Behind the rhetoric: What fair deal in NFL labor debate will look like
Like moths to light, we in the media tend to gravitate to the conflict that invariably comes to dominate a story like the NFL's looming labor battle. The back-and-forth dramas that have recently surfaced in the absence of any real news on the negotiation front (see the alleged Jerry Richardson versus Peyton Manning faceoff) seemingly have weeks and perhaps months remaining before they run their depressing course.
But I spent considerable time this week talking to sources on both sides of the labor front, asking what comes after the posturing and the hard-line rhetoric begins to die down and the real negotiating begins. What will eventually come forth in the way of agreement between NFL owners and the league's players union, even though the two sides haven't really begun to talk to one another in a meaningful way?
What would a fair deal entail? What are the likely building blocks that will wind up as part of any agreement? And is this showdown destined to end up being resolved in the courts years from now, with the two principals dependent upon someone else's opinion of an equitable resolution? Hello, Judge Doty.
Granted, trying to divine what lies far, far ahead in the NFL's labor stand-off is a little like trying to write about the outcome of a game while the two opponents are still engaged in a pre-game pushing and shoving match in the tunnel (think Miami at Notre Dame, circa 1988). It's an exercise in projection, based on past labor battles and trying to accurately read the tea leaves as they currently exist.
In talking to some informed league and union sources this week, I tried to get them to look beyond the sobering recent developments regarding canceled negotiation sessions, legal maneuvering and contentious behind-closed-doors exchanges between owners and players. My question was, whenever labor peace finally resurfaces in the NFL, what will it look like?
"I don't think anybody really knows where it's going,'' said one NFL club executive. "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.''
Optimism for a settlement any time before late this offseason is pretty scarce on both sides of the players-management divide. Most believe we're looking at the beginning of what will be a long, hard slog to a new deal, with the owners' apparent intention to stage a lockout after the March 3 expiration of the current CBA met by the NFLPA's decision at some point to file for decertification as a union and pursue anti-trust litigation against the league.
The union is thought to view the pursuit of that legal remedy as its best leverage to both potentially force a new labor agreement and keep the game going in the meantime, while the case works its way through the legal system. History certainly backs up that perception. The league is contesting the legitimacy of the union's decertification plans -- the first step of which was the filing of
But despite the question of when and if those two dramatic maneuvers will be employed, there are some components that appear likely to be part of any eventual deal, sources say. Though the jigsaw puzzle that will be the next CBA hasn't taken shape yet, most expect it to contain the following:
• A rookie wage scale that takes a sizable chunk from the pool of money used to pay the league's unproven first-year players and gives it to both veterans and retired players. No one on the union side is opposed to getting a more equitable pay scale in place for rookies, as long as the subtracted funds still go to players.
• An 18-game regular-season schedule, which the players currently oppose but may be the only way that allows the math to work for them to not take too big a financial hit under a new CBA. Concessions clearly will have to be made to the players on several fronts to make the 18-game season palatable from a health standpoint.
• Expanded forfeiture clauses that allow clubs to recoup signing bonuses and monies from players who violate the league's personal-conduct policies. Sources on both sides say no one is willing to go to the wall to protect the bank accounts of the Albert Haynesworths and Donte Stallworths of the league.
• Perhaps some modification of the salary-cap system, in which the floor of the cap (the minimum a club can spend on player salaries, which was $108 million in 2009) would be raised to help offset the lowering of the cap ceiling (to reflect the reduction of player costs that owners seek). Such a move would help protect against the teams that habitually spend below the cap ceiling.
• And lastly, the biggest issue of all, the reworking of the revenue split between players and owners Players currently get almost 60 percent once a little more than $1 billion is deducted off the top of a $9 billion-plus revenue pool. The owners are determined to almost double those expense credits to $2 billion off the top and then drop the revenue split to much closer to 50 percent, citing their stadium debt level and grow-the-game costs, while the players want to protect as much of their majority slice as possible.
"The owners are trying to test the resolve of the players, because they think that history says the players will cave at some point,'' one longtime players agent said. "I think the players know they're going to take a haircut in this deal. But they think it can be done with a scalpel, and the owners want to use a machete.
"It seems like DeMaurice Smith thinks he can come out of this with his head held high and get roughly the same deal the players have now, but I disagree with that. I think the owners are more prepared and more unified this time. I think they do want a lockout, because they think they won't get their best deal without one. It'll hurt them, too, but they know the players will be hurting more.''
Though there are peripheral issues like the 18-game season and the rookie wage scale that both sides consider significant, the crux of the NFL's labor negotiations will revolve around where the line is re-drawn in regards to the split of revenues between owners and players.
"The rest are really side issues,'' the NFL club executive said. "If you drew a circle representing these negotiations, a dollar sign in the middle would be the heart of it. Once that piece is in place, how to fairly split the revenues, the rest of it will come together. The other issues, those are outliers and what-ifs that can be figured out.''
