There's unrest aplenty on the NFL labor front

[Mr. Laz]

SAM FARMER / ON THE NFL
There's unrest aplenty on the NFL labor front

NFL Commissioner Roger Goodell and NFLPA Executive Director DeMaurice Smith testify on Capitol Hill regarding the upcoming collective bargaining agreement. (Charles Dharapak / Associated Press / October 28, 2009)

The league and players' union are girding for a possible lockout next year, and it isn't just posturing. The issues are divisive, the impediments to a new collective bargaining agreement are real, and both sides appear dug in.

By Sam Farmer March 13, 2010 | 5:45 p.m.


It's a fight between millionaires and billionaires, so it's not something that's going to elicit much sympathy from everyday Americans.

But the dispute between NFL players and team owners could result in a lockout in 2011 — the first labor meltdown since the 1987 strike — and that would certainly grab the attention of football fans.

As the NFL Players Assn. conducts its annual meetings in Hawaii this weekend, and owners prepare to convene later this month in Orlando, Fla., the two are on opposite sides of the actual and philosophical map.

By asking and answering his own questions, Times NFL writer Sam Farmer looks at what both sides want, and what's keeping them apart.

What's the dispute about?

No surprise here: money. Owners believe players have gotten too much of it under the current collective bargaining agreement, struck in 2006, and that they haven't shouldered enough of the financial risk of "growing the pie" with new stadiums, NFL.com, NFL Network, international games and the like.

Is there extra pressure on the two leading men, NFL Commissioner Roger Goodell and NFLPA Executive Director DeMaurice Smith?

Yes. Each is making his debut as the No. 1 negotiator on a CBA, and each has to convince his constituency that he fought hard and left nothing on the table.

Both Goodell and Smith have to live up to the legacies of former commissioner Paul Tagliabue and former union head Gene Upshaw, who presided over a long era of labor peace and unparalleled prosperity.

Smith faces the pressure of possibly being the NFLPA leader who gave back financial gains Upshaw made in the last negotiations, or being the person in charge when labor peace ended.

What got them to this point?

Four years ago, owners were facing a similar deadline, and, in the 11th hour, agreed to a CBA cobbled together by Tagliabue and Upshaw.

Owners agreed to that deal but almost immediately regretted it. They saw it as heavily lopsided in favor of the players. In the spring of 2008 — at their earliest opportunity — they unanimously opted out of that deal, setting the current countdown in motion.

In every other case before this, the labor deal was extended before the disincentive of an uncapped year was reached. Not this time. The deadline passed last March 5, and there is no salary cap for this season.

What do the players want?

They feel the status quo is fine, and they certainly don't want to take a pay cut, especially considering how the game's popularity has skyrocketed over the last 20 years. The average NFL career lasts a little more than three years, and those players could very well wind up with injuries they'll feel for the rest of their lives. They want to make their money while they can.

Owners might be able to create more revenue by growing the league, but what percentage of the players will still be around to realize those gains?

Not only that, but players see franchises that were bought for, say, $200 million now valued at $1 billion or more. If and when those franchises are sold, that money will go straight into the pockets of the owners, not the players.

Are there other issues?

Yes, although most relate directly to how the money is distributed. Some of the "biggies" are the future of the salary cap, a rookie pay scale, benefits for retired players, blood testing for human growth hormone, and the possibility of expanding the regular season to 17 or 18 games.

Are owners demanding that players take a pay cut?

Not in the way you might think. Imagine a bucket called Total Football Revenue, into which a percentage of virtually all NFL revenue goes. Out of that $8 billion in annual revenue, $1 billion is removed for the teams' operating expenses. Under the salary cap — which is not currently in effect — the players got 60% of that remaining $7 billion, and the teams got the other 40%. Now, the owners are asking for an additional $1.3 billion (called an expense credit) to come off the top before the players get their cut. The owners are arguing that the money will be used to grow the game, and because the revenues will be higher, the players won't end up taking a pay cut.

The league says expenses for franchises have risen faster than revenue under the current agreement and that the economics must be adjusted. One owner told The Times that the league considered starting an NFL retail chain, but scrapped the idea because it couldn't take the economic risk.

"NFL player compensation has almost doubled in the last decade because of investments made by the clubs," the league said in response to a union memo criticizing the owners' current proposal. "If we continue to invest and grow, current players will have higher compensation, former players will have higher benefits, and fans will enjoy a better game."

