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SBD/June 22, 2011/Leagues and Governing BodiesPrint All
NFL owners and players are scheduled today to meet for the fourth round of intense negotiations this month, following yesterday’s five-and-a-half hour owners meeting outside Chicago. While there was the expectation owner divisions might be exposed at yesterday’s meeting, such a development did not appear to be the case. And while there were reports yesterday of very specific revenue splits and deal terms being discussed, sources said what was presented to owners yesterday was more conceptual. “We don’t have an agreement,” said NFL Commissioner Roger Goodell. “We have I think a very strong view of the priorities, a very strong view of what we need to accomplish in the negotiations and a determination to get there and the ownership is unified on that basis.” Responding to a question about unifying the owners, he replied, “There wasn’t a gap in the first place.” However, those hoping for a quick return to the field might have had those hopes tempered here. Speaking after the commissioner, NFL Exec VP/Labor & General Counsel Jeff Pash said, “We would have to make sure the documents were fully drafted and approved and both parties would have to ratify the agreement. There is some litigation that would have to be dealt with and we would have to be before the various courts. If large sums of money are changing hands and players are signing multi-year agreements, you would want this confirmed not just in a general way.” A fair share of the meeting was spent discussing how, if a deal is struck, the league would come out of the now 103-day lockout, evidenced by football operations execs like Browns President Mike Holmgren and Chiefs GM Scott Pioli who attended (Daniel Kaplan, SportsBusiness Journal).
INSIDE THE NUMBERS: ESPN's Chris Mortensen cited sources as saying that among the details Goodell revealed to owners yesterday "is that in the next proposed agreement players will receive a 48 percent share of 'all revenue,' without the $1-billion-plus credit off the top that had been a point of contention in earlier negotiations." The sources said that under a new formula "being negotiated, players will receive 48 percent of all revenue and will never dip below a 46.5 percent take of the money." In the previous CBA, the players "received approximately 60 percent of 'total revenue' but that did not include $1 billion that was designated as an expense credit off the top of the $9 billion revenue model." Owners "initially were seeking another $1 billion in credit only to reduce that amount substantially before exercising the lockout on March 13." Sources added that owners "still will get some expense credits that will allow funding for new stadium construction," and that players "are willing to commit to at least a 10-year labor agreement if the sides can agree on terms." Mortensen reported a rookie wage scale "will be part of the new deal but is still being 'tweaked,' and the much-discussed 18-game regular season will be designated only as a negotiable item with the players and at no point is mandated in a potential agreement." A "full 16-game Thursday night TV package could be the source of new revenue," though Goodell said that "no discussions were held Tuesday on a potential full-season Thursday night TV package." A source said that current TV deals "make 2014 the target year for an extended Thursday package, not 2012" (ESPN.com, 6/21).
CONCESSIONS TOWARD A DEAL: ESPN.com's John Clayton reported owners are "willing to give players a major improvement in minimum team payrolls." Under the old CBA a team's "payroll minimum was 86 percent of the salary cap, but that was off just the cap number and teams could build in phony incentives to make up the difference." But a source said that owners in order to get a deal "now are willing to guarantee close to 100 percent of the salary cap as the minimum amount of payroll on a team's books." That means a team "would have to have a minimum cash payroll of close to $120 million if the cap were at $120 million" (ESPN.com, 6/21). The AP's Barry Wilner noted players "have been concerned that some teams whose revenue streams don't match up with the richer clubs would try to hold down salary spending" (AP, 6/21). Meanwhile, YAHOO SPORTS' Doug Farrar noted the new Thursday schedule, "which would put 16 mid-week games in-season, would start in 2012 and would be a new source of revenue." The games "may be a way for the owners and [players] to bridge the gap between the profits the league anticipated from an 18-game season, and the fact that the players appear to see 18 games as a non-negotiable deal-breaker" (SPORTS.YAHOO.com, 6/21).
