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Volume 24 No. 114

Leagues and Governing Bodies

The NFL yesterday filed a legal memorandum asking that a federal court deny a motion filed by NFL players asking that the NFL lockout be enjoined for a number of reasons, including questions about whether the NFLPA had legally decertified as a union. The U.S. District Court in Minnesota is scheduled to hear arguments in the players’ class action antitrust suit, Tom Brady v. the NFL, on April 6 on whether the court should issue an injunction against the NFL lockout. But the NFL in its legal brief said that the court should stay this case pending a decision by the NLRB, which is currently investigating the NFL’s unfair labor practices charge it filed against the NFLPA on Feb. 14. The NFL said the lockout “is unquestionably lawful and permitted by federal labor law” and questioned whether the NFLPA legally decertified as a union. “A union cannot, by a tactical declaration akin to the flip of a switch, transform a multiemployer bargaining unit’s lawful use of economic tools afforded it under the labor laws into an antitrust violation giving rise to treble damages and injunctive relief,” the NFL said. The NFL said questions about whether the NFLPA legally renounced its status as a labor union with collective bargaining rights should be under the jurisdiction of the NLRB. “The NLRB is now considering whether the union has purported to disclaim in order to gain a tactical bargaining advantage, rather than disclaiming unequivocally and in good faith, as the federal labor laws require,” the NFL states in its brief. “If the Board finds such a violation, it will issue an order requiring the union to return to the collective bargaining table. Under the primary jurisdiction doctrine, the Court must stay this case pending the outcome of the Board proceedings.” The NLRB is currently investigating the NFL’s charge that the union did not bargain in good faith, something that the NFLPA has denied at the time the charge was first filed. It is not clear how long that investigation could take (Liz Mullen, SportsBusiness Journal).

STATE YOUR CASE: In L.A., Sam Farmer noted the NFL in essence is arguing that Congress has "barred judges from stopping lockouts as part of the Norris-La Guardia Act, which was intended to limit the ability of employers to crack down on strikes." The league contends that the "door swings both ways and that law also protects an employer's right to impose a lockout." The NFL also argues that it is "confronted with a Catch-22, saying the NFLPA is simultaneously trying to force league operations to continue, and make antitrust claims if the NFL attempts to act collectively." Furthermore, the league said that the NFLPA still is "acting like a union ... and therefore has not truly decertified" (L.A. TIMES, 3/22). The NFL's brief also argues that "both the owners and the players would be placed in 'an untenable position' if an injunction is granted and then the NLRB ruled that the union needed to reconstitute and resume bargaining." The league contends that the National Labor Relations Act "does not recognize a union's disclaimer made in bad faith or used as a 'tactical maneuver'" (NEWSDAY, 3/22). In DC, Mark Maske notes yesterday's filing to Judge Susan Nelson "raised the prospect of a lockout that could continue beyond the April 6 hearing that she has scheduled on the players’ request to end the lockout." One NFL official yesterday said that he "doesn’t expect the NLRB to complete its investigation for at least a few more weeks," adding that the "entire process, including appeals, could last a year" (WASHINGTON POST, 3/22). YAHOO SPORTS' Jason Cole wrote the brief is "convincing enough that the owners might have a real chance of maintaining the lockout and getting leverage on the players." With that in mind, the players "might want to reconsider coming back to the table for talks just in case" (, 3/21).

LEAGUE REJECTS OFFER TO DISCUSS LAWSUIT SETTLEMENT: NFL outside counsel Gregg Levy formally responded in writing this morning to lawyers for the players suing the league, rejecting their offer of meeting to discuss settlement of the case, a source said. The league made it clear to reporters yesterday that it would only entertain collective bargaining negotiations, but the NFLPA decertified. The league contended in its brief filed with a federal court yesterday, where the players’ filed their antitrust lawsuit, that the decertification is not valid. Today’s letter was sent to the class counsel, Jeffrey Kessler and Jim Quinn, and reiterated the NFL would only meet to recommence collective bargaining. Quinn and Kessler sent the letter yesterday to Levy offering settlement discussions. The league clearly does not want to meet under the terms set by the letter because it would be a de facto recognition that there is no longer a union. The developments make it clear there is little to any chance of discussions between the two sides before the April 6 hearing in the Minnesota federal court. The players have asked the court to issue an injunction to lift the lockout imposed by the league on March 12 (Daniel Kaplan, SportsBusiness Journal). Meanwhile, Patriots President Jonathan Kraft yesterday said that he hopes Patriots QB Tom Brady "had mixed emotions about playing such a prominent role" in the lawsuit filed against the NFL. Kraft said, "On a personal level, myself and I think every member of my family, feels extremely close to Tom. I'd like to think Tom was conflicted before he made that decision, but you'd have to talk to Tom about it. He obviously feels like, I guess, that he made a business decision that was the right thing for him. I'd like to think he was conflicted in making it, but I don't know that" (, 3/21).

