SBD/March 9, 2011/Leagues and Governing BodiesPrint All
The investment bank the NFLPA has hired to analyze NFL financial information is UBS, sources said. The NFL and NFLPA declined to comment. News emerged yesterday that the NFLPA had tapped a firm, but the union has had UBS on retainer for several months. In fact, it had some trouble securing an investment bank as many did not want to run afoul of the NFL, investment banking sources said. UBS, which is not known to be active in sport, declined to comment. One source questioned whether UBS’ powerful wealth management division might have some NFL owners as clients who would be unhappy with UBS’ new assignment. That said, the hire could be seen as how serious the NFLPA takes the claims of the NFL. The NFL’s argument is not simple, such as the NBA’s that it is just losing too much money. Instead, the NFL is contending it needs to earn more money to afford capital investment that will generate more revenue. The NFL already makes all revenues available for union audit, and the NFLPA knows the bulk of the expenses: player costs plus audits of the more than $1B the league shaves off the top as an expense credit, plus audits of money held back from the salary cap as part of the stadium funding program the union and league had agreed to. The NFLPA wants to see team-specific information in order to verify that profit margins have been declining, and that if true, it is for the reasons the league maintains. The union yesterday turned down additional offers from the league of cumulative profit info. That info would not have been the detailed team by team audit the union is insisting on. There is deep concern within league circles that much of this information would come out during a potential antitrust trial anyway, so its unclear why the league is still not pushing all the information to the center of the table at this point, with the CBA set to expire Friday (Daniel Kaplan, SportsBusiness Journal).
TRANSPARENCY CONTINUES TO BE A KEY: Multiple sources over the past several days have said that financial transparency has become a key issue in the talks, in which the NFL originally asked that the players’ share of revenue be shifted by 18%, or $1B, to the owners' side. The NFL and the NFLPA have narrowed that $1B gap to $750M in the past week, but it is not clear exactly how much of that narrowing was due to movement by either the players or the owners off their original positions. Browns LB and NFLPA Exec Committee member Scott Fujita did not name UBS as the bank yesterday, but he said, "They are going to help us understand what kind of information we need and what kinds of questions we need to ask." The NFLPA's request and the NFL's refusal to provide the union with audited financial statements has been a sticking point in the negotiations for two years. Fujita described the information that has been provided by the NFL over the last few years as "a brief summary or snapshot and doesn't satisfy what any competent business person would want to see" when negotiating a deal the magnitude of the NFL CBA. The NFL declined to comment on reports which began surfacing this week that the league was willing to share financial information with the NFLPA (Liz Mullen, SportsBusiness Journal). Colts C and NFLPA Exec Committee member Jeff Saturday last night said having the bank involved "was to help judge how helpful the material they were offering to give us -- how worthwhile it was in helping us make a decision" (NFL.com, 3/8).
KEEP IT COMING: In N.Y., Judy Battista reports NFLPA officials yesterday "rejected an offer from the owners to turn over audited profitability data from all 32 teams for the past several years." That offer, made Monday night, was the "first time the owners indicated a willingness to share financial information with the players beyond what is required" by the CBA. Sources indicated that union leaders "told the owners’ negotiating committee that they wanted each club’s audited full financial statements." Battista notes the "standoff could significantly hamper negotiations because union officials have indicated they will not make any more financial concessions without receiving fully audited financial statements." But one source involved in negotiations called full financial disclosure a potential "silver bullet" in the negotiations (N.Y. TIMES, 3/9). Also in N.Y., Bart Hubbuch reports the NFL labor negotiations "took a dispiriting turn last night." It "wasn't enough to stop the talks completely, but the owners' unwillingness to open their team-by-team financial books to the players appeared to increase the odds of a lockout and an antitrust lawsuit by the union that would quickly follow" (N.Y. POST, 3/9). Patriots OT and player rep Matt Light in an interview with WAAF-FM yesterday said, "At the end of the day, the biggest battle is in the overall salary cap and what that number should be. Obviously they wanted to cut about $1 billion off the overall pie. That number obviously would have been drastically reduced from where it is today" (ESPNBOSTON.com, 3/8).
