NFL Labor Talks: Creative Solutions & Compromises for a New CBA
Five years later, here the NFL and its players are again, trying to rush to get a CBA so they can continue with their business—namely free agency, which was supposed to start Thursday.
In 2006, they pushed free agency back a day. This time, it has been delayed for over a week—assuming they get a deal done by next Friday.
Last time they let it go to the end, the owners panicked and let lame-duck commissioner Paul Tagliabue and union chief Gene Upshaw pressure them into the first truly bad deal the owners had ever signed with the players. The owners quickly grew to regret agreeing to give the players almost 60 percent of league revenue, and now they want some of it back.
Basically, NFL owners realized they were in danger of losing their game to the players, like baseball did 35 years ago. That’s why Major League Baseball has a horrible business model and largely uncompetitive league.
NFL owners want to take back control of their game, and it’s hard to blame them. Players come and go, but the franchises are the constant that keeps the league moving. For that reason, it doesn’t make any sense that players would receive more money than the franchises they play for. But they do, because the owners agreed to pay it.
The NFL brings in $9 billion a year, with the players receiving $4.8 billion and the owners getting $4.2 billion—$1 billion off the top and 40 percent of the rest.
The owners want to take more off the top before splitting the rest. But to get back something they have already given up, the owners are going to have to give up some things they value. And the more money they want, the more they are going to have to give up.
The sides apparently have made enough progress to make each other think they can get a deal done, and they have agreed to extend their mediated discussions for a week.
Jeff Pash, the NFL’s chief negotiator, told reporters he’s looking forward to “a solid week of negotiations.”
“There’s been a tremendous amount of discussion,” Pash said. “It’s time for us to dig deep and try to find solutions, try to be creative and try to compromise in a way that will work for everybody. The commissioner has been very clear: If both sides give a little, everybody can gain a lot.”
In that spirit, here are some creative solutions and compromises for the issues:
The league wants to increase its pre-split cut from $1 billion to $2 billion before splitting 40-60 with players. In 2009, that would have meant the owners would have received $4.8 billion and the players $4.2 billion, as opposed to the other way around.
The players reportedly proposed to split the entire $9 billion in half, with no deduction for the owners, plus allow credits to teams that reinvest in stadium improvement.
Michael Silver of Yahoo! Sports thinks the owners will get more money off the top—somewhere between the $1 billion they were getting and the $2 billion they initially asked for.
They apparently have lowered their demand in this regard (reportedly down to $800 million), and it will drop further because they know they can’t get the money, plus a rookie wage scale, plus an 18-game season, plus everything else they want.
(For fun, we’ll include a value for each of the other issues to end up with a final tally.)
The Rookie Wage Scale & Free Agency
Salaries for highly drafted rookies have skyrocketed, with the last few No. 1 overall picks getting around $40 million guaranteed, and both sides agree that needs to change.
Even the players are annoyed about it, since the best veterans are being paid less than upstart rookies like JaMarcus Russell who end up busting out of the league.
Under the old CBA, players with four years of experience whose contracts had expired became unrestricted free agents (in the uncapped 2010, the UFA requirement was six years). Players with three years of service and expired deals were restricted free agents for one year. Teams also held the right to retain one premium player with a franchise or transition tag.
The owners reportedly suggested a five-year wage scale for first-rounders and four years for other drafted players, with escalating salaries. Players would not be able to renegotiate for the first three years. Signing bonuses would be fixed, paid over the length of a contract and subject to forfeiture.
The union’s reported proposal: four-year contracts for players drafted in the first three rounds and three-year contracts for other drafted players; individually negotiated contracts instead of set salaries; and a cap on rookie contract incentives and escalators, with the money saved going into a bonus pool for veteran players and rookies who outperformed their contracts.
Here’s our proposal:
**Three-year contracts with set salaries/cap numbers.
**After three years, players become restricted and subject to tender offers.
**Teams can opt to use one-year tenders or two-year tenders, with the two-year tenders requiring premium bonuses be paid to the players.
**Rather than teams determining which tenders to use, the players’ performance would determine what the teams would have to pay to keep them. Have an independent three-man panel use predetermined criteria for each position to determine which tender each RFA qualifies for.
**Teams also could sign players to longer contracts after three years, but those would be subject to individual negotiation.
**Other teams could no longer sign RFAs for draft-pick consideration. Restricted free agency would be simply a decision of whether to pay players their market value or let them become unrestricted.