Basically, the players are saying, tell us how much you're making and prove to us you need that extra money for expenses.

Do the players know what the owners are making?

Depends on whom you ask. The NFLPA has continually asked the NFL to open its books, something the league has never done. It doesn't even share that information among teams.

The NFL calls the union's request a diversion, saying the union knows the two pertinent figures: revenues down to the penny, and the teams' largest expenditure, player salaries. Additionally, the league points out that opening the books never saved any other league from work stoppages.

Do TV networks pay the league even if there's a lockout?

Yes, but it isn't money for nothing. The league would have to pay it back over time, probably by charging those networks less in future years. The way the NFL puts it, that arrangement is simply a
financing mechanism, sort of like a home-equity line of credit. Still, that money would tide over the owners — who wouldn't be paying player salaries — while players would be missing one-seventeenth of their salaries with each game missed.

Is there really a chance of a lockout?

Absolutely. To this point, negotiations have been described as genial but slow, and both sides are dug in. It's still early — the CBA doesn't expire until March 2011 (although there would still be a draft) — but there is a lot of ground to cover. Technically, there could be a lockout without any games being missed, ratcheting up the pressure for a settlement as the 2011 season approaches.

As for the argument that there's so much money at stake, and owners will eventually snap to their senses, that was the logic that pushed them into a "bad" agreement in 2006. To be convinced this time, they'll need to hear a far more compelling case.

Speaking to reporters at the scouting combine two weeks ago, Smith referred to "the lockout" (as opposed to "a lockout") — which was a subtle change for him but it didn't go unnoticed.

Basically, neither side is flinching. Yet.

sam.farmer@latimes.com

twitter.com/LATimesfarmer

[Dave Lane]

I still think the easy way for the NFLPA to save face is put in place a rookie slotting arrangement and give the extra money to current and past players while reducing a small amount of the rookie salary cap savings back to the owners for their "investment" Sort of a small win for everyone but the current rookie classes that are vastly over paid

[DrRyan]

Sure a rookie salary cap is necessary but it would have little to do with the 60/40 split referenced in the article. That seems to be the major hold up.
Posted via Mobile Device

[Dave Lane]

Originally Posted by DrRyan

Sure a rookie salary cap is necessary but it would have little to do with the 60/40 split referenced in the article. That seems to be the major hold up.
Posted via Mobile Device

The owners want to do the 60/40 they just want more deductions from the pie to cover stadium expenses before the 60/40 split. The rookie salary cap savings would be a bone the NFLPA could offer to help offset the extra stadium costs.

[tyton75]

Since we suck anyway.. Lock them out forever, bring in people willing to play for less.. put together a new contract structure.. and go for it.. the league would suck for a couple of years.. but eventually the good football players would want to get paid to play, even if its not as much as it is now.

then guarantee them health insurance.. retirement plans..etc...

I know I'll get flamed so flame away

[orange]

Originally Posted by tyton75

Since we suck anyway.. Lock them out forever, bring in people willing to play for less.. put together a new contract structure.. and go for it.. the league would suck for a couple of years.. but eventually the good football players would want to get paid to play, even if its not as much as it is now.

then guarantee them health insurance.. retirement plans..etc...

I know I'll get flamed so flame away

Uh...

The good players would form their own league and the NFL would come begging.

See "American League."

[AustinChief]

Originally Posted by orange

Uh...

The good players would form their own league and the NFL would come begging.

See "American League."

HAHAHA, not a chance.

#1 Where would they get the money to do so?

#2 WHERE exactly will they play? In what stadiums?

#3 The NFL is a POWERFUL brand that transcends individual players.

[Mr. Laz]

Originally Posted by orange

Uh...

The good players would form their own league and the NFL would come begging.

See "American League."

no freakin way

this would require the players to actually be involved in running the business and 90% of them want no part of that.

[notorious]

I would rather have 1-2 seasons of no football and have them fix it the right way (especially the salary cap/floor) then to have uncapped hell with the current draft payscale.

[MGRS13]

Why don't the owners just get cheap players from india.

[bevischief]

Originally Posted by MGRS13

Why don't the owners just get cheap players from india.

Not big enough...

[BossChief]

With talks of extending the schedule coming around as well, now would be a good time to start a developmental league. It will be a requirement in a few years (if the world doesnt end and football commences after 2010)