The plight of former National Football League players heads back to the Senate
Tuesday, led by Football Hall of Fame members Mike Ditka and Gale Sayers, joined by National Football League Commissioner Roger Goodell and NFL Players Association Executive Director Gene Upshaw these group of former and current NFL executives addressed a U.S. Senate Committee on the Oversight of the NFL Retirement System.
Nearly three months ago the same committee held hearings that featured Ditka, Sayers and other members of the Gridiron Greats a group formed by Ditka and former Green Bay Packers Jerry Kramer to help former NFLers in need. Goodell and Upshaw didn’t appear at the June 26, 2007 hearings and where roundly criticized for what was perceived as their inaction. Tuesday, the two acknowledged leaders of the $7 billion industry (better known as the NFL) shared how they felt about the issue of the NFL Retirement System.
Upshaw enshrinement in the Football Hall of Fame isn’t based on what he has done with the NFLPA, a lengthy career that played itself out long before the NFL became an economic engine.
“Prior to becoming Executive Director in 1983, I played 16 years in the National Football League. I know the risks and rewards of the game.
“I am distressed when I hear about any former player who is hurting and in need. Remember I played with a lot of these guys. I have spent my entire professional career fighting for the rights of players. I also recognize these are very emotional issues but we cannot overlook the facts. The facts are the facts. I ask permission to submit for the record our detailed “White Paper,” which describes the retirement, disability, health care, and other benefits currently available to NFL players.
“Our benefits were forged in collective bargaining. In 1993, as part of my first collective bargaining agreement as Executive Director, we dramatically improved both pension and disability benefits for all players.
“I want to make three simple points.
“First, the NFLPA is proud of the job we have done for NFL Players both active and retired. NFL Players are well compensated and enjoy an outstanding benefits package. Unlike many businesses, where benefits have been reduced, benefits for NFL players have been maintained and repeatedly improved. We represent the best practices of labor relations.
“Second, we are not finished. I think all of the active players respect and empathize with the emotions and concerns expressed by retired players. This is why we established a Retired Players organization as a division of the NFLPA in 1984. And, in 1990, we established the Players Assistance Trust (PAT), funded by the active players to help former players in need. In the past 18 months, this fund has disbursed over $1.5 million to former players in need of financial assistance.
“When I became Executive Director in 1983, about 30% of NFL revenues went to the players. That has now doubled, to 60% of all revenues. Our union went through some dark times. We had to renounce our union status – "decertify" – to bring the legal challenge that ultimately led to our present success. I don't think any other union has ever done that; everyone said we were crazy. But we made it work. We shifted the battle from the picket line to the courtroom, and forged the partnership with the owners we are proud to have today. With labor peace, the game has grown enormously, and all have benefited – players, owners, and fans.
“This success has allowed us to win against the prevailing trend of reducing benefits to workers. Before we get into the hype, let's look at the facts. The NFLPA has fought hard to increase benefits -- especially pensions, disability, and health care.
The NFL generated more than $6 billion in revenues last year. That figure is expected to come close to $7 billion this year/ The NFL’s television contracts collectively generate $3.75 billion a year. Current NFL players receive 60 percent of all football related revenues. The average NFL salary in 2006 was $1.4 million. And that average salary has been over the $1 million a year threshold for some time. The average salary of $1,169,470 for the 2001 season reflected a 5% increase over 1999, according to NFL Players Association documents. It topped the previous high of $1,137,800 set in 1998.
Everything changed for NFL players in 1982. The players went on a 57-day strike (no not the strike that inspired the movie “The Replacements”), but a work action that led to a 9 game NFL season. Among the ‘goodies’ the players negotiated with the owners – the right to obtain copies of all individual contracts.
Before NFL players obtained that right it was anyone’s guess what players were being paid. Former Kansas City guard Tom Condon, now a super-agent, told USA Today’s Gordon Forbes in 2001 he remembers learning in a shower conversation that his backup was earning $65,000, or $15,000 more than his own salary. The Chiefs dug down and gave Condon $65,000 plus 2 more years, each with a $10,000 raise.