OWNERS LARGELY ON THE SAME PAGE: In DC, Mark Maske notes owner opposition yesterday to the "plan hammered out in closed-door deliberations over the past few weeks apparently was modest and confined to certain aspects of the complex deal." Sources said that it appeared that "only a handful of owners had serious objections to the broad terms of the deal." Some owners "apparently want the agreement to provide protection for the teams in case of an economic downturn," while some "appear to believe that the league should take advantage of recent courtroom victories to negotiate a more favorable pact." But other owners are "pressing for a deal on the terms currently under negotiation." Goodell said, "We've got a lot of work to do and we've got to do it right." Meanwhile, Maske cites a source as saying that the players "likely would accept slightly less than half" of revenues "in the future because overall revenue is expected to rise sharply and total compensation would increase rapidly, even if players accepted a smaller percentage of the gross revenue" (WASHINGTON POST, 6/22).
MOVING AT A FAST PACE: NFL.com's Albert Breer noted owners "had the opportunity to voice concerns and debate issues" at the meeting yesterday, and "so the speed at which things moved along was considered a good sign." Patriots Owner Robert Kraft: "It's good that things seem to be moving. But there's a lot of hard work left to be done." The meeting was "designated as a 'two-per-club' meeting," and "because such a small number of clubs have been involved in the 'secret' meetings the last few weeks, it was important for football people to stay updated on the process to preserve competitive balance." Breer also noted the plan for "how the league year would begin following a labor resolution is on the table, and football people need to be involved in that" (NFL.com, 6/21). CBSSPORTS.com's Clark Judge reported owners and GMs "swore there were no rancorous discussions or divisions among clubs and that Goodell did not have to serve as a peacemaker." A source: "It wasn't like there was a rumble that was expected in there. But I didn't come here expecting that. It was more to bring us up to speed on what's going on" (CBSSPORTS.com, 6/21).
Goodell cautions that there is still a ways
to go to reaching new CBA
NOT ENOUGH OPPOSITION: THE SPORTS XCHANGE's Len Pasquarelli reported there are "some owners, including at least two from AFC franchises, who are not in favor of some of the presumptive tenets of an agreement framework." After yesterday's meeting, three owners said that the opposed owners "have not dramatically shifted their opinions." However, Pasquarelli noted it "does not appear there is sufficient opposition to derail the process or to block approval of a CBA if current momentum leads to an agreement." Several owners "seemed to be operating under the assumption that an accord could come in the next 2-3 weeks" (CBSSPORTS.com, 6/21). SI.com's Don Banks reported he "talked to no one within the NFL at Tuesday's owners meeting who counts nine no votes poised to quash a possible deal." There was "some dissent and concerns being voiced in the NFL's nearly six-hour session," but league sources said that it was "not significant enough numerically to pose real trouble should a vote occur." However, league sources said that there were "very few specifics relayed to league owners about the framework of what a final deal might look like, and minus those details, there was no reason to either start counting votes in the room or engage in spirited debate about the pros and cons of such a proposal" (SI.com, 6/21). In N.Y., Bart Hubbuch writes the meeting was "expected to be a huge test of Goodell's leadership because several small-market clubs had balked at the latest league proposal." But if there were "any significant internal opposition ... it was nowhere to be found in the hallways of the meeting site." Hubbuch writes the "onus now is on" NFLPA Exec Dir DeMaurice Smith "to sell the owners' proposal to his side" (N.Y. POST, 6/22).
GETTING ANTSY: YAHOO SPORTS' Cole wrote the league year could start "sometime or or just before July 15." An owners source said, "That kind of timeline is altogether possible" (SPORTS.YAHOO.com, 6/21). Colts Owner Jim Irsay: "There's a sense of urgency to continue to get something done. That's my hope, but these things are tough and fragile, and that's why you've got to keep working at it" (USA TODAY, 6/22). Goodell: "Is there a 'drop dead date?' There isn't. But obviously time is moving quickly, and I think there is an urgency to get this done. I hear from fans all the time, and the anxiety level is very high. ... We know how important football is to them, and we hope to deliver" (New Orleans TIMES-PICAYUNE, 6/22). He added, "It's not what everybody wants; it's what everybody needs to reach an agreement that's fair and balanced and is going to work to make our game better and to continue to grow our game." In N.Y., Judy Battista notes league officials indicated that they "hoped to increase the frequency of negotiations with players." In recent weeks, the sides "have met for about two days each week" (N.Y. TIMES, 6/22).
