Fiddling around while the NFL burns
Roger Goodell and DeMaurice Smith seem to be playing games instead of negotiating
From our Courtside Seat, you hear a lot of legal lingo. Some of it sounds scary. Words like decertification. Antitrust. Fraud. But the word we're dealing with today is just about the scariest one of all. It's so frightening, in fact, we can't bring ourselves to say it out loud. (Not, at least, for another paragraph or so.) So for now, we're just going to call it
The L Word
The clock is ticking down to kickoff for the Super Bowl a week from Sunday, but there's another timer ticking away in the NFL, too. And the numbers on this clock have far greater implications than the 60 minutes of football the Packers and Steelers will play in Dallas. It's the countdown to an NFL lockout -- that's right, the L word -- and it has both the players and the owners working hard.
Trouble is, they appear to be working hard on something other than an actual agreement that would avoid what could become the biggest work stoppage in the history of sports. Instead, they seem to be spending their time on public relations stunts, self-righteous rhetoric and preparations for litigation.
The silly PR dueling reached a new low this week when NFL commissioner Roger Goodell promised to reduce his salary to $1 if there is a work stoppage after the current collective bargaining agreement expires in March. Goodell's top negotiator, Jeffrey Pash, did the same. And NFL Players Association chief DeMaurice Smith responded with a tweet that said, "If we have a deal by Super Bowl, I'll go down to 68 cents."
It all produced a few minutes of news and some smart-aleck remarks on talk radio. But let's think beyond the spin and look at the numbers in the Goodell-Pash offers. Their salaries -- Goodell makes about $10 million annually, Pash nearly $5 million -- essentially are paid by the league's owners. Assuming the commissioner and his chief negotiator go without compensation for, say, three-quarters of the year, it will mean that the owners will save more than $11 million. If a lockout costs the owners less money than they expected, does it hasten an agreement or prolong the dispute?
Even when the two sides turn away from PR spin and manage to get together to talk about the possibility of an agreement, they seem to agree only that the meeting wasn't productive.
Each of the NFL's teams is worth more than $1 billion, according to Forbes, though that number is down a bit from previous valuations. The average player salary is $1.7 million. So what is the problem? Reduced to its simplest terms, the problem is this: The players are happy with what they have and want to keep it, and the owners are not happy with what they have and want more.
The disagreement is the direct result of the collective bargaining agreement signed in 2006, a sharing of bounty and abundance that has allowed both owners and players to thrive for the past five years. Former NFL commissioner Paul Tagliabue and late union executive Gene Upshaw made the deal at the last minute, with Upshaw travelling to Hawaii for a players meeting. It's an arrangement that many owners now regret. Tagliabue and the owners agreed to a new definition of team income that added substantially to the players' share of NFL revenues. It was only after the telephone agreement was reduced to writing during the next few months that owners began to realize what they had given away in the negotiations, and they've been preparing for the lockout ever since. They want to remove at least 18 percent of team income from the funds they share with the players.
"The owners were not well-prepared for bargaining and made a bad deal for themselves in 2006," observes Marc Ganis, a Chicago-based consultant who has worked with numerous NFL owners. "Upshaw and the union did a great job of taking advantage of the situation."
Now, after two years of intense preparations for a lockout that included a failed attempt to change the law in the U.S. Supreme Court and the inclusion of lockout clauses in coaches' and television contracts to avoid making payments during a work stoppage, the owners appear to be ready for hard bargaining. In anticipation of last-minute developments, Goodell has arranged owners meetings on Feb. 15 in Philadelphia and from March 1-3 in Fort Lauderdale for a possible final lockout vote. The contract is set to expire on March 3.
The players appear to be equally ready. Their leader, Smith, has been meeting with team representatives, informing and exhorting them to prepare their fellow players for what promises to become a career-bending melodrama.
Both sides have gathered all-star lineups of attorneys. I have been around judges and lawyers on a daily basis for more than 40 years, and I have never seen a group of advocates with greater skill and dexterity.
The aforementioned Pash, the NFL's top attorney, is Harvard-trained and brilliant. He worked with Tagliabue on the antitrust litigation in the early '90s that formed the basis for years of labor peace. Richard Berthelsen, Pash's counterpart at the union, is an equally brilliant lawyer whose experience in NFL labor wars goes back to 1972. He was at Upshaw's side through the complex and demanding antitrust battles in the early '90s.
In its preparations, the NFL added Robert Batterman, the New York lawyer who led the NHL through a lockout that caused the cancellation of an entire season and resulted in a collective bargaining agreement that completely restructured the relationship between NHL owners and players.
