Saturday, March 12, 2011

My Random Thoughts On The Decertification/Lockout

I have a few things on my mind about the desertification/lockout yesterday and it was more than twitter would hold so I figured I would come back here to hash it out.

First off, yes my loyalties like with the players and the NFLPA. Don't like it? Don't read it.

Now lets talk about the NFLPA decertifying. In the event of a lockout one of tools available to the NFLPA to block it and try to force cooperation from the owners through litigation is to decertify as a union so that players can then file injunctions and anti-trust lawsuits. Now to me the problem is that the CBA required the union to basically fire the first shot.
The collective bargaining agreement says the NFLPA in effect must wait six months to decertify if it does it after the collective bargaining agreement expires.

I would say it was PR genius from the owners on that accord. See I'll bet there are a lot of you out there that feel like the union forced a lockout yesterday because they had to act first. Only problem with that is there is literally no way for the union to force a lockout. Even without a union to bargain with the owners could have set up free agency last night. They just chose not to. Which should have been utterly predictable.

And yet I'll bet you most of the stories today give the impression that the NFLPA caused the situation we are now in. But that would ignore the fact that it was the NFL ownership that in fact opted out of the previous CBA and hadn't participated much in negotiations at all until the eleventh hour when they were forced to. Yes the NFLPA HAD to act first in order to protect the players' rights to bring litigation but this was far from their doing.

And I know some folks are salty about De Smith's "ultimatum" yesterday. Well I'll get to that but first lets talk about a really big deal that is THE tell about how we got here and why

I would hope by now almost all NFL fans had heard the term "lockout insurance". It of course refers to contract the NFL owners signed with the TV networks which included money that owners would be paid even in the event that games weren't played during the 2011 season. It was to be a war chest of sorts to help keep owners rolling in the dough while players were going broke from being locked out in order to force them to take whatever deal the owners decided to offer.

Now I'm sure if you haven't really followed the case and or have it set in your mind that "both sides" are at fault for the work stoppage you probably think I'm embellishing the situation. If anything I'm probably being kind.

If anything I'm probably being kind.

Please please please do not take my word for it though. What you should do instead is read Judge David Doty's decision for yourself in full and see for yourself the kind of fuckery the owners were on with those TV contracts.

I know that most of us, myself included, are not lawyers and a lot of us, myself included, tend to be lazy when reading blogs and don't always click the link. So allow me to excerpt just a few parts of the ruling here with relevant parts highlighted.

Here is one section:

Broadcast contracts are an enormous source of shared revenue
for the Players and the NFL. Under the SSA, the Players rely on
the NFL to negotiate these contracts on behalf of both the NFL’s
own interests and the interests of the Players. In May 2008, the
NFL opted out of the final two years of the CBA, and recognized
that a lockout in 2011 would help achieve a more favorable CBA.
Thereafter, the NFL sought to renegotiate broadcast contracts to
ensure revenue for itself in the event of a lockout.
See, e.g.,
Exs. 98, 102, 110, 131, 228. The record shows that the NFL
undertook contract renegotiations to advance its own interests and
harm the interests of the players. The NFL argues that the SSA 4
does not require it to act in good faith in 2011 or subsequent
seasons, that lockouts are recognized bargaining tools and that it

The NFL’s “Decision Tree” is one glaring example of the 4
NFL’s intent and consideration of its own interests above the
interests of the Players. See Ex. 216, at 00081969. Moving
forward with a deal depended on the answer to the question: “Does
Deal Completion Advance CBA Negotiating Dynamics?” If yes, the NFL
should “Do Deal Now”; if no, the NFL should “Deal When Opportune.”

