NFL Labor Dispute 101 with Braham Dabscheck

March 18, 2011

Just when sports fans were starting to turn their attention away from the NFL labor dispute and toward NCAA March Madness, the fighting between the players and owners has taken center stage once again. And during a time when buzzer-beating underdogs advancing in the NCAA Tournament typically captivates the nation, it’s quite a feat that the NFL has been thrust back into the proverbial water cooler discussions.

San Diego Chargers linebacker Kevin Burnett put the NFL dispute back into spotlight by these comments earlier this week to XX Sports Radio in San Diego about NFL commissioner Roger Goodell:

“Goodell’s full of it. He’s a liar. You’re a blatant liar. ‘It’s our league, it’s we, we love the players, we want the league,’ but what have you done for the players? What have you done, in all honesty, to improve the game, besides fine guys, besides take money away from guys, besides change a game that you’ve never played? … He’s done nothing to improve the game.”

While the players and owners kept comments to themselves during the mediation process, since the NFLPA has decertified, a group of players has filed an antitrust lawsuit against the NFL and its owners, and the owners have locked out the players, the public verbal sparring has begun once again.

But for those without a law degree or intimate knowledge of player associations, sport leagues, and labor relations, much of what the two sides are bickering about can be a bit confusing. That’s why Fitness Information Technology has turned to Braham Dabscheck for a primer we’ll call NFL Labor Relations 101. Dabscheck, a senior fellow in the Faculty of Law at the University of Melbourne in Australia, is an industrial relations scholar who has conducted research on professional team sports for nearly four decades. He is also the author of a new release, Reading Baseball: Books, Biographies, and the Business of the Game.

Q: With the players’ union decertifying and 10 players filing an antitrust lawsuit against the NFL owners, who as a result locked out the players, which side holds more power at this point?

Dabscheck: “There will be different answers for the short- (off-season) and long-term (when next season should begin). A lockout is an aggressive act by employers attempting to force workers/players to accept their terms and conditions. In the short run it will negatively affect the players. Once the season is scheduled to start, if the lockout continues, the players don’t buckle, and there is no play, that will hurt the owners more. Why? Because they will obtain no revenue. I feel at this stage both sides are testing each other; wanting to see who will blink first. This may suggest that the dispute will drag on to just prior to the new season. If the players haven’t blinked there will be internal pressure from within the owners to lower their eyelids.”

Q: What exactly is an antitrust lawsuit?

Dabscheck: “Owners/leagues introduced rules like the draft, trading, salary caps etc to control players. Such rules (with the exception of baseball) have been found to be in breach of the Sherman Anti Trust Act 1890 (see my chapters 3 and 4). An antitrust suit would be where players challenge such IMPOSED rules as being in violation of such legislation. A way for owners/league to protect such rules from antitrust action is to have them endorsed in a collective bargaining agreement with players/players’ association. This is why the NFLPA has decertified as a Union under the National Labor Relations Act. It removes such protection.”

Q: Is the decertification and lawsuit just a power move or do the players really intend to see the lawsuit run its course?

Dabscheck: “It is both. It is a power move that opens up the owners’ revenue sharing plans, which by definition is a collusive agreement to antitrust action. It is the major bargaining chip at their disposal. To back down would be tantamount to throwing in the towel. The problem for the NFLPA is for players to hold firm. It looks like the action is well supported by players, especially the stars who have the most to lose if the NFL wins.”

Q: Aside from locking out the players, which they have now done, is there anything else the owners can do to try to gain the upper hand in this dispute?

Dabscheck: “If the dispute goes on long enough they would have the option of looking for replacement players, as they have done in the past and as American corporations do in other disputes. This will help to raise the temperature. Fans and commentators may regard this as a devaluation of the NFL product. In short, this is a tactic that has to be played most carefully.”

Q: Will both sides continue to negotiate even though a group of players is suing the owners and the owners have locked out the players?

Dabscheck: “Yes. Negotiations will occur formally and informally. Also, various intermediaries will be active behind the scenes.”

Q: Can you give us your best projection of how this will play out and how, if at all, the 2011 NFL season will be affected?

