NFLPA ACCUSES NFL OF COLLUSION VOTE TO LOWER TEAMS' DEBT CA
By Daniel Kaplan & Liz Mullen, Staff Writers, SportsBusiness Journal
The NFLPA late yesterday afternoon accused the NFL of collusion, the
first such charge the union has brought in the 15-year history of the
current collective-bargaining agreement.
The NFLPA plans to announce later today that it is has asked Special
Master Stephen Burbank to overturn the NFL's decision last fall to
lower teams' debt cap, a move the union contends is designed to dry up
the cash teams need to spend on players salaries.
Under the CBA, when one side has a grievance, it is brought before the
special master, who is like an arbitrator.
The NFLPA initiated the proceeding Wednesday, charging that the league
violated the anti-collusion and anti-circumvention provisions of the
CBA, according to Jeffrey Kessler, the NFLPA's outside counsel. The
NFLPA also sent a discovery request to the NFL, and Kessler added that
it was "likely" the nine NFL club owners on the league's finance
committee would be deposed as part of discovery in the proceeding.
NFL club owners voted last October to lower the debt ceiling for each
of the 32 NFL clubs from $150 million to $120 million and to lower
league and team debt by $1 billion over the next three years.
"In October, the Finance Committee determined, in light of the current
turmoil in the economy — which has only gotten worse in the
intervening four months — that our overall business interests would be
best served by a reduction in the league's overall debt burden," wrote
league spokesman Brian McCarthy, in an e-mail to SportsBusiness
Journal. "The union's attack on that prudent financial decision, which
serves to protect the league's credit ratings and its strong
reputation as a borrower, is inexplicable and totally lacking in
merit. The prescribed reduction in the league's overall debt — a
phased reduction in an amount up to the equivalent of $30 million per
club — will have no impact on the league's financial obligations to
players under the CBA. Those obligations are determined by revenue,
not by debt."
In October, NFL Commissioner Roger Goodell told reporters the league
was making the move in response to the turbulent global credit
markets. But New Orleans Saints Owner Tom Benson, chairman of the NFL
finance committee, told SportsBusiness Journal shortly after the vote,
"The union forced this, not us."
Said Kessler, "The league's claim that [the debt reduction] was
undertaken because of issues in the economy is a ruse. ... That would
be inconsistent with the statements made by Mr. Benson, who is the
chairman of the finance committee, and we think he is telling the truth."
The NFLPA's action is expected to increase tension between the union
and the league over the labor agreement, which was renewed in 2006. In
fact, NFLPA officials said the plan by the owners to lower the debt
ceiling of the league and its clubs may be directly related to what
they believe are the league's plans to opt out of the labor deal early.
The CBA is set to expire after the 2012 season, but club owners are
expected before November to exercise a clause to opt out of the last
two years of the deal. If they do opt out, 2010 would be the last year
of the deal and the league would be forced to operate that year
without a salary cap.
The league's debt plan forces clubs to reduce debt in three years.
"It is no coincidence that the deadline for compliance with the [new
debt standards] coincides exactly with the uncapped year in the CBA,"
said NFLPA General Counsel Richard Berthelsen. "Our agreement clearly
states that there will be no restriction on free agency. ... We see
the debt limitation as a restriction on free agency."
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Qui Fev 21, 2008 6:27 pm