is entitled to maximize its post-SSA leverage. The court agrees. 5
However, under the terms of the SSA, the NFL is not entitled to
obtain leverage by renegotiating shared revenue contracts, during
the SSA, to generate post-SSA leverage and revenue to advance its
own interests and harm the interests of the Players. Here, the NFL
renegotiated the broadcast contracts to benefit its exclusive
interest at the expense of, and contrary to, the joint interests of
the NFL and the Players. This conduct constitutes “a design ... to
seek an unconscionable advantage” and is inconsistent with good
faith. See Ashokan Water Servs., 807 N.Y.S.2d at 554 (citation and
internal quotation marks omitted).
The NFL next argues that any injury to the Players’ interests
will occur after the termination of the SSA. The court disagrees.
As a result of the broadcast contract renegotiations, the NFL
demanded and received “material[ly]” different, immediately
effective work-stoppage agreements. See, e.g., Bornstein Dep. 168-
69. Moreover, at least one broadcaster would have considered
paying more in the 2009-2010 seasons “to have [the work-stoppage
provision] go away,” Tr. 410, indicating that the NFL’s
inflexibility with respect to lockout provisions resulted in less
total revenues for the 2009-2010 seasons.
The NFL also argues that

The court notes, however, that a lockout is usually an 5
economic weapon employed in response to a strike. See 48B Am. Jur.
2d Labor & Labor Relations § 2652 (“A lockout is a legitimate move
by an employer in the face of a strike....”).

the broadcast contracts were renegotiated to avoid defaulting under
certain loan covenants. That fact alone substantiates value to the
NFL without a corresponding increase in total revenues. Moreover,
the value of the renegotiated contracts far exceeds the amount
needed to satisfy loan covenants, and the DirecTV contract creates
a financial incentive to institute a lockout. Further, the
decision to lockout the Players is entirely within the control of
the NFL,
thereby rendering a debt default also entirely within its
control. Lastly, the debt covenants are of the NFL’s own making.
The risk of debt default brought about by a lockout does not excuse
or justify a breach of the SSA. Therefore, construing the good
faith obligation as modified by “consistent with sound business
judgment,” the NFL breached the SSA by failing to act in good faith
so as to maximize total revenues for each SSA playing season.

Here's another section:

To the extent that “consistent with sound business judgment”
modifies the best efforts requirement, the NFL may consider its
long-term interests but not at the expense of maximizing total
revenues for each SSA season for the joint benefit of itself and
the Players. A promisor’s consideration of its own interests
becomes unreasonable when it is manifestly harmful to the party to
which it has obligations. See Van Valkenburgh, Nooger & Neville,
Inc. v. Hayden Pub. Co., 281 N.E.2d 142, 145 (N.Y. 1972); accord
CASE 4:92-cv-00906-DSD -SPMS Document 675 Filed 03/01/11 Page 25 of 28
Dist. Lodge 26, 689 F. Supp. 2d at 242. “Consistent with sound
business judgment” does not permit the NFL to enhance its long-term
interests at the expense of its present obligations. The record 10
shows, however, that the NFL did just that. In considering
broadcast contract renegotiations, the NFL consistently
characterized gaining control over labor as a short-term objective
and maximizing revenue as a long-term objective.
See, e.g., Exs.
142, 201, 228. The NFL used best efforts to advance its CBA
negotiating position at the expense of using best efforts to
maximize total revenues for the joint benefit of the NFL and the
Players for each SSA playing season. Moreover, at least three
networks expressed some degree of resistance to the lockout
payments. As it renegotiated the contracts, the NFL characterized
network opposition to lockout provisions to be a deal breaker and
“clearly a deal” it would not consider. Ex. 163. To the contrary,
the evidence shows that maximizing total revenues for SSA seasons
was, at best, a minor consideration in contract renegotiations.
Therefore, the court finds that the NFL breached Article X,
The NFL urges the court to follow an unpublished Fourth 10
Circuit case, which held that the duty to use best efforts
“consistent with its overall business objectives” allows the
defendant “to act in accordance with its own objectives if they
conflict with those of [plaintiff].” Mylan Pharm., Inc. v. Am.
Cyanamid Co., Nos. 94-1502, 94-1472, 1995 WL 86437, at *6 (4th Cir.
1995). This unpublished case is not persuasive or controlling
authority. See 8th Cir. R. 32.1A; 2d Cir. R. 32.1. Moreover, it
provides no analysis or substantive reasoning for its

§ 1(a)(i) in extending or renegotiating its broadcast contracts.
Accordingly, the special master committed legal error in failing to
properly interpret the SSA’s requirement to act in good faith and
use best efforts, consistent with sound business judgment, to
maximize total revenues for each SSA playing season, and thus
finding no breach.

