Supreme Court Ruling Could Spur New CBA Talks
Had the ruling gone the other way, and the court granted the NFL the sweeping antitrust exemptions for which it was hoping when it joined in hatmaker American Needle's appeal of a lower-court ruling that it (the league) actually won, the labor landscape could have been post-nuclear.
Conceivably, such a ruling could have absolved the league of any need to bargain collectively with its players, as opposed to simply imposing work rules. Some on the union side believed that the extreme possible outcome was one reason the league was in no hurry to engage in serious talks on a new deal -- what incentive did they have to deal in advance of a possible ruling that could have seriously strengthened their leverage?
But when the ruling was announced Monday, the union was predictably thrilled and said it hoped it could lead to a new round of labor talks. There are no talks currently scheduled, but the sides have been in discussions and are hoping to schedule the next talks for sometime in June.
"While the NFLPA and the players of the National Football League are pleased with the ruling, we remain focused on reaching a fair and equitable Collective Bargaining Agreement," NFLPA executive director DeMaurice Smith said. "We hope that today also marks a renewed effort by the NFL to bargain in good faith and avoid a lockout."
Smith has been very public over the past year about his belief that the league is planning to lock out NFL players in 2011 in an effort to secure an arrangement the owners find more favorable than the current one. The owners say they are unhappy with a system that awards nearly 60 percent of the league's shared revenue to players, and have cited stadium costs and growth in player salaries as reasons they need to restructure the system.
Had the Supreme Court ruled that the league was allowed negotiate as a single entity (rather than as 32 separate businesses) for purposes beyond those for which it is currently allowed to do so (i.e. broadcasting rights), it's conceivable that the league could have just imposed its own salary structure without the agreement of the players. The union -- and other sports league unions that shared in its concern -- feared a precedent-setting ruling that would have crippled its bargaining power.
"Today's decision strongly affirms that the NFL must play by the same rules other businesses do," NFLPA general counsel Richard Berthelsen said. "Once again, the court has rejected -- as it should have -- a sweeping exemption for the NFL. The court's decision affirms our belief that the NFL should not be allowed to operate as a monopoly to the detriment of fans, players and the government."
The NFL, through league spokesman Greg Aiello, downplayed the ruling and its impact on the labor talks.
"The court noted that the NFL teams' shared interest in making the league successful and cooperating to produce NFL football provide 'a perfectly sensible justification for making a host of collective decisions,'" the statement read. "The decision will simply result in American Needle's claim being sent back to the federal district court in Chicago, where the case will resume in its early stages. We remain confident we will ultimately prevail because the league decision about how best to promote the NFL was reasonable, pro-competitive and entirely lawful. The Supreme Court's decision has no bearing on collective bargaining, which is governed by labor law."
What this means for the league in the short term is that the American Needle case goes back to district court, where American Needle will seek to prove that the NFL's exclusive hat-licensing deal with Reebok did harm to consumers by raising prices. If American Needle wins on those grounds, it could then try and negotiate a deal with the league, though it's hard to imagine the negotiating environment for such a deal being favorable at this point.
What this could mean for the NFL is an issue involving revenue-sharing. Teams with very marketable brands -- such as the Dallas Cowboys and New York Giants -- are free to make their own licensing deals and could decide not to share revenue from those deals with the other teams. But they were free to do that before this ruling, and unless the current CBA process makes revenue-sharing a more contentious issue between large-revenue teams and small-revenue teams than it already is, there's little reason to believe Monday's ruling will spur such rogue behavior. It's possible such was already being planned by certain teams, and that they were waiting for this ruling before making a move, but that remains to be seen.