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Volume 24 No. 158

Leagues and Governing Bodies

The Federal Mediation & Conciliation Service Thursday announced that the NFL and NFLPA have agreed to mediation in their ongoing CBA negotiations. At the invitation of the FMCS, and with the agreement of both the league and union, the ongoing NFL labor talks will be conducted under the auspices of FMCS Dir George Cohen in DC, starting Friday. The agency said that it will refrain from any comment regarding the future schedule of labor meetings. Last year, Cohen supervised CBA negotiations between MLS and its players union, helping the sides reach a deal before the '10 season (THE DAILY). In N.Y., Judy Battista notes the current CBA expires in less than two weeks, and the "decision to attempt to intensify negotiations with the help of a neutral party is the first significant move at making progress since owners abruptly canceled a negotiating session last week." Still, the developments "do not guarantee a new deal will be finished before the current one expires." Consultation with the FMCS is "voluntary and is not binding," meaning Cohen "merely hopes to help the sides find common ground." Battista notes in four decades with the law firm Bredhoff & Kaiser, Cohen worked for the MLBPA and NBPA. After his retirement, he "was on the advisory board" of the NHLPA, and also represented the MLBPA before then U.S. District Judge Sonia Sotomayor "when she issued the injunction that wound up ending the strike of the mid-1990s" (N.Y. TIMES, 2/18).

CAUTIOUSLY OPTIMISTIC:'s Dan Graziano noted this is the "first time the NFL has ever agreed to federal mediation in such a dispute." That could indicate that the league and owners are "feeling pressure as a result of some recent PR hits they've taken over the Super Bowl seat fiasco, their walking out of last week's session and the reports" that Panthers Owner Jerry Richardson was condescending to Colts QB Peyton Manning at a recent meeting. But it also could be "part of the owners' ongoing attempt to persuade the public that they're serious about getting a deal done when the other side suspects they're not" (, 2/17). Colts C and NFLPA exec board member Jeff Saturday said, "Anything that kind of breathes new life into this thing and sets us back down at the table and gets us back to negotiating, I think it can do nothing but help us" ("NFL Live," ESPN, 2/17). NFLPA President Kevin Mawae in an e-mail said, "Any time that both sides of negotiations can get together, whether through conventional means of bargaining or mediation, to come to an agreement that can benefit all parties, it is a good thing." Friday is scheduled to be the "first of seven straight scheduled days of negotiations between the league and the players' union." But one source said, "Personally, I would be surprised if they met more than two or three days in a row" (, 2/17). N.Y.-based labor attorney Seth Borden, who is not involved in the NFL negotiations, said, "By all accounts, the level of trust in the relationship is not there. It's possible that someone from the outside can be just what's needed here. On the other hand, it might be too much to ask for him to work through this if there's not that level of trust" (WASHINGTON POST, 2/18).

STEP IN THE RIGHT DIRECTION: In Houston, John McClain wrote bringing in a mediator is a "good move for several reasons." Having Cohen at the bargaining table "might reduce the big egos in the room," and at the very least, "it's a good public relations move because it makes the rest of us think both sides are serious about reaching" a new CBA. McClain: "By bringing in the Federal Mediation and Conciliation Service, the owners and union are showing they can't do this by themselves. They can't even agree to disagree" (, 2/17). In Boston, Greg Bedard wrote, "This is a positive development, although it seems a bit early for a mediator to become involved since there haven't been any substantial talks yet between the two sides" (, 2/17). NFL Network's Albert Breer said, "This is good because the two sides have been so far apart on the financial structure of the game. Maybe this guy comes in and helps bring them closer together" ("NFL Total Access," NFL Network, 2/17). Gabe Feldman, Dir of Tulane Univ.'s Sports Law Program, said, "I think it's a good step in the sense that it'll bring the two parties together. It's always helpful to bring an outside perspective to bridge the gap" (USA TODAY, 2/18). Comcast SportsNet legal analyst Steve Moskowitz noted a mediator "can aid" in bargaining talks. Moskowitz: "But the thing here is you have very sophisticated parties and a lot of people, especially the owners, are really set in what they're trying to do. Also, trying to get the union decertified doesn't exactly help with the good spirit of the negotiations" ("Chronicle Live," Comcast SportsNets Bay Area, 2/17). In N.Y., Paul Schwartz writes, "Cohen will need the wisdom of Solomon and the patience of Job to help these sides come together" (N.Y. POST, 2/18).