**Tendered players would become UFAs after four or five total years, depending on which tender was used.
**The owners also would give up the franchise tag.
This would be a good compromise, because teams would have the chance to retain players for five years at salaries that are fair to both sides, and the best players would be well compensated by the fourth or fifth year and also would not have to worry about being held out of free agency by the franchise tag once they were vested veterans.
Value: Give the owners $200 million for the franchise tag.
The 18-Game Season
Commissioner Roger Goodell repeatedly has said the 18-game season is a direct response to the wishes of fans who don’t like the quality of the preseason. What he doesn’t say is that fans are not asking for an 18-game season; they just don’t want to pay to see bad football in the preseason.
But the owners don’t want to lose that money, so they figure to make two of the preseason games counters (and surely raise ticket prices).
Of course, this whole hypocritical idea flies in the face of the league’s stated desire to help keep players from getting injured. And it also runs counter to the commissioner’s attempt to make every late-season game meaningful, with no teams resting players at the end of the season.
Hey, Roger & Co., both will happen if you go to 18 games!
Based on history, an average of one more player per team will go on injured reserve each year—and that doesn’t even take into account potential late-season injuries that are not season-ending but might affect the playoffs.
Meanwhile, to avoid injuries, well-positioned teams absolutely will sit their best players in the last couple of weeks (so the league effectively would still have four preseason games—two before the season and two at the end).
Almost to a man, the players are against an 18-game season. They have used the same arguments we voiced months ago, and they are completely right: An 18-game season is a horrible, hypocritical idea.
Despite all of that logic, Yahoo’s Silver thinks the union will agree to it: “The addition of two games (and elimination of two preseason games) might not be immediate, and the players would receive concessions such as limitations to offseason workouts and training camp practices and a new formula allowing them to qualify for certain benefits with fewer seasons played than in the past. However, in the end, the union is likely to capitulate and agree to the ‘enhanced’ season in exchange for other considerations. ...”
Value: If the league goes to 18 games, the players shouldn’t give up a dime. If the owners give up the idea, let them have $200 million for being sensible.
Appeals for Fines & Suspensions
The NFL is very inconsistent with its punishments, and it wrongly serves as judge, jury and arbitrator.
Fines are not equitable. Uniform fines are often the same as fines for some personal fouls. And players are fined without regard for salary. While a $50,000 fine is nothing to a guy making $5 million, it is a ton to someone making $500,000.
On top of that, the NFL—in its zeal for increased player safety—has sent mixed messages to players. The head-leading hits issue from last season was a prime example. In midseason, the NFL decided to get tougher on those kinds of hits, which gave players no time to adjust.
The NFL needs to clarify its rules and its fine and suspension system, use a percentage scale so lesser-paid players aren't being punished more, and let an outside panel of arbitrators—perhaps a three-person group including a former referee, coach and player—serve as its appeals court.
Value: Give the owners $200 million for this concession.
In a business whose business is to beat up its employees, it’s asinine to think there is not a good post-retirement health plan in place for these guys.
The NFL should establish its own version of the Veterans Hospital and offer treatment to any alumni who opted for the post-retirement health plan. Have players pay into the plan while they are active to be eligible for it once they retire, and have the league offer insurance to all retirees who qualify.
Value: Give the owners $200 million to fund this.
One of the things Upshaw managed to finagle out of the owners in 2006 was an enhanced revenue-sharing plan in which the 15 richest teams share money with the rest to varying degrees so all teams would be capable of signing free agents. High-revenue teams have paid something like $500 million under this plan since 2006 and certainly want to get out of it.
The franchises have long shared TV and other league-wide revenue, but money makers like Jerry Jones in Dallas, Daniel Snyder in Washington and Robert Kraft in New England are not keen on using their local revenue (mainly stadium revenue other than gate receipts) to subsidize small-market teams like Wayne Weaver’s Jacksonville Jaguars or Ralph Wilson’s Buffalo Bills.
This is probably one of the main reasons the owners want to pull extra money from the $9 billion before splitting with the players.
Value: This is an owner issue that players should have no say in (just like the players don’t need to see the owners’ ledgers).
Judge David Doty
The owners have long wanted to replace U.S. District Court Judge David Doty, the labor judge who has consistently sided with the players since 1993 and who ruled last week that the owners could not use $4 billion in TV money to stay afloat during a lockout.
Silver thinks the owners will get their way on this one.
Value: The players should get $200 million for this concession.
So, this is who should get what, in our estimation:
*An extra $600 million pre-split
Rookie wage cap
New revenue sharing
New labor judge
*No 18-game season
No franchise tag
More favorable free agency
Better appeals system
Better retirement plan
*If the 18-game season goes to the owners, they lose the money.