: Dolphins Owner Stephen Ross yesterday said that he "dislikes the way unions often operate, whether they represent government employees, construction workers or football players." Ross: "The unions have kind of exceeded their bounds, if you know what I mean, in just about every aspect of life." He also called the players' demands "extraordinary," citing in particular their desire for a percentage of gross revenues (PALM BEACH POST, 3/22).

The NFL proposed allowing players to invest alongside owners in various ventures as part of the league’s final labor proposal that the NFLPA rejected on March 11, NFL Exec VP & General Counsel Jeff Pash told reporters yesterday at the NFL annual meeting in New Orleans. The proposal was seen by the NFL as a way to address the many failed investments that so frequently afflict players, Pash said. He said the idea, which was akin to a fund, was not countered by the NFLPA. Pash again made a plea for the players, who decertified, to return to the negotiating table. He confirmed a report that the owners had long ago given up talking about an expense credit and instead had moved to a pegged cap system. He seemed to suggest there was an inconsistency in the players’ demands for the league to open up its past audited financial statements, when the issues surrounding the pegged cap dealt with future growth. "We made a proposal to address their concerns about transparency," he said, referring to the offer to make each team’s audited financial statements available to a third party auditor. "It would have been one thing if they had said, 'Fine, let’s take a look at what you have' ... and then come back and said, 'We have this problem, that problem.' But without looking at a single line on a single piece of paper, it raises a question of why they were asking for it in the first place" (Daniel Kaplan, SportsBusiness Journal). More Pash: "We don't accept that the union has 'decertified' or something like that. We don't accept that; we don't believe that it has taken place. We believe that is a tactical move by the NFLPA. We believe they are continuing to function as a labor organization. We believe they intend to negotiate a collective bargaining agreement with us" (FT. WORTH STAR-TELEGRAM, 3/22).

FINDING MIDDLE GROUND: Pash said the possibility of "going back to the mediation process" has been discussed, but the "critical thing is that our commitment is to negotiate." Pash: "We are not going to solve this in litigation." In Boston, Greg Bedard notes the NFL "wants third-party arbiters." A league official said, "Like every other sports league has." Bedard: "For the NFL or NFLPA to get to that point, it's either going to be through negotiations or through the courts. ... All that's needed is for one side to get serious about it, likely the NFLPA because it filed the antitrust complaint. But it doesn't seem like it will happen." NFLPA Exec Dir DeMaurice Smith "sent a letter yesterday to NFL attorney Gregg Levy telling him that the league can negotiate through settlement talks with NFLPA counsel Jeff Kessler," but the league "will not do that" (BOSTON GLOBE, 3/22). In N.Y., Gary Myers notes Smith's letter to Levy offered to "get talks started again before an April 6 court date to rule on the lockout." But because the NFLPA has decertified, Smith said that it "would have to be with the class counsel, the attorneys representing the players in their antitrust suit against the league." Any negotiations "would technically have to be in the form of settlement talks of the lawsuit." But the league "wants no part of lawsuit settlement talks," rather it "wants collective bargaining talks with the union leaders" (N.Y. DAILY NEWS, 3/22). In N.Y., Judy Battista notes as long as the NFLPA "maintains that it has decertified, its lawyers cannot engage in collective bargaining as agents of the players." One NFL official said, "The problem is if they come back and negotiate with us, that makes them look more like a union and undermines their lawsuit. They have to choose: do they want to act like union and get a deal, or act like plaintiffs and have a lawsuit?" One league official called the NFLPA's decertification a "fake suicide" (N.Y. TIMES, 3/22).