Pash addresses media outside mediation
offices before today's session
TODAY'S MEDIATION "MOST CRITICAL YET": ESPN.com’s Chris Mortensen cites a source as saying that today’s mediation talks may be the “most critical yet in the collective bargaining process.” Federal mediator George Cohen is “meeting with smaller group of negotiators while the larger groups await word.” The financial disclosures that “remain the major stumbling block in the negotiations is believed to be Cohen's focus in mediation Wednesday.” Mediation resumed around 9:30am ET this morning, starting the 14th day of CBA negotiations overseen by Cohen. A source indicated that Steelers President Art Rooney II was scheduled to join the NFL’s team for today’s bargaining session. Chiefs Owner Clark Hunt and Giants President & CEO John Mara also are in attendance (ESPN.com, 3/9). NFL Network's Albert Breer reported on Twitter, “I sense growing frustration on the players' side. This was always about the money, so transparency issue is critical. Today's a big day” (TWITTER.com, 3/9). Newark Star-Ledger reporter Mike Garafolo said Mara "is a calming presence" at the CBA negotiations, and "his ability to stay level-headed in negotiations like this I know is big for the league" ("Loud Mouths," SNY, 3/8).
DIFFERING VIEWPOINTS: ESPN's Andrew Brandt, who was the Packers VP/Player Finance from '99-'08, said, "I think the owners are not saying we're losing money, and that's what the players are thinking they're going to see. If the owners open up documents, they're not going to show a lot of losses. This is about the owners protecting the future. Player costs are outpacing revenues, so we're trying to protect 2015" ("SportsCenter," ESPN, 3/9). But ESPN's Tim Hasselbeck, who played in the NFL from '02-07, said if NFL owners opened their books to the NFLPA, "it would be embarrassing for the owners." Hasselbeck: "What people would see is they'd see relatives on private jets. They'd see relatives on payrolls at salaries that quite honestly would probably disgust a lot of the fans" ("NFL Live," ESPN, 3/8).
IT'S SHOWTIME: YAHOO SPORTS' Michael Silver writes now is the "time for the owners to open their books, or to acknowledge that doing so is not an option and lower their financial demands accordingly." The NFLPA has "no divine right to the financial information it seeks." Nothing can "force the owners to stop stonewalling the union on this issue -- but there are strategic reasons why continuing to do so may not be such a great idea." If the union elects to decertify, an "antitrust lawsuit will follow" and the owners "will almost certainly be forced to open their books during discovery proceedings." The NFLPA also can "make a reasonable case, both in the bargaining room and in the court of public opinion, for the importance of receiving such information." Silver notes "there may be some very logical reasons why the owners are resisting this revelation." The financial statements "could contain embarrassing information that could be used against them if made public, or even shady dealings that might attract outside attention from authorities" (SPORTS.YAHOO.com, 3/9).
The "most influential man in professional football, at least in recent days," is not NFL Commissioner Roger Goodell but District Judge David Doty, according to a sports-section cover story by Shipley & Maske of the WASHINGTON POST. Some believe Doty "broke the bargaining stalemate between players and owners" with his ruling in favor of the NFLPA in the closely watched media fees case. That ruling and "other high-profile decisions by Doty have so angered owners that they have made the judge himself one of the key issues in the current contract talks." A source on the ownership side said that he "didn't think the league would agree to any labor settlement that includes ongoing oversight by Doty." However, Shipley & Maske note while Doty’s associates “agree that Doty has held a position of unusual power over the players and owners,” they “dispute the suggestion that his decisions have reflected any favoritism” (WASHINGTON POST, 3/9). Meanwhile, SI.com's Peter King wrote, "In some ways, I wouldn't be surprised if Goodell, deep down, wasn't unhappy with Doty's ruling. Because it would be a message to the hard-line owners that they were going to have open their books at some point anyway. Why not do it in negotiation instead of litigation?" (SI.com, 3/8).
WILL IT COME TO THIS? In Baltimore, Ken Murray writes the option of decertification "hangs over NFL labor negotiations like an anvil." Indiana Univ. School of Law Dean Gary Roberts said that decertification "is not necessarily the negotiating hammer some believe it to be." Roberts: "My own instinct is that it's not as big a threat as some players and people on that side think it is. Only because I don't think anybody thinks the two sides would litigate for two or three years, which is what it would take. To shut down the NFL for three years while they litigate is inconceivable." But former National Labor Relations Board Chair William Gould argues decertification is "the ultimate weapon." Even he admitted that "decertifying was no guarantee of success in the courts" (Baltimore SUN, 3/9). ESPN's Mark Schwarz said, "Everyone is hoping on the owners' side that a deal is done so that they avoid that dirty word, decertification. They do not want this to go to the courts" ("NFL Live," ESPN, 3/8).