"I was just happy as hell and said, 'Let's sign,' " Condon said. And when the NFLPA's first salary survey came out in 1982, Condon learned that the Chiefs were an equal opportunity employer. Condon (10th round), right tackle Charlie Getty (second) and left tackle Matt Herkenhoff (fourth), all from an offense-heavy 1974 draft, each earned $130,000 in base salary in 1982. Left guard Brad Budde, their first-round pick in 1980, earned $90,000. Jack Rudnay, a Pro Bowl center, earned $175,000. Shockingly, Bill Kenney, the starting quarterback, also earned $130,000.
The players that are suffering the most, those being forced to live on next to nothing played their football (with Upshaw) before 1983. Today’s NFL players who are guaranteed 60 percent of all football related revenues (60 percent of the $7 billion) are the ones who at the end of the day determine how those who built the NFL into a money making machine are going to be treated.
Roger Goodell said as much in his testimony to the committee Tuesday.
“In considering the subject of benefits for retired players, I begin from a premise which I think no one seriously disputes – the men who played professional football decades ago deserve our respect and recognition, and their contributions to our game must never be overlooked. I honor them and their achievements and neither I nor the NFL clubs will turn our backs on them.
“Second, while it might be tempting to say – as some have – that this is Gene Upshaw’s problem to solve that is neither fair nor accurate. The responsibility for addressing the needs of retired players belongs to all of us. The retired players, the current players, the clubs, Gene as head of the Union, and I as the Commissioner – all of us have a role to play. We will continue to address this issue in a way that is compassionate, creative, and realistic.
“Third, just as it would be wrong to say this is Gene Upshaw’s problem to solve, it would be wrong to say that the NFL can or should solve the problem by itself. While some may not believe this, the fact is that we cannot solve every problem of every type that has been identified, and certainly not in a way that will satisfy everyone. NFL clubs currently spend close to 60 percent of their gross revenues on player benefits and salaries. Our clubs contributed almost $150 million last year to finance medical, disability, and retirement benefits for former players, and during the term of our current collective bargaining agreement, we project that our clubs will spend more than $700 million to fund just this package of player benefits. Owners are responsibly addressing these concerns, but they are simply not in a position to absorb significant incremental costs.”
Goodell went on to address the committee pointing out how well today’s players are treated – essentially missing the point of the hearing, today’s NFL players may indeed enjoy a great benefit package but with the average NFL salary estimated at $1.4 million for the 2007 season, today’s NFL player stands to earn between $3 million and $5 million if he plays for the NFL average of 3.5 seasons. Before 1983 the average salary was less than $100,000 per year.
“Commissioner Goodell and I do not decide disability claims. Disability claims must first go to a two-person Disability Initial Claims Committee (required by Department of Labor regulations since January 2002). If the Committee deadlocks or a player is not satisfied with its decision, the player may appeal to the full Retirement Board. The Board has six voting members; three appointed by the League and three appointed by the NFLPA. The 3 members appointed by the NFLPA are retired players: Tom Condon, former President of the NFLPA, played 11 years in the NFL; Jeff Van Note, former President of the NFLPA, played 18 years for the Atlanta Falcons; and Dave Duerson, who played 11 years, and was an All-Pro safety. The NFL appointees are team owners William (Bill) Bidwell (Arizona Cardinals), Clark Hunt (Kansas City Chiefs) and Dick Cass (President, Baltimore Ravens). If a player is dissatisfied with the Board’s decision, a player may seek review in federal court.
“More recently the NFLPA/NFL formed an “Alliance” bringing together an initial $7 million fund to pay for joint replacement surgery and address other financial hardships of retired players. The joint replacement surgeries will be available at no cost to retired players without insurance at designated hospitals across the country.
“All of these benefits and improvements are paid for by the active players.
“Our CBA allocates a fixed percentage of Total NFL revenues for player salaries and benefits. As you can see, last year alone the current players voluntarily gave up $147.5 million to help former players. None of this $147.5 million went to current players.
