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Join Date: Apr 2004
Re: Is McNair suddenly optimistic about a new CBA?
from WALL STREET JOURNAL
NFL Owners, Players Extend Talks
By MATTHEW FUTTERMAN
At the brink of an all-out labor war Thursday, National Football League owners and the players union agreed to a 24-hour extension of their collective-bargaining agreement, putting off, for now, a potential season-threatening lockout.
The agreement was due to expire at midnight. At stake was the future of the world's most successful professional-sports league, a $9 billion annual juggernaut now threatened by the sort of deep-seeded labor strife that has caused months-long work stoppages and billions of dollars in losses for professional baseball, hockey and basketball.
The NFL makes money from three main sources—tickets sales, broadcast fees and corporate sponsors. A lockout, if it occurred, would likely have a drastic effect on ticket revenues and money from sponsorships, as the league is forced to cancel games and companies take their sports-marketing dollars elsewhere.
In addition, a federal judge suggested this week he could hold some $4 billion in expected broadcast-rights fees in escrow, leaving owners to search for alternative means of meeting their debt obligations.
For sponsors and broadcast companies, losing the NFL would mean losing the most reliable, albeit expensive, tool for reaching TV's largest audience.
On Thursday, during a 10th day of talks mediated by George Cohen, director of the Federal Mediation and Conciliation Services, the two sides extended the CBA, a move that could prevent a lockout and what could become a lengthy and ugly litigation. If the talks break down, the National Football League Players Association was expected to to decertify their union, a move that opens up the door for the players to file an antitrust suit against the owners if a lockout ensues.
The NFLPA had planned to file papers in federal court in Minnesota with U.S. District Court Judge David Doty Thursday. The immediate goal would have been to ask Judge Doty to issue a temporary injunction that would prevent the owners from locking out the players.
In response, the NFL was expected to argue that despite decertification, the NFLPA would still function as a union, that the union can't seek relief through litigation and that the owners maintain the right to a lockout once the CBA expires. NFL officials have said they would view moving the process to the courts as a hostile maneuver that would effectively end talks.
More on NFL Labor
Networks Brace for NFL Hit NFL Impasse Q&A: What's at Issue? Timeline: Sports Labor Disputes The NFL's Final Deadline: November The $1 Billion Game of Chicken Has the League Reached Its Apotheosis? What the NFL Stands to Lose Financially Players-union officials view the federal courts as a more friendly arena, since Judge Doty gave them their biggest victory nearly two decades ago when they won the right to free agency.
In addition, the U.S. Supreme Court ruled last year the NFL isn't a single entity and its teams shouldn't be exempt from antitrust regulations, leaving it vulnerable to further lawsuits.
The main sticking points in the dispute include how to divide roughly $9 billion in annual revenue. Currently, the owners immediately get $1 billion of that amount for themselves as an expense credit before giving nearly 60% of what is left over to the players.
Now the owners would like to increase their off-the-top credit to $2 billion from $1 billion, leaving $7 billion to divide in the 60%-40% split with the union. If owners get their way, the players' current share, worth about $4.8 billion, would be pared to about $4.2 billion.
Owners also would like to extend the season to 18 games from 16 and cut pay for rookies. Players are against any pay cuts. They fear a longer season would cause more injuries and would only allow a firm rookie wage scale if it saved money flows to veterans.
Little progress has been made since 2008, when team owners voted to cut the final two years off the current CBA because they say their labor costs were rising far faster than their profits.
If a lockout occurs, the owners would risk a substantial loss in revenue at a time when their debt obligations have never been higher. If Judge Doty prohibits them from collecting or using TV fees, they may not be able to cover their debt obligations. If the players missed a season, it would cut short careers that already last, on average, a little more than three years.
The labor strife is a major blow to the NFL, which has always prided itself on its labor peace. Unlike the other major sports, the NFL has never endured the sort of calamitous work stoppages of Major League Baseball, which cancelled the 1994 World Series, the National Basketball association, which lost half its games in 1998-99, or the National Hockey League, which cancelled an entire season in 2004-2005.
As NFL owners and players hover on the brink of an all-out labor war, take a look back at some of the disputes that have upset play in major-league sports.
A strict cap on player salaries—currently about 52% of overall revenue—has always formed the basis of the NFL's labor peace. But in recent years, owners have had to invest an increasing amount of their own money to cover expenses, especially for building and renovating stadiums.
As a result, the amount of money players receive is rising much faster than owners' profits, putting at risk what has been the most reliable investment in sports, according to the owners.
League officials and a small contingent of owners led by Commissioner Roger Goodell joined union officials led by DeMaurice Smith just after 9:30 a.m. at the FMCS headquarters building. Wednesday night, a union official said he was anticipating a short, unproductive session. Just two owners on the league's management council joined the talks. But as the day wore on and the two sides remained behind closed doors, word emrged that the players and league officials were working to extend the CBA deadline.
Unlike the owners in other sports, the NFL's leaders have dominated its players in each labor standoff, even as the power in sports has a shifted to athletes as their salaries have continued to rise. The late Gene Upshaw, who led the union for 25 years, was widely seen as the sports world's most owner-friendly labor leader. He often spoke of his organization's "partnership" with management.
NFL players battled for free agency throughout the 1980s, but broke down during brief midseason strikes in 1982 and 1987. Ultimately, the union had to disband in 1989 and pursue its efforts in federal court, which resulted in a settlement and a new collective-bargaining agreement in 1993 that included a hard cap on player salaries, which would increase only as revenue rose. Also, NFL players have never been able to win guaranteed contracts as basketball, baseball and hockey players have. As a result, they have little job protection and can be cut at any time with little financial penalty to the owners.
Players achieved a small victory in 2006, by getting owners to agree to keep player compensation tied to revenue rather than profit. But management shares little financial information with the union and still doesn't guarantee contracts.