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Breaking down the NFL labor unrest

When it comes to the ongoing fight between the NFL and its players union, the issues are complex, the details mind-numbing. With intense legal wrangling over seemingly innocuous issues — such as the difference between "total revenue" and "all revenue" — it's enough to turn off even the most passionate NFL follower. To Joe Fan, here's what matters: In six weeks, the owners are likely to initiate a lockout of the players. That means no free agency, no minicamps and, eventually, no football on Sundays. With no meaningful negotiating sessions currently scheduled, hope is dwindling. "Hope for the best, prepare for the worst," was the sobering summary of union executive committee member (and Ravens cornerback) Dominique Foxworth on a conference call this week. Given the likelihood of a lockout, there are some key issues you'll want to be familiar with as the league's current collective bargaining agreement gets closer to its expiration date (March 3) and the potential for an all-out labor battle increases exponentially. Let's go beyond the rhetoric and actually examine the issues.

Money, money, money

It should come as no surprise that this whole dispute exists largely because of disagreements over one thing: money.

The players make a great living, and the league is insanely profitable. Still, the owners believe the current 60 percent of revenue the players receive is unsustainable, citing increasingly higher operating costs and the current economic downturn. Estimates place annual revenue at about $9 billion, making the NFL the most profitable sports league in the world.

In negotiations, the league has sought to reduce the revenue paid out in salaries by 9-18 percent, depending on whom you believe.

"Yes, NFL players deserve to be paid well," commissioner Roger Goodell said in an open letter to fans this month. "Unfortunately, economic realities are forcing everyone to make tough choices, and the NFL is no different."

The union disputes the assertions, calling for the league to open its books and prove its financial position. The league has never honored the request and doesn't plan to now.

Another key financial issue for owners is stadium construction. Cowboys owner Jerry Jones, who recently built a $1.1 billion stadium, is among the biggest advocates that stadium expenses be factored into the next collective bargaining agreement. The union counters that, in other industries, employees aren't typically asked to contribute to operating costs.

"They want us to pay for the overhead," union executive director DeMaurice Smith told the Sports Business Journal.

An 18-game season

From a fan's standpoint, the concept of more regular-season games is probably tantalizing: more excitement, more intense matchups, more of what makes the NFL king of American sports. Commissioner Roger Goodell and the owners are intent on extending the regular season by two games, likely reducing preseason games from four to two.

But some of the players' strongest objections stem from this issue. They claim the league is unwilling to do much to compensate players for the cumulative impact of playing two extra games per season. A quicker path to free agency and more post-career health coverage are among the issues the union deems necessary to consider the longer schedule.

"Eighteen games the way it's been proposed is totally unacceptable," said Browns linebacker and union executive committee member Scott Fujita. The union stresses the toll the game takes with 352 players placed on injured reserve in 2010 (11 per team) during the 16-game season.

Goodell, left, has tried to appeal to fan sentiment, saying, "Fans tell us they don't like the quality of the preseason games, and we're listening."

Rookie salary cap

Rams quarterback Sam Bradford's staggering rookie contract, for reportedly $78 million with $50 million guaranteed, makes it easy to understand the argument that such contracts are excessive for players who have not played a single down in the NFL. And given the annual salary increase in contracts for early selections (who routinely make more than All-Pros), it's fair to question if that can be sustained. But this is not the slam dunk issue you might expect. While the union leadership comprises veteran players who, presumably, would not be opposed to rookies earning less, they are staunchly opposed to a rookie cap. "The rookie money that's saved, should it go to vets?" said Browns linebacker and union executive committee member Scott Fujita. "Absolutely. Should it go to retired players? Absolutely. Should it go to improving post-career medical (benefits)? Absolutely. But the league didn't want to do any of that kind of stuff. It seems like the league is asking the union to bail them out because of some of their bad decisions and draft choices." Commissioner Roger Goodell calls the rookie contracts "outrageous," saying the class of 2009 received $585 million in guaranteed money and $1.2 billion in total contract value. A cap is widely expected to be implemented. The fight, however, will center on the conditions.

Is there a TV conspiracy?

This one's complicated but critical.

The union is awaiting a decision in a pending legal action that alleges the NFL violated a 1993 antitrust ruling that mandates the league maximize revenues and bars "transactions that circumvent" that responsibility.

The union, whose salaries are tied to revenues, accused the owners of not maximizing revenue when they negotiated the most recent television contracts. In those deals are provisions that guarantee the NFL more than $4 billion in revenue next season, even if games are not played.

The league achieved this, the union claims, by making financial concessions in previous years of the TV contract, thereby reducing revenues (i.e. less money for players) and violating the antitrust ruling. The players also say this speaks to the owners' intent all along was to institute a lockout.

The stakes here are enormous. If the union is successful, the very television revenue that will allow owners to withstand a lockout might instead be placed in escrow and made unavailable to them until an agreement is reached with the players.

The union calls the TV deals "lockout insurance." Rhetoric aside, the ruling could be pivotal. A decision is expected before the Super Bowl.

What about the draft?

If a lockout ensues, the NFL intends to proceed with its draft in April. However, no rookie contracts can be signed, and rookies likely would not be able to take part in workouts until an agreement is reached.

That could create a scenario in which coaches are, literally, getting their first opportunity to instruct rookies on the first day of training camp — whenever that is.

Another key point: Undrafted players would not be gobbled up like in other years. Because the lack of a deal doesn't provide a framework for contracts, undrafted players can't sign until a new deal is in place.

Those rookies will instead be doing the same as fans looking for their football fix: waiting.

Stephen F. Holder can be reached at sholder@sptimes.com.

Breaking down the NFL labor unrest 01/13/11 [Last modified: Thursday, January 13, 2011 8:29pm]
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