STRANGE BEDFELLOWS: The NBA is currently trying to negotiate a new CBA before it expires on June 30, and SportsNet N.Y.’s "The Wheel House" yesterday debated whether Goodell or NBA Commissioner David Stern is hurting their respective sport more with each sport’s labor troubles. SNY's Eamon McAnaney said, "I got to go with Roger Goodell on this one because he's just losing all the good PR that the NFL gained over the last few years. ... Roger Goodell does not have the clout in that league that David Stern does in the NBA. I don't think there's any question that what David Stern wants or what David Stern says goes in the NBA, whereas Roger Goodell is coming off right now as a mouthpiece for the owners.” But the N.Y. Daily News' John Harper said, “What Goodell has going for him is, the NFL is the NFL. No matter what happens, even if they miss half a season, people are going to come back to the ... games. I don't think you can say that with the NBA. That’s why I think Stern really can hurt this league even more” (“The Wheel House,” SNY, 6/21).
With the June 30 NBA CBA deadline looming, labor talks failed to yield an agreement yesterday, with the league offering the players no less than $2B in annual salary along with what league officials called a “flex cap” of $62M per team. NBA Commissioner David Stern said the $2B is what the player salary level is this year. While the league had been discussing the flex cap in previous sessions, the $2B salary offer was made yesterday after the union’s initial proposal of a five-year offer to include a $100M annual salary decrease along with a reduction of the players' share of basketball revenue to drop to 53.4% from the current 57% share. The league then countered with its offer to pay players no less than $2B. After the meetings, Stern said that while both sides will meet again on Friday, “the cupboard is getting barer and barer." He added, “We think this is virtually the best shot we think we have to both demonstrate to the players our good faith, our desire to go as far as we can to avoid a lockout. This now makes 10 proposals that have gone back and forth at least.” After the meeting, NBPA Exec Dir Billy Hunter, along with union economist Kevin Murphy, held a lengthy conference call with the player representatives to go over the proposals (John Lombardo, SportsBusiness Journal). NBA Deputy Commissioner & COO Adam Silver said that the owners "want to implement an 'NHL-type' system," one that would "allow teams to exceed the $62 million cap but would also place the financial onus on the players if the average payroll of all 30 teams" exceeded that amount. The NBPA said that it "will spend the next three days determining whether it interprets this proposal as a hard cap with different language." The sides are expected to meet again on Friday, and Lakers G and NBPA President Derek Fisher said that they "have not agreed on any of the smaller issues because they are interconnected with the hard cap and guaranteed salaries." Fisher: "So far, there hasn’t been much movement at all" (BOSTON GLOBE, 6/22).
INSIDE THE OWNERS' PROPOSAL: Stern did not indicate if yesterday's proposal was the final offer from the owners, but he said, "We wanted to make sure that we laid it all out there. It’s all out there." CBSSPORTS.com's Ken Berger reported the proposed CBA calls for an escrow-like system that "would be used to adjust for teams coming in below and above" the $62M target. Stern said that unlike the current CBA, the owners "would keep the escrow under the new system -- making this, in effect, an 8 percent pay cut for the players in Year One." Compared to the owners' initial proposal of a $45M hard cap, this offer "amounts to a $650 million move." The luxury tax "would be eliminated under the owners' proposal." Berger noted the "flex cap offer made by the owners Tuesday seemed to be a victory for high-revenue owners and the trend of forming superteams" (CBSSPORTS.com, 6/21). ESPN.com's Chris Sheridan reported the owners "also moved their position on cap exceptions, saying the Larry Bird Exception and the mid-level exception would remain in a new system, although teams could not exceed an as-yet-determined maximum team salary." In addition, a source said that the proposed CBA "would increase salaries only minimally over the 10-year period, having the effect of cutting the players' portion of basketball-related income, as currently calculated, from 57 percent last season to less than 40 percent in the latter years of the proposed 10-year agreement." NBPA attorney Jeffrey Kessler said, "We both made real moves, but we're still very far apart" (ESPN.com, 6/21).
