SBD/July 15, 2011/Leagues and Governing BodiesPrint All
The NFL and NFLPA "moved to the brink of an agreement in principle to end the sport’s four-month shutdown when they completed a tentative deal Thursday on a new rookie pay system," according to sources cited by Mark Maske of the WASHINGTON POST. The sources said that a "few minor details on the rookie compensation system remained to be worked out as of early Thursday night but an accord on the issue was essentially in place." Additional sources indicated that "with the resolution on rookie pay, a handshake deal between the two sides was possible by Friday but still was more likely to take a few days longer than that to finish." It appeared that there "was a growing expectation within the sport that a resolution to the long-running dispute was near." Maske reports the salary cap for the '11 NFL season reportedly "will be set at approximately $141 million per team including salaries and benefits for players, of which about $120 million will be devoted to players’ salaries." Remaining "unresolved issues apparently include retiree benefits and free agency rules." League and NFLPA reps are "scheduled to meet Tuesday in Minneapolis" with U.S. Chief Magistrate Judge Arthur Boylan, and both sides "apparently would like to have an agreement in principle by then to present to Boylan" (WASHINGTON POST, 7/15). On Long Island, Bob Glauber noted 10 members of the NFL's 12-owner negotiating team were at Thursday's talks, "which lasted into the evening." One person involved with the negotiations said, "We have not had this many owners in one spot for labor talks since March 11" (NEWSDAY, 7/15).
ON THE GOAL LINE: ESPN's Chris Mortensen reported the players are “willing to give up judicial oversight, which was a big deal for the owners.” There will now be a “panel of former judges who will do the arbitration and a lot of disciplinary matters, though it appears commissioner discipline may still be separate from them.” Mortensen noted the remaining issues include workman’s compensation and the “settlement of the Brady anti-trust lawsuit.” He said, “There were skeptics in that room up there who say that they were shocked at the momentum towards a settlement as the night moved on. I think it is reasonable to think there might be an agreement in principle within 24 to 48 hours” (“SportsCenter,” ESPN, 7/14). NFL Network's Albert Breer said, "To say we’re close might be overdoing it a little bit, but the momentum is positive and the two sides are in a good place” (“NFL Total Access,” NFL Network, 7/14). A source on the players' side late Thursday said, "I know everybody is tired of hearing the word ‘close.’ I know I am. But I think this is really, truly right there, ready to be done unless somebody comes in and really screws things up" (SPORTS.YAHOO.com, 7/15). However, a source said the issue of judicial oversight not been discussed for weeks (Daniel Kaplan, SportsBusiness Journal).
DETAILS OF ROOKIE SCALE: Sources said that the agreed upon rookie wage scale calls for "five-year contracts, with a team option for the fifth year." If the "team option is exercised, in the fifth year the top 10 picks would receive a salary equal to the average of the top 10 player salaries at their respective positions," and that money "would be guaranteed if the option is exercised after the third year of the contract." Also under the agreement, if the "team option is exercised, in the fifth year picks 11-32 would receive a salary equal to the average of the Nos. 3-25 salaries at their respective positions." That money "would be guaranteed if the option is exercised after the third year of the contract" (ESPN.com, 7/15). ESPN's Cris Carter said, "If you’re taking the money from the young kids, I think that they should keep the standard contract entering the league to a four-year deal. ... I hope the current players have a tough stance on it and do not let the owners have a five-year initial contract for guys coming into the league” ("NFL Live," ESPN, 7/14).
POSSIBLE CAP EXEMPTION: ESPN's Mortensen reported the salary cap will be $120M, “but for this year, they might get a $3 million exemption for a player." The cap in '09, the last year played under a salary cap, was $128M. ESPN's Sal Paolantonio said, “If you have a $120 million salary cap all of a sudden, you could have teams over the cap, so you would have an exemption in place for certain teams” ("SportsCenter," ESPN, 7/14). USA TODAY's Gary Mihoces notes with the salary cap settled, the "next domino to fall in the talks could be setting the minimum amount teams can spend under the salary cap." That number is "expected to be between 90% and 100%" (USA TODAY, 7/15). The guaranteed spend "forces every team to put up more than 90 percent of the salary cap in cash each season." Sources indicated that the owners a few weeks ago "talked about having the guaranteed spend number at close to 100 percent of the salary cap." That number and percentage "could still be adjusted" (ESPN.com, 7/14).
