Ten things to know right now about the labor situation
Posted by Mike Florio on January 12, 2011, 8:38 AM EST
With the labor deal between the league and the players’ union expiring at the moment the clock strikes midnight on March 4, we’ve been getting more and more questions about what will happen if the bell tolls without a new agreement.
So we’ve decided to provide a basic overview of what will, or could, occur once the current agreement expires, along with other issues.
We’ll do it via a blend of our 10-pack approach and Rosenthal’s “umpteen things to know” routine about the injury report.1. A lockout would begin long before September.
Many NFL fans believe that the offseason would continue, business as usual, until the start of the 2011 regular season, at which time a lockout would be imposed.
That’s not how it would work.
When a labor agreement expires, the workers can choose to operate without a contract, reserving the ability to strike at any time. The employer, however, can’t agree to continue without a formal agreement and then slam the door at a time of maximum leverage, such as the point at which the players begin to collect game checks.
As a result, the owners most likely will be required to lock the players out in early March, pulling the plug on most player access and activities until the CBA is resolved.
Thus, regardless of whether any regular-season games are lost to a lockout, a lockout could start more than six months before a regular-season game ever would be missed.2. The union has the ability to try to block a lockout.
For months, the union has been warning the media and the fans against a lockout. The rhetoric from NFLPA executive director DeMaurice Smith regarding a lockout is looking more and more accurate, even if to some extent it has become a self-fulfilling prophecy.
During the 2010 regular season, however, the NFLPA embarked on a series of meetings with players from every team. Systematically, the union obtained advance approval to decertify in the face of a lockout.
Derided by the NFL as a decision to “go out of business,” decertification would prevent the league from locking out the players by converting the NFLPA from a legally-recognized union into a collection of individual, non-union workers. Some think that the NFL would challenge the maneuver as a sham, but such an approach would entail P.R. risks, since the NFL would be using the legal process in order to force a lockout on the players.
Still, the union inexplicably continues to warn against a lockout while ignoring the fact that the NFLPA has spent hundreds of hours and thousands of dollars to line up the ability to block a lockout via decertification. If the union fails to decertify, it will prove that the effort was a ruse aimed at making the NFL think that decertification would occur.
If decertfication happens, the league then would be compelled to craft across-the-board rules regarding free agency, the draft, and player salaries. The union would likely respond by filing an antitrust lawsuit, arguing that the league consists of 32 separate businesses that cannot work together to place common limits on its workers. (This is why the American Needle case was viewed as being critical to the labor situation, even though the facts center on marketing deals. If the league had secured a ruling from the Supreme Court that it is one business, an antitrust claim based on labor rules may have been doomed from the start.)
A league source with knowledge of the labor dynamics recently told us that the NFL could respond to decertification by simply applying in 2011 the rules that applied in 2010: no salary cap, no salary floor, six years to unrestricted free agency, no rookie wage scale (Andrew Luck just peed a little), one franchise tag per team, continuation of drug and steroids policies. The league would adopt this approach in the hopes that it would survive an antitrust challenge; though the NFL lost the American Needle case as it relates to whether the league is one business, the Supreme Court’s written ruling strongly suggests that a pro sports league may have a valid, legal reason to apply across-the-board labor rules.
With no salary cap and no salary floor, teams would be permitted to spend as little or as much on players as they choose — a dynamic that didn’t hurt franchises like the Chiefs, Buccaneers, or Jaguars in 2010, each of whom were far more successful than big-spending teams like the Cowboys and Redskins.3. The owners have an alternative to a lockout.
If a new agreement isn’t reached by March 4, the owners aren’t required to lock out the players. Negotiations may continue and, at some point, the league can declare an impasse in the talks — and implement its last, best offer as the new set of rules, pending a formal agreement.
The union then would have to decide whether to work under those rules, or whether to strike. With the union repeatedly insisting that it won’t strike, some nifty P.R. moves would be required in the event the union decides to walk out in the face of a decision by the league to welcome the players to continue to work, under the terms of the league’s final offer.
Some think that the league prefers a lockout because the players at some point would agree to the terms of that last offer for several years beyond 2011, presumably after they miss one or more game checks. By implementing the last, best offer, however, the league would be getting what it wants, at least in the short term.
Likewise, the league would be able to claim the moral high ground in the event of a work stoppage. No longer would the owners be locking out the players; if football goes away for all or part of the 2011 season, the players would be the ones to make that happen.
