Saturday, March 12, 2011

NFL Labor Wars: A Primer

Good luck trying to separate fact from fiction when it comes to the NFL and its labor problems with the trade association formerly known as the NFL Players Association. But there is one fact that no one is much focusing on but is perhaps the most crucial for even the casual fan to understand: no matter how much litigation is pursued by the players it will not and cannot result in a new labor contract between the parties.

The best that a court, the NLRB or even some neutral mediator or arbitrator can do is tell the parties to work out the problems themselves, something that the players abandoned yesterday when they walked away from the bargaining table, pulled the pin on the grenade and began pursuing a strategy that isn't in anyone's best interest, including the players they supposedly represent.

Let me break this down as simply as possible. The NFL is an affiliated group of competitors. Though each club is run separately from a business standpoint they do get together as a group to handle the big things like television rights negotiations and collective bargaining with the players' union.

What's crucial to that previous sentence though is that there must be a players' union for the owners to be able to lawfully engage in this activity. Otherwise almost any of this collective action becomes an antitrust violation. The NFL owners can no more get together and set economic terms for the players then, say, Acme can get together with Giant Eagle and agree on wages for their employees absent a certified labor union representing those employees.

When the negotiations between the NFL and the former union didn't produce an agreement by Friday, the union decertified as a union and then had individual players file a lawsuit alleging collusive behavior against the owners not because they thought it would lead to a labor contract but because they think it will put economic pressure on the NFL owners. Antitrust violations, when proven, can be extremely expensive to the perpetrators.

But it's not even about the damages the owners could be forced to pay if they lost such a lawsuit. The real key to this strategy for the players and their former union is to try and get the courts to grant them an injunction against the owners, preventing them from locking out the players. If that's achieved, two things happen, at least under the union's goofy view of the world.

First, they believe this would essentially force NFL owners to stay open for business, though even the union isn't quite sure under what terms that would be. Second, forced to stay open with an injunction hanging over them beings a doomsday scenario that the players believe the owners simply couldn't tolerate. Given that, the union thinks it could then re-certify at any point, return to the bargaining table comfortable in the knowledge that unless they get the deal they want they'll continue this same Groundhog Day strategy of decertification until the owners eventually throw their collective hands up in surrender.

At least I think that's what the former union's strategy is. It's hard to tell because they have an abject neophyte in DeMaurice Smith as their chief negotiator. Smith may look the part of a smart person, someone to go toe-to-toe with sophisticated owners, but Smith has absolutely no background whatsoever in labor relations or collective bargaining. The players might as well have hired Samuel L. Jackson to act the part of a tough guy at the bargaining table, it wouldn't have been any less effective.

In actuality, Smith is a mere puppet for the behind-the-scenes manipulations of union lawyers like Jeffrey Kessler whose goal has never been to reach an agreement but simply keep the owners in court as long as possible, almost out of sport. Kessler and his group led the union down this path. Smith was a bystander to a strategy I'm fairly certain he and the players that are following him don't completely understand and certainly don't know where it could possibly lead.

But irrespective of whether Smith and the players that filed the lawsuit actually understand the intention, what they don't understand is that their strategy is hardly foolproof let alone the key to success.

Let's deal with their first point. In order to keep the owners under the injunction, the union can never re-certify. That means that if football gets played there would essentially be no economic rules in place. The owners couldn't hold a draft because that's an unlawful restraint of trade absent an agreement with a certified union. Teams couldn't place “franchise” tags on players to retain any rights to them. Free agents could sign anywhere for any amount of money because there would be no salary cap. Indeed teams couldn't be constrained to limit their rosters. If the Browns wanted to sign 100 players, they could, though I'm sure they'd still finish 5-11. If the Bengals wanted to put 25 players on their roster they could do that. In short, any attempt by the owners to work together on anything, including collective negotiations with television networks, would be prohibited and thus whatever competitive balance currently exists in the NFL would be abandoned for so-called free market principles.

But the straw that stirs the drink in the NFL, like all professional sports, is television revenues. A key reason the NFL is perhaps the richest sports league in the world is because it has such good competitive balance. Fans in every city (except, perhaps, Cleveland) feel like in any given season their team could go to the Super Bowl. They buy tickets to games, buy jerseys and other team-branded tchotchkes. More importantly, they watch games on television until their eyes pop out of their sockets and they get brainwashed into buying copious amounts of Bud Light and the latest Buick Enclave. Networks like that sort of thing because they earn lots of money from sponsors willing to pay for that sort of audience.

But if the NFL turns into the Wild West it will eventually lose its appeal to the sponsors and thus the networks. Not all at once but over time. The money eventually will dry up. In short, played out to its logical extreme, the players' strategy undermines the health of the sport that they themselves need in order to ply their trade.

On their second point, that the leverage in future negotiations shifts to the players, this is a fallacy. In truth, there will be no negotiations. The minute the union re-certifies the owners get the right to act collectively and then would turn around and lock the players out so fast that their collective heads wouldn't stop spinning for a month. The union simply never gets the chance to exercise the leverage they think they'd gain.

So what this really comes down to is an edge-of-the-cliff gambit that the union believes the owners won't want to go down. The problem of course is that if the owners go over the cliff, they take the players with them. It's a mutual self-destruction strategy and why anyone except a bunch of lawyers looking to get rich off all the litigation thinks that makes sense for anyone actually impacted by all of this is really hard to say.

For now and for probably months to come, NFL football, at least in the form fans have come to know and love, won't exist. Courts will make decisions that the other side will appeal and the lawyers will get rich. Eventually though the hundreds of other players who don't have million dollar bank accounts to fall back on, which is the vast majority of players, will get itchy to go back to work to the only job they know that will pay them the kind of money they desire. When that happens, the pressure on the trade association formerly known as the NFL players union will become immense and if Smith has even an ounce of self-preservation instinct in his bones, he'll recognize his own livelihood and reputation will be jeopardized unless he can solve their problems. At that point the lawyers will be told to work out a deal and one will get struck.

Until all that comes to pass, fans can only wait out the ride. Pack heavy. It's going to be a long one.

1 comment:

m. said...

In a perfect wild west, we could re-name you Wyatt Earp and send you in to clean up this mess. I'm a stranger to these parts and even I can see that you have a better handle on the situation and what needs to be done, than any of the cowboys out there pretending to be sharp shooters. The problem is, ofcourse, that guns are louder than brains. m.