NFL Labor Deadline Is Extended Again
Monday, March 6, 2006
A day of mixed signals and on-again, off-again bargaining between the NFL's team owners and players' union ended with the league agreeing to present the union's latest proposal for a labor settlement to the owners during a meeting scheduled to begin tomorrow afternoon in Dallas.
The league and union agreed last night to postpone the opening of the NFL's free agent market for a second time, this time until Thursday. Teams have until Wednesday night to get under next season's salary cap of $94.5 million per club, which would increase to as much as $108 million per team if a labor deal is ratified.
Any labor settlement would have to be approved by at least 24 of the 32 teams to go into effect. The union's proposal apparently calls for the players to receive slightly less than 60 percent of a greatly expanded pool of league revenues as compensation. Gene Upshaw, the executive director of the NFL Players Association, said over the weekend he had dropped his demand below 60 percent but declined to be more specific.
A seven-hour bargaining session in New York between representatives of the owners and players ended early last night and failed to produce the settlement that Upshaw said was within reach when the day began.
But the deadline for teams to release players to get under the cap was pushed back from 6 p.m. to 10 to 11:30, and then finally to 9 p.m. Wednesday. The free agent market did not open as scheduled at midnight this morning. Instead, union officials said they were contacted by management representatives late last night and told their proposal would be put to a vote of the owners.
Teams already had begun announcing last night that players had been released, but those moves apparently can be rescinded by clubs if they choose because they were not official until the league waiver wire went out. Last night's breakdown in talks had left many clubs poised to scramble to get under the salary cap and had left a league accustomed to labor peace potentially headed toward an uncertain future with a prospective legal tussle between owners and players, a season without a salary cap in 2007 and a growing gulf between the franchises making the most money and those making the least.
Upshaw said he began the day believing that a settlement with the owners would be completed, but by early last night, progress in the negotiations had halted and the owners had reverted to offering the players a smaller portion of the league's revenues than they currently receive.
"The longer we went, the further apart we got," Upshaw said by telephone from New York. "They were offering us a reduction over what the players already make. In this economic climate, I can't recommend to the players that they accept that. Look at the growth the game is experiencing."
Harold Henderson, the NFL's chief labor executive, said in a written statement released by the league that the league's proposal "would have increased player compensation to unprecedented levels." Henderson said the league's offer would have boosted player compensation by $577 million in 2006 over the 2005 level, and would have given the players an additional $1.5 billion in income over six seasons.
"It is an unfortunate situation for the players, the fans and the league," Henderson said.
According to Upshaw, the owners ended up offering the players 56.5 percent of an expanded revenue pool.
Upshaw said the dispute could not be settled in large part because the owners could not resolve their internal dispute about how to divide locally generated revenues among the teams.
"It definitely played into it because that's how you fund our proposal," Upshaw said. "You need revenue-sharing to fund our proposal, and they can't come to an agreement on revenue-sharing."
Negotiators for the owners and players met from around 11:15 a.m. until approximately 6:30 p.m. Upshaw and Richard Berthelsen, the union's general counsel, returned to New York from Washington yesterday morning after leaving New York when the talks collapsed Saturday. The negotiations resumed through a series of e-mails later Saturday, and by early yesterday Upshaw said in an e-mail that the parties were "now in the area where we will get a deal. I think it may be there. It comes down to a few final points."
Upshaw has been seeking during these negotiations to expand the pool of revenues from which the players are paid. Currently, they receive about 65 percent of a smaller pool of revenues. Owners of lower-revenue teams, meantime, have been seeking to have more locally generated revenues shared among the clubs. The teams currently share national revenues equally, but some teams have used growing revenues from sources such as luxury suites, stadium naming rights and local sponsorships to widen the revenue gap between the franchises. Some owners worry that revenue gap might ultimately lead to a competitive imbalance.
Upshaw has maintained that any labor deal between the players and owners would have to be accompanied by a revenue-sharing agreement among the owners. Otherwise, Upshaw has said, lower-revenue franchises could not afford the salary commitment they'd be making to the players. Some owners have said they could complete a labor deal with the players without finishing a revenue-sharing agreement.
Following an owners' meeting Thursday in New York, Commissioner Paul Tagliabue and several owners called the players' demands excessive. The owners voted unanimously Thursday to reject an offer by the players and declared that it did not provide a basis for further bargaining. But Tagliabue and Upshaw agreed later Thursday to the first three-day postponement of free agency, and negotiations resumed Friday.
The current labor deal keeps the salary cap system in place through the 2006 season, then there would be a season without a salary cap in 2007 before the deal expires.