NFL Labor Negotiations: Updates From the Scene


5:40 PM/ET Update: The NFLPA will go the litigation route. They have informed the league that they will decertify and the next step is to file an antitrust lawsuit.

This does not mean that there will be no future negotiations outside the courts, but it does mean that, for now, it will hit the legal system.

The union obviously feels they are better off in the hands of Judge David Doty, who has handed down all pro-uniondecisions over the course of his presiding of the collective bargaining agreement over almost two decades.

5:18 PM/ET Update: AP reports: NFL Players Decertify As Strike Seems Certain

4:50 PM/ET Update: NFL Union Executive Director DeMaurice Smith came out of the meeting and said that "significant financial differences remain" between the players and the owners and that the players want more detailed financial data and the owners have until 5PM/ET to make good on that.

The assumption is if that doesn't come, the union will go ahead with their plans to decertify.

4:10 PM/ET Update: Well, what do you know? Here we are. Supposedly 50 minutes before the union would have to decertify and they are still in the room. This is what negotiations are all about. Making the right move at the right time, calling a bluff could be worth hundreds of millions of dollars to either side.

2:35 PM/ET Update: We have gone from reporters having information to misinformation to absolutely no information.

Total and complete radio silence.

I have to think this is good for negotiations. If it were ugly in there, I assume there would be some leaks. Despite having no binding power, mediator George Cohen has done a masterful job. Guessing he got both sides to shut their traps after a day of bashing each other.

1:35 PM/ET Update: I have tried to stay positive and convince myself that negotiations are about last second deals.

I have to say I'm not getting a good vibe, but I'm also optimistic because they have been in the building — though not necessarily talking to each other —for more than three hours.

The further we get to the close of the business day, the more likely it is that this won't all end for the worse today.

12:30 PM/ET Update: Let's do a little math here.

As it currently stands, the owners want a $1.7 billion expense credit. Since $1 billion already exists in the current deal, how about dividing the difference with the players giving the owners a $1.35 billion annual expense credit. Taking away that expense credit from overall league revenues before a player/owner split occurs would likely mean that owners would get 55% of total league revenues and players would get 45%. Earlier this morning on a local radio show, union head DeMaurice Smith said he would do a deal if the players could get 50% of the total league revenues.

Is it really worth blowing this all up for 5% annual cut? And at what point does a destructive future minimize that extra 5% goal?

Is it possible that labor peace now gets the union less of a percentage but the same overall dollars?

12:10 PM/ET Update: Reporters have left the room and are now standing in front of the building where the negotiations are taking place.

There has been much speculation that not much has been accomplished today.

Remember, the players union said they would notify the players of the status by 2:00 PM/ET today. If this whole thing implodes many reporters around here feel that the owners and the players will have dueling press conferences - at the same time.

Subway Free Footlong for NFL Football Negotiators
Photo credit: Rob Bronfeld
Subway Free Footlong for NFL Football Negotiators

11:49 AM/ET Update: There is not much love for either side right now.

But at least Subway has offered to cater their lunch!

Check out the picture from outside a Subway in DC given to us by a friend of this blog, Rob Bronfeld.

11:15 AM/ET Update: I'm sitting in a hotel conference room with the other reporters as they begin to speculate with me about all the possible scenarios.

We like to think we know what is going to happen, but we don't. Most of us do have a hunch that this is going to be an early day with little negotiating substance. Again, we could be completely off.

10:00 AM/ET Update: The players arrive, including Drew Brees and Jeff Saturday. The union's executive director DeMaurice Smith shows up in his trademark hat.

9:45 AM/ET Update: As we wait for the owners to arrive, let's take a question from my Twitter feed @DarrenRovell.

This from @brettbivens: "Do any leagues allow players to receive an equity stake in the organization as compensation?" It's a good question.