HOW WILL IT ALL PLAY OUT?'s Don Banks wrote, "Whenever labor peace finally resurfaces in the NFL, what will it look like?" One NFL team exec said, "I don't think anybody really knows where it's going. Things aren't off to a good start. But at the end of the day it's a negotiation, and sometimes those can come together quickly, like it did in 2006. I'm going to try to remain optimistic until it all goes the other way. I refuse to believe that (NFL commissioner) Roger Goodell and (NFLPA executive director) DeMaurice Smith want that as their legacy, that they let the game stop." One player agent said that an 18-game regular season is "fait accompli, even though players and fans don't really want it." Banks wrote the players "will realize the extra money generated will lessen the impact of their losing a portion of the league's revenue pool, and come to view 18 games as a more acceptable tradeoff." Sources noted that neither side "seems to be starting the labor negotiations with a targeted point of where the percentage of players-owners revenue split has to be to work for them." Part of that is "because there are still too many moving parts that will play into how those percentages fit into the final agreement." Another team exec said, "Would the league accept 54 percent (of post-expenses revenue to players) if it got everything else it wanted in terms of the 18-game schedule, the rookie wage scale and the forfeiture language? Or is it better to fight for 53 percent and losing all the rest of those battles? I don't know if anybody knows yet." Banks noted both sides "recognize that the players' slice of revenues will decrease from 2006 standards, and the owners' will increase," and "every percentage point it moves represents millions of dollars" (, 2/17).

NO COMBINE BOYCOTT: NFLPA Assistant Exec Dir for External Affairs George Atallah during an online chat Thursday said that the union "will not use current college players in their fight with the NFL." In N.Y., Ralph Vacchiano notes there "had been some talk of a union-inspired combine boycott," but there "appeared to be little support for the idea among agents." Still, sources indicated that while a boycott of next week's draft combine "appears to be off the table, a draft boycott remains a possibility." Vacchiano: "Telling those players not to go would be a way to at least mildly hurt the league without affecting the future of the boycotting players" (N.Y. DAILY NEWS, 2/18).

WHAT ABOUT THE FANS? In Philadelphia, Sam Donnellon in an open letter to NFL fans writes, "If they do cancel part or all of next season, they expect you to wait for them, which you will, wait for them with your season-ticket and seat-license money, with your funds for the NFL Sunday Ticket, for parking, for merchandise, for whatever. Because as insane as this potential work stoppage would be, it would make even less sense if they thought that even some of that $9 billion wouldn't be there when they sort it all out" (PHILADELPHIA DAILY NEWS, 2/18).

U.S. District Court Judge David Doty has granted a motion by the NFLPA to hold a hearing next week on whether to unseal some of the documents in the union's case challenging the NFL’s use of television rights money. The NFLPA argued that the NFL players and public have a right to the information and Doty scheduled a hearing for Feb. 24 in federal court in Minneapolis, the same day oral arguments will be held on the union’s appeal of the Special Master’s decision in the case. The Special Master awarded the NFLPA about $6M in damages in the case, but did not grant the union the injunction it was seeking to stop the NFL from receiving more than $4B in television revenues that would be paid whether or not games are played. The case is of great interest to the sports industry, but the hearing before the Special Master was closed and the documents have been sealed. The NFL in a statement said, “We advised the union prior to its filing that we are amenable to submitting a public version of the union's brief and the Special Master's opinion as long as certain commercially sensitive information of our network television and other business partners remains confidential as required under the protective order governing this litigation.” The NFLPA said it was not seeking to unseal any information about the NFL’s television partners’ proprietary business information. “Moreover, this motion does not seek to cause the disclosure of any third party information (e.g., information produced by DirecTV, CBS, Fox, NBC, ESPN) pursuant to the stipulated protective orders governing such information,” the NFLPA said in its papers. Sensitive information about the networks’ business has been redacted and the NFLPA is seeking to make public the unredacted portions of the case. The NFLPA alleged in the case that the NFL violated the CBA by making a deal with TV networks that did not maximize revenues that are shared by the players and the league, as required by the CBA and the Stipulation and Settlement Agreement (SSA) of the Reggie White v. NFL case.

TRYING TO SHOW PLANNED USE OF SSA REVENUE: The NFLPA in court papers said that the information it is seeking to have unsealed “describe the NFL’s development, implementation and execution of its plan to use the shared SSA revenues through the TV contracts to finance a 2011 lockout that, in turn, would be used as immediate and overwhelming bargaining leverage against the players.” The NFLPA said in court papers that there is nothing in the unredacted documents “that can overcome the strong public policy against secrecy in the federal court proceedings. … The NFLPA (has) an institutional interest in communicating with NFL players to inform them about efforts to vindicate [their] rights under the SSA and CBA. This is especially important because the NFL has made several extremely inaccurate public statements about this proceeding to divide players from their representatives, and to persuade players not to pursue their legal rights.” The NFLPA in its motion cited public statements made by Patriots Owner Robert Kraft, including a statement on in which he said, “Remember, when the players union lost its case, which was a bogus case to begin with, I had to give a deposition. They collected $15 million in fees that the players paid, think about that!” The NFLPA’s motion said, “It is highly misleading and very troubling to NFL players that Mr. Kraft could make such public proclamations in a case in which he knows the NFL was found guilty of two SSA violations that the NFL is not even challenging on appeal.”

