FWST: NFLPA Director DeMaurice Smith proposes current system continuation....

[CCBoy]

Just CHILL: NFLPA Director DeMaurice Smith proposes continuation of current system for a year, while bracing players and agents for uncapped season



Clarence Hill

In a memorandum to players and agents on Tuesday, NFLPA executive director DeMaurice Smith expressed doubt about an agreement on a CBA extension being reached before the March 5 deadline. The memorandum, obtained by the Star-Telegram, also states that the NFLPA's latest offer included a proposal to continue the current cap system for another season to provide more time to reach a deal.

That last concession was out of sensitivity to the scores of players like Cowboys receiver Miles Austin who will be restricted free agents instead of unrestricted agents, and thus stand to lose millions of dollars since unrestricted free agency in an uncapped year increases from four to six accrued seasons.

Remember, in a normal year, Austin could capitalize off his breakout season as an unrestricted free agent with a big-money contract either from the Cowboys or a team on the open market. He could at least get a contract in the same ball park as fellow Cowboys receiver Roy Williams ($45 million over five years), who happens to be the No. 2 receiver behind Austin.

But as of now Austin will have to settle for the hightest restricted free-agent tender of $3.1 million.

Here is the memo -- or shall I take a cue from Jerry Maguire and say mission statement -- from Smith:



MEMORANDUM

To: NFL Players and Contract Advisors

From: DeMaurice Smith

Date: February 23, 2010

Subject: CBA Negotiations/Restricted Free Agency

As we quickly approach the beginning of the uncapped year, I wanted to take this opportunity to update you on the NFLPA’s efforts to reach agreement on an extension of the CBA before the beginning of the uncapped year on March 5, 2010. It is our view that obtaining an extension to the CBA prior to the uncapped year is in the best interest of both the players and the owners. However, the terms of any CBA extension must allow for players to get their fair share of NFL revenues while at the same time address the owner’s issues in such a way as to allow them to continue to grow the game of football. All of the NFLPA’s proposals have been crafted with that in mind. The Player Representatives have also been advised of the NFL’s request that players take a pay cut that would move players back to the 1980’s in terms of their share of NFL revenues.

CBA Bargaining

There have been 12 general bargaining sessions with the NFL discussing issues relating to the proposed terms of a new CBA. Comprehensive written proposals and counter proposals have been presented to meaningfully address issues such as the overall player cost/free agency system, revenue sharing, rookie salaries, forfeiture clauses in player contracts, and off-season/pre-season work rules. In addition to NFLPA staff and outside counsel, NFLPA player leadership has been present at all of the sessions. Players attending at least one session include NFLPA President Kevin Mawae, Mark Bruener, Kevin Carter, Tony Richardson, Domonique Foxworth, Chester Pitts, Sean O’Hara, Jay Feely, Pete Kendall and Donovin Darius. These players have contributed valuable insight and perspective in support of NFLPA positions at the bargaining table.

On the NFL side, owner representatives in attendance have included John Mara (New York Giants), Mark Murphy (Green Bay Packers), Robert Kraft (New England Patriots), and Ozzie Newsome (Baltimore Ravens). The most recent session was held on February 6, 2010, just prior the Super Bowl, and was attended by the NFL Management Council’s Executive Committee, which is comprised of 10 owners, and chaired by Carolina Panthers owner Jerry Richardson.

In addition to the general bargaining sessions, six sub-committees were created to address very specific areas of the CBA. Those sub-committees are as follows: Benefits, Drug Policies, Grievance Procedures, Working Conditions, Injury Data and Licensing/Intellectual Property Rights. The NFLPA has prepared detailed written proposals for each of the areas addressed by these sub-committees and each committee has held no less than three meetings to discuss their respective proposals.

In total, we have held more than 30 overall bargaining sessions with the NFL in the past six months. And while we have made progress in some areas, we continue to have significant

disagreement with the NFL over their desire to have players take an 18% reduction in their share of revenues given the NFL’s failure to provide meaningful financial data to support the assertion that their costs have increased significantly since the capped system was put into place in 1993. Their demand that the players take such an historic pay cut is even more disturbing given the NFL’s continuing economic growth despite the worst recession in recent history.

The NFL has made it clear that the league and its clubs remain profitable. There has not been any statement, affirmative or suggested, by the NFL that any team is losing money. Moreover, the league has rejected any offer to discuss their profit margins, team profitability or any of their teams’ individual financial statements.

Players have always been willing to create incentives for NFL owners to develop new revenue streams for their clubs. The G-3 program contained in the existing CBA which provides salary cap credits for new stadiums provides a good example of our commitment to this philosophy. Our current proposal would allow NFL clubs to obtain substantially increased deductions for costs incurred to generate new revenue streams.

