Full access to financial statements at heart of league labor issues
WASHINGTON -- Now that the players have decertified as a sports union, setting into place the real possibility that games will be lost in the 2011 season, the biggest question fans across America must have is this: How in the world did it come to this? It's complicated, of course, but then again, it's not. The die was cast in the dispute that led to the NFL's version of nuclear winter here Friday on March 1, when the judge overseeing the league's labor scene slapped the league down harshly. And the players' union never felt a need to come off its core negotiating tenet for the past two years: full and unfettered access to the league's audited financial statements.
What's amazing, and what shows the absolute distrust the players have for the owners, is that the NFL offered the players to have an independent auditor -- to be determined by both sides -- study the audited financial statements. The independent auditor would have studied the statements, then reported to the union the year-by-year profit-and-loss statements for each team. Theoretically, that would have shown whether teams were becoming less profitable in the past two or three years, a core argument of the ownership.
But that wasn't good enough for the players. And from their standpoint, who could blame them? The NFL was asking for more money to be exempted from revenue-sharing while the league was in a time of unparalleled success. If the NFLPA was going to give owners any more revenue credits, the union felt strongly that the league had to show its hand. Show how much teams were spending (and wasting, perhaps). Over the past few days, I've had union officials (more than one) give me examples of how money is wasted by teams, and how some expenses that clubs claim as football expense should be personal expenses. And at the end of the day, the union simply didn't trust that teams' financial records weren't riddled with such wasteful spending.
And when they read U.S. District Judge David Doty's 28-page ruling, the NFLPA knew it didn't have to budge off its demand for full financial transparency. Doty wrote in his ruling that three networks expressed reservations about being used by the league when the NFL insisted that a provision of the TV contracts be that, whether games were played in 2011 or not, owners could use the war chest in event of a lockout. The networks blanched, but if they wanted to get the deals done, they had to comply with the demand. And Doty wrote: "The record shows that the NFL undertook contract negotiations to advance its own interests and harm the interest of the players.''
Though the $4 billion was in essence a loan that the league would have to repay over the term of the contract, the money still would be a hammer to harm the players in negotiations for a new CBA this year. Doty's acknowledgment of that, and the fact that he would be the one overseeing legal arguments if these negotiations became deadlocked, was all the NFLPA needed to read.
As Giants owner John Mara said Friday evening when talks broke off: "One thing that became painfully apparent to me during this period was that their objective was to go the litigation route. I think that they believe that that gives them the best leverage. I never really got the feeling during the past two weeks that they were serious about negotiating.''
Executive director DeMaurice Smith of the union adamantly shot that down Friday night. "With all due respect to the owners in the room ... nothing could be further from the truth,'' said Smith, who went on to entail offers he said the union made to, in his words, slow down the runaway pace of the salary cap, among other things.
"For them to say we did not engage in good-faith negotiation flies in the face of reason, flies in the face of facts, and is simply untrue,'' Smith said.
Perhaps, but as far as Friday goes -- and as far as the time since Doty's ruling 10 days ago -- it's clear the players didn't have to bend over backward. Or even a little. Because they knew with Doty in their corner, they could play hardball with the league -- and have a good chance of winning.