SBJ/Jan. 24-30, 2011/Labor and Agents

NFLPA assets up 18% as CBA deadline nears

The NFL is not the only side in football's bitter labor dispute stockpiling financial reserves for a potential work stoppage. The NFL Players Association's assets, including those in its marketing arm, jumped 18 percent in its last full fiscal year to $340 million, according to the union's tax return, which was filed with the Internal Revenue Service last week.

While that amount pales next to the NFL's $900 million lockout pool, and not all of the union's assets are liquid, the two sums, when taken together, suggest that the brewing battle between the NFL and the union looks to be far and away the best-funded sports labor fight ever.

"Never in the history of sports labor negotiations have both sides had so much money available to fight the battle," said Marc Ganis, a sports consultant with ties to management in the NFL. "Both sides have an unprecedented, huge war chest to spend relatively unlimited funds on lawyers, public relations and for ongoing operations during a work stoppage, if it comes to that."

NFLPA ASSETS
Year* AMOUNT
2010 $339.6 million*
2009 $287.3 million*
2008 $214.9 million
2007 $185.1 million
2006 $164.5 million
* Fiscal years ended Feb. 28 Beginning with the 2009 return, the NFLPA began disclosing in its tax return the assets of its for-profit licensing arm, NFL Players. Without this unit, the figure for 2010 is $245.8 million and for 2009 is $204.9 million.
Source: NFLPA tax returns

The NFLPA could not be reached for comment on its tax return, which covers the 12-month period ending Feb. 28, 2010, meaning the assets could be even greater at this moment.

Two factors appear to have driven the asset increase: a healthy investment portfolio and a more than doubling of the players' dues. On the latter, dues rose to $42 million from $19 million, according to the two most recent returns. Investment in securities and cash investments rose to $237.1 million, a 25 percent increase, reversing a decline in investments the previous year.

The union also owns its headquarters building, an asset it values at $56 million, which bring the union's full value to nearly $400 million, according to the tax return. The union unit that owns the building is accounted for as a for-profit entity so it is not formally reflected in the union's assets. Neither is NFL Players, the licensing and marketing arm, where assets jumped 13 percent to $93.7 million. That gain was likely fueled by investment growth, however, because revenue for the unit dropped from $99.7 million to $75.5 million, according to the tax return.

The return also serves to provide the first glimpse of the compensation of DeMaurice Smith, who assumed the executive director role in April 2009, one month into the fiscal year. He earned $1.96 million in the 12 months ended Feb. 28, 2010, of which he would have served 11 months. NFLPA general counsel Richard Berthelsen earned $1.7 million in the time period; Clark Gaines, the union's assistant executive director, earned $864,470, according to the return.

The union also has a somewhat modified travel policy. Only Smith is allowed to travel in first or business class, according to the policy listed in the most recent return. Previously, all management could travel business or first class, but now Smith has to approve anyone else traveling other than in coach. The travel policy also allows Smith to offer airline charters to anyone providing a "legitimate business purpose" to the union.
Costs at the union rose slightly after factoring out a huge jump in players dues rebates. Legal costs jumped $2.1 million to $7.1 million largely because of an increase in payments to outside counsel Jeffrey Kessler's firm, which took in $4.5 million in the time period, up from $2.4 million in the year-before period, according to the last two tax returns.

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