Saturday, February 02, 2008

Countdown to Super Bowl XLII – is the NFL headed to war?

On the eve of the sports industries annual orgy of excess the Super Bowl, National Football League commissioner Roger Goodell and NFL Player Association executive director Gene Upshaw indicated labor Armageddon may indeed be on the horizon for the NFL a sports league that continues to set the bar for the entire sports industry when it comes to generating money.

On March 9, 2006 the NFL reached an agreement to extend their current CBA six years. Notwithstanding NFL owners have the right to opt out of the current CBA in November. The owners have until November 8, 2008 to inform the players of their intention. That would make the 2009 season the last with a salary cap and the 2010 season looming as an uncapped season. The current agreement guarantees the players 59 percent of all football generated revenues.

Earlier this month influential Denver Broncos owner told The Rocky Mountain News he expects the owners to opt-out of the current CBA when the opportunity presents itself later this year.

“Cash is an issue in the National Football League. I think it's pretty common knowledge our last labor agreement is not our smartest move, and that we're way beyond, and I'm not talking about just the Denver Broncos, I'm talking about just the league in general . . . we being we collectively, 32 teams, can't live with this deal."

"There seems to be pretty good consensus that the owners are going to write us our letter by November and opt out of the CBA," said Redskins guard Pete Kendall, a former player representative with the Jets told the Boston Globe last week. "If they do, I'm sure we'll have a plan. I know we've already talked about it as a board of representatives, and I know we'll be prepared."

The two sides dealt with the looming labor issues and other ‘matters of interest’ the NFL and the NFLPA share in the last few days leading up to Sunday’s Super Bowl XLII.

In a press conference packed with reporters Thursday at the Phoenix Convention Center, NFLPA Executive Director Gene Upshaw made it clear he believes NFL owners plan on terminating the existing Collective Bargaining Agreement in November 2008, so he has been preparing players for the future legal options.

"I wish I had a crystal ball to tell you [what's going to happen]," Upshaw said. "I don't. But I know at the end of the day whatever we agree to is going to be fair for the players. We're not going to agree to a deal that's not fair. We're not going to agree to a deal that rolls back the economics."

Upshaw, who talked to players about the future of the CBA at team meetings last fall, said the topic will be a priority at the player representative meetings in March. He said he and the NFLPA legal team will talk about the four options: a strike, a lockout, decertification and a CBA extension.

"Our players will be prepared for whatever the owners might decide to do, because we can't control that anyway," Upshaw said. "We can only control what we can control. And we can control not accepting a deal that's not fair to us. I can tell you, we're getting 60 percent of the revenues [today]. When it's all said and done, we're not giving any of it back."

Troy Vincent, NFLPA president, also discussed the CBA Thursday and said that in talking to players, he's confident that they are more educated than ever about the issues at hand, and that they are united. "Sometimes we hear a few [other] voices, but the majority, we all sing and praise the same language," Vincent told reporters.

One of the first questions Goodell was asked during his State of the League address Friday and for his part Goodell didn’t back away from the issue.

“I think these issues don’t get resolved by making comments publicly, but rather sitting at the negotiating table and working, and addressing the issues that we may have. I don’t think it is any secret, as you point out, a number of our owners are concerned with many aspects of the current labor deal. That’s something we need to improve, we need to address, and we will do that, directly with the union. I believe we will be able to come to a resolution that is good for the game, good for the players, good for the owners, and good for our fans, most of all. As it relates to what I would say to our fans, I think it is important for our fans to understand that the labor agreement is critically important to our business, and that our business has changed over the last several years.

“The cost of operating an NFL franchise, not only in labor costs that are 60 percent of the gross, but the cost in stadium operations and building stadiums, operating them, and capital improvements, these are all additional costs that we didn’t have just several years ago, and I think they need to be recognized in this labor agreement, and the union has done that. We think there is probably going to have to be some additional consideration in how they do that, but that is the give and take of negotiation. They have, I’m sure, other issues they want us to address. We will do that, we will do that responsibly, and I hope we’ll come to a successful conclusion on that because it’s good for the game.”