AND MILES TO GO ... In N.Y., Howard Beck notes after "nearly five hours" of negotiations yesterday, the league and players "appeared only marginally closer to a deal and still on course for a lockout July 1." There was a "slight softening of the rhetoric," but NBPA officials contend that the owners' proposal "still amounts to a massive pay cut for the players -- at least $7 billion over 10 years, when compared to the current system." Still, Hunter said it was the "first move of any consequences they’ve made in the two years that we’ve been negotiating" (N.Y. TIMES, 6/22). Knicks G and NBPA VP Roger Mason Jr. following yesterday's meeting said, "We know the deadline is approaching and we're doing the most we can to prevent a lockout. We're still so far apart on the hard salary cap. As players, it's something we don't see as something we can do." NBPA attorney Ron Klempner: "I don't know what a flex cap is. As long as there is a target number, it's a hard cap. I don't see how it isn't. It's nomenclature" (N.Y. POST, 6/22). Hunter said, "While it obviously demonstrates some good faith on their part, there's still a huge gap from where they are to where we are." Yesterday's meeting "included several players and seven of the 11 owners on the league's labor relations committee" (NEWSDAY, 6/22). In Charlotte, Rick Bonnell wrote, "They're still miles apart, and it won't take much for David Stern and Billy Hunter to start growling at each other again and maybe [end] up in court. But steps were taken today toward a deal. That feels important" (CHARLOTTEOBSERVER.com, 6/21). Below is a list of some of the participants in yesterday's CBA negotiating session in N.Y.
COMMITTEEJeanie Buss (Lakers)
Spurs F Matt BonnerJames Dolan (Knicks) Lakers G Derek FisherDan Gilbert (Cavaliers)Hawks F Al HorfordPeter Holt (Spurs)Knicks G Roger Mason Jr.Larry Miller (Trail Blazers)Hawks C Zaza Pachulia Robert Sarver (Suns)Spurs G Tony Parker Bob Vander Weide (Magic)Hornets G Chris PaulLakers C Theo RatliffBucks G John SalmonsT'Wolves G Sebastian Telfair
NBCUniversal has bought back a stake in the Dew Tour that it sold to MTV in '08 "in a deal that values the property and its assets" at $40-60M, according to Tripp Mickle of SPORTSBUSINESS JOURNAL. The deal puts the Dew Tour “back exclusively in the hands of the NBC Sports Group.” NBC sold MTV a stake in the tour three years ago “because officials believed that MTV’s cable networks, digital expertise and appeal to youth could help expand the tour’s fan base.” But Comcast’s acquisition of NBC “meant the company had more assets and gave its executives confidence that it could build the tour independently now.” The Dew Tour will “still air on MTV2 this summer, as well as NBC and USA Network.” NBC Sports Group Senior VP/Business Development Kevin Monaghan said that NBC after this summer will “look to shift the programming to Versus and Comcast regional sports networks.” Mickle reports the value of Alli Sports, which operates the Dew Tour, has increased “from a reported $15 million to $30 million valuation in 2008 to a $40 million to $60 million valuation today.” The size of MTV’s stake in Alli Sports “remains unknown.” The tour is “in the middle of negotiating renewals with all of its title partners: Mountain Dew for the summer and winter tours; Gatorade for the Free Flow Tour; and Lucas Oil for the AMA Motocross Series.” In the wake of NBC’s acquisition, Allisports.com “will move from an MTV-supported Web platform to an NBC-supported one.” MTV Networks Music Group COO Alex Ferrari said that MTV2, which “is where most Dew Tour programming aired, will still show sports but the company has no specific plans in action sports” (SPORTSBUSINESS JOURNAL, 6/20 issue).