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Consensus among owners may be key to labor peace
By Larry Weisman, USA TODAY
What happens when the "virtually dysfunctional" meet the "overreaching?"
Perhaps an extension of the NFL labor contract. Perhaps nothing.
NFL team owners, labeled as "virtually dysfunctional" by NFL Players Association lawyer Jeffrey Kessler, meet Tuesday and possibly Wednesday in Dallas to consider a proposal from the union not so radically different from one they called "overreaching" and voted unanimously against less than a week ago.
Labor-management squabbles often degenerate into a trade of insults instead of meaningful bargaining points, but the NFL's deal includes another area of contention: The lack of consensus among the owners. It affects not only their dealing with the players but with each other and their failure to get behind Commissioner Paul Tagliabue.
Revenue-sharing has been a cornerstone of the NFL since the early 1960s when a number of the big-market clubs agreed to pool the television money and keep their little brothers financially whole. But the growth in recent years of unshared revenues for a number of clubs — the Washington Commanders, Dallas Cowboys, New England Patriots — has driven a wedge between the owners. Some want more of this money to be shared and others (primarily those who are earning it) do not.
If they cannot agree among themselves, they cannot agree with the players. At stake: A system of free agency and a salary cap that has served both sides well since it was implemented in 1993.
"The owners are working through their own issues. They are not lined up behind Paul. They have the 'haves' and 'have-not' issue," says Robert L. Clayton, a sports labor lawyer with Mintz Levin in Washington, D.C.
It is creating weird dynamics in the talks, in the stances the sides take and in the public perception of the nation's most popular sport, he says.
"Everyone saw a golden goose that no one wanted to harm. But now the focus is on the group of wealthy teams, and the fans are starting to look at this group as the problem, not the union. The union is talking an extension of the cap, which is a cap on salaries and that is contrary to how people view unions, usually," Clayton says.
There's also a lot of attention being paid to the lower-revenue teams. They will not vote in favor of the extension without more revenue sharing because the salary cap will be driven up another $10 million by the unshared earnings of the richer teams.
Currently, the players derive their share from what's called defined gross revenues — basically broadcasting and television money. The new model throws everything in the pot, even if some teams don't earn that type of revenue. If they were stretched to compete before, when 70% of their income went to payroll, how much worse will the low rollers feel now?
"The owners are already at the point of pain" with the offer they made to the players on Sunday, says Marc Ganis, a Chicago-based consultant to several NFL teams on stadium and business issues. Whether or not they share more of their money with each other, they will not want to meet the players' demand of 59.5% of what is now called total football revenue. Their offer is for 56.2%.
"I suspect that the (union's) stridency and the overreaching were a surprise to the owners after they agreed to the structural change to TFR (total football revenue). This is one of those situations that really does appear to be a significant overreach. The numbers the players are asking for may not be feasible from the owners' standpoint," Ganis said.
So they could agree on that and perhaps no more at this meeting. Cowboys owner Jerry Jones likes neither the idea of more revenue sharing nor the idea of coughing up nearly 60% of revenues pegged at $5.7 billion by the Sports Business Journal and on their way as high as $10 billion by the end of the decade.
"I'm not happy with the proposal," Jones says. "I didn't think we'd be entertaining the type of proposal we got from the players."
If it does not pass — and it needs 24 of 32 votes — the waiver deadline is set for 9 p.m. ET on Wednesday. That is when the teams would need to be in compliance with the 2006 salary cap of $94.5 million, which could precipitate the release of well-known players. Many contracts were done in recent years in anticipation of this extension and a much higher cap figure that may not happen.
Free agency then would begin at one minute after midnight on Thursday morning. It will be business as usual in times that have suddenly become unusual after 13 years of labor peace.
Consensus among owners may be key to labor peace
By Larry Weisman, USA TODAY
What happens when the "virtually dysfunctional" meet the "overreaching?"
Perhaps an extension of the NFL labor contract. Perhaps nothing.
NFL team owners, labeled as "virtually dysfunctional" by NFL Players Association lawyer Jeffrey Kessler, meet Tuesday and possibly Wednesday in Dallas to consider a proposal from the union not so radically different from one they called "overreaching" and voted unanimously against less than a week ago.
Labor-management squabbles often degenerate into a trade of insults instead of meaningful bargaining points, but the NFL's deal includes another area of contention: The lack of consensus among the owners. It affects not only their dealing with the players but with each other and their failure to get behind Commissioner Paul Tagliabue.
Revenue-sharing has been a cornerstone of the NFL since the early 1960s when a number of the big-market clubs agreed to pool the television money and keep their little brothers financially whole. But the growth in recent years of unshared revenues for a number of clubs — the Washington Commanders, Dallas Cowboys, New England Patriots — has driven a wedge between the owners. Some want more of this money to be shared and others (primarily those who are earning it) do not.
If they cannot agree among themselves, they cannot agree with the players. At stake: A system of free agency and a salary cap that has served both sides well since it was implemented in 1993.
"The owners are working through their own issues. They are not lined up behind Paul. They have the 'haves' and 'have-not' issue," says Robert L. Clayton, a sports labor lawyer with Mintz Levin in Washington, D.C.
It is creating weird dynamics in the talks, in the stances the sides take and in the public perception of the nation's most popular sport, he says.
"Everyone saw a golden goose that no one wanted to harm. But now the focus is on the group of wealthy teams, and the fans are starting to look at this group as the problem, not the union. The union is talking an extension of the cap, which is a cap on salaries and that is contrary to how people view unions, usually," Clayton says.
There's also a lot of attention being paid to the lower-revenue teams. They will not vote in favor of the extension without more revenue sharing because the salary cap will be driven up another $10 million by the unshared earnings of the richer teams.
Currently, the players derive their share from what's called defined gross revenues — basically broadcasting and television money. The new model throws everything in the pot, even if some teams don't earn that type of revenue. If they were stretched to compete before, when 70% of their income went to payroll, how much worse will the low rollers feel now?
"The owners are already at the point of pain" with the offer they made to the players on Sunday, says Marc Ganis, a Chicago-based consultant to several NFL teams on stadium and business issues. Whether or not they share more of their money with each other, they will not want to meet the players' demand of 59.5% of what is now called total football revenue. Their offer is for 56.2%.
"I suspect that the (union's) stridency and the overreaching were a surprise to the owners after they agreed to the structural change to TFR (total football revenue). This is one of those situations that really does appear to be a significant overreach. The numbers the players are asking for may not be feasible from the owners' standpoint," Ganis said.
So they could agree on that and perhaps no more at this meeting. Cowboys owner Jerry Jones likes neither the idea of more revenue sharing nor the idea of coughing up nearly 60% of revenues pegged at $5.7 billion by the Sports Business Journal and on their way as high as $10 billion by the end of the decade.
"I'm not happy with the proposal," Jones says. "I didn't think we'd be entertaining the type of proposal we got from the players."
If it does not pass — and it needs 24 of 32 votes — the waiver deadline is set for 9 p.m. ET on Wednesday. That is when the teams would need to be in compliance with the 2006 salary cap of $94.5 million, which could precipitate the release of well-known players. Many contracts were done in recent years in anticipation of this extension and a much higher cap figure that may not happen.
Free agency then would begin at one minute after midnight on Thursday morning. It will be business as usual in times that have suddenly become unusual after 13 years of labor peace.