Dabscheck: “This is a tough question. It looks like the owners want a fight. They may or may not be solid on this. The NFL has experienced much growth and success in recent years. The owners will feel less inclined to fight when they start to experience costs (loss of revenue). Assuming the players don’t capitulate, the 2011 season may be disrupted. If the owners (or enough of them) perceive that the players aren’t likely to cave in and the use of replacement players will cause different types of problems, they owners will have an incentive to lower their eyelids.”


Panel of Pro Sports Experts Offers Insight, Opinion

November 5, 2009

BusinessofSportsA group of proverbial heavyweights in the sport industry gathered at West Virginia University Wednesday night to share their insight, opinions, and plenty of jokes during “The Business of Sports” discussion.

The distinguished lecture series featured Ken Kendrick, managing general partner of the Arizona Diamondbacks; Bob Nutting, principal owner of the Pittsburgh Pirates; Oliver Luck, president and general manager of the Houston Dynamo; and Sam Huff, a Hall of Fame linebacker and current radio broadcaster for the Washington Redskins. It was a great opportunity to hear the foursome’s viewpoints on a variety of timely topics and their responses to questions were, at times, as humorous as they were insightful.

Below are some of their thoughts on a variety of topics that were discussed.

• On public financing of stadiums

There has been plenty of research, much of which has been published in the International Journal of Sport Finance, regarding the benefits and/or drawbacks of public financing for construction of new stadiums and arenas. All three panelists associated with professional teams claimed that there were long-term benefits for communities that receive a new professional sports facility, despite many sports economists who claim otherwise. Both MLB owners on the panel also happen to own teams that received public financing to help fund stadium construction projects.

Pittsburgh footed a large portion ($174 million) of the bill for the Pirates’ new PNC Park, which opened in 2002 but was five years prior to Nutting’s ownership. Kendrick’s Diamondbacks and their retractable roof stadium (Chase Field Ballpark) cost taxpayers approximately $238 million.

“It’s difficult to talk about public funding of stadiums during these economic times,” Kendrick admitted. “Economic impact studies show there can be a return on investment. Over time, there is tremendous tax revenue and jobs are created and I think that model still works. But having said that, in this time (of economic struggles) I think public funds should be used other ways.”

Luck was previously the CEO of the Harris County-Houston Sports Authority, which oversaw the construction and financing of Houston’s three new professional sports venues—the Astros’ Minute Maid Park, the Rockets’ and Comets’ Toyota Center, and the Texans’ Reliant Stadium.

“The city of Houston took on approximately $1 billion in municipal debt to build three new venues,” Luck said. “All three were up for a public vote and all narrowly passed and they were funded by hotel and rental car taxes. Because of those new venues, Houston has been chosen to host the Super Bowl (2004), Final Four (2011 and 2016), MLB all-star game (2004), NBA all-star game (2006), and (in 2010) the MLS all-star game and that’s important for a city that was down on its luck after the Oilers left Houston. It helped to rejuvenate the urban core of Houston.”

• On small- and mid-market teams competing in Major League Baseball

Both Nutting and Kendrick consider themselves owners of mid-market clubs, although based on the most recent MLB revenue reports the Diamondbacks are a few rungs above the Pirates. The biggest limitation, according to Kendrick, was that small- and mid-market teams are less able to successfully cope with injuries to key players. If they retain All-Star caliber players, often much of the team’s salary is invested in that one player.

The Diamondbacks, winners of the 2001 World Series in a dramatic Game 7, 9th inning rally to defeat the New York Yankees, have had some very talented players on their roster. In fact, five of the past 10 National League Cy Young Award winners played for Arizona (Randy Johnson in 1999, 2000, 2001, and 2002, and Brandon Webb in 2006). Arizona made it to the playoffs in 2007 and finished second in the NL West in 2008 but this past season finished in last place in its division due in large part to an opening-day injury to Webb.

“This year our top pitcher, who had won the Cy Young, was injured in the first game of the year and he missed the rest of the season,” Kendrick said. “That was a devastating injury for us to try to overcome.

“It would be nice to have unlimited money like the New York Yankees. But I think that (Arizona’s) competitive model is a very good one and, frankly, for me it’s a lot of fun to beat teams like (the Yankees).” Read the rest of this entry »