Another general bargaining session is scheduled for Thursday, February 25, 2010, at the NFL Combine in Indianapolis.

Uncapped Year

While we are doing all that we can to reach a fair agreement with the NFL before the start of the 2010 league year, it appears likely that no new CBA will be reached and the 2010 season will be uncapped. For some players this means that they will be Restricted Free Agents instead of Unrestricted Free Agents since unrestricted free agency in the uncapped year increases from four (4) to six (6) Accrued Seasons. We are sensitive to the impact that this change in the free agency rules will have on these players. Because of this, our most recent proposal to the NFL contains an offer to continue the current capped system for an additional year which would allow the parties ample time to complete work on a long-term CBA.

The NFLPA just recently won a Special Master decision against the NFL and its clubs which will force the high revenue clubs to share millions of additional dollars with the low revenue, small market clubs during the 2010 season. The decision to pursue this action was based upon our belief that we had to make more money available to sign players in the uncapped year.

Remember also that the uncapped year provides just that -- no cap or limit on the amount of money a club may spend on player salaries. The last time there was an uncapped season in the NFL was in 1993, and in that season clubs spent collectively over 70% of league revenue on player costs. While we cannot predict what will happen in 2010, we suspect that it will be dependent on the individual player and team. Given the projected increases in NFL revenues for 2010, more money should be available for player salaries than ever before. In addition, keep in mind that each NFL club will be saving approximately $10 million in benefit costs as a result of their not having to fund certain benefits in the uncapped year. That money can and should be used for player salaries.

For those players negotiating new contracts in 2010, please keep the NFLPA updated on the status of your negotiations as it will allow us to be informed of the trends in the market for player services. With that information, we can then help all players maximize their ability to get the best contracts possible. In the meantime, the NFLPA will continue its efforts to reach agreement with the league on a new CBA.

 

[Hostile]

It is my understanding that it is the owners who don't want the current system, not the players.

 

[TheCount]

It is my understanding that it is the owners who don't want the current system, not the players.

Same here, so that makes no sense. The owners are the ones saying the revenue isn't there.

 

[Hostile]

Same here, so that makes no sense. The owners are the ones saying the revenue isn't there.

So this is merely posturing that will look like they are making a concession when in fact they aren't moving one inch.

 

[Kangaroo]

18% wow I don't see the players caving with the owners asking for that much of a cut. I think the owners are using that as a barging ploy ask high have the uncapped year have a lock out have the players settle on a 6-8% reduction. Kind of like presenting budgets at work you inflate automatically because you know they are going to cut.

 

[AdamJT13]

So this is merely posturing that will look like they are making a concession when in fact they aren't moving one inch.

Exactly. The owners opted out of the current agreement, which was their right as negotiated in the CBA. The players saying they will continue in the old system won't get them very far. My guess is that they finally realized that the owners have played this uncapped season exactly right -- almost every big name player is either under contract already or will be a restricted free agent. Plenty of owners have set themselves up to spend much less on player salaries this season than they'd have to spend in a capped season (no cap means no salary floor, either).

 

[Hostile]

Exactly. The owners opted out of the current agreement, which was their right as negotiated in the CBA. The players saying they will continue in the old system won't get them very far. My guess is that they finally realized that the owners have played this uncapped season exactly right -- almost every big name player is either under contract already or will be a restricted free agent. Plenty of owners have set themselves up to spend much less on player salaries this season than they'd have to spend in a capped season (no cap means no salary floor, either).

Offbeat question about the comment in bold. Will that look like collusion?

 

[Manwiththeplan]

Offbeat question about the comment in bold. Will that look like collusion?

IMO, no. The way contracts are currently set up, most players sign 4 year deals, so they can take advantage of unrestricted free agency as soon as possible. In the past, this benifits the players, now it doesn't. Moving the requirements from 4 to 6 seasons in an uncepped year was genius, but also agreed to by the players, so they can't cry about it now

 

[AMERICAS_FAN]

Exactly. The owners opted out of the current agreement, which was their right as negotiated in the CBA. The players saying they will continue in the old system won't get them very far. My guess is that they finally realized that the owners have played this uncapped season exactly right -- almost every big name player is either under contract already or will be a restricted free agent. Plenty of owners have set themselves up to spend much less on player salaries this season than they'd have to spend in a capped season (no cap means no salary floor, either).

Owners also want slotted contracts for rookies coming into the league so they don't give up big pay days to first rounders, most of which never live up to their first contracts. But I can't ever see players agreeing to that since those contracts are typially no more than 4 years, which also hapens to be the average career-span of the average NFL player.

 

[AMERICAS_FAN]

In case anyone has not paid any attention, the NFL suffered a big blow in the recent American Needle v. NFL case heard before the US Supreme Court. While the heart of this case is about merchandising, in the case the NFL argued before the court that it should be viewed as a singe entity. That's important because if the court agrees then the NFL would gain antitrust exemption status which effectively means the NFL could force the dismantling of the NFLPA (players union).