For his part Goodell delivered a not so subtle shot at the players and the millions of dollars they’re making. Upshaw might be well advised to take note of this Goodell gem.

“It’s a point that we’ve discussed with our Player Association. We think it is an important thing. We’re not trying, in this case, to pay players less money. What we’re trying to do is make sure that the money that is allocated to the salary cap goes to the players that have earned that, that have done it over a period of time. So I think we want to talk about the impact of the rookie pool, what it should be, how it should provide opportunities for players that come into the league and be paid appropriately and be paid fairly, but also make sure that that money goes to the players that really have performed on an incredible level. I think that’s something that we’ll continue to engage in with the Players Association.”

Among the issues the players and owners are going to be dealing with the matter of retired NFL players and both their personal and financial health. Led by NFL Hall of Famers Mike Ditka and Jerry Kramer the problem has made it to Capital Hill. Politicians have made it clear – the NFL had better start showing not only more empathy for those who built the game but had better start showing it with dollars and cents as well.

Thursday Upshaw spoke up – he’ll listen to whatever former players have to say but it isn’t going to effect his decision making process.

"Guess what, I've been reading it, and guess what, it doesn't have any effect on what I will do tomorrow, the next day and the next hour," said Upshaw. "It's just like water off a duck's back. It had no effect before and it will have no effect."

One issue the players seem unified on – if there are any more dollars heading towards those no longer playing football it won’t be coming from the money earned by today’s players.

"Every dollar in the National Football League is spoken for," the retired Oakland Raiders guard and Pro Football Hall of Fame member said. "Everyone can talk about all of the money we have in the pension plan. We have as much liability as we have assets; in fact, we are a little underfunded.

"But we are not going to take a pension from guys that have one coming and give it to someone else. We have to solve it a different way and we will."

During his press conference Thursday Upshaw discussed what he believes are the significant improvements in benefits for retired players in the last year, including the Alliance and the joint replacement program. He said 47 men have applied for the program and a dozen are scheduling replacements (knees, hips and possibly ankles) in the very near future. Upshaw mentioned that there is now a partnership with three assisted living facilities that specialize in the care that NFL players need most. Plan 88 is nearly a year old, and so far, $1.3 million has been spent on the 80 applications that have been approved.

Improvements continue, Upshaw said. There is now a physician’s panel, telephone intake through a toll-free number and the ability to use the Internet for appeals to speed up the process between meetings. "Every day, I fight not only for the retired players, I fight for the active players and I also flight for the future players," he said. "We fight for all players all of the time."

Those sentiments aside – that would play well with Congressional leaders who have made it clear someone had better do something soon.

In late June a House of Representatives subcommittee (Judiciary Subcommittee on Commercial and Administrative Law) hearing on the N.F.L.’s divisive player-disability plan in Washington made their feelings clear.

In their report The New York Times said: Representative William Delahunt, Democrat of Massachusetts, asked Douglas W. Ell, the lead lawyer for the (NFL’s) plan, whether retired players are represented by the N.F.L. players union. Ell replied, “Understand that legally, under the law ... ” before Delahunt interrupted.

Representative Linda T. Sanchez, Democrat of California, who called the hearing as chairwoman of the House Judiciary Subcommittee on Commercial and Administrative Law, replied that Congress was prepared to stage more hearings and take legislative action if the N.F.L. and the players union did not agree on a “fair and compassionate plan” on their own.

“I think they do need to be worried that they’ve got someone looking over their shoulder,” Sanchez said. “I don’t want to threaten them and say we’ve got this legislation lined up, because that’s not the case at this point. We’re still in a very preliminary stage. We’re giving them the opportunity, and I hope they’re taking it.”

Friday Goodell remained on message when the question was brought up – he believes the NFL is moving forward in helping retired players.

“We have made some changes that I think will take some of the red tape out and make the process, hopefully, simpler. It will get to the result that we are looking for, which is to have an effective, responsive disability program. We just spent four or five hours with Gene (Upshaw) last week, talking about further changes in our disability program. This is not unusual just to our industry. Disability programs are complicated. You see these come up with veterans—lengthy delays. We don’t have that experience. I think that any delay, though, is unfortunate. Our players, who helped build this game, deserve to have a system that is responsive, professionally done and independently done. That is what we’re working on. I’m confident that we are going to make some changes that are going to be beneficial to our former players.”

