SBJ/20090921/This Week's News

NFL labor fears affect deals for execs, coaches

Some NFL clubs are asking top-level employees to take pay cuts as steep as 50 percent or agree to be terminated with little notice if there is a work stoppage in 2011.

Clauses to that effect began appearing in coaches’ contracts about six months ago, and have been included in contracts of other high-level NFL club employees as well, sources said, including contracts for scouts and high-level business-side executives.

The NFL collective-bargaining agreement with players expires in March 2011, and owners are expected to lock players out if there is no deal. That would mean little or no work for thousands of other NFL club employees.

The vast majority of non-player employees at NFL clubs can quit or be fired “at will,” and do not have employment agreements. But many top executives on the business side have contracts, as do all general managers and coaches.

Many of the work-stoppage clauses differ from club to club but some of the same language appears in multiple contracts, said Larry Kennan, staff director of the NFL Coaches Association, a trade association that represents the about 600 NFL coaches, from head coaches to the lowest-level assistant coaches.

Some clauses in recent contracts of top team executives, coaches and general managers give clubs new rights to cut compensation and terminate contracts. Some examples, according to multiple sources, include language allowing clubs to:
Reduce, terminate or suspend the contract on 20 days’ notice.
Reduce salary by 50 percent if the lockout continues for more than 90 days.
Terminate the employee without pay on 60 days’ notice.
Extend the contract another year at same terms as 2011 if at least eight NFL games are canceled.

“There are multiple contracts with the same terms. For instance, a lot of them have that the club can impose a 25 percent salary reduction in the event of the lockout,” he said.

The language in some contracts goes even further, according to multiple sources (see box).

NFL spokesman Greg Aiello declined to discuss the contracts of team coaches or executives, saying, “The terms are negotiated individually by the clubs and the employees.” He said he was not aware of similar language being inserted into the contracts of league employees.

Aiello declined to estimate the number of club employees at the 32 NFL teams, but industry sources said many NFL clubs employ about 100 people and sometimes more.

The number can vary greatly depending on whether the club owns and operates its stadium or is a tenant in a government-owned stadium, said Marc Ganis, president of SportsCorp. Ltd., a Chicago-based sports business consulting firm. Employees in football operations, including the entire coaching staff, are contract employees. “And then, on the business side, you will have your executives, your top marketing people, your top financial people, your top administrator [under contracts],” Ganis said.

During the last major work stoppage in sports, the 2004-05 NHL lockout, about 1,000 jobs were eliminated at NHL clubs, business partners and the league itself. Some clubs chose not to lay off any employees while others did, and many employees whose compensation was based on sales commissions quit. At one club, the Dallas Stars, upper management, including full-time scouts and coaches, took 20 percent to 25 percent pay cuts.

Kennan said many coaches are not aware of the new contract language because they haven’t negotiated their contracts for the potential lockout year. He did say that some of the language in the contracts ties coaches down. “In most cases the club is saying we can renew this thing when the lockout ends,” he said. On the other hand, there are some clauses which allow coaches to work in college football, he said.

Some coaches are refusing to sign contracts that contain the work-stoppage language, according to Kennan and agents who represent coaches.

Agents, who spoke on condition of anonymity because they feared reprisals against their clients, say some coaches have fought successfully to get the lockout clauses stricken. “Like anyone else, it depends on how much leverage you have and if a team wants a coach badly enough,” one agent said.

Unlike NFL players, NFL coaches are not part of a collective-bargaining unit and have no union to fight against the changes in their contracts. (The NFL Coaches Association is funded by dues, which about two-thirds of the 600 coaches pay voluntarily. The association is not funded by the NFL Players Association, but the players union provides office space and services, including administrative and legal services, to the coaches group.)

Kennan said coaches are upset about the new contracts and feel caught in the middle between owners and players.

“I don’t want to say we will be on the players’ side,” Kennan said. “We will be on the side that will be most friendly to coaches. If the owners are trying to lock us out, that is not very friendly.”

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