Q. Can you comment on the following statement by NFLPA executive director DeMaurice Smith: “The question is whether or not there’s any other way of interpreting the new television contracts as anything but lockout insurance. The answer is no. I mean, when you put in, for the first time, a guarantee that there will be almost $5 billion to not play football, what else can you consider it to be?”
A. The statement is incorrect in numerous respects. Any sums paid by the broadcast and cable television networks to the NFL during a work stoppage would have to be repaid with interest. For decades, NFL network TV contracts have protected the NFL against the possibility that games might be lost for any of a variety of reasons, including work stoppages, natural disasters, or other similar events.
Q. Why does the NFLPA say that the owners have never explained why this current CBA has been terminated?
A. The decision has been explained repeatedly at the bargaining table and publicly. The CBA, which does not adequately recognