"Business and frustration, they just go hand in hand," Indianapolis Colts owner Jim Irsay said Wednesday, after NFL owners met for three hours at a hotel in suburban Washington, D.C.
Irsay strolled down a hallway, headed to get his bags and leave town, as the bulk of owners declared their intentions to depart.
"I don't have a gut feeling," he said. "I've seen these things before. I just know that with a phone call, things can change at any time."
NFL owners canceled a scheduled second day of league meetings here today. But its principal negotiators, including NFL Commissioner Roger Goodell, are scheduled for another bargaining session today with NFL Players Association counterparts led by executive director DeMaurice Smith, before federal mediator George Cohen. It would be the 10th session within the last two weeks.
While owners huddled, several players did likewise at the union's headquarters in Washington.
New Orleans Saints quarterback Drew Brees, a member of the NFLPA's executive committee, said on Twitter: We the NFL Players are in D.C., ready to get a deal done, just in case anyone wants to know.
Goodell, some members of the owners' labor committee and league lawyers returned to Washington late Wednesday to meet in Cohen's office; the NFLPA was not at that session.
What's next?
As early as Friday, the NFL could be essentially shut down by a lockout.
The NFLPA, by tonight, could renounce its role as bargaining agent and declare decertification, laying groundwork for antitrust lawsuits.
Of course, it's possible there could be a new deal, which might represent a miracle known henceforth as The Immaculate Negotiation.
The NFL, which generated $9.3 billion in revenue in 2010, hasn't had a work stoppage in more than 23 years, the longest such run of any of the major U.S. professional sports leagues. But with the sides apparently still far apart on key issues — including whether the players will relinquish another $1 billion a year to the owners — that streak could go the way of Brett Favre's ironman record.
Then again, after more than 60 hours of bargaining before Cohen, the deadline could be pushed back for further negotiations.
"It will come down to the last minute," says Cyrus Mehri, a Washington lawyer and counsel for The Fritz Pollard Alliance, which monitors the NFL's interview process regarding minority coaches.
Less than a month since Super Bowl XLV attracted the largest TV audience in U.S. history, the NFL is riding an unprecedented wave of popularity.
Shutting down the game, the league estimates, would result in $400 million a week in lost revenue during the regular season. If there's no deal until the summer, an estimated $200 million in revenue generated during the offseason would be lost.
Players face the loss of salaries and benefits — for a career that, on average, lasts less than 3½ years. If the league shuts down, players would not be paid bonuses, unless the payments are guaranteed against a work stoppage.
And both sides would face more risk — in addition to paying millions in legal fees — if the dispute repeats history and winds up in antitrust litigation.
"If either side takes too extreme a position — like a lockout or decertification — it would escalate the situation," Mehri says.
The decertification option
Barring significant 11th-hour progress in negotiations, there are strong indications the players union would decertify before the collective bargaining agreement expires. That move, which could be contested by the NFL, might effectively prevent a lengthy lockout.
If the NFLPA decertifies, it would technically become a trade association without authority to negotiate a CBA, in addition to relinquishing rights to benefits and even the power to file grievances.
Instituting a lockout under those conditions would fuel charges of antitrust violations. It is likely that with a player as a plaintiff, the NFLPA would file for an injunction from a federal judge to stop a lockout.
In 1989, two years after a players strike was offset by three weeks of games largely featuring non-union replacement players, the NFLPA disclaimed its bargaining interest with a letter from then-executive director Gene Upshaw to NFL lead negotiator Jack Donlan.
Why not wait until the owners institute a lockout — which would freeze all activity involving players except for the NFL draft — before decertifying?
There are different factors in play, compared with 1989, when the NFLPA became the first and only pro sports union to decertify. Language in the existing CBA prevents the union from engaging in any antitrust action against the league for six months upon expiration of the CBA.
Furthermore, the NFL filed a charge against the union with the National Labor Relations Board on Feb. 14, contending the threat of decertification — the union has already collected the signature cards needed from its membership to approve the action — constitutes an unfair labor practice.
"That's the big fight on the back burner," says Gabe Feldman, director of the Sports Law Program at Tulane University Law School. "In every other industry, it's employees trying to keep unions together, not the other way around."
In its NLRB filing, though, the NFL argues that the NFLPA's decertification threat and expected antitrust litigation is an unlawful subversion of the bargaining process. It maintains that the precedent of the NFLPA ultimately reformulating as a union after the CBA was struck in 1993 is proof that it intends to win negotiations in court.
Even if the NLRB rules in the NFL's favor, a court action could supersede such action.
"Decertification is a silver bullet, but it is not the guaranteed weapon," Feldman says. "There are a lot of risks. In 1989, the players were fighting for a very fundamental right — free agency. There's not the same fundamental issue here."
This time, the percentage of revenue shared with players is the fundamental difference.
Under the current CBA, players receive 59.5% of revenue after the first $1 billion is credited to owners for costs. Owners want to double that to $2 billion, which the NFLPA says constitutes an 18% rollback.
NFLPA wants books opened
Attached to that issue has been the unwillingness of owners to fully disclose financial records. The union verifies revenue with an independent audit. Yet the NFLPA's Smith has said repeatedly that he cannot justify significant givebacks without owners showing more data. The NFL won't budge on the issue, citing it has no legal obligation for full disclosure.
"Everybody's making money, so it's a little surprising to see the differences have become so great," says William Gould, Stanford law professor and former chairman of the NLRB. "On the other hand, you're seeing more collective bargaining negotiations where big-time employers like the NFL are saying, 'We're making money but we're concerned about costs and need to tighten our belts.' "
The NFLPA points to a component of the NBA's current labor talks as a model for what it wishes to achieve: The NBA has opened its books to its union.
Gould, however, says that, based on a U.S. Supreme Court ruling in another case, the NBA is legally obligated to full disclosure because it has asserted that it cannot afford to pay its player costs, leaguewide, with at least 17 franchises reporting losses. The NFL hasn't stated such a crisis.
"When an employer says, 'I can't pay you because I am not able,' then there's an obligation to verify that assertion by opening the books," Gould says.
The NFL has publicly contended that, since the last CBA extension in 2006, player costs have outpaced revenue growth by $200 million. Even so, according to Forbes, NFL revenue grew 9% in 2010 despite the recession. In 2005, the year before the last CBA deal, revenue totaled $6.5 billion.
Of 32 NFL franchises, 19 are worth at least $1 billion, according to Forbes.
Even so, NFL owners are entrenched in their position that the status quo won't work.
"We're in different times," said Dallas Cowboys owner Jerry Jones, whose franchise is valued by Forbes at an NFL-high $1.8 billion. The magazine also concluded that, leaguewide, franchise values dipped 2% last year, the first decrease since the annual survey began in 1998.
Who blinks first?
"Negotiation is about leverage," Mehri says.
Players scored a victory Tuesday when U.S. District Judge David Doty overturned a ruling and blocked the NFL from having access to $4 billion in broadcast fees that would have been available — as a loan — even in the event that games were not played.
That action, legal experts say, might not be a game-changer.
Says Gould: "In a labor dispute, if it goes on for a long time, unions and workers never win. You lose so much money. In sports, in particular, the careers are so short. So whatever the players gain is gained for future generations. So in that sense, the owners have more leverage."
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