The owners are seeking to take roughly another $750 million to $1 billion off the top of the league's $9 billion-plus revenue pool, and it's the fight for that "new money'' that will dominate these labor talks. The players have been getting nearly 60 percent of those dollars since the 2006 CBA, and now they will fight to hold onto as much of the pie as possible.
"It's about the money, that's the whole deal,'' another NFL club executive said. "They're arguing over at least three-quarters of a billion dollars and that's pretty real money. It's just about how to make the economics work and re-divvy up the pie. But it's scary right now, because we're two weeks out from the CBA expiring, and they're not even talking. Nobody's blinking.''
Roughly speaking, in 2009, the last season with a salary cap in the NFL, per team player costs were about $150 million -- a $128 million salary cap and another $20 million-plus of benefit-related expenditures. Owners are seeking to adjust that overall number to the range of $125 million in per-team player costs, an NFL club source said, with the difference being used to fund initiatives that they say will help grow the game. The players counter by asking for financial transparency to see exactly why that money is needed, where it will go and how it will be used.
"That's why the 18-game schedule is the easiest way to grow the pie,'' a NFL club executive said. "At the end of the day, if that's the only way for the players to get a better deal, they'll probably do it, as long as rosters are expanded, offseason workout rules are adjusted, and the post-career medical benefits are extended.''
One veteran agent told me this week that's the reason he believes the 18-game season is a fait accompli, even though players and fans don't really want it. In time, 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.
"The nut of this whole thing is how much of that $1 billion are they going to be able to keep?'' the agent said. "They know they won't get the whole thing. It's really about how much of that money can they get back? Is $500 million possible? It might be. With the new revenue of 18 games, that might be realistic.''
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, sources say. Part of the reason is because there are still too many moving parts that will play into how those percentages fit into the final agreement.
"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?'' another NFL club executive said. "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.
"You can't look at the numbers without looking at the whole deal and seeing how the other issues factor in. If it's 16 games as opposed to 18 games, the numbers would change, so you can't separate it out and say in abstract that it would be a good deal for either side at this percentage or that percentage.''
Still, 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.
"My sense is neither side was ever prepared to make a deal before the CBA expires,'' the veteran agent said. "If De Smith thinks he's getting a deal between now and March 4, he's crazy. And if he thinks he's going to get a better deal after March 4, he's naïve. There are some owners who are really angry, and there are some owners who are more player-friendly. But I'm not sure there is more of them than the angry ones right now. There are some hard-liners who want to kick the players' ass. They really want to exact some revenge on the players.
"This thing is going to take a while though because the players need to be much closer to the brink of disaster before they compromise. Keeping something like 54 percent (of revenues) would probably be pretty good for the players. Something like 52 percent would probably be closer to an ass-kicking. There were years gone by where the players would have been thrilled with 52 percent, but not now.''
A second veteran agent I talked to this week said given the lack of bargaining sessions and the rising acrimony between owners and players in recent days, he has grown increasingly pessimistic about the chances of the 2011 season being played. He sees no pressure point to compel both sides to negotiate in good faith until the regular season is in jeopardy. And even then he wonders if both sides won't be dug in too far at that point to give any meaningful ground.
"The owners talk about growing the game, but the only way the game will grow is if there is a game,'' the agent said. "If the game stops for a year, some people will find they can live without it. The more this unfolds, I'm starting to think either a season is going to be missed, or this thing is going to get locked up in court for a long time through decertification. It's almost a rewind back to 1987-92, when there was football but no CBA.
"The more I hear, it seems like the owners see this as a time where they can try to break the union. Even though they actually need the union, so they're not vulnerable to getting sued for anti-trust charges. It's going to be tough for Roger Goodell, because procedurally it's only going to take nine votes (from owners) to block a deal. It's not going to be easy to get something done.''
Union sources refuse to confirm when or if the NFLPA will pursue its decertification option, because it likely considers that move something of a last resort that comes with some inherent risk. There's no guarantee that its decertification will be recognized by U.S. District Court Judge David Doty in Minnesota, who has issued favorable rulings in the past for the NFLPA in its labor showdowns with league management. But if he does grant the union's decertification, it would clear the way for anti-trust litigation and block the NFL from locking out its players.
Much of the union's confidence in its position seems to be based on having the decertification option in its back pocket. One NFLPA source I spoke with said "the greatest chance for a resolution is with factors that the union and the league are not in control of,'' i.e. the courts.
While the union won't talk about decertification, it seems to have been preparing for the possibility nearly as long as league owners have been making lockout plans, with the NFLPA securing the authorization to decertify in a team-by-team vote during the 2010 season. History offers a ready reason why decertification looks like the union's most likely course of action.
"It's probably their best solution, because anything the players have ever gained has been in Doty's court, and not through a work stoppage [a players' strike],'' one agent said. "If there's a lockout and they decertify and go to court, there'd be some short-term suffering for some players between now and the years before the case got decided, but the decertification would keep football going. It's not a CBA deal, but the football would resume.
