SBJ/June 13-19, 2011/Labor and Agents

Filing: Smith’s contract set to expire March 14

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NFL Players Association Executive Director DeMaurice Smith’s contract is due to expire March 14 next year, according to the organization’s annual report filed recently with the Department of Labor, meaning Smith could be up for re-election of the group not long after the labor strife between the league and players is settled.

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The NFLPA paid Smith $1.53M and NFL Players paid him $920K in his first full year.
The NFLPA paid Smith $1.53 million in the year ended Feb. 28, 2011, his first full year as head of the organization, the report filed late last month with the Labor Department revealed. The group’s licensing arm, NFL Players, paid him $920,000, the annual report shows, for a total of $2.45 million. Like his predecessor, the late Gene Upshaw, Smith’s pay is shared between the NFLPA and the for-profit licensing unit.

The NFLPA decertified as a union March 11 after collective-bargaining talks with the league broke down. The next day, the league locked out the players. The league and players, with Smith serving as an outside counsel, were in secretive talks last week (see related story).

“His contract was obviously framed around these negotiations. He has to prove himself,” said Bill Gould, former National Labor Relations Board chairman and a Stanford Law School professor. “This whole process is a big test for him.”

The NFLPA, which is now operating as a trade association, did not reply for comment.

The decertification was designed to allow the players to legally challenge a lockout by the owners. An appeals court has allowed the now-three-month-old work stoppage to remain in place.

The players voted Smith to his post in March 2009, and he served for at least six weeks without a contract while he negotiated terms. The length of the contract had not previously been disclosed. A source familiar with that six-week period said Smith wanted a longer term, but the players did not wish to replicate the longer contracts that were held by Upshaw that they felt did not give them enough chance to review performance.

At the time of his death on Aug. 20, 2008, Upshaw held a five-year contract, according to the then-union’s 2006 annual report. Upshaw’s previous contract was a seven-year deal, according to the 2000 annual report.

The most recent annual report also shows that the NFLPA in the 12 months ended Feb. 28, 2011, paid former Smith employers Patton Boggs and Latham & Watkins $3.8 million in total for issues related to labor and public policy. Latham & Watkins earned more than $3 million, which is more than the $2.87 million paid to longtime outside counsel Dewey & LeBoeuf.

Latham & Watkins worked on the NFLPA complaint against the NFL that it had violated the CBA by requiring broadcasters to guarantee payments during a lockout. A federal judge agreed with the players.

The NFLPA under Smith also has engaged in extensive lobbying efforts in Washington, D.C. Patton Boggs, Smith’s employer at the time he won the NFLPA post, is a D.C.-based law firm with a specialty in lobbying.

The NFLPA spent $8.9 million across 25 firms in the 12-month period for matters related to the CBA, an analysis of the annual report shows.

Because the NFLPA decertified, it will no longer be required to file with the Department of Labor because it is not operating as a union. What is therefore perhaps the NFLPA’s last public annual report shows that the NFLPA’s commercial revenue rose to $129 million over the 12-month period, up from $119 million, largely because of a jump in video game and trading card fees.

The report also underscores how much of the NFLPA’s revenue is tied to the NFL. The league paid the NFLPA $50 million under contractually agreed terms for sponsorship and licensing rights as well as an annual payment from the 1993 settlement of that year’s antitrust case. Not including NFLPA proceeds from the sale of securities, the NFL payments represented 30 percent of NFLPA revenue.

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