As owners fight among themselves, union prepares to decertify
COMMENTARY
By Ron Borges
NBCSports.com contributor
Updated: 12:09 a.m. ET Feb. 23, 2006
That is the NFL's problem today, as its wealthy labor union negotiates with its wealthy owners to extend a labor contract that has made both of them wealthier. Considering what the NFL's labor agreement has achieved since it first went into effect in 1992, one might think "What's to negotiate?'' But that's the problem. You're thinking. They're greedy. The latter is often the counter weight to the former.
It has come to the world's attention this week that upwards of nine of the league's wealthiest owners have threatened to sue their partners if they are forced to accept a majority vote that would force them to share equally or at least in no small part the locally generated revenues teams have been allowed to hoard in recent years. As those numbers have swelled, the rich have gotten richer and the richer still have gotten richer still.
Where this has left the players, who are the guys generating all this revenue in the first place, is simply rich which, naturally, isn't good enough for them.
Union chief Gene Upshaw didn't get rich playing even though he was so adept a blocker he went to the Hall of Fame. But he did get rich once he became the head of the NFL Players Association. Now he's insisting, quite logically, that the 32 rich owners share their total gross revenues with their slightly less rich players, and not just the "designated gross revenues'' as in the past. It's a term that never did make any sense to people whose mothers raised them to think sharing meant sharing what you've got, not just some of what you've got.
In recent days, Upshaw has said repeatedly there can be no effective negotiation of an extension of the present work agreement, which has allowed the league to prosper peacefully for more than a decade, until the owners decide among themselves how they're going to cut up those local revenues.
New England Patriots owner Robert Kraft responded to that by saying Upshaw should worry about his union members and getting them a contract extension, and let the owners work out their internal problems between themselves.
The only problem with such thinking is that until those owners stop threatening to sue each other over the idea of sharing their incredible wealth equally the way they always used, Upshaw feels he can't make a deal. The union, you see, knows local revenues in places like
The wealthiest owners, meanwhile, say they have different debt structures than long-time owners such as Lamar Hunt in Kansas City or the Mara family in New York, and aren't a publicly held trust like the Green Bay Packers. They argue that they're generating much more local revenue than some of their partners because they work harder at it than, say, Bill Bidwell, who owns the Arizona Cardinals, or Mike Brown, the long-time head of the penurious Cincinnati Bengals. Why should they share with guys who aren't willing to work as hard as they are at maximizing their business, they ask?
What that leaves is the union setting an end-of-the-week deadline for completing an extension of the present collective bargaining agreement, or simply allowing the deal to go to its ultimately disastrous 2007 conclusion.
That would also be the end of sanity in the NFL because it would make that season uncapped, and end the golden goose that has made every owner fabulously more wealthy than they were when they bought these teams because each has functioned with guaranteed labor costs ever since the cap was instituted.
Those fixed labor costs have allowed the value of their franchises to skyrocket, but if the cap ends, so would that increase because everyone knows the NFL would soon become like Major League Baseball. MLB is a marketing disaster in most of its cities because before the first game is played most of the have-not teams have been eliminated from World Series contention. The absence of that kind of situation has been the great magic of the NFL. Because of the cap, anyone (well, perhaps not Bidwell) can create a team that can win the Super Bowl. But if the cap disappears, the NFL will become the athletic and economic version of a third world economy in short order, and both Upshaw and the owners know it.
Should not that simple fact, and the downside that would follow, convince them all to work together? Well, it used to. However, the local revenue numbers have skyrocketed in some cities so dramatically that it has caused the normal levels of greed that made all these owners what they are today to mutate into the kind of greed than can lead eight or nine of them to threaten to sue their partners if they're forced to share, even if the vote is democratically taken.
This recently led Pittsburgh Steelers' owner Dan Rooney to ask, "Sue over what? They can vote no.''
True, but they can't win, and rich guys like Dan Snyder, who owns the Washington Redskins and makes fabulously huge profits, are used to winning. Or at least to getting their way.
In a nutshell, the problem, it seems, is basically that while NFL owners love capitalism, they also love monopolies. They love the free-market system but only as long as they don't have to play along with too many of the rules of the free-market system. In point of fact, as Upshaw said recently, "Everything they do is illegal,'' meaning monopolistic things like the draft (illegal), transition and franchising players (illegal), one-way contracts (illegal), well, you get the drift. What allows them to get away with such things, which fly in the face of both the constitution and federal labor law, is that they've been agreed to by a union representing the players' best interests. But that can change in a minute if the players' greed isn't soon satisfied.
Upshaw is threatening to ask the players to vote to dissolve the NFLPA on or around March 9 when the Governing Board meets in
He would also do this so that quite quickly antitrust laws would again apply to the league and even the greediest of owners knows the NFL's winning percentage in federal court on matters of antitrust is similar to the Cardinals' winning percentage in playoff games.
As you can see, the stakes are rising quickly on both sides, and so is the rhetoric. When Upshaw gave his annual state of union address during Super Bowl week, he showed up for the first time in years with Jeffrey Kessler, one of the nation's top antitrust lawyers, at his side. Kessler lingered for some time after Upshaw finished speaking to answer questions about the league's antitrust violations and the NFLPA's legal options if the present agreement isn't extended.
Over on management's side, you heard for the first time in years the word "lockout'' as well as talk of obscenely rich guys suing only ridiculously rich guys over the one side's refusal to share local revenues with the other side the way their mothers and the NFL's founders taught them.
Is this all a recipe for disaster? Kraft insists not, saying this is what happens at such times, with all sides jockeying to get as much as they can before the "11th hour and 59th minute arrives'' and a deal is struck.
It is then and only then, he says, that common sense prevails. Not long after he said that, it was learned he was among the eight or nine owners threatening to sue his partners if forced to share local revenues equally.
So much for the 11th hour and 59th minute.
Kraft is a very smart guy, but he's also one of the guys who doesn't want to share with partners he feels are not working as hard or as intelligently as he is to maximize their investment. He's a very good businessman who understands brinkmanship and suicide and is smart enough to avoid them both on most occasions.
But then again, the guys who own hockey teams and baseball teams were supposed to be smart guys too, and look what they've done. Could the same thing happen in pro football? You wouldn't think so, but don't underestimate the most destructive force on earth — blind greed.
Ron Borges writes regularly for NBCSports.com and covers the NFL for the
© 2006 MSNBC.com
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