NFL delays start of free agency

3-day wait may help in resuming talks with union on extension of labor deal

March 03, 2006|By BILL ORDINE | BILL ORDINE,SUN REPORTER

The NFL's march toward a potentially calamitous impasse with its players union came to a temporary halt yesterday when the league announced it was postponing the start of free agency for 72 hours, until Monday. The delay allows talks to resume with the NFL Players Association.

However, the possible end of 13 years of labor peace still threatens to seriously destabilize a business model that has been the most successful money-making machine in professional sports, experts say.

"It's almost unconscionable to think that the worst possibility is one that we can be contemplating and one that could play out," said David Carter, executive director of the University of Southern California's Sports Business Institute.

"The problem in sports with these types of situations is that while they can identify some of the short-term consequences," Carter continued, "it is the vastness of what can happen down the road where the issue really lies."

The sticking point has been how much of the league's revenues should go toward player salaries. Negotiators for the owners, including NFL commissioner Paul Tagliabue, reportedly have been offering a little over 56 percent, while NFLPA executive director Gene Upshaw wants 60 percent.

The NFL's contract with the union runs through the 2007 season but without an extension of the labor deal, the league-wide salary cap - the limit that each team is permitted to spend on its roster - would disappear after this season. The deadline for an extension had been today, the original start of free agency.

Without an extension that would have raised the current salary cap by about $10 million, cap-crunched teams will be forced to release solid performers to get under the comparatively restrictive $94.5 million cap that was set yesterday.

Although team owners voted unanimously early yesterday in favor of discontinuing talks with the union during a brief meeting in New York, the three-day reprieve announced later revived hopes that an agreement can be reached before a chain of events is set in motion that could permanently alter the league.

Rick Horrow, a visiting expert on sports law at the Harvard Law School and a former consultant to the NFL on stadium matters, pointed out that the league's current system is a delicate "triumvirate of a salary cap, shared revenues and a carefully defined free agency."

"Take away any one of those legs and you destabilize a league that's enjoyed unparalleled prosperity," Horrow said.

The integrity of two of those legs is now imperiled. Without an extension of the current bargaining agreement, the salary cap disappears next year. And in the future, the NFL's "carefully-defined free agency" could deteriorate into a free-for-all grab for talent.

It's even imaginable that shared revenues will provide less parity because locally generated income - say, from luxury boxes and stadium naming rights - remains with an individual franchise. As the gap in that type of revenue widens between large- and small-market teams, the race for playing talent - and the Super Bowl - conceivably would go to the teams with the biggest earning power.

In fact, the debate over sharing such local revenues has been going on among team owners, with a handful of high-revenue franchises, such as Dallas, reluctant to share that money with other clubs. The bulk of NFL revenue, from national TV contracts and ticket sales, is already shared among the 32 franchises.

The league's current economic model - the sports world's "gold standard" as both Carter and Horrow referred to it - came after a nasty labor war in 1987. Back then, players went on strike for a month but owners used replacement squads to crush the union.

"They totally annihilated us in that round of brinksmanship," said former tight end John Spagnola, who was the union player representative for the Philadelphia Eagles and eventually became vice president of the players union.

"But there's an evolutionary process to bargaining and the labor movement. A player [hurt in the 1987 strike] might have benefited from players who came before him that went on strike in the 1970s or 1982," said Spagnola, now a financial services executive.

And today's players are beneficiaries of those 1987 strikers because the work stoppage set in motion events that included the temporary decertification of the union and a federal lawsuit by individual players against the league.

That legal action spurred the NFL to negotiate the current deal that integrated free agency, the salary cap and revenue sharing. Since then, pro football labor and management have often worked toward what they perceived as common goals. Meanwhile, baseball lost a World Series and hockey an entire season to labor strife.

"Paul Tagliabue and Gene Upshaw have viewed themselves as strategic partners, not as adversaries as we have seen through the rest of big-time sports," said USC's Carter.

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