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Union looks at six-year CBA deal with NFL
The NFL and its players union are seeking a long-term fix for their labor issues.
NFL Players Association executive director DeMaurice Smith said he and NFL commissioner Roger Goodell are working to finalize a Collective Bargaining Agreement that would run through the 2016 season.
“We’re going to negotiate a six-year deal,” Smith told FOXSports.com at the NFL’s Rookie Symposium.
The CBA extension approved in 2006 was also six years in length. In 2008, owners unanimously voted to truncate the deal by two years. The NFL is now heading toward a work stoppage in March 2011 when the current CBA expires.
While stating some progress is being made, Smith remains adamant that the NFL provide detailed financial records for its teams before an agreement can be struck. Goodell has strongly resisted such requests and shows no sign of acquiescing.
Such information is especially important to the NFLPA because Smith claims the league is demanding an 18 percent reduction in player salaries. NFL executive vice president/legal counsel Jeff Pash has said Smith’s contention is a “misrepresentation” of the league’s proposal. Pash said the $1 billion generated by a new split of applied revenues between the two parties would be reinvested toward business stratagems designed to produce more money for both sides. Pash also said that player salaries wouldn’t necessarily be affected. The league generated roughly $9 billion in 2009 with a 52-to-48 percent overall revenue split between the NFLPA and NFL.
“When I advise (players) on the current state of things, they always ask me the same critical question: What’s wrong with our business model?” said Smith, who replaced the late Gene Upshaw as the NFLPA’s executive director in Spring 2009. “The league hasn’t provided us with any financial information to answer that critical question. The rookies heard that last year was a $9 billion revenue year. The league hasn’t told us that one team has lost $1. They haven’t told us team revenues or profits are down one percent. They haven’t told us profit margins were off one percent.
“We haven’t seen any financial information whatsoever that would suggest to us team profits are trending downward. Everything we’ve seen indicates to us team profits and revenues are trending upwards. Even if there was a down year this year for all 32 teams, it seems to me if they believe there is something functionally wrong with the operating business model, provide us with some shred of financial information that says teams are losing or not making enough money. Let that serve as the driver for fundamental change.”
The only NFL franchise with open financial records is the Green Bay Packers. Forbes Magazine reported the team suffered an 80-percent reduction to $4 million in 2008 net income largely because of a $50 million devaluation of its investment portfolio. According to the Milwaukee Journal-Sentinel, Green Bay’s total revenue increased $6.9 million to $247.9 million and national revenue given the team by from the NFL jumped by $12.1 million to $147.1 million.
But Packers president Mark Murphy told the newspaper that player salaries grew by $14 million in that same span and team owners don’t believe their revenues are growing quickly enough.
“The current system looks at total revenue and doesn’t recognize the cost owners incur to generate that revenue,” Murphy said. “That’s a big flaw.”
The Packers are expected to release their 2009 financial statement next week, but Smith said one franchise’s financial situation isn’t reflective of the entire 32-team league. Smith compared the situation to a national chain of ice-cream stores.
“If someone said we want you to make a sizeable investment by looking at the one that happens to be at Coney Island, would you do it? No,” Smith said. “Now, does that mean the information you got from that one store is worthless? No. But no sane person would ever make a significant business decision based upon an isolated snapshot.”
Smith and Goodell were both at the rookie symposium, but the two sides didn’t conduct CBA negotiations. Smith said he is happy with recent steps the NFL has taken toward player safety, particularly concussion treatment and management. Smith also described recent negotiations between the parties about expansion to an 18-game schedule as “good” even though the union has expressed trepidation about a longer regular season.
“They wanted to talk a little more in depth about their idea,” Smith said. “That was an important move because if it is important to them, it’s important for us to try and understand it and get the critical information we need to analyze the proposal. That’s what collective bargaining should be.”
But storm clouds could soon be forming once again. Smith didn’t dismiss a Profootballtalk.com report that the NFLPA is considering a grievance claiming collusion among team owners because of the overall lack of expenditures on player salaries in 2010. Almost every team has slashed its payrolls following the elimination of the salary cap and a minimum spending floor.
“If we move forward, it would be a very deliberate step,” said Smith, whose union already has filed a legal complaint about the league’s recent television contracts.
“We’ll take a look at the objective information, the amount of player movement, the (restricted free-agent) tenders and all of the other anecdotal information we have available to us as well as other information and evaluate it and make a decision ... It’s an issue.”
The NFL is the only major sports league with uninterrupted play since 1987. The current CBA was approved in 1993 and has helped lead to unprecedented financial prosperity for players and team owners following multiple extensions.
Asked about labor negotiations on Sunday night, Goodell said there were “really no developments of any significance to report.”
“There will be an agreement at some point,” said Goodell, who is heading his first CBA negotiations since replacing retired commissioner Paul Tagliabue in 2006. “Everyone would like it sooner rather than later, whether it’s the players, the owners or the fans.
“It’s important for us all to get more productive dialogue. Sometimes, these things don’t happen until you get a little closer to the end (of the CBA). That’s just the reality.”
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