Lockout in 2011 Looks Likely as NFL Labor Talks Stall

The NFL and the players union met again Tuesday, ostensibly to continue discussions about a new collective bargaining agreement. But as was the case with all seven of their prior negotiating sessions, no serious progress got made. One person familiar with the negotiations told me these scheduled meetings were "so the lawyers can justify their fees," and that characterization reflects the growing pessimism -- mainly on the part of the union -- about the chances of getting a deal done in time to make sure games aren't canceled in 2011.

NFLPA chief DeMaurice Smith told me last June that he believed the owners were intent on locking out the players in 2011 in an effort to break the union and get a new CBA deal that's tilted heavily in the owners' favor. And nothing that's happened in the seven months since has made the union any more optimistic. Smith's requests for audited financial statements that would back up the owners' claims of economic distress have all been rejected, leading the union to believe the other side isn't interested in negotiating.

"The owners are of the opinion that costs are rising too quickly or that costs are too high, and they would like players to take a smaller piece of the pie," said Jessica Horewitz, a financial consultant and industry expert who's been hired by the players to assist them. "But without some concrete data for each of the clubs, it's pretty hard to get an understanding of what the issues are with regard to those costs."

One of the things Horewitz is working on is a review of the past five years' worth of financial data for the Green Bay Packers, who are a publicly owned team and therefore required by law to make their balance sheets public. In June, the Packers released statements that said they made a $20.1 million profit for the fiscal year that ended March 31, 2009, which seems to hurt the credibility of the owners' cries of poverty.

In a letter sent to player representatives last week (and first reported by ESPN), Smith painted a bleak picture of the state of the negotiations. He said all evidence points to the owners having been determined since 2007 to lock out the players in 2011, and that evidence includes the hiring in 2008 of attorney Bob Batterman, who helped engineer the lockout that cost the NHL an entire season, and the new TV deals that will pay off even if there are no games in 2011. Those were two points Smith made to me last June, and since then the owners have done several things that have solidified his opinion that a lockout is, in fact, what they're after:

1. They've made it clear that they're willing to play the 2010 season without a salary cap, which they must if there's no deal in place by March. The owners have installed several safeguards to prevent top-revenue teams from overspending on players in George Steinbrenner-like fashion, and their fears of what an uncapped season would mean long-term have been shelved in favor of a desire to get the labor deal they want. But the union hates the idea of an uncapped season, since about 200 players who would otherwise be unrestricted free agents will instead be restricted free agents and because they're far more worried about low-revenue teams paring back to bare-bones budgets than they are about high-revenue teams breaking the bank.

2. The owners have decided to abolish the $200 million supplemental revenue sharing fund for 2010. This is money that would go to the bottom eight revenue teams in the league for use on their 2011 payrolls. The union has appealed this decision to a special master and fears that it too portends a lockout. After all, if the owners aren't expecting any games to be played in 2011, that $200 million would be a lot more useful as rainy-day money split among 32 clubs than it would be as supplemental payroll funds for eight of them.

3. The NFL has helped take to the Supreme Court the American Needle case, which is scheduled to be heard next week. The union believes one of the reasons the league has been moving so slowly on the CBA negotiations is that it's waiting to see what happens in American Needle, where a win for the league could conceivably broaden the league's antitrust exemption to the point where it might not even have to bargain collectively with its players. The league is currently exempt from antitrust laws for purposes of negotiating its broadcasting contracts, and this particular case applies to licensing. But since the NFL joined American Needle's appeal even after winning the lower-court case, the union's fear is that the league believes it can score a big enough victory in the Supreme Court to give it "single-entity" status in such matters as determining player salaries -- i.e., the league itself could set the salaries instead of allowing players to negotiate them individually with the different teams. This case is of grave enough concern to other sports unions that the MLB and NBA players unions have offered support to the NFLPA in preparing for the case.

4. Smith's letter claims the league has asked the players to give back 18 percent of their portion of the overall revenue pot in the first year of the new CBA. There's a lot of debate about the overall revenue figures and how much each side gets. The popular notion is that the players get about 60 percent and the owners 40 percent of the league's $8.5 billion total revenue. But sources close to the situation say the pool that's actually split is only about $7.5 billion. The players get 60 percent of that, which amounts to about 53 percent of the gross. And if they gave back 18 percent of what they already have, they'd be down to about 43 percent of the gross. The union doesn't consider that a reasonable proposal. In fact, they believe the league is overreaching to an extent that only a side that was willing to cancel games or a season to get what it wants would overreach.

5. The union believes the league is attempting to divide players on issues such as a rookie wage scale (which has public support and the ability to rile up veterans when they see what the top draft picks get, but which the union opposes on its face), and that it's using the issue of retired players as a wedge issue. By offering to use part of their desired savings as a fund for retired players, the league could well be trying to get the retired guys on their side against a union the retirees already distrust due to years of perceived neglect by the previous NFLPA administration.

The union and the players insist they will not go on strike. They say they liked the current CBA (which was supposed to run through 2012) and that the owners won't tell them why they opted out of it. They want the public to know that any work stoppage would be owner-driven and not player-driven. But unless they can get public support (or congressional support, which they're working on) on their side, it's hard to see how they have a whole lot of leverage on these issues. And by stonewalling so far in the negotiations, the NFL is acting as if it knows that -- as if it knows it will eventually get everything it wants. No matter what it has to do to get there.