Now I really, REALLY encourage you to read the whole thing if you can. I mean hell I might be just excerpting the part that helps my case right? But the truth is there is MORE in there than I excerpted. A lot more.

But this is also an issue that has pissed me off to no end. The owners stood to rake in $4 billion dollars from those deals during a lockout.


And yet pundit after pundit tried to downplay the effect before the ruling of them having that money and the effect after that ruling of them losing that money. Some said it was only for the second year of a lockout, others said it was only a loan.

And you know what on paper they might have been right.

But lets be real here, $4 BILLION dollars in your pocket spends RIGHT NOW. And you can bet your ass that if the owners didn't need it they wouldn't have played hardball to get it in the contracts and wouldn't have worked so hard to keep it after the litigation started. Oh yeah, that's that word again, "litigation". I imagine you will hear it a lot from the owners over the next few weeks and months to try to demonize what was essentially the only approach the players could take once the owners revealed they had no interest in negotiating.

And yes you can make that determination from the response to Doty's ruling. Hell the owners were no where to be found prior to that ruling, famously cancelling meetings to meet with the players during the Superbowl and also never seriously offering any proposals until the last few weeks.

And then all of a sudden they show up RIGHT AFTER THE DOTY RULING. And yet you STILL didn't see pundits connecting the dots. None of them dared say that the ruling had changed the owners policy of just sitting on their hands until they could lock the players out.

And so I ask to the people who are still on that "both sides are at fault" bullshit, what could the players do to compel owner's to negotiate with them prior to that ruling on the lockout insurance. I mean yeah they could have just accepted everything the owners demanded but that's not a negotiation at all. And is that REALLY what you're telling me they should've done?

And don't miss this point from the part I highlighted: The owners themselves argued that they didn't have to "act in good faith" when negotiating those TV contracts. Seriously its right there in the ruling. THAT was their argument.

So let's get back to De Smith's "ultimatum" from yesterday.

Earlier this week I happened to read one of the worst reported, bordering on libelous reports from ESPN's Adam Schefter. You see Schefter, probably force fed by a shill for the owners, claimed that ownership this week had offered to show De Smith and the NFLPA ALL of the financial data that they had been asking for and De Smith said no. The reason Schefter gave, covering his ass by saying an anonymous person "with knowledge of the process" was his source, was that De Smith didn't want to lose face with the public after demanding the owners open the books.

One slight was total bullshit.

After Schefter's article got a gazillion links on blogs everywhere covering the negotiations the AP came out with their own report where by they actually did something CRAZY. They asked De Smith about the financial data he had been asking for and then he did something crazy. He gave them a letter from two years ago that he sent ownership asking for 10 years of audited team by team statements.

And you know what ESPN and Adam Schefter did? Well first I'll tell you what they didn't do. They DIDN'T offer De Smith and the NFLPA leadership a public apology. They did go back and totally rewrite the story from the information inside of it to the tone (seriously, the story is a 180 turn from the original) and put a nice "updated" note beside it. As if that would explain everything.

Now you may recall that the original CBA deadline was a week ago. It was extended first for a day and then for a week. But the question was and always had been whether or not the owners were just stalling or truly committed to reaching a deal. And yet after two years of demanding the 10 years of audited financial statements the owners were still acting as if they had access to their lockout insurance and didn't really need to show the NFLPA anything more than what they chose to. And remember that an appeal on Doty's ruling is coming soon which could be another reason to just stall out negotiations. And what do you know...

