The 136 days of lockout anxiety is at an end. The NFL lockout is over, and the players and owners have signed a new collective-bargaining agreement. Really, the fire went out two months ago, and we’ve just been watching the embers fade. In May, I wrote that the Eighth Circuit’s declaration that it was likely to permit the owners to lock out the players effectively meant a sure win for the owners that would result in a speedy resolution of the ongoing labor dispute. The court made its ruling official during the first week of June, finding that the Norris-LaGuardia Act prevents courts from issuing orders that end strikes or lockouts. At that point, the players’ war was lost, and the owners’ relative position of wealth over the players would play the primary role in further negotiations. The last two months really have been about little more than the players trying to save face and wrangle over lesser issues. Others agree:
"The decision lifting an injunction was absolutely a game-changer in these negotiations," said Geoffrey Rapp, professor at the University of Toledo's School of Law. "As long as players had hope that the lockout would be prohibited by the courts, they could choose to continue with litigation -- at, essentially, no cost to themselves. The league would have to let them come to work, and paychecks would be earned.
"But once the appellate court made it clear the lockout would not be prohibited, that made the reality of a potential lost season sink in for players. The concessions we've heard the players have made since, like dropping their share of the revenue by several percentage points, represent a real effort by the players to reach an agreement with the owners. Had the original injunction stopping the lockout been left in place, I think the players would not have faced the same pressure to adopt such an accommodating position." (Clark Judge, CBSSports.com; 7/18/11)
The major points of the new deal, which will last for a term of 10 years, are as follows:
Win for Owners
Percentage of Total Revenue
This is the big one. Everything else takes a distant back seat. The primary reason for the lockout was the owners demand for a bigger piece of the almost $10 billion that the league makes annually. Under the old system, owners lopped off $1 billion from the top, with players picking up 60 percent of the rest and 50 percent of all revenue. That amounted to owners receiving 49% of total revenue and players receiving approximately 51%. Under the new agreement, there is nothing lopped off the top. Owners now will receive 53% of total revenue versus players’ 47%. That said, given the expected growth of the NFL, players’ total intake will continue to grow significantly. Every NFL team is profitable, and the value of television contracts is projected to increase wildly.
Stadium-Investment Credit
Owners who invest in modernizing their stadiums are allowed a reduction of up to 1.5 percent of revenue each year.
Rookie Contracts
Bonuses and contracts for highly-drafted rookies will be significantly reduced with a four-year salary program and a team option on a fifth year.
Elimination of Lawsuits
The lockout-related suit was just one of several that the players brought. All are now extinguished.
Win for Players
No 18-Game Schedule
The 16-game schedule remains, for at least another two years, when the parties will revisit the idea. If accountants can show that an 18-game season brings in a substantially greater amount of money to the league, 47% of which goes to players, perhaps the players will change their minds.
Cash-to-Cap Requirement
A new cash-to-cap commitment requires each team to spend at least 89 percent of its $120 million salary cap on actual player payroll. That means annual cellar-dwellers like the Buccaneers, Panthers, Chiefs, and Bills must spend millions above what they usually pay out. This potentially could result in greater parity.
Lifetime Health Insurance
A new program, partially funded by mandatory contributions from the players, provides lifetime health insurance for retirees. Additionally, the package provides that players whose careers are cut short by injury can receive up to $1.5 million in compensation during the two years after the injuries occur.
Long-Term Disability Fund for Retirees
A $1 billion "legacy fund" for retired players has been created, and some of the money for those players will come from the money saved on rookie contracts.
Lighter Practices
Required practices, especially during training camp, are now less frequent and less strenuous. All but a few practices during the course of the year are now no-contact.
To Be Determined
A few smaller issues still must be addressed, including rules for health care, player conduct, and disciplinary proceedings.
So, everyone can now get back to work, with the first preseason games scheduled for August 11th. This week, teams will be busy signing free agents, Tom Brady will have his hair styled to look good for training camp, Tony Siragusa will celebrate by consuming two dozen burgers and five pizzas in one sitting, and Antonio Cromartie will exhale, knowing that his paternity checks to the eight mothers of his nine known children won’t bounce. Most importantly, NFL fans will now sit back and relax.
Bill Staar is a partner in the Boston office of Morrison Mahoney LLP. He concentrates in the areas of product liability, construction disputes, toxic torts, and general business litigation. He is a member of DRI's Product Liability, Construction Law, and Commercial Litigation, Committees, vice chair of DRI's Sports Law, Specialized Litigation Group, and member of the Sporting Goods Manufacturers Association Legal Task Force.