But the court did not agree with the NFLs opening argument that it is a single entity, and this is why talks between the NFL and NFLPA about the CBA are starting to pick up now. Before this recent hearing there were hardly any talks as the NFL was positioning for the exemption in attempt to phase the players-union out altogehter. Now that it has lost the argument, and in turn bargaining power against the NFLPA, it must negotiate with the NFLPA on a future labor agreement with no way around it (because while there has been no officila ruling in this case yet, it is pretty well believed that the NFL would never gain this blanket antitrust exemption from the court).

And so the NFLs talks with the NFLPA are picking up and becoming a bit hostile as we're hearing claims from the NFLPA now that the NFL is gearing up for a lockout when that is not the case - so claims the NFL. So clearly, the NFLPA is shooting back by flexing its offensive muscle, and putting the NFL in a defensive position in the press.


Here's an article from the American Law Journal providing more detail on the case.


The NFL is not a single entity
Gabriel Feldman, for The American Law Journal
February 1, 2010

Teams within the league compete with each other for players, coaches, fans, sponsors and even home cities and stadiums.


Last month, the U.S. Supreme Court heard arguments in American Needle v. NFL, a case that has been dubbed the "Super Bowl of sports litigation" and could significantly affect the structure and operation of the National Football League and other professional sports leagues. The case, which involves a challenge to the NFL's exclusive apparel deal with Reebok International Ltd., addresses a fundamental question in sports law: Do professional sports leagues constitute a single entity for purposes of Section 1 of the Sherman Act? This section explicitly requires an agreement, and an agreement requires two entities — a single entity cannot agree with itself. Thus, as a matter of law, if a sports league is a single entity, it cannot violate Section 1.

For more than 50 years, sport leagues have argued that they are single entities, and for more than 50 years, courts have rejected their argument and analyzed the legality of league restraints under Section 1. The Section 1 analysis, known as the "rule of reason," instructs courts to balance the anti-competitive effects and pro-competitive benefits of the challenged restraint. A restraint is illegal, or unreasonable, if its anti-competitive effects outweigh its pro-competitive benefits. Section 1 has served as a check on professional sports leagues (excluding Major League Baseball, which was granted an anomalous exemption from the antitrust laws that has since been pared back), ensuring that the leagues do not engage in conduct that harms competition and consumers. Challenges brought under Section 1 have resulted in significant gains for players, fans and individual owners.

In American Needle, the U.S. Court of Appeals for the 7th Circuit bypassed the rule of reason, holding that the single-entity status of the NFL should be determined "one facet of the league at a time," and that NFL and its teams act as a single entity when licensing their intellectual property. The NFL, however, believes that its teams act as a single entity in all areas of its operation — ranging from scheduling to free-agency restrictions to salary caps to franchise relocation rules. The NFL's basic argument is that the league can only be created by a series of agreements among its teams — the teams must cooperate on a variety of rules, ranging from the simple (e.g., team schedules and rules of the game) to the complex (e.g., rules regarding the location of teams and player restraints). As counsel for the NFL argued before the Supreme Court, the teams have no value without the league, so the teams and the league should be considered one entity. Thus, the NFL made this case about much more than hats and T-shirts. The NFL asked the Supreme Court to grant it complete immunity from Section 1.

At oral argument, several of the Supreme Court justices expressed skepticism about the breadth of the NFL's argument. Justices Samuel Alito Jr., Anthony Kennedy and Ruth Bader Ginsburg questioned whether basic rules of the NFL, including scheduling and rules of the game, should be subject to Section 1 attack, but Chief Justice John Roberts Jr. and justices Antonin Scalia, Stephen Breyer and Sonia Sotomayor seemed troubled by the suggestion that the NFL should be treated any differently than other joint ventures. Breyer stated that the NFL teams needed to cooperate to produce the game of football but questioned why this need for cooperation meant that the teams should be exempt from scrutiny when they combined to sell logoed hats or agreed to other rules and restrictions off the field.

Although it is difficult to predict the result of the case from the questions asked during oral argument, the back-and-forth between counsel for the parties and the justices highlighted the basic flaw in the NFL's argument. Despite their interdependence, the NFL teams compete with each other for, among other things, players, coaches, fans, sponsors and even home cities and stadiums. Agreements made by NFL teams, like agreements by competitors in other industries, have the potential to harm competition and consumers. As Breyer and Sotomayor suggested during the oral arguments, these are precisely the types of agreements that must be subject to scrutiny under Section 1's rule of reason.