MAJOR ISSUES: Pash yesterday said that NFL owners "offered salary-cap plus benefits of $141 million for the 2011 season rising to $161 million in the fourth year." Smith "maintained that the 18-game season wasn't a deal breaker but that owners would first need to make significant improvements on current and retired player health care." USA TODAY's Jim Corbett writes there is "no disputing their impasse is a trust issue" (USA TODAY, 3/22). Meanwhile, in Boston, Ron Borges notes league officials "repeatedly indicated they have no intention of using scab players to replace the real ones this fall if the labor impasse continued," but NFL outside counsel Bob Batterman said that there is "no legal bar to preventing the use of replacement players, thus adding into the mix a new threat from management at a time when the league keeps insisting it just wants to negotiate a fair deal" (BOSTON HERALD, 3/22).

McNair not sure NFLPA would believe
numbers if owners opened up their books
OWNERS SPEAK OUT: Texans Owner Bob McNair yesterday said NFL owners are "not going to just open up the books and let people go on a fishing expedition." McNair: "The NBA did it, and all they've done after a year is the union's come back and said, 'We don't believe the numbers.'" Falcons Owner Arthur Blank: "We offered a great deal more than was ever offered in the past, beyond what federal law requires and actually more than we have shared among clubs. I thought it was a substantial 'give' by the league" (USA TODAY, 3/22). Ravens Owner Steve Bisciotti said of losing fans: "I don't think anybody is going to win the war of public opinion. And I don't think it's going to matter in the long run. I think fighting turns off the fans regardless of who is in the right or wrong. ... I'm embarrassed that we're fighting over money, just like you would be embarrassed if you and your wife were fighting over money in public. It's an embarrassing topic to have to get into. Unfortunately, it is a public forum running a professional football team. I'm very concerned." Bisciotti added, "A public fight over money turns off everybody. ... Our fans have loved football for 20, 30 and 40 years. If the fight screws up the season, shame on both sides. We've got to get this done. If we turn off our fans, then shame on us" (Baltimore SUN, 3/22).

The NBPA feels that "only a 'small number' of NBA teams are losing money and continues to say that it is not willing to put a hard salary cap into play" this summer when it negotiates a new CBA with the league, according to Henry Abbott of The NBA has repeatedly said that "more than half its teams are losing money -- more than $300 million a year." But NBPA Exec Dir Billy Hunter said, "Our belief is that a small number of teams are suffering, and their problems can be addressed through revenue sharing." Hunter also said that the "key negotiating point for the players is the NBA's push for a hard salary cup, rather than a 'franchise tag' or some other limit on the movement of top players." He contends that a hard cap would "effectively end guaranteed contracts which he calls 'the lifeblood' of professional basketball." Hunter: "We've had that right for years, and it's not something we're trying to give up." With the CBA expiring June 30, the NBA says that it has "given the players all the financial information they need," but the union believes that the "reality is more complex than is expressed in those documents." NBPA Dir of Communications Dan Wasserman said players are projected to make a combined $2.02B this season and added, "Just two years ago that number was $2.14 billion, so negotiated salaries are down $120 million in two years. That's the first time that has happened." The union argues that a "reduction in negotiated salaries demonstrates that the current CBA is sufficient to reduce long-term spending." Hunter said of the league's stance, "We're trying to determine whether it's all rhetoric, or if it's real. ... David (Stern) hasn't given me any indication for me to conclude that it's rhetoric. He seems pretty strident, and pretty much dug in in terms of where he is" (, 3/21).