EBERSOL, MCMANUS AMONG WITNESSES: The heads of three major television companies testified on behalf of the NFL last month in the NFLPA’s action against the league’s use of media fees, said NFL outside counsel Gregg Levy. NBC Sports Group Chair Dick Ebersol, CBS Sports President Sean McManus and News Corp. Deputy Chair, President & COO Chase Carey each provided testimony during the trial, Levy said, presumably backing up the NFL’s contention that requirements in TV deals to pay the fees even in a work stoppage are standard features of sports media contracts. Each side had five witnesses. The other two for the NFL were TV consultants Neal Pilson and Doug Perlman. The NFLPA utilized five economic witnesses: Stanford Univ. professor Roger Noll, Univ. of Chicago professor Kevin Murphy, Wharton School professor Thomas Donaldson, former inDemand and USA Network exec Steve Brenner and Chilmark Partners Founder David Schulte. CBS declined to comment on behalf of McManus. Carey, Murphy, Donaldson and Schulte could not be reached for comment. The remainder confirmed their roles.

The lead negotiators for the NBA and NBPA Friday “will hold a bargaining session in Beverly Hills -- the latest attempt to break a 12-month stalemate on a new labor deal,” according to Howard Beck of the N.Y. TIMES. There has been “no meaningful movement, and no expectation that anything will change Friday.” The union has “invited all of the All-Star players to attend," and the league has invited every owner, meaning there “could be 60 people in the room -- hardly a setting for serious negotiations.” The current CBA expires on June 30 and “with four and a half months to go, the urgency is real.” NBA Deputy Commissioner & COO Adam Silver said, “The clock needs to start now.” Referring to Friday’s meeting, he said, “I don’t have any expectation that we’ll make any substantive progress. But hopefully we can start to build the trust that will ultimately be required to get a deal done.” Beck notes the NBA is “following in the staggered footsteps of the NFL.” Although the two leagues are “grappling with fundamentally different issues, each has a vested interest in the other’s conflict.” The NFL sued the NFLPA to prevent decertification, and the NBPA also “is considering decertification in case negotiations fail.” A ruling in the NFL case “could affect the NBA.” Also, some NBA owners are “advocating an NFL-style franchise tag to keep star players from becoming free agents.” Belson notes the NBA “outwardly ... appears healthy.” Attendance is “up, modestly, and the league is on pace for its highest viewership ever on TNT and ESPN.” Local broadcasts have also “shown big increases.” But NBA officials said that the “cost of doing business -- selling tickets, maintaining arenas, promoting the games and signing players -- has also gone up” (N.Y. TIMES, 2/18).

OWNERS LOOKING AT THE BOTTOM LINE:'s Ken Berger noted Friday's bargaining session "will mostly be for show," but a "significant number of owners remain focused strictly on the bottom line." There is "unwavering support for commissioner David Stern's stated goal of reducing player salaries by $750 million to $800 million, but reducing costs is far from the only goal." Sources said that the "undercurrent of concern about the players' power and control has never been greater." However, as with any other "attempt to play negotiating hardball, the owners' stance comes with a 'careful what you wish for' disclaimer." More than decade after the '98 lockout, owners "coincidentally have been victimized by their own strategy of limiting the salaries of top players and incentivizing star free agents to stay with their current teams." Concerned by the trend that began with LeBron James, Dwyane Wade and Chris Bosh coming together with the Heat, small-market owners "in particular are seeking to further restrict player movement by adopting an NFL-style franchise tag." But some execs "believe a further reduction in max salaries will only achieve the unintended result of more player movement, not less" (, 2/16).

PAY CUTS ON THE HORIZON?’s Ian Thomsen noted NBA coaches and execs said that they “believe they'll be threatened with a major cut in salary next season as part of a new cost-savings approach that will affect all areas of NBA business.” Two team execs predict that “each team will be given a standardized budget from which to pay the entire coaching staff, and another budget to cover the salaries of the entire front office.” With no CBA “between owners and coaches or front-office employees, the owners won't be able to cap their salaries.” But the league “could attempt to punish teams that ‘overpay’ coaches by refusing to share certain revenues with them” (, 2/17).