Yet the NFL seems to believe it is entitled to special treatment. The league claims that it must be protected from attack under Section 1 because antitrust litigation is burdensome and expensive. Antitrust litigation may be inefficient and costly, but blanket protection from federal law is not the solution — it is an invitation to violate the law. Many league agreements, including the NFL's exclusive deal with Reebok, may be legal, but that determination should be made on a case-by-case basis under the antitrust laws, not by an ill-suited label used to avoid the law. We will find out later this year if the Supreme Court agrees.

Gabriel Feldman is a professor at Tulane University Law School and director of its sports law program.

 

[arglebargle]

Owners also want slotted contracts for rookies coming into the league so they don't give up big pay days to first rounders, most of which never live up to their first contracts. But I can't ever see players agreeing to that since those contracts are typically no more than 4 years, which also hapens to be the average career-span of the average NFL player.

Not so on the players side. Remember, the rookies have no one on their side other than the agents. The older, experianced players see themselves getting less money or getting cut to fund $35 million dollar rookie gambles. Both the owners and the players want some sort of reasonable slotted rookie salary cap. Just the top 10 or so of the draft get painfully large contracts. I don't think the rookie salary cap will be divisive at all. The extra games, money cut backs, and other such NFL schemes will be much more serious roadblocks.

Good reading on all that info though.

 

[Idgit]

Not so on the players side. Remember, the rookies have no one on their side other than the agents....

They shouldn't even have the agents, really, who have an ethical obligation to represent their veteran clients, as well. Plus, it's better for the league to make sure the best players get the most money.

 

[CCBoy]

The agent represents both the veteran as well as the 'rooks' on the basis of a future projection of talent and the need for a team to possess his particular services. Those aspects are independent from former performance as well as specific football values beyond a projected role in the present. There is no disparity or lack of ethics in the bargaining of a player, whether proven or not...as he acquires market value for his services to begin with. That is established by need as well as history of practice, market demands.

In any union driven market place, a new arriving member is given the opportunity to participate and as such, becomes under the very same protective umbrella as well.

I don't see a lack of ethics in the onset in the least...the system would be void of value, if the top producers didn't dominate market value. Then only.




Good posting, Americas Fan. Thanks.

 

[tunahelper]

The players need to be at least 50/50 on revenue sharing. If I was an owner I would not give an inch.

 

[jumanji]

Not so on the players side. Remember, the rookies have no one on their side other than the agents. The older, experianced players see themselves getting less money or getting cut to fund $35 million dollar rookie gambles. Both the owners and the players want some sort of reasonable slotted rookie salary cap. Just the top 10 or so of the draft get painfully large contracts. I don't think the rookie salary cap will be divisive at all. The extra games, money cut backs, and other such NFL schemes will be much more serious roadblocks.

Good reading on all that info though.

not necessarily. a lot of veterans believe that when a rookie gets 50 million dollars for 5 years, it drives the market rate up for the veterans also.

for example, jake long became the highest paid olineman last year when he was signed. in turn, that made signing the veteran olinemen more expensive.

 

[HanD]

not necessarily. a lot of veterans believe that when a rookie gets 50 million dollars for 5 years, it drives the market rate up for the veterans also.

for example, jake long became the highest paid olineman last year when he was signed. in turn, that made signing the veteran olinemen more expensive.

although that is true, IMO that is only for a select few elite. when a team's cap has a large portion used on high draft picks, it's the other 20 or so veterans that are role players that end up getting the minimum.

 

[burmafrd]

That is BS about driving up the price. A lot more players are ticked off with all the newbies getting all that money for doing nothing. Smith has been trying to keep them from making that plain but the PLAYERS want a rookie salary cap that keeps rooks from getting $30-40 million guaranteed. Which comes out of the VETERANS pockets in the long run.

If Smith really wanted to be helpful he would have made this suggestion about 6 months ago. Waiting until now is so clearly political posturing its not worth even discussing.

 

[BHendri5]

I just want to say that I believe the owners are losing some money, even if it is just on the rookie contracts alone. They are also loosing money on some FAs that play great one season get paid, and then fat cat it.

There ought to be a way the owners can cut under performing players with out any loss of money. Rookies need a cp put on them for their first 3/4yrs.

The players that have played and retired need to be taken care of.

 

[sonnyboy]

I have a very very dumb question..............

Why is the uncapped system we will be working under in 2010 not a long term answer in everyone's favor?

With no floor, all the owners who say they are losing money can spend a little less.
With no cap, the players should be happy with one less artificial restriction to salaries.

Since it now takes 6 yrs to hit FA, owners/teams should have a better chance to reap the benefits of good drafting.

What really surprises me is all the talk of a lock-out in 2011. WHY? I anything the current system appears to favor the owners.

 

[burmafrd]

The money is where the owners are balking. They say the players are getting too much of the gross and also they want to take part of the gross and start putting together a stadium fund. Which is hard to argue since public money for stadiums is a thing of the past now.