BILLY'S CLUB: YAHOO SPORTS' Adrian Wojnarowski reported Hunter, during an address to NBA players over All-Star weekend with Stern, "had a different plan" this year than in the past, "unleashing an inspired soliloquy to frame the gathering storm of labor strife." The speech "may have just transformed the way the biggest stars in the sport see him." The room was "thick with league executives, coaches and players on the afternoon of Feb. 19, and they listened to Hunter insist he couldn’t come in good faith and tell them everything was well within the NBA." Hunter said that the owners "had made a crippling proposal, a long lockout loomed and these players in the room would bear the biggest financial and public relations burden of a work stoppage." He "dropped dramatic, long pauses and left everyone -- including Stern, who had started barking into the ear of his deputy, Adam Silver -- thinking that Hunter had come to advocate the players make some kind of bold stand themselves." Wojnarowski reported Stern "would barely even look at Hunter when Hunter handed him the microphone," and the players "could see the anger rising" within the commissioner. Several players in that meeting contend that Stern then "told the room he knows where 'the bodies are buried' in the NBA," because he "had buried some of them himself." Bulls G Derrick Rose recounts, "It was shocking. I was taking off my gear, and when he said that, I just stopped and thought, ‘Whoa ...' I couldn't believe that he said that." Wojnarowski noted for "all the talk of the players’ disjointed ranks, Hunter had gone a long way toward cementing the support of his most important constituents." Rose: "Especially Billy talking like that with David in the room, it makes you feel good." Hunter more recently said of Stern, "I don’t think he has the sway that he once did. I’m not saying that he’s not the commissioner and does not have the power to act. But I don’t know that he has the unfettered, undying support that he had before. There’s maybe a little crack in the dike" (, 3/21).

UFC President Dana White Friday appeared on “Inside MMA” to speak about UFC’s recent purchase of MMA rival Strikeforce. He said Strikeforce will not be set up as a feeder league or minor league to UFC. White: “The reason we bought Strikeforce is that we need more fights. … England is losing their mind because there’s not enough fights over there. Ireland, people want to kill me in Ireland. Germany. Australia. Every time we go there we sell out. There is demand for all these fights.” White said the company “must hire 10-12 people a week” to handle the number of fighters. White: “We’ve outgrown the building that we just bought and redid. And we own the building next to it. We’re buying the one in front of us.” Strikeforce CEO Scott Coker noted his organization originally started out as a partnership with Silicon Valley Sports & Entertainment, but said that SVSE officials are “trying to bring another sports franchise to San Jose and want to continue to focus on the hockey team.” Coker: “At that point we started going out there looking for different partners. … When you have a financial partner that wants to leave, you have to start looking for another partner.” White said in the next five years, a UFC Network “makes sense.” White: “Going out and starting your own channel isn’t as easy as it was six or seven years ago. It’s a lot tougher than it used to be, but it does make sense” (“Inside MMA,” HDNet, 3/18).

The AP's Doug Ferguson reported the PGA Tour is "considering a change to the end of its season in which players" who do not qualify for the FedExCup playoffs "would compete for their cards in a series of tournaments against top Nationwide Tour players." PGA Tour Exec VP/Communications & Int'l Affairs Ty Votaw "confirmed the policy board has given preliminary approval to the concept, although it is in the early stages of discussion." The Tour "began informing players by memo late Monday afternoon." It remains to be seen how the Fall Series would be affected. Ferguson noted the Tour "has been looking at ways to strengthen the Nationwide Tour," and another change "being contemplated is Q-school at the end of the year providing access only to the Nationwide Tour" (AP, 3/21).

WATCHING THE NFL: MLBPA Exec Dir Michael Weiner "admitted the union is mindful of the negative public opinion about both the NFL’s ongoing mess and the looming labor issues for the NBA," but he "hopes the union and the owners will be influenced only by the issues that directly affect baseball." Weiner: "Context is important. By that, I mean that while baseball players support football players and basketball players, baseball players understand that each sport and each union has its own history." He added, "From the owners' side, there is some cross-ownership. They may follow it more closely. I would hope that baseball owners approach our bargaining with an understanding of the history of our bargaining agreements" (BOSTON HERALD, 3/20).

IN THE FINAL MINUTES? In N.Y., Joseph D'Hippolito notes as David Beckham enters the final season of his contract with the MLS Galaxy and "continues to pursue his international ambitions, he risks forfeiting support from the Galaxy’s most vocal fans." But for MLS Commissioner Don Garber, "there is a larger universe." Garber said, "I’m looking at a more global perspective: what impact David has had on our awareness and credibility internationally, what he has done for our commercial business, for our television ratings." He added, "The league has far more credibility, far more awareness, far more respect five years after David came in than we did prior. When I travel abroad, people know about Major League Soccer today because David’s playing in our league" (N.Y. TIMES, 3/22).