NFL Owners Approve Labor Pact, Raising Salary Cap
Thursday, March 9, 2006
GRAPEVINE, Tex., March 8 -- The NFL narrowly avoided a labor confrontation when its team owners voted Wednesday night to approve a six-year extension of their collective bargaining agreement with the players' union, overhauling the way the thriving league does business.
The owners, after two days of sometimes-heated deliberations at a Dallas-Fort Worth airport hotel and plenty of behind-the-scenes lobbying by Commissioner Paul Tagliabue, also agreed to a system that increases the amount of locally generated revenue shared by the teams. That eases the concerns of some owners about a growing economic divide between the 32 clubs.
"I am pleased," Tagliabue said. "And more than pleased, I am relieved."
The deal runs through the 2011 season and sets the salary cap for players at about 59.5 percent of a greatly expanded pool of league revenue. The owners' ratification of the deal, which was proposed by the union and delivered to the owners Tuesday by Tagliabue, came by a 30-2 vote, with the Buffalo Bills and Cincinnati Bengals voting against it.
"It was a good compromise," said Indianapolis Colts owner Jim Irsay, "and we're all happy to have labor peace again."
The immediate effect is that teams that had been facing a salary cap crunch, including the Washington Redskins, have more wiggle room to retain their current players and sign new ones. The labor extension raises the cap to about $102 million per team next season -- up from the $94.5 million per club that was allotted before the labor extension -- and $109 million in 2007. The deal also eases some restrictive salary cap rules, related to the expiration of the cap, that would have taken effect and further hindered teams in negotiating with players.
The league's free agent market was expected to be pushed back 48 hours to 12:01 a.m. Saturday and teams would have to be under the new salary cap by Friday night.
Tagliabue and Gene Upshaw, executive director of the NFL Players Association, agreed Monday that there would be no further negotiations and this proposal would be a take-it-or-leave-it offer for the owners. Although the league had agreed to give Upshaw an answer by 8 p.m. Eastern time Wednesday, Upshaw, who is in Hawaii for a meeting of the players' executive board, waited about 35 minutes beyond that, then got the response for which he had hoped.
"This agreement is not about one side winning or losing," Upshaw said in a written statement. "Ultimately, it is about what is best for the players, the owners and the fans. . . . Moving forward, this new agreement gives us the opportunity to continue our unprecedented success and growth."
When Tagliabue presented the proposal to owners Tuesday, he told them that many of them had not been around for the league's labor strife in the 1980s and urged them not to repeat it. He told them it was important for them to resolve this dispute and find a way to work with the players.
People around the league were convinced before this meeting that Tagliabue would do all he could to get the proposal ratified, and owners said that the commissioner indeed performed plenty of arm-twisting. The revenue-sharing plan came together during an afternoon meeting Wednesday in which three owners -- the Denver Broncos' Pat Bowlen, the New York Giants' John Mara and the Carolina Panthers' Jerry Richardson -- met with Tagliabue to blend two proposals that were under consideration, one by the New York Jets and New England Patriots and another by the Pittsburgh Steelers and Baltimore Ravens.
The result was a plan that will transfer an average of about $150 million per season from high-revenue teams to low-revenue clubs. The top 15 revenue-generating clubs will have to pay, and the burden will be particularly heavy for top-five franchises such as the Redskins.