Even after federal mediator George Cohen began presiding over the sessions, union negotiators thought they were being shined on by the league, as most or all of the owners were absent from the bulk of the meetings. Finally, last Wednesday – the day after Doty’s decision – 10 executives from the league’s labor management committee showed up for the talks at the FMCS building. They left to join the rest of the league’s owners at a meeting 25 miles away in Chantilly, Va., and Smith and other union negotiators were under the impression that those owners would return for the next round of discussions.

Instead, the union leaders learned that those owners, including the Dallas Cowboys’ Jerry Jones and the New England Patriots’ Robert Kraft, had flown home on private planes, leaving only two members of the league’s labor committee (New York Giants owner John Mara and Green Bay Packers president Mark Murphy) to attend Thursday’s crucial session.

Even after negotiating a pair of extensions, the league’s negotiating team showed up this past Monday without displaying a sense of urgency. On Thursday afternoon – with Friday’s deadline looming – Smith and other union negotiators left the FMCS building and walked back to NFLPA headquarters. They were told by Cohen to expect a call before 4:30 p.m., at which point they’d be summoned to return for another session of talks.

The union officials waited as 4:30 arrived, then 5, but the call never came. Finally, Atallah learned via a reporter’s post on Twitter that the owners who’d been in attendance were on a conference call with the rest of the league’s owners.

Said Atallah: “I turned to De and said, ‘Oh, that’s funny – we were supposed to be over there right now. “He said, ‘Are you serious?’ At 6:15 we called the mediator’s office, and he told us, ‘Well, they’re packing up to go, so we’re not doing anything tonight.’ And then we heard they all went to dinner.”

So yes, De Smith put conditions on continuing the negotiations and I thought he was entirely right in doing so. For two years now many in the media have, again, tried to downplay the significance of wanting the owners to open their books. Hell one ex NFL coach this week went so far with his shilling that he said NFL owners were "small business owner". You know like the folks running the Mom and Pop store on the corner.


But let me break this down in two different ways.

First I keep getting folks tweeting me saying something to the effect of "hey dude, if I asked my employer to open their books they would just laugh at me".

Well yeah, DUH!

If any single person goes to their boss out of the blue and asks them to open their books I'm sure they WOULD get laughed out of the room. But this ain't Peyton Manning going to Jim Irsay asking him to open the books, and this ain't out of the blue.

If you want a more valid comparison you would say "Hey dude, if they chose to cut everybody at my job's pay by around 15% after they made record profits before we all renewed our contract and then we all banded together and decided to go ask the owner to open the books to justify it or else none of us would sign on to come back...."

Well it gets kinda convoluted after that but I think you get my drift. But see the comparison will never really make sense for two reasons. Now you might not like to hear this but playing in the NFL is not something the overwhelming amount of people can do. Hell its not something the overwhelming amount of people who play college football can do. And so they players themselves are a precious commodity that owners know they can't replace wholesale and keep the same or close to the same quality level.

On the other hand NFL players are pretty much captive employees to the NFL because there are no comparable professional football leagues out there where they can make around the same amount of money doing what they do.

But if you have a job outside of the NFL then there are probably other people that can do your job and at the same time there are probably other companies that you can leave and go work at if your job start's tripping and trying to lower your compensation.

Now I have been rude to a few of the people who have tweeted this at me. And honestly I don't take any of it back. Mostly because they were unsolicited tweets to me and I feel like if you are going to say something to me out of the way you should at least know what you're talking about. Otherwise either stay silent or ask somebody who might know. But at the end of the day the truth is people should understand that these differences in how the relationship with their job is with the players and their job make those kinds of comparisons unrealistic.

And yes, dumb.

Now let's back up a minute and come back to a very important point. This is mostly about MONEY.

Read that line again. MONEY!!!

Yes, 18 games and a rookie scale are very important issues too. But make no mistakes ladies and gents this is about money.

About $5 billion dollars worth to be exact.

Now some of yall are probably scratching your heads right now because you thought it was either about $9 billion or $1 billion. $9 billion being an approximation of total revenue or $1 billion, the amount the owners are asking players to give back of that revenue.

