NFL locks out players, who file suit
WASHINGTON -- All along, the NFL said it was certain the union would dissolve itself and players would head to court for antitrust lawsuits.
All along, the union insisted the league's owners were planning to lock out the players.
And that's exactly what happened.
Unable to decide how to divvy up $9 billion a year, NFL owners and players put the country's most popular sport in limbo by breaking off labor negotiations hours before the collective bargaining agreement expired. At midnight, as Friday became Saturday, the owners locked out the players -- creating the NFL's first work stoppage since 1987 and putting the 2011 season in jeopardy.
Galloway & Company
Mike Vrabel, Kansas City Chiefs LB and member of NFLPA Executive Committee, explains the impact of decertifying the union.
The league said in a statement Saturday it was "taking the difficult but necessary step of exercising its right under federal labor low to impose a lockout of the union."
On Friday, the union decertified, meaning it declared itself out of the business of representing players. In exchange for giving up their rights under labor law, the players are able to take their chances in court under antitrust law.
That paved the way for 10 players, including MVP quarterbacks Tom Brady and Peyton Manning, to sue the owners in federal court in Minneapolis in a class-action claim. The players also sought an injunction to block a lockout -- even before one had been imposed.
Despite two extensions to the collective bargaining agreement during 16 days of talks overseen by a federal mediator -- following months of stop-and-start negotiating -- the sides could not agree on a new deal.
The league's statement Saturday called the NFL Players Association's decertification a "sham" and said the players' court action is "built on the indisputably false premise that the NFLPA has stopped being a union and will merely delay the process of reaching an agreement."
The statement told fans: "We know that you want football. You will have football. This will be resolved."
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In the end, it appeared the sides were about $185 million apart on how much owners should get up front each season for certain operating expenses before splitting the rest of the revenues with players -- a far cry from the $1 billion that separated the sides for months.
But the union refused to budge any further without getting detailed financial information for each team.
"I would dare any one of you to pull out any economic indicator that would suggest that the National Football League is falling on hard times," NFLPA executive director DeMaurice Smith said. "The last 14 days, the National Football League has said, 'Trust us.' But when it came time for verification, they told us it was none of our business."
By dissolving and announcing it no longer represents the players in collective bargaining, the union cleared the way for class-action lawsuits against the NFL, which exercised a CBA opt-out clause in 2008. The antitrust suit -- forever to be known as Brady et al vs. National Football League et al -- attacked the league's policies on the draft, salary cap and free-agent restrictions such as franchise-player tags.
Invoking the Sherman Act, -- a federal antitrust statute from 1890 that limits monopolies and restrictions on commerce -- the players are seeking triple the amount of damages they've incurred. That means the stakes could be in the hundreds of millions of dollars.
It could take a month for there to be a ruling on the union's injunction request, and antitrust judgments should take longer.
Depending on what happens in court -- a Minnesota judge has held jurisdiction over NFL labor matters since the early 1990s -- the 2011 season could be threatened. The last time NFL games were lost to a work stoppage came when the players struck 24 years ago, leading to games with replacement players.
As promised in January, NFL commissioner Roger Goodell and league general counsel Jeff Pash are slashing their salaries to $1 each during the lockout.
Goodell and Pash said they would take salary cuts if there was a work stoppage. Goodell earns about $10 million a year, including bonuses, and Pash nearly $5 million.
Goodell also has asked the league's compensation committee to delay any bonus payments to him until there is a deal with the players' union.
A lockout is a right management has to shut down a business when a CBA expires. It means there can be no communication between the teams and current NFL players; no players -- including those drafted in April -- can be signed; teams won't pay for health insurance for players.
Even though the NFL is early in its offseason -- and the regular season is six months away -- this is hardly a complete downtime. Free agency usually begins in March, and there are hundreds of free agents now in limbo. Also this month, under a regular schedule, team-organized offseason workouts would start. The lockout grinds all such activity to a halt.
March and early April are when many sponsors and corporate partners renew their deals with the NFL, part of why the league says hundreds of millions of dollars in revenue are going to be lost now.
"This obviously is a very disappointing day for all of us. I've been here for the better part of two weeks now, and essentially ... the union's position on the core economic issues has not changed one iota," New York Giants owner John Mara said. "One thing that became painfully apparent to me during this period was that their objective was to go the litigation route."
The NFLPA also decertified in 1989. Antitrust lawsuits by players led to a new CBA in 1993 that included free agency, and the union formed again that year.
The sides met from 10 a.m. ET until about 4 p.m. ET Friday, discussing a new proposal by the owners. When the possibility of a third extension to the CBA was raised, the union said it first wanted assurances it would get 10 years of audited financial information.
"I will tell you this: Any business where two partners don't trust each other, any business where one party says, 'You need to do X, Y and Z because I told you,' is a business that is not only not run well, it is a business that can never be as successful as it can be," Smith said.
At 4:45 p.m. ET, Smith and the union's negotiators left the mediator's office. About 15 minutes later, the union decertified.
"No one is happy where we are now," Pash said. "I think we know where the [union's] commitment was. It was a commitment to litigate all along."
After Pash talked to the media outside the Federal Mediation and Conciliation Service, union lawyer Jim Quinn spoke at NFLPA headquarters about three blocks away and said: "I hate to say this, but he has not told the truth to our players or our fans. He has, in a word, lied to them about what happened today and what's happened over the last two weeks and the last two years."
The NFL said its offer included splitting the difference in the dispute over how much money owners should be given off the top of the league's revenues. Under the expiring CBA, the owners immediately got about $1 billion before dividing the remainder of revenues with the players; the owners entered negotiations seeking to roughly double that.
But the owners eventually reduced that additional upfront demand to about $650 million. Then, on Friday, they offered to drop that to about $325 million. Smith said the union offered during talks to give up $550 million over the first four years of a new agreement -- or an average of $137.5 million.
"We worked hard," said Goodell, who was joined at mediation on Thursday and Friday by nine of the 10 members of the owners' powerful labor committee. "We didn't reach an agreement, obviously. As you know, the union walked away from the mediation process."
Also in the NFL's offer, according to the league:
• Maintaining the 16 regular-season games and four preseason games for at least two years, with any switch to 18 games down the road being negotiable.
• Instituting a rookie wage scale through which money saved would be paid to veterans and retired players.
• Creating new year-round health and safety rules.
• Establishing a fund for retired players, with $82 million contributed by the owners over the next two years.
• Financial disclosure of audited profitability information that is not even shared with the NFL clubs. That was proposed by the NFL this week, and rejected by the union, which began insisting in May 2009 for a complete look at the books of each of the 32 clubs.
As Pash outlined each element of the owners' last offer, he ended with the phrase: "Evidently not good enough."
When Goodell, Pash, Mara and owners Jerry Jones of the Cowboys and Jerry Richardson of the Panthers emerged from Cohen's office shortly after 5 p.m., they sounded hopeful negotiations would resume soon.
"We're discouraged, we're frustrated, we're disappointed, but we are not giving up. We know that this will be resolved in the negotiation process," Pash said. "We will be prepared to come back here any time the union is ready to come back here."
Information from The Associated Press was used in this report.
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