The NFLPA's outside counsel, Jeffrey Kessler, was one of the union's lead attorneys in the historic antitrust litigation in Minneapolis of nearly 20 years ago. He seems to thrive on complex confrontations with the NFL's 32 well-heeled owners. Players from every team support a possible decertification of their union; and if that happens, Kessler is poised to initiate a new round of antitrust litigation, hoping for the kind of gains he and Upshaw and Kessler accomplished for the players with their litigation breakthroughs in the early '90s. (Antitrust litigation can begin only after decertification, which involves the union ceasing to exist and becoming a trade association.)
If the dispute winds up in court, the players have the right guy in Kessler.
The bargaining includes a vast array of issues, including an 18-game season and a rookie wage scale. But, again, the primary question is whether the owners will get what they want or the players will keep what they want.
And it clearly is a matter of want, not need. Both sides have flourished under the expiring agreement. The players enjoy salaries, bonuses and benefits that would have been unthinkable to the players who first went on strike in 1970. And the owners enjoy record profits, new stadiums, their own network and the fastest-growing audience in all of television, things that George Halas and Curly Lambeau could never have imagined.
If you could put both sides in a room and tell them anything you thought would help, you could do worse than to start with the lyrics of a great Rolling Stones anthem: "You can't always get what you want. But if you try sometime, you'll get what you need."
To bankruptcy and beyond! (Like, to prison)
It's bad enough when you've been paid more than $100 million, the money is gone, and you're forced to file for bankruptcy. But it's even worse when even the bankruptcy filing doesn't protect you from debt collectors who want to see you thrown into jail.
It isn't working out as Walker hoped. He has already lost a $2.3 million house in Miami, where he won an NBA championship with the Heat, as well as a second house he purchased for his mother in a Chicago suburb. In both cases, Walker's failures to pay mortgages and real estate taxes put him in a position where the bankruptcy court could offer no protection.
In addition to the loss of the houses, Walker now faces a challenge from the court trustee assigned to his bankruptcy. The duties of the court-appointed trustee are to determine whether the listings of assets and liabilities are accurate, and to try to determine what happened to all the money.
Trustee Drew M. Dillworth, who was appointed by a bankruptcy judge in Miami, has undertaken an investigation of Walker's various claims. The trustee and his attorney, Vincent F. Alexander, have issued several subpoenas to banks, NBA teams and Walker's former agents. They reported to the court two weeks ago that they need additional time to complete their work and to complete a detailed interrogation of Walker.
The investigation is far from over, but the subpoenas and the request for more time are not good signs for Walker. If the trustee discovers fraud, misrepresentations or stashes of money, it could lead him to recommend that Walker should not be permitted to escape his debts with a discharge in bankruptcy.
Casinos in Indiana and Las Vegas, where Walker wrote bad checks and markers for $2.2 million, are also refusing to go along with Walker's attempt to eliminate his debts in bankruptcy court.
Harrah's in East Chicago, Ind., persuaded U.S. Bankruptcy Judge Laurel M. Isicoff that Walker's checks and markers were deliberately fraudulent and could not be forgiven in bankruptcy. Although anyone can eliminate things like credit card debt in a bankruptcy, the court will not discharge a debt when it was part of a fraud. When Walker wrote bad checks to a casino in Indiana, it was not a simple accounting error. The account was closed, leading Judge Isicoff to conclude that Walker had defrauded the casino.
On Monday of this week, Isicoff entered a judgment for $500,000 against Walker -- exactly the kind of thing he'd hoped to avoid when he filed for bankruptcy.
On May 9 in Las Vegas, Walker faces felony charges resulting from a series of 10 bad checks written to three casinos in 2008 and 2009. In an attempt to resolve the case, Walker had agreed to make installment payments to the casinos, but he has not made a payment in several months.
Time behind bars appears to be a certainty for Walker. In a nearly identical case last week in Las Vegas, a gambler who wrote a series of bad checks was sentenced to a prison term of 19 to 48 months. The severity of that sentence, according to Clark County assistant district attorney Bernard Zadrowski (who is also prosecuting Walker) was based on the gambler's pattern of refusing to pay debts other than the casino debts.
It is not a big surprise that neither Walker nor his two attorneys responded to e-mails and phone messages from ESPN.com asking for explanations of the unpaid bills and the gambling debts. How do you explain the inexplicable: a world-class athlete who won championships at both the college (Kentucky) and NBA levels yet has blown through $100 million and is on his way to the penitentiary?
Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.
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