"That's why it's the best leverage the players have. The league knows it doesn't want to go that route and wind up back in Doty's court, where it has never won. That's why it's trying to challenge the union's ability to decertify.''
Though the league has been emphasizing the March 3 deadline for striking a deal before either side starts feeling any financial pain, sources I talked to on the union side of the spectrum don't foresee players feeling a sense of utmost urgency to negotiate until the regular season looms.
"The pressure will come the day before and after the regular-season game checks would have been due,'' a veteran agent said. "The games are the point of no return. And really up until then, the fans won't really feel it either.''
One agent I spoke with said that despite all the information that has been made available to the players about what could be in store this offseason, some remain unprepared, asking about offseason workout bonuses that won't be paid in the event of a lockout, or just now learning about COBRA medical insurance coverage that will be their responsibility once a lockout begins. Some of the less-informed players will be the greatest threat to union solidarity once the lockout starts to lengthen and approach the regular season, the agent said.
"I kind of know how it's going to go in some cases,'' the agent said. "When it comes close to time for the game checks, some players will fold like folding chairs in late August, when the real money starts being in play. Not the majority of them. But some of them. The union doesn't want us to say that, but it's reality. The real pressure point will be the start of the season.''
It's instructive to remember that it was some of the NFL's biggest stars who proved so undermining to the union's efforts in the players strike of 1987. After the union voted to strike two games into the '87 regular season, stars such as Joe Montana, Mark Gastineau, Randy White, Lawrence Taylor, Howie Long and Steve Largent were among the 89 players who eventually crossed the picket line and reported back to their teams, joining both replacement players and their fellow strike-breakers.
Could there be a similar breaking point of this labor showdown looming in late summer or early fall? How will a player like recently franchised Baltimore Ravens defensive lineman Haloti Ngata react when he's facing the forfeiture of his roughly $700,000 paycheck each week? Will he take that financial bullet for the long-term good of his fellow players and the NFLPA's cause? Or will he and other prominent players exert pressure on Smith and the union at that point to cut their best deal and get back to work?
"Part of the disconnect in this situation is that you're asking players who have a short-term career to look at the long-term benefits of the deal,'' an NFL club executive said. "There's just not a horizon matchup for them.''
With the current CBA still having two more weeks to run before expiration, we're still in the phase where both sides are talking about holding real negotiations, but doing very little of it. It remains a battle for hearts and minds, and both the union and the NFL are engaged in the effort to shape public opinion to their point of view.
To that effect, Smith held a conference call with the player agent community on Monday, asking them to consider having their clients boycott next week's NFL Scouting Combine in Indianapolis as a show of strength and solidarity with the players union. It was not a well-received proposal, sources said.
"He got shut down pretty quickly on that,'' an agent told me. "It kind of told me how naïve he is with stuff like that. These players, this draft class, is really not a part of this whole process, and yet they're going to kind of get thrown under the bus in this deal. They're already going to get a rookie wage scale, and he's asking them to boycott after they've been training for this event for months already, with a lot of agents paying for that training for months.
"He quickly abandoned that idea and asked if we can have the draft's top 10 players or so boycott the draft festivities that weekend in New York. That's really no big deal. The top 10 players can be induced to stay home and have a draft party instead of going to New York. But that tells you it's not going to be quick. I think it's going to be ugly. Maybe something happens late summer or early fall. I know I've been telling my guys it's a great time to go back to school and get your college degree, because you're going to be on vacation for a while.''
Interestingly, one NFL club executive told me he believes the agent community could conceivably wind up playing a key role in getting players and management to work together towards a deal. Agents have relationships with both sides and might try to exert their influence if negotiations go nowhere for months.
"That hasn't played out yet, but in the end the wild card in this negotiation is the agents,'' the NFL club executive said. "They understand both the short-term and long-term interests at stake in this, and they probably have the greatest feel for the true pulse of the players. If this goes long enough, the players may start to listen more to the agents than the union reps or the union.
"The agents can see it both ways, and they'll be looking for solutions to get guys paid. They'll be dealing with guys who have been paid, guys who need to get paid in the future, and guys whose money is on the line right now. They're a critical swing area, but we haven't gotten to the stage where they can be influential yet, because the players haven't turned to them.''
One of the things we like most about football and sports in general is the clarity it provides. There's a winner and a loser of every game, and there's a scoreboard to tell you which is which. But there's very little clarity on display in a labor negotiation, and the spin, rhetoric and posturing continues to be a big part of this game. Whatever winds up being the terms of the next CBA, it's clear no one has put their best deal on the table yet.
"It's like a couple of armies still facing each other down,'' an NFL club executive said. "They're both still trying to out-flank each other. Once they both start running in the middle, you might get a deal. But right now, nobody's running in the middle. It's just a staring contest.''