WHAT HAPPENS NEXT? In N.Y., Bart Hubbuch notes the two sides "already have worked out the overriding issue -- how to divide annual league revenues that reached $9.3 billion last year." The NFLPA "has agreed to reduce its cut to 48 percent (down from 53 percent) in part because the owners will no longer take $1 billion off the top and have promised to double league revenues by 2016" (N.Y. POST, 7/15). In N.Y., Judy Battista notes players are expected to receive between 46-48% of all revenue, "but there will also be a mandatory amount that teams must spend in cash on player salaries each year" (N.Y. TIMES, 7/15). Meanwhile, in L.A., Sam Farmer notes there will be a "compressed free-agent period after a deal is done, and that includes the scramble to sign first-year players who have been waiting in limbo." NFL Network's Mike Mayock: "It's going to be a feeding frenzy." Mayock said that, "in anticipation of the lockout and the inability to contact prospects in the immediate aftermath of the draft, many teams took special care to make connections with college players to lay the groundwork for the eventual signing period" (L.A. TIMES, 7/15).
WANT TO BE A PART OF IT: The AP's Jon Krawczynski reported a group of retired players sent the NFL a letter Thursday "asking to be a part of the negotiations." In it, the players refer to a letter they received from Panthers Owner Jerry Richardson and Packers President & CEO Mark Murphy that said improving benefits and retirement plans were a "top priority." The letter comes less than two weeks after the group of retired players, including HOFers Carl Eller, Marcus Allen and Franco Harris, filed a complaint "alleging that the NFL and NFLPA 'have conspired' to set low retiree benefit and pension payments" (AP, 7/14).
Peterson says there will be no hard feelings
toward owners once lockout ends
The NBA confirmed that it has cut 114 jobs, or about 11% of its workforce, at its league office. NBA Senior VP/Marketing Communications Mike Bass said the layoffs are part of a $50M cost-cutting effort by the league. “The layoffs are not a direct result of the lockout but rather a response to the same underlying issue that is the league’s expenses far outpace our revenue,” Bass said. The cuts are across all areas of the NBA’s business, but not all departments had layoffs. The league has also shut its Tokyo and Paris offices and shuttered a studio at its Secaucus, N.J., offices. The NBA last had a layoff in '08, when the league office cut about 80 jobs (John Lombardo, SportsBusiness Journal). USA TODAY's Jeff Zillgitt reports the now-vacant positions "won't be refilled when the lockout ends." Those in the Paris office "who were not laid off will work in the London office, and those still with the NBA in Tokyo will work in the Hong Kong office." The league said that it lost nearly $350M during the '09-10 season, and nearly $300M last year (USA TODAY, 7/15). In N.Y., Howard Beck reports while the NBA "declined to offer specifics, the layoffs included a number of senior-level executives." All of the affected employees "were offered severance packages." NBA Deputy Commissioner & COO Adam Silver informed the owners of the layoffs in a memo, calling them "part of our larger efforts to restructure our operations and create a long-term sustainable business that is well-positioned for future growth." The league plans to shut down its Secaucus studio, "where the draft lottery is staged each year," later this summer. The NBA "has not identified a new home for the lottery, but it will likely be held at an ESPN or ABC studio in Manhattan." Commercial shoots and "other programming that had been done in Secaucus will be moved to Atlanta" (N.Y. TIMES, 7/15).
Several foreign basketball federations are “grappling with high insurance costs in the weeks leading up to regional Olympic qualification tournaments, one piece of the ‘collateral damage’ that NBA commissioner David Stern spoke of when he announced on June 30 that the league was imposing a lockout,” according to Chris Sheridan of ESPN.com. The federations are “trying to find ways to shoulder the enormous financial burden of insuring their star players' NBA contracts, an expense that could force several of the top international players to sit out FIBA tournaments this summer.” In a normal offseason, an agreement between FIBA and the NBA “provides an infrastructure that holds down the cost of insuring players' contracts in case they are injured in an international competition.” But that agreement “has been suspended” as part of the NBA lockout. The Australian federation “already has announced that it will not have Andrew Bogut on the roster for the FIBA-Oceania tournament, and the Spanish federation has said it will cost as much as $5,670,000 to insure the contracts of players including Pau and Marc Gasol, Rudy Fernandez, Jose Calderon and Ricky Rubio.” Many NBA players are reporting to their national team training camps in the hope that a CBA resolution "will come before the qualification tournaments begin." Sources said that FIBA is “exploring several possible solutions, including an option being spearheaded by FIBA Europe to find one insurance company to insure all European NBA players regardless of their national affiliations” (ESPN.com, 7/14).