Commentary

Storm clouds gather and lockout looms large in NFL labor strife

Updated: March 12, 2008, 11:12 AM ET
By Lester Munson | ESPN.com

A fight between NFL owners and players was simmering already, but it flared into the open not long ago when the federal judge who has presided over 15 years of labor peace invited union officials into his private chambers for coffee and conversation and left NFL owners and their lawyers waiting in the courtroom.

It happened 30 minutes before the judge, David Doty of Minneapolis, began a hearing on Nov. 30 to determine whether to allow disgraced NFL quarterback Michael Vick to keep his bonuses.

Doty calls these get-togethers "Minnesota Nice," and he has followed the practice throughout a distinguished judicial career. They often result in the settlement of irreconcilable disputes. But the NFL executives and lawyers think they were slighted by not being invited into the gathering, and they weren't amused. They launched a scathing and personal attack on Doty and demanded an end to his long-standing role as the arbiter of disputes between the players and the owners.

In papers filed in court after Doty ruled in Vick's favor, the NFL and its owners accused Doty of "bias" and violations of the code of conduct that governs the nation's federal judges.

[+] EnlargeGene Upshaw
Jim McIsaac/Getty ImagesThe NFLPA's Gene Upshaw can see a lockout coming from three years away.
For NFL players and their union, that attack on Doty amounted to an act of war. They responded with a vigorous defense of the judge who was the architect of the historic 1993 settlement that established free agency and a salary cap in the NFL.

And the players went one step further: They filed their own legal action accusing the owners of a "collusion conspiracy" designed to hold down bonuses and salaries.

As the legal disputes continue, a gracious invitation from a revered judge might end up leading to a labor conflict that could result in a season-threatening lockout in 2011.

"That's where we're headed. They're going to try to lock us out," NFL Players Association leader Gene Upshaw told ESPN.com this week.

Beneath the surface of this increasingly rancorous dispute is the bargain the players and the owners made in March 2006, an agreement that provided significant increases for players in salaries and bonuses. Instead of 55.5 percent of NFL revenues, the players now are entitled to 60 percent. The salary cap has jumped from $85.5 million per team in 2005 to an expected $123 million per team in 2009, an increase of 43 percent.

Although the owners agreed to those increases, they are not happy about their decision. A number of owners claim their profits have dropped from 10 percent each year to only 4 percent since the 2006 bargain was struck.

"They think [the current deal] is too rich for the players, and they want to take some back," Upshaw observed.

It is no surprise that the players will decline the opportunity to give anything back.

Although there is some dispute over the owners' claims of declining profits, there is no doubt that what had been 15 years of a mostly harmonious partnership since the historic free agency and salary-cap agreement of 1993 is turning into a brawl. If the fight continues at its current intensity, the owners will seize their first opportunity to terminate the current contract and start the process that will lead to a confrontation and a lockout in the 2011 season.

The first step is to opt out of the contract, a move the owners must and probably will make between now and November.

Under the terms of the player-owner agreement, the owners' termination of the contract will trigger two more years of salary-cap football, then the 2010 season will be played without a cap on salaries. After the 2010 season and the college draft in spring 2011, the players and owners will be at a critical crossroads.

Upshaw and others involved in NFL labor issues expect the owners to announce that the players will be locked out of training camps, putting the 2011 season in jeopardy. An NFL lockout would come six years after the National Hockey League locked out its players, which killed the 2005-06 NHL season.

The NFL's union, according to Upshaw, will counter with decertification, which means it will give up its role as the official labor organization of NFL players and become a trade association.

"How can they lock us out if we are not a union?" Upshaw said.

Jeffrey Kessler, a union attorney who was a leader of the court fight that led to the 1993 restructuring of the NFL, added: "If you lock out players who do not have a union, it is an antitrust violation."

[+] EnlargeHowie Long
AP Photo/Mark TerrillDuring the 1987 work stoppage -- a players' strike -- stars such as the Raiders' Howie Long walked a picket line.
The battle will lead to the same kind of litigation that began after the players' unsuccessful strike in 1987 and led to the 1993 settlement that allowed owners and players alike to prosper for 15 years. It will be a high-stakes struggle, as the players will seek to duplicate their triumphs in the early '90s with demands for triple damages and injunctions.

But it also might lead to the loss of all or part of the 2011 season.

