SBD/April 1, 2011/Events and Attractions

IMG World Congress Of Sports: NFL, NBA Labor Situations Put Under The Spotlight

SportsBusiness Journal/SportsBusiness Daily’s IMG World Congress of Sports concluded Thursday with a discussion centered around the hottest topic in sports business: labor. The panel, titled “At A Crossroads: The State of Labor/Management Relations in Professional Sports,” featured NHL Deputy Commissioner Bill Daly; Octagon President Phil de Picciotto; Proskauer Sports Law Group co-Chair Howard Ganz; NFLPA and NBPA outside counsel Jeffrey Kessler; and MLBPA Exec Dir Michael Weiner. Kessler stepped up to the plate first to address the labor unrest in football -- nearly three weeks since the NFL locked out players -- and compared it to what MLB went through in the ‘90s. “If you look at all the sports, these things tend to go through different life cycles,” Kessler said. “They each have their own rhythm. There was a period of great contention in the NFL (in ’87). ... Unfortunately, we’re in a period now where there’s lots of disputes. You can find a similar history in baseball.” Pressed further on why the two sides are mired in such a contentious battle, he added, “There are changes on both sides. There is a whole new group of owners. There’s a new commissioner. There is a new leader at the NFL Players Association.” Weiner weighed in on the NFLPA’s insistence that owners show all financial information. “It’s critically important for both sides when they’re bargaining anything to have common information,” he said. Weiner later added, “It seems like it’s hard to do without financial transparency.” But Ganz added, “Clearly, as a matter of law, the NFL is not required to provide the information that the players wanted. ... I assume that the provision of the information satisfies curiosity. I’m not sure whether it really has an affirmative effect on bargaining.”

PLAYERS ANTICIPATING TEAM RESTRICTIONS: Kessler provided some insight into what the decertified NFLPA envisions could come about if Judge Susan Nelson rules in its favor next week and blocks the NFL lockout. Kessler believes if the lockout is lifted, teams will impose severe restrictions on the players. “We believe, and we have good reason to believe, their intention would be to impose restrictions that are going to be anti-competitive. In fact, more restrictive than anything that has ever been agreed to previously in collective bargaining.” Keeping in mind the Brady v. NFL antitrust lawsuit, Kessler said, “That’s why that case also seeks to stop them from doing that, to stop them from substituting for a lockout with a set of restrictions that themselves would be antitrust violations.” He added, “If the league wants to disabuse us of that notion, and not impose such restrictions, then life will be a lot easier, legally, for them. But right now, we have every reason to believe that if they’re forced to impose a system, it’s not going to be one that complies with the antitrust laws. But that’s what we’ll find out.”

HEADING IN THE SAME DIRECTION? While the NFL is stuck in a lockout and attracting much of the labor attention, less than three months remain on the NBA’s CBA and the two sides in that negotiation seem even further apart. But with reps from each side on the panel, a slight hint of labor peace emerged from the discussion. Ganz, outside counsel for the NBA, said, “Certainly a lockout is by no means inevitable. ... I think both sides, notwithstanding some public statements, are hopeful for a deal.” Kessler, in the thick of both the NFL and NBA labor battles, agreed with Ganz when he said, “I hope it’s not inevitable. One would hope that basketball can learn from the lessons that are being provided right now from football.”

PHONY BALONEY: Kessler and Ganz also touched on NBPA Exec Dir Billy Hunter calling the NBA’s financial statements it showed to the NBPA “baloney.” Ganz said of Hunter, “I think he’s changed his tune a little bit since then. That certainly did not advance a warm and fuzzy feeling between the parties. We’ve gotten over that, but it’s not a total one-way street in any respect.” Kessler later added, “He didn’t really call the financials ‘baloney.’ I know David (Stern) has been very upset about that comment. What he was saying was baloney were the conclusions that the NBA owners were drawing from the financial statements. Providing those statements from the union’s perspective was very helpful, and we viewed that as a positive thing that the owners did. But we did draw different conclusions as to what solutions the financial statements suggested were appropriate for basketball.” Ganz said, “‘Any place, any time’ is, I think, David Stern and Adam Silver’s mantra. That’s certainly been the case. I’m happy to hear Jeff amend the ‘baloney’ statement. I agree there was a difference of view about the conclusions one could draw or the remedies one might seek based upon the numbers."

ADDING SOME PERSPECTIVE: Daly added his two cents, having been through a lockout with the NHL that resulted in a canceled season before ultimately leading to a drastically changed CBA, which is set to expire in ’12. “We have six years of experience with this collective bargaining agreement,” Daly said. “There are things that worked well, and things that didn’t. And that’s what we try to fix.” Similarly, Weiner weighed in on MLB’s tumultuous past, even though the league now seems to be the model of stability. “It wasn’t just a period of turmoil,” Weiner said. “It was decades and decades of all-out war.” So how do sponsors, notably those tied to the NFL, operate during a lockout? “Uncertainty is not good for business,” said de Picciotto, whose agency works with several companies tied to the NFL. But he added, “There’s still a little bit of time. ... Every situation is different. So the advice is very specific to each one.”
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