“That's $96.5 million to fund pensions, $20 million to fund disability benefits, and $31 million to fund medical benefits. Just for former players. And these numbers are growing. Because of the pension increases in the 2006 CBA, the cost of funding pensions alone for former players more than doubled --from $39 million to $96.5 million -- a 147% increase in one year.
“In the process each active player essentially reduced his salary by $82,000.”
And while what Upshaw said is correct it is the essence of the problem. NFL owners negotiated and bargained in good faith a collective bargaining agreement that guarantees NFL players 60 percent of all football generated revenues. It is up to the players what they want to do with the money the owners’ grantee the players. Nonetheless Upshaw did offer three suggestions to Congress as to how he believed this problem might be solved.
First, we need federal standards for workers compensation. The current state-by-state system often causes the vast majority of hurt workers, not just NFL players, to settle for a lump sum, and give up their rights to lifetime medical care for their injuries on the job. Congress should impose federal standards that allow injured workers to get immediate medical help and keep lifetime coverage.
Second, Federal law does not allow unions to manage their own plans, even when, as here, the negotiated contribution by employers is fixed and plan actions cannot impose extra liability. By proposing this I do not suggest that any of the six trustees have not acted in good faith and in accordance with their fiduciary duty. But since the NFLPA has been criticized when applications are denied (even though a majority vote of the six trustees is necessary for a decision), and since current players are funding the system, it makes sense for the players to be the ones making the disability decisions.
Third, in 2002, the Department of Labor imposed an extra level of decision-making in disability decisions – a new Initial Claims Committee – before our six trustees can hear the evidence about a particular player’s disability. I ask Congress to eliminate this requirement. I opposed the creation of this extra committee when the Department of Labor proposed it.
When the initial hearings where held three months ago Congressional leaders who attended the hearings where outraged at the plight of these seemingly forgotten football heroes, expressing outrage – suggesting in no uncertain terms something had better be done to help these former heroes of the gridiron and it had better be done sooner rather that later. The only real difference between the first hearing on June 26, 2007 and yesterday’s on September 18, 2007 was the appearance of Goodell and Upshaw.
What may or may not be a surprise, the lack of reaction this time from the politicians who took the time to attend the hearing and listen to what was said.
According to ESPN.com’s Lester Munson who attended the hearing and reported on the day’s events for the worldwide sports leader -- the senators apparently have little desire to do anything about the issue.
"I hope we never have to act and set up some sort of accountability," said Sen. John Kerry (D-Mass.). "People must wonder why we are even in this. My hope is the league will act."
Sen. Byron Dorgan (D-N.D.), who chaired the meeting, agreed according to Munson.
"I'm not interested in legislating," Dorgan said.
After Upshaw and Goodell addressed the hearing – things seemed to get a great deal worse according to Munson, “At one point, when Ditka made his suggestion about a board of doctors, the only two senators in the room ignored it. Dorgan was conferred with an aide, and Sen. Ben Nelson (D-Neb.) abruptly changed the subject completely and suggested that the NFL somehow could learn something from the military's veterans disability system, which is in complete disarray.”
One senator, however, did offer some sympathy for the players' plight according to the ESPN report
"I never played football. I was a cheerleader," Sen. Claire McCaskill (D-Mo.) said. "I didn't have any big linemen chasing me."
Then she paused and corrected herself: "Maybe I did."
McCaskill suggested that the players should operate the fund.
"If it is money that is set aside for the players [in the $1.1 billion player pension and disability fund], then why are the owners involved in the decisions?" she asked.
It almost makes the comments the politicians who attended the pervious hearing seem nonsensical. Attendance, interest and intent seem to have changed almost overnight with the Senate Commerce Committee looking at this issue. Again the only difference between the hearings was three months and the attendance of Goodell and Upshaw. The question that begs to be asked – was the first hearing nothing more than political opportunism and did any of the members of the Senate Committee ever really care about the fate of these broken down football players?
For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: ESPN.com