SBJ/20090817/Special Report

Four veterans look at the state of labor relations

With the collective-bargaining agreement between the National Basketball Players Association and the league due to expire in 2011, will the players once again capitulate to the demands of management? The past several negotiations have seen a series of compromises by the players — the most humbling after a 1998 standoff over a luxury tax and maximum player salaries that prompted a three-month lockout, the only labor stoppage in NBA history.

This time around the union must stave off shorter contracts, a hard salary cap, a higher age limit on incoming players, elimination of the midlevel cap exception, and an overall reduction in the players’ percentage of revenue. Prior to any negotiations, the union must, for once, subject the issues to thorough analysis and educate players about the consequences of previous concessions.

Past sacrifices have resulted in the virtual elimination of free agency with players now having to accept less money to jump teams. In addition, rather than protecting veterans, the last pact led to a significant reduction in the number of vets getting multiyear contracts commensurate with their true worth. Furthermore, the shrinking cap has increased tenfold the number of players making the league minimum.      

In the absence of revenue-sharing, the well-heeled Lakers now pull in more than $120 million from gate receipts and local TV deals while the cash-strapped Grizzlies pocket barely a fifth of that. Clearly, the system must be changed. Popular wisdom is that the owners have the power to impose their will on the players and their weak union, but ultimately the players will have as much power as they have the courage to exert.

Arn Tellem is president of management at Wasserman Media Group. He has been a member of the National Basketball Players Association’s agent advisory committee for labor for about 15 years. He is known as an ardent and vocal defender of players’ and unions’ rights.

When NFL clubs voted unanimously in 2008 not to extend the current deal, the NFL explained that a big problem is this CBA does not adequately recognize the costs of generating revenue, of which our players receive the largest share. The problem has worsened as those costs continue to rise in the current economy. Clubs have been required to make ever-increasing investments and take on even more risk as the share of the overall pie devoted to players has increased.

The NFLPA has access to an extraordinary amount of financial information and will have the necessary financial data it needs to make informed decisions, as has been true for the past 15 years. One reality is that player costs are rising at a faster rate than revenue.

Apart from economics, we can improve the system to benefit veteran players contributing on the field. Clubs need the authority to recoup bonus money from suspended players so it’s available to players performing on the field. We need a more reasonable way to pay rookies so that more money is available to proven veterans. Today, rookies drafted in the first round are often among the NFL’s highest-paid players at their position. This isn’t good for owners or players.

We need to return to jointly operating and improving our substance abuse and steroid programs. For the first time, the NFLPA has sponsored litigation over our collectively bargained steroids program. Why isn’t the union standing behind this negotiated national program that has brought so much credit to NFL teams and players?

We want to further address retired player issues and explore restructuring the season to add more value and quality for fans, players and teams.

As a player, I served as vice president of the players union. Now I am on the other side. I know we can get it done.

Mark Murphy is president/CEO of the Green Bay Packers and a member of the NFL’s management council executive committee. Murphy played for the Washington Redskins 1977-84, and served as the Redskins’ player rep to the NFLPA 1980-84, including the position of vice president of the players union (1983-84). He later served as assistant executive director of the NFLPA 1985-88.

Labor relations in the NFL have been what professional labor negotiators would call “mature” for 16 years — no strikes or lockouts and no rupture in a relationship characterized, for the most part, by respect and recognition that the competition was baseball and movies, not the other side of the table. That may change quickly unless DeMaurice Smith and Roger Goodell can prevent mass amnesia on the part of their constituents.

Sure, let’s return to the good old days when team owners, led by Hugh Culverhouse, did their level best to divide retired and active players, fought fiercely against player freedom of movement, would brook no dilution in commissioner authority and worked to weaken the NFLPA to the point of irrelevance. And, let’s return to the days when retired players were uninvolved in the NFLPA and routinely attacked it, when active players argued bitterly over choosing between better pensions and free agency, and when the NFLPA had few resources and no financial reserves. 

Or, we could look to the model of leadership practiced by Gene Upshaw and Paul Tagliabue. Represent and defend your constituency first, but within the context of a business partnership dedicated to growing the business and sharing in that growth fairly.

There are, of course, some real thorny problems to resolve. Roger Goodell has to figure out how to get the owners to share their revenue more equitably among small market and big market teams. That is not the players’ problem and the solution can’t be to let the smallest or worst-run team set the standard for reasonable player costs; a race to the bottom that the players shouldn’t enter. DeMaurice Smith needs to prepare his members to renounce collective bargaining (“decertify”) if, once again, the owners unwisely try to use collective bargaining to restrict player movement and prevent a real market for player talent. The players weren’t recognized as partners at the table until they exercised the leverage of antitrust challenge to unlawful restrictions on player movement and compensation. It is ironic that the best way to avoid a strike, lockout or protracted antitrust lawsuit is to be fully prepared for each possibility.

Doug Allen was assistant executive director of the NFLPA for 20 years and on staff for 25 years. He participated in hundreds of CBA negotiation sessions as a key member of the NFLPA’s bargaining team.

Management has the burden of protecting its product, the “game,” the balanced distribution of talent among the teams and protection of the integrity of the game so that the outcome of each game is in doubt. This last concept is the very essence to the appeal of sports. To accomplish this, management will strive to balance revenue among the teams, control player entry into the league, the period of a team’s control before free agency, the rules of compensation for free agents lost and, the most important issue today, drug testing. This last issue gets at the “outcome in doubt” issue and is of critical importance. Of course, overall player compensation, salary caps and luxury taxes will be vigorously negotiated.

The union has the easier chore, as its job is to increase salaries, including salary protection, and reduce team control. Unions have no interest in competitive balance and resist intrusions into a player’s personal life, like drug testing.

The stage is set and each side has power. For management — the lockout; For unions — a strike. Both have been used often. Of interest to me is the presence of two new union leaders in MLB and NFL. Both will try to make a mark.

Clark Griffith is a former owner of the Minnesota Twins and served on the MLB labor committee for six years. He conducted labor relations for the Twins from the advent of the union to his departure in 1984. He is a lawyer and arbitrator and teaches sports law at two Twin Cities law schools.

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