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NFLPA paid Upshaw’s estate $16M out of trust
Published February 1, 2010
The NFL Players Association paid the estate of its late executive director, Gene Upshaw, $16 million that had accumulated in a trust set up for the long-running leader of the union, according to the group’s tax return filed last month.
The return also shows that the NFLPA lost $13.5 million in the fiscal year ended Feb. 28, 2009, because of steep investment losses. That in part led to the first annual decline in assets for the union in at least six years, according to the group’s tax returns (see chart).
The disclosures emerge as the NFLPA is locked in contentious collective-bargaining negotiations with the NFL. Players have openly talked about the owners locking them out after the 2010 season.
“Whenever you are about to go into [a] labor battle, which seems to be what the parties are girding for, you want to have a war chest,” said Joshua Zuckerberg, an attorney with Pryor Cashman, where he has represented both management and labor. “To the extent that [the NFLPA has] lost a lot on the market and they had to pay out a significant amount to the Upshaw estate, it is not great for their battle strategy.”
That said, Zuckerberg added, the $194 million in assets claimed as of Feb. 28, 2009, is still a lot of money, and presumably the investments did better in the past 10 months given the relatively healthier stock market.
The NFLPA disclosed in court documents in 2008 that its designated strike funds had reached nearly $120 million.
The NFLPA lost $22.6 million on its investments in the 12 months ended Feb. 28, 2009, according to the tax return. The group’s investments stood at nearly $147 million at the end of that period.
The NFLPA’s revenue, which does not include revenue from its for-profit licensing unit, was $62.7 million, with expenses of $51.2 million, giving the group a pre-investment gain of $11.5 million. Another $2.4 million of losses were tied to accounting adjustments, according to the return, leading to the overall $13.5 million loss.
The return also discloses that the NFLPA has taken nearly total control of its licensing and merchandise arm, NFL Players, the group formerly known as Players Inc. The NFLPA owned 97.9 percent of that entity as of Feb. 28, 2009, whereas a year earlier it owned 79 percent. An NFLPA charity owns the remainder.
That subject became a point of contention when a group of former players sued the NFLPA over the distribution of licensing income. The main issue was the split between active and retired players, but the group made a point of asking why 20 percent of the revenue went not to players but instead to a charity.
The group won a district court jury trial in late 2008, and the NFLPA, which appealed the decision, settled the case for $26.25 million.
An NFL Players spokesperson could not immediately be reached for comment.
NFL Players revenue at the end of the fiscal 2009 period reached $102 million, roughly the same as the year earlier, according to the union’s tax return. However, assets dropped from $115.5 million to $84.2 million, according to the returns.
Upshaw’s compensation when he was alive was a lighting rod for many of the league’s retired players. The NFLPA paid the $16 million out of a trust it established for its leader during his tenure, with his pay from NFL Players going directly into that fund. He died on Aug. 20, 2008.
Upshaw’s longtime critics took aim at the recent disclosure.
“I find it very disturbing but I don’t find it surprising,” said Dave Pear, a former Oakland Raiders player whose battle with the NFL and NFLPA over the long-term health effects of his playing injuries he documents on his blog, davepear.com. “Quite frankly, I thought it would be more. Millions of dollars for him, and pennies and half-pennies for his football brothers.”
But Cathy Griffin, a compensation consultant with a specialty in sports, said the Upshaw payout is where it should’ve been for someone who for 25 years led what is arguably the biggest provider of entertainment talent.
“I don’t think it is inappropriate when it is [viewed] over time and he has a long legacy of contributions,” Griffin said.