Still, the players could strike at any time, like at the outset of the postseason or two days before the Super Bowl.4. In a lockout, free agency would be tabled.
Sunday’s news that Raiders cornerback Nnamdi Asomugha will become an unrestricted free agent in 2011 sparked considerable Twitter activity from fans who’d like to see their favorite teams pursue Asomugha. The widespread “let’s go get him” chatter suggested a fundamental misunderstanding regarding free agency in the event of a lockout.
If there’s a lockout, free agency won’t begin until a new agreement is reached between the league and the union.
In fact, there’s a chance that 2011 will include no free agency at all.
Peter King of Sports Illustrated explained in his most recent MMQB that it’s possible a lockout lingering into the late preseason or what would otherwise be the regular season will result in a decision to freeze all potential free agents in place for one more season with their current teams, with 2011 base salaries based on their 2010 pay plus a premium. Such an approach could be necessitated by the chaos that would erupt if, for example, the players cry uncle after losing two weeks of pay and the league slapping together plans for a regular season on the fly. Opening the free-agency flood gates at that point would create chaos as 32 franchises attempt to get ready to play a real game within a week or two after a new labor deal finally is struck.5. The draft would proceed, but with no player trades.
The only good news in the event of a lockout that wipes out the offseason is that the draft will still happen. As Charley Casserly of CBS pointed out last month, only the draft would happen. The flurry of signings of undrafted players immediately after the draft wouldn’t. Those players would remain unaffiliated until the lockout ends.
Though trades of current and future draft picks would be permitted on draft day, no players could be traded during the draft.
This will turn the offseason flow upside down. Typically, teams attempt via nearly two months of free agency to fill certain holes on the roster. Likewise, free-agency departures create other voids to fill. The draft allows teams to focus on adding players in specific areas of need. For 2011, the first crack at addressing those needs will come in late April with the draft, forcing teams to make decisions without knowing when or if they’ll be able to retain their free agents, or to sign new ones.
Though most teams seem to be content to wait to attempt to sign their own free agents after the labor situation is settled, the smart move may be to make the decisions now about the free agents that a team would like to keep, and to sign them to new contracts before March 4. Any team that follows that approach, however, would likely draw dirty looks at league meetings, since new contracts surely would include signing bonuses — which would make it easier for those players to hunker down once a lockout extends into the regular season.6. Say farewell to the offseason, training camp, and the preseason.
With the owners wanting the players to agree to shrink the size of the slice of the financial pie they receive in the hopes of growing the pie moving forward and the players lacking any specific information on which a decision to reduce their slice of the pie could be justified, a lockout won’t end until the players blink. They quite possibly won’t blink until they start losing game checks.
As a result, they won’t be blinking in March or April or June or July or August. Which means that there would be no offseason workouts, no OTAs, no minicamps, no training camp, and no preseason.
Which means that we’ll have to be making a lot more stuff up than usual.7. Pressure points for the owners.
With the players likely to break once they start missing paychecks, the union has been trying to give the owners a reason to try to work out a new deal before September.
Specifically, the players are trying to create pressure points for the league. The current attack on the TV contracts, which will continue to pay the owners in the event of a lockout, create pressure while the claim is pending — and a lot more pressure if the claim succeeds, blocking the billions of dollars that will help men like Cowboys owner Jerry Jones pay the mortgage on his new stadium.
Another potential pressure point comes from a collusion claim based on the lack of league-wide interest in restricted free agents last year. The union had been preparing to initiate a legal action alleging collusion, and the two sides agreed to delay the deadline for doing so pending further negotiations. If negotiations don’t result in a new deal before the end of February, the collusion claim likely will be filed.
Other pressure points won’t come from the players directly. With uncertainty hovering over the 2011 season, fans in markets without season-ticket waiting lists will be inclined to wait on renewing their seats. Also, sponsors will be unwilling to make financial commitments (unless the lockout will be “brought to you by” a company that makes locks, or maybe lox). Eventually, the networks will get antsy, due to both the prospect that they won’t be able to sell advance advertising space for the 2011 football season and the reality that the rights fees will have to be paid to televise football games that won’t occur.
In the end, more pressure applied to the owners will make them potentially less likely to push a lockout into September, at which time the players would bow to the league’s demands after missing multiple game checks.8. Supplemental revenue sharing.