The use of performance-enhancement drugs was an issue for both the players and Goodell.

"We all know there is no reliable test for HGH," Gene Upshaw, executive director of the NFL Players' Association, said Thursday at the union's Super Bowl news conference. "Until a test is developed for HGH, there's really not an awful lot to talk about. And when that test is developed, we really believe it should be a urine test. No one is interested in a blood test. We got a lot of big tough guys, but they don't even like to be pricked on the finger to give blood."

“I don’t, because I’m not involved in developing that test. Obviously there are some scientists and some personnel we have engaged, that we’ve invested in, just recently $3 million with the United States Olympic Committee, to develop a test for HGH. It’s not at the point where there’s a valid test that is widely distributed, that we can use, that we can be comfortable with, but when there is, we certainly will evaluate that, and in fact, we are investing in trying to develop that test. I don’t think there is a significant amount of HGH use, but I have no factual basis for saying that. I think our athletes are extremely well trained. I don’t think they want HGH or performance enhancing drugs in the game.

“I think that is why our drug program has been so effective, and the gold standard in sports, because our union supports it, wants it eliminated from the game because it is good for all players. So I think we’ll continue to take that leadership role in how we develop our policies, our drug program, so it continues to be the gold standard.” Goodell noted Friday

Vincent the President of the NFLPA Thursday also said the issue of player conduct will be an important topic at the upcoming meetings. "It's a serious issue, one we need to take a hard and close look at about what we can do to protect ourselves first and foremost, and our families," he said. "We need to sit back, roll up our sleeves and just think about how do we keep these men on the field, out of the courtrooms and not going to funerals."

Goodell was asked about the NFL player conduct he instituted in April – a season later what about the results?

“I believe that our policy – in respect to player conduct and personal conduct for everybody involved in the National Football League – was well communicated. I think they understand the policy. I think that we made progress. I think that we are beginning to understand that we hold ourselves to a higher standard. Everybody associated with the league must do that. As I said when I first came out with the policy, I didn’t expect it to solve all of our problems in one quick moment. It was going to take some time for people to understand. One of the most encouraging things in addition to there being a 20 percent reduction in incidents this year is that we saw a tremendous reduction in rookie incidents because I think we were able to do programs that educated players on what we expect of them and to help them and to make them understand. I must tell you, none of this would have been successful without the support of the NFL Players Association and the players. They wanted this and they helped make this an important priority for us. I think it was effective.”

One of the most important issues the NFL is facing – NFL players become targets. The death of Sean Taylor shook the sports industry to its foundation, something Goodell noted Friday.

“The tragedy of losing Sean Taylor, and in fact we lost four players, all 24 years old, in the past year, which is clearly the lowlight of the season for me. It’s a tragedy. We have to do everything that we can to educate our players of the simple things that they can do to protect themselves and their families. They are celebrities. There are people that want to associate with our players, our coaches, and they have to understand that there is some risk involved with that. There are some very simple things that we can do and we have been doing with our security department just to make sure that they understand that you need to lock your homes, put your alarm on. If you have the ability to live in a secured environment, in a community that has private security, that’s a benefit. There are a lot of things that we can do, that we are doing with our players. I think we will help them make better decisions, and more importantly, protect them.”

The challenges Goodell and Upshaw are facing in the months leading to the November 8 deadline are considerable. Paul Tagliabue who served as NFL commissioner from 1989 to 2006 had a great relationship with Upshaw. In some circles many believed the two men worked too closely together. But that said in the 17 years Tagliabue and Upshaw worked together the NFL enjoyed labor peace a key to the success the NFL has enjoyed.

Maybe some of the comments coming from both sides are much too do about nothing. After all as has been well documented the two sides have reached where they appear to be headed (the edge of a cliff) before and managed to settle their differences. It remains to be seen if this will be the case this year, but its well worth paying attention too.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times

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