Although the owners based their recent legal action on Doty's ruling in favor of Vick and his bonuses, there is clearly more at stake. In papers filed in Minneapolis, the owners' attorney, Gregg Levy, made serious charges. Levy and the owners clearly are frustrated with Doty's rulings over the years, asserting that "the time has long since passed to put an end [sic] this court's supervision of labor relations in the NFL."

Doty's ruling for Vick, which allowed the player to keep $19 million in "earned" bonuses despite his incarceration on dogfighting charges, was not a big surprise to legal experts who studied the intricacies of the bonus clauses of NFL contracts. Doty has ruled for the league and its owners in a number of other disputes.

Now, using their scorn for his Vick decision as a platform, the owners want Doty to remove himself from his continuing supervision of these disputes, opening the door to access to a new judge when the more serious battles begin over the lockout.

The players want Doty to remain in his supervisory role over player-owner disputes. The union calls his role one of the "core principles" of the agreement.

The owners are particularly angry about comments Doty made in a recent Sports Business Journal interview, in which Doty said, "[NFL owners] pretend they're getting beaten around. Well, they did, initially, but they had a position that was not legally sound … I think if you ask Paul Tagliabue [former commissioner], he would say, 'the whole thing has come out our way.' Because even though the owners complain about it, all they've done is make tons of money."

These statements, the owners say, demonstrate Doty's bias against them and in favor of the players. Upshaw and the players reply that Doty was talking only about the earlier litigation that led to the 1993 agreement and that there is no indication of bias in any of the statements.

The statements to the media and the Minnesota Nice sessions "demonstrate bias," say the owners, and they want Doty to walk away from any further role in the disputes.

Attorney Kessler and the union leadership are outraged over the owners' attack on Doty. They say in court papers that the NFL attack on Doty "indicates that the [NFL] lawyers have lost control over their … disgruntled clients."

While the owners were trying to remove Doty from future conflicts, the players fired off their own complaints, accusing the owners of "collusion" and "circumvention" of basic elements of the player-owner contract.

The players object to a league decision to reduce the borrowing limits that apply to all 32 NFL teams. The league's new rule drops debt limits from $150 million per team to $120 million per team, a leaguewide decrease of $960 million.

For the players, any reduction in owners' power to borrow money is bad news. They believe that many bonuses and salary increases come from borrowed funds. And they argue that the reduction in borrowing power is part of a "collusive agreement to suppress player salaries and [is] especially targeted at suppressing the amounts of signing bonuses."

The timing of the owners' resolution to reduce team debt limits is particularly suspicious to the players and their union. Anticipating the owners' termination of the current deal and an uncapped season in 2010, the players assert that "the very design and timing [of the debt rule change] is a direct and collusive attack on competition for free agent players during the uncapped year [2010]."

The players look forward to the uncapped year as a bonanza of huge bonuses and salary increases, and there is reason for their belief. In 1993, the last uncapped year, player salaries rose to 69 percent of NFL income, a record high.

The new rule on debt, according to the players, goes into effect just in time to put a lid on bonuses and salaries in the uncapped year. They say it is "collusion" and "anti-competitive." In the lexicon of NFL labor disputes, "collusion" and "anti-competitive" are fighting words and can lead to a lockout and litigation.

Said Marc Ganis, a sports finance expert who has consulted with several NFL owners: "The profits are down to the point where the owners do not have the flexibility they need to grow. And the players believe there will be some sort of bonanza for them in the uncapped year. It won't be resolved until the players realize that there will be no big bonuses and no big salary increases in the uncapped year."

NFL officials dismiss the players' claim of collusion.

"This is part of our overall fiscal planning at a time when the economy is in turmoil," said NFL spokesman Greg Aiello. "It will have no effect on the league's financial obligations to players under the collective bargaining agreement. Those obligations are determined by revenue, not by debt."

Responding to the union's suspicion about the timing of the debt limit change, Aiello said, "It will be phased in over time and is not aimed at anything other than protecting the credit rating of our clubs."

What prompted this sudden battle after years of mutual prosperity?

Upshaw said, "[The owners] just don't like what they agreed to in March of 2006."

Added Kessler, the players' attorney: "The problem is that the owners could not agree among themselves on how they would share their revenues. The high-revenue teams do not want to share money they earn in their markets, and the low-revenue teams are unhappy about everything. So they find a place to agree -- they try to get it back from the players."

With the two recently filed legal actions, there is no longer any doubt that the owners and players are on a collision course. Instead of prospering together, they will be meeting each other in court and tossing around words such as "collusion" and "decertification" and "lockout."

Unless something unexpected happens, the 2011 season is in serious jeopardy.

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.