The answer is no and in leagues with caps it's obviously seen as something that would be done to circumvent the cap. The question I've had for the players association in this deal is, if they want to be equity partners, let them be. The union would argue that they deserve those shares for free, while the owners would of course say, "If you want to be equity partners, take the risk with us and buy your piece."

NFL commissioner Roger Goodell entering the negotiating room
NFL commissioner Roger Goodell entering the negotiating room

9:40 AM/ET Update: The NFL side has arrived including NFL commissioner Roger Goodell and owners Jerry Jones, Jerry Richardson, Mike Brown, Clark Hunt and John Mara.

First Post: The are many complexities to these negotiations that frankly the public doesn't care to hear about. I get it. Fans just want a season.

If there's one central issue to the talks, one issue at will make or break today and what happens from here, it revolves around this question: How much of a partnership is the owner-player relationship?

The owners have offered the players the right to look at the league's profit and loss statements, though only an auditor would have access to the individual team data to confirm that the numbers are accurate. The players think they deserve to look at the financial data from all 32 teams. They deserve this right, they believe, because they feel they can't evaluate how much the owners deserve as an expense credit, an amount of money that comes off the top before the owner-player revenue sharing agreement comes into play.

In the current agreement that expense credit, which is directly earmarked for capital expenditures, interest and stadium debt financing, is $1 billion. As it stands today, the expense credit in a new deal would be $1.7 billion to address the owners concern of rising costs and increasing obligations. This matters because the split is based on gross revenues, not net revenues.

So let's get back to the essential question. Do the players deserve to see the balance sheets of all the teams and evaluate for themselves whether the numbers are real and valid, as if they are equity partners with the owners? The players think so.

The owners don't really see it that way. They see that the players are partners to a point, as they've agreed to share league wide financials with them and offered an auditor to check those numbers. They don't think they have the right to look individually through all the balance sheets and determine whether or not the owners accounting practices are acceptable. (By the way, the NBA has given their union complete tax audited breakdowns of all the teams and the union still says they don't believe the numbers.)

The players are already more than employees. Unlike most of the world's workers, obviously excluding many of those in the finance and legal world, their salaries in total aren't completely arbitrary. Like a profit sharing business which includes partners in a hedge fund or a law firm, their deal assures them that they receive a minimum share of overall revenues, which has worked out to roughly a 50-50 split after the $1 billion has been taken off the top. Based on how the deal is structured, the players' guarantee grows no matter what, as long as gross revenues rise.

That's not what happens in law firms and hedge funds, where salaries and further distribution of funds to the workers are based on profits. If gross revenues increase, but profits decrease, the partners aren't making more money. NFL players are guaranteed more cash as long as the league is pulling in more total cash.

So is what the owners have offered the players acceptable?

Some sports investment bankers I've spoken do think it's enough.


Because, they say, players don't deserve to see all the numbers because they aren't truly equity partners. They risk their bodies and don't have guaranteed salaries outside of bonuses, but they don't exactly have the same leverage as top partners in a law firm or a hedge fund, who can change companies at their free will (think leagues, not teams here).

Secondly, those investment bankers find it hard to believe that the owners' accounting would be so fishy that the profit and loss statements they presented to the players would really be that off. Given that the players don't have any other similar alternative for employment, unlike those hedge fund managers or law firm partners whose value is often created by switching firms (think leagues, not teams) those investment bankers also are surprised that the NFL has even shared what it has with the players.

Let's just take you through today's timeline. The owners and the players are scheduled to start meeting at 10 a.m. ET here in Washington, D.C. The union has told the players that they should expect to hear something by 2 p.m. If the union hopes to avoid an owners lockout, which could happen at 11:59 pm ET tonight, they need to inform the league that they are going to decertify and file an antitrust lawsuit before the end of the business day. If they don't do that, they would have to wait six months to file a suit, which would take us passed the start of the regular season.

We'll be here all day outside where they are meeting at the Federal Mediation and Conciliation Services Building here in DC to give you a play-by-play breakdown.

Questions? Comments?