Well see that $1 billion the owners want back is per year. Mean if a CBA is for 5 years they are really asking for $5 billion dollars back. I thought of this after De Smith made reference to writing a $5 billion dollar check which at first kind of threw me off.

Now you tell me and be serious about it. If you had $5 billion dollars to spend on an investment, just how damn much information would YOU want to know on that company?

See the owners are asking the players to give up $5 billion dollars of revenue they themselves help to generate because, and I'm paraphrasing here, "they said so dammit". The information they have released to the union so far has been by all accounts underwhelming. The supposed reason that the owners believe the players HAVE to give back this money is because, according to them, the owners are starting to lose money. Now they give a list of reason's they deserve more of the revenues like building new stadiums etc. But they have been reluctant to actually show players the information that would prove quite clearly the financial direction the NFL is headed in.

Because if the profits aren't actually dropping, how could they possibly justify wanting to take more money from the players than they were getting in the last CBA?

The core of their argument is something they have the ability to prove. And its apparent at least to me that if the league could prove that the owners were losing money public opinion would decidely shift to their side and there would be enormous pressure on the NFLPA to give up that money.

And yet they have, up until now, refused to do so.

You take from that what you will. I'm sure you probably know what I think.

And while we are on the subject lets talk about why the money is the most important part of this negotiation and integrate why you shouldn't buy the spin from owners in the current weeks about what the active players "walked out on" yesterday that would have benefited both them and the retired players. Supposedly.

Until we find out how the money will be split up we don't get to find out what that financial implications are for an 18 game season if it's implemented. See one would assume there would be additional revenue with additional games. And so how much more the players would get from actually playing in those games would likely color whether they were more likely or less likely to even negotiate on the issue. But how can you know what that is if you still don't know how the revenue is going to be divided?

Also with the rookie cap again how could the NFLPA possibly decide if they should agree to such a cap without knowing how much of the revenue the players will be getting to offset the lost income draft picks will see due to a rookie cap?

It is obvious that, as with many things in life, the real issue here is the money.

And so when you here the NFL's shills talk about how much money active and retired players are going to miss out on by rejecting their final offer just remember that they are proposing to you that in some sort of new math that players were going to get more with less of a share of the revenue.

I don't know about you but I can't get my calculator to figure that one out.

And that's kind of why I wrote this blog today. You see, and I'm not saying all because obviously there is some good reporting going on out there, I just don't see a lot of NFL writers shooting it straight on this labor issue. It moreso appears that they are either trying so hard to refrain from blaming either side or that they simply do empathize more with the owners, that the reporting tends to strain credibility. I mean last night the NFL sent out a statement that the owners hadn't decided whether to lockout or not. And some folks were sending that out as if it had ANY credibility behind it. Look back up at Judge Doty's order. THEY PLANNED FOR MORE THAN TWO YEARS FOR THIS LOCKOUT. And yet now we are all supposed to believe that they just weren't sure about it?

C'mon Son. Thats ludicruss <

So it is that kind of reporting that to me has been the biggest problem as far as public opinion is on this issue. If more reporters just stuck to the facts and refused to publish some of this spin I don't think there is any question that more NFL fans would be siding with the players. I just don't know of too many people who think $5 billion dollars doesn't warrant some serious interest in the financial data. And yet, because the owners' spokesmen say so, writers are reporting that the NFLPA maybe doesn't really need all that information.

Now if you read this post and like it I would just ask you to do one thing. When you see people on other social media who are fans of football and either confused about which side they should support or say stuff like both sides are at fault, I would just ask you to send them the link to this blog. I'm not trying to garner sympathy for the NFLPA or De Smith but I do believe that the facts in this situation are decidedly on their side. I just don't think that most of those people with that point of view have been exposed to the facts and or have been spun hard in the media by the owners about what those facts really mean.

One last note, there won't be any replacement players because this isn't a strike. When the owners lock the players out business stops. There won't be any games unless the current players are involved and the lockout is lifted. Just FYI to a frequently asked question on twitter.

Aight peace