When the current labor deal was negotiated in 2006, the owners squabbled over the issue of supplemental revenue sharing. Basically, the NFL decided long ago to share core revenues like box-office receipts and TV money. Over time, many teams have discovered and exploited new forms of revenue that aren’t shared, like luxury suites.
Five years ago, a debate raged over the impact that a player-compensation model based on total football revenues would have on the teams that generate relatively low amounts of total football revenue. Bengals owner Mike Brown explained that the new system could eat into his profit margin by raising his overall labor costs, since the salary cap and salary floor would be determined by the revenues generated not only by the Bengals but by high earners like the Cowboys, Patriots, and Eagles.
Former NFLPA executive director Gene Upshaw insisted that the last labor deal include an agreement among the owners regarding supplemental revenue sharing, even though such an accord arguably was irrelevant to the union. In the end, the owners did the deal, in large part because the teams found themselves squeezed by restrictive rules of the last year with a salary cap, which was set to launch if a new labor deal hadn’t been reached.
Today, the owners want to squeeze back, and they’ve done a great job of keeping under wraps the lingering disagreements regarding supplemental revenue sharing. But multiple league sources have told us that a major potential fight among the owners regarding revenue sharing lurks just beneath the surface.
So how do the owners avoid that fight among themselves? Ravens cornerback Dominique Foxworth nailed the owners’ strategy: “Let’s take it from them.” Mike Brown doesn’t care if Jerry Jones is making too much money; Brown wants only to be making what he deems to be enough for himself. So by giving the players a smaller slice of the pie, Brown’s team will receive enough cash each year to offset the effect of high-revenue teams on labor costs.
With the union searching for viable pressure points aimed at getting a new deal done, the best strategy would be to expose the notion that the owners are simply hoping to give the players less money in order to permanently solve the problem of supplemental revenue sharing.9. De Smith’s dilemma, and possible agenda.
Less than two years ago, DeMaurice Smith became the executive director of the NFL Players Association. Many league insiders believe that, unlike his predecessor, Gene Upshaw, Smith doesn’t plan to remain in the job for more than 20 years. The perception is that Smith has bigger ambitions — political ambitions.
Folks with political ambitions realize that those ambitions can be better realized by publicity. And a lockout imposed by the owners would thrust Smith into the national spotlight, especially if it were to linger into September. As a result, there are more than a few folks on the ownership side of the equation who genuinely believe that Smith will refuse to do a deal until he has had a chance to maximize his own personal “Q” rating.
The more practical reality, apart from whatever Smith’s ambitions may be, is that he can’t do a deal in the short term without appearing soft to his constituents. Even if no regular-season games are missed, the thinking is that Smith must provoke a fight that lingers past the expiration of the current contract in order to create the impression that the deal he finally proposes to the players is a good one.
Of course, Smith wouldn’t be in this position if he hadn’t spent the last year or so sounding the lockout alarm, which in turn created the impression that the league’s best offer won’t be made before the current labor deal expires — and which means that the union will have to engage in legal, political, and/or P.R. battles in order to get it.
All of which will increase Smith’s profile.10. The absence of gravitas.
Regardless of the issues and agendas at play, a concern has emerged that the ranks of NFL ownership are being overrun by men whose personal financial interests supersede the best interests of the game. Combined with the possibility that union leadership is being influenced, directly or indirectly, by concerns unrelated to the long-term health and well-being of the game, damage to the sport seems to be inevitable.
But there’s still hope. Somewhere with the ranks of ownership, someone needs to stand up and remind the Jerry Joneses that the game is much bigger than one team’s profits. Someone who currently is an owner needs to emphasize to all owners that there can be no league without the players, and that the players must be fairly compensated for their efforts and the risks they take.
Some hope that Steelers chairman Dan Rooney, currently the U.S. ambassador to Ireland, will become more involved in the process. (That said, there’s also a sense that the Rooneys have lost some of the influence over other owners that they previously enjoyed.) There’s also a vague notion/hope that Chiefs owner Clark Hunt could rise up and follow in the league-first leadership that his late father, Lamar, provided to the sport for decades.
Either way, there currently seems to be too many people worried about “me” — and not enough of a focus on the concept of “we”. The league and its players are partners. For the past 18 months or longer, they have been at times behaving like enemies. Though some may believe that the current popularity of the game would allow it to overcome an offseason lockout and an in-season work stoppage, the stakes are too high to justify the testing of that theory.http://profootballtalk.nbcsports.com/20 ... situation/