BOOKS: CBSSPORTS.com’s Mike Freeman cites a source as saying that some owners “want to completely open the league's financial books to the union,” but others “are refusing.” The source indicated that the “stalling in the talks has happened because one set of owners desires to open their books and others do not.” Freeman notes ownership is “stuck trying to find a way to mend these differences,” and it is “virtually impossible for ownership to reach a consensus on this issue by the Friday evening deadline” (CBSSPORTS.com, 3/10). In Dallas, Gerry Fraley reported a majority of the 10 members of the NFL owners' negotiating committee were scheduled to be present today in CBA negotiations, marking the "first full appearance for the committee since last Wednesday” (DALLASNEWS.com, 3/9). But ESPN's Chris Mortensen said while the feeling was “bleak” a week ago before the two extensions, it currently “feels bleaker, and I would say if there's an extension on Friday, that's really, really a good sign.” Mortensen: “If I were forecasting … I'd be forecasting that this thing is not getting done in time by the 5:00pm deadline Friday, which, of course, would mean a decertification process." Mortensen said the NFL players are “very active in this negotiation ... and they're running out of patience." Mortensen: "They believe this is a delay of game tactic by owners with what's going on, so I would say that the players are ready to decertify, ready to go to court, and let Judge David Doty handle the proceedings. Certainly that would be where the battle would start" ("Mike & Mike in the Morning," ESPN Radio, 3/10).

SHOW & TELL: SI.com's Jim Trotter reports the NFLPA has asked Doty, who "ruled in its favor in a case involving TV contracts, to release information that the NFL wants kept confidential." The move appears to be a "reminder to the league of two important points -- the possibility of legal action if no new CBA is reached, and the union's insistence on transparency." The NFLPA in its filing said that the NFL "hasn't explained why material should be sealed and that the league hasn't cooperated with the union's attempt to propose limited redactions to protect third-party information only" (SI.com, 3/10). In St. Paul, Brian Murphy notes "at issue are thousands of pages of arbitration transcripts and legal motions plus notes and e-mails among NFL and network executives, including correspondence by Commissioner Roger Goodell and his predecessor, Paul Tagliabue." NFLPA attorney Timothy Thornton in the filing wrote, "The players should no longer be forced to have the fate of their careers decided in the dark" (ST. PAUL PIONEER PRESS, 3/10). In yesterday's motion, NFLPA leaders wrote that the NFL "must respond to the motion within seven days per a directive from Doty's chambers" (AP, 3/9).

BATTLE IN THE TRENCHES: YAHOO SPORTS' Jason Cole wrote the NFLPA's insistence that the league open its books is a "great negotiating stare down, a real test of the NFL’s mettle because there is almost zero chance that the league will give the union what it really wants." Yet the league will "have to weigh the risk of this information coming out in a lawsuit versus the cost of giving in further on what it has asked for in these negotiations" (SPORTS.YAHOO.com, 3/9). Former Eagles GM Susan Tose Spencer said, "The players are still asking for the owners’ financial information. They want them to prove they need the extra billion. That’s never going to happen, not in a million years. It just unnecessarily opens up Pandora’s box" (CHICAGO SUN-TIMES, 3/10). In Boston, Ron Borges writes, "The union is not claiming anyone is cooking the books. They just don’t want to be forced to take ownerships’ word that they aren’t -- especially after seeing how the owners failed to negotiate in the players’ best interest during the last round of television contracts" (BOSTON HERALD, 3/10). In L.A., Sam Farmer: "Both sides have a reasonable argument, and neither is likely to budge before the negotiating deadline when Friday turns to Saturday on the East Coast" (L.A. TIMES, 3/10).

THE TALK OF THE SPORTS WORLD: The NFL labor talks are being watched throughout the sports industry and especially by people in the business of representing players. NBPA Exec Dir Billy Hunter on Wednesday issued a statement of support for the NFL players and the NFLPA. "The success of the NFL is built on the backs and shoulders of NFL players," Hunter said. "NFL players deserve nothing less than an agreement that recognizes the players’ contributions and sacrifices, despite the owners’ threats and tactics to impose a lockout. The NBPA offers unconditional and uncompromising support for the NFLPA’s continued efforts to secure a fair deal." Earlier this week, MLBPA Exec Dir Michael Weiner said, ""The MLBPA stands with the NFLPA in its steadfast pursuit of a fair contract." But while a number of prominent NFL agents were hopeful earlier in the week about a deal, the mood was noticeably darker yesterday. "The rhetoric has increased & whenever the rhetoric increases, the negotiations go south," one NFL agent said (Liz Mullen, SportsBusiness Journal).
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