A LOOK ON THE BRIGHT SIDE: Jets Owner Woody Johnson yesterday said he is "eternally optimistic" the league and union can come to terms on a new CBA. He added, "Whether we get it done this week, it’s possible. As long as we’re talking, as long as we’re being mediated. I think (federal mediator George) Cohen’s pretty good. He’s gotten them together all these days, that’s a sign of progress" (NJ.com, 3/8). Eagles TE Brent Celek: "I know it's going to get done in time. There's too much at stake for both sides. They'll probably just keep extending" the deadline, currently set for Friday. We'll see. I don't see there being a lockout. If there is, I'll be really surprised" (PHILADELPHIA DAILY NEWS, 3/9). Patriots OT and player rep Matt Light is "beginning to feel cautiously optimistic." In an interview with WAAF-FM, he said, "I’m hopeful we can get a deal done." But Light also said that he "couldn't guess whether there will be a deal" (BOSTON HERALD, 3/9).
ONE SHINING MOMENT? ESPN.com's Gene Wojciechowski wrote Goodell should "resign immediately if this owners-created labor dispute becomes a living, breathing lockout by the end of Friday's federally mediated negotiating deadline." When it "comes down to it, Goodell has a single job as commissioner of the world's most profitable sports league: Make the NFL trains run on time." If he "can't do that, then it's time to find another conductor." Wojciechowski: "This is when we learn whether Goodell is worth his nearly $10 million in annual salary. The last thing these negotiations need is an owners' lap dog who yaps at all the wrong times and for all the wrong reasons" (ESPN.com, 3/8).
As the NFL and NFLPA continue negotiations for a new CBA, "the union we're seeing, in some ways, is a completely new one," according to Mike Freeman of CBSSPORTS.com. NFLPA Exec Dir DeMaurice Smith's "overall mission has been simple," as he wants to "make as many current stars in football as possible" union reps. Smith is "going to give former stars more of a voice at the negotiating table and more say in union strategy sessions," and he is "building a wider, more open union, which in turn made the union a tighter knit group." His predecessor, the late Gene Upshaw, "was smart and resilient but he ran the union with an iron fist and power was held by a few." Having star players as union reps "happened in the past but occasionally proved disastrous." But Freeman noted by "bringing in numerous big names, convincing them of his message and then mixing in past legends," not only has Smith "penetrated deeper into the chromosomal guts of the union but he's limited the chances of a potential uprising should there be no football for months or longer." Most union reps previously "got the job because no one else wanted it." People close to Smith contend that "one of his main missions after becoming union head was to change that," and the current NFLPA "might be the most unified group of players the owners have faced." If there were "ever any doubt about whether or not Smith would unleash his star power, they were erased" when QBs Drew Brees, Peyton Manning and Tom Brady reportedly agreed to be "plaintiffs in any potential antitrust case" in the event of a lockout (CBSSPORTS.com, 3/8).
BIG NAMES STEPPING UP: ESPN's Tim Hasselbeck said in past years there “was a fear associated with being a player rep,” but the NFLPA "kind of had a switch from kickers and punters and long snappers” to stars like Packers QB and player rep Aaron Rodgers. Hasselbeck: "Getting some of these bigger name guys as player reps, it's not so easy for the owner to say, 'Well, I don't like what he's saying in the locker room. We're going to get rid of him,' because they're players they need" ("NFL Live," ESPN, 3/7). Other Pro Bowl-caliber players who are serving as either their team's primary or alternative player rep include Patriots QB Tom Brady, Broncos S Brian Dawkins, Panthers WR Steve Smith, 49ers LB Patrick Willis, Cowboys TE Jason Witten and Packers CB Charles Woodson (THE DAILY).
Outgoing Dodgers VP & Assistant GM Kim Ng said that the Dodgers' uncertain future "wasn't a factor in her decision to leave the club" to become MLB Senior VP/Baseball Operations, according to Jill Painter of the L.A. DAILY NEWS. Ng said that Frank and Jamie McCourt's court battle for ownership of the Dodgers was "absolutely not" a factor. Ng: "I've taken a longterm perspective on decisions I've made in my career. This was an opportunity that was [too] fantastic to let pass by. These opportunities don't come along very often. You can see some of the stability that exists in the commissioner's office. Those don't come open very often." Ng said she will be "overseeing a lot of the international operations" as part of her new job. Ng: "There's a lot going on in the Dominican Republic and potentially a worldwide draft" (L.A. DAILY NEWS, 3/9). Ng added, "I have a chance to help Joe [Torre] and help the commissioner change policy and impact the game in a meaningful way." Ng said that she "would remain with the Dodgers through opening day before moving to New York for the new job." But Ng said that she "has not given up her dream of becoming" a GM. Ng: "In terms of my long-term aspirations, they're still there. If anything, this makes me a more well-rounded candidate" (L.A. TIMES, 3/9). Dodgers GM Ned Colletti said that there is "no urgency to replace Ng" because "all of the Dodgers are signed to contracts for 2011." He was "uncertain whether he would hire from outside the organization, promote from within or divide her duties among multiple people" (MLB.com, 3/8).
MLS is "fortifying its position" as the league enters its 16th season, and it may soon gain "relevance in the larger soccer universe and relevance in the American sporting landscape," according to Leander Schaerlaeckens of ESPN.com. While profitability "may still be a utopia," relevance would be "something much more valuable." The expansion Portland Timbers and Vancouver Whitecaps both "command such affection from their considerable fan bases that their commercial traction will further pad the league's coffers." The Timbers are the "toast of Portland and have already sold out most of their home games," while the Whitecaps "already lead the league in sponsorship revenue." MLS Commissioner Don Garber said, "We're certainly positioned to achieve growth. We've got two new teams, expanded rosters, 31 players signed from (MLS's own) academies and a number of great young players." In addition, Sporting K.C. is "moving into a new venue, to be followed next year" by the Dynamo and perhaps in '13 by the Earthquakes. When pressed to "rate the league's progress on a scale of one to 10 -- one being MLS's birth and 10 its full maturity, having achieved all of its goals -- commissioner Garber gave it a three." He said, "As a 16-year-old league, we're no longer a toddler. We're a teenager but we expect to live a long life." ESPN soccer analyst Alexi Lalas said, "There's a recognition that MLS is something that's not going away and, quite to the contrary, it's actually on the ascendance." Schaerlaeckens noted amid "all of the positive signs for the once beleaguered league, which had to contract two clubs as recently as 2001, the only blight on MLS recently has been its inability to negotiate a new long-term broadcast deal" with Fox Soccer. This offseason, "crunched for time by the deadline on releasing the television-driven schedule, the two ultimately settled on a one-year contract, meaning they will fight this battle anew next year" (ESPN.com, 3/7).
The NBA is "consulting with an independent neurologist and may establish a league-wide policy for handling concussions by next season," according to Colin Fly of the AP. NBA Senior VP/Basketball Communications Tim Frank said "the league is working with a consulting neurologist concerning the possible adoption of a league-wide protocol." Frank "declined to name the neurologist involved with the league, but said they've been working on the issue extensively this season." The move "would bring the NBA more in line with both the NHL and the NFL." Over the last four weeks, "six NBA players have missed games because of concussions or concussion-like symptoms." Eight NBA players "have missed games this season because of head injuries, concussions or concussion-like symptoms and there's been an average of nine players per season who've missed playing time over the previous five years." The league and the NBPA said that they are "tracking the number of head hits" (AP, 3/8).
NHL NEEDS TO ADDRESS HEAD SHOTS: A TORONTO STAR editorial states, "When NHL general managers meet in Florida next week, ways to avoid head injuries should be at the top of their list." There are "some encouraging signs," as Penguins GM Ray Shero has said that the league "should at least consider banning head shots." Aside from "toughening the rules on head shots, GMs could make sure players in trouble get prompt medical attention." Hockey traditionalists "worry that further restricting head shots will water down the full-contact nature of the game." But the GMs "should take a longer view and do more to protect their players -- and all the young players coming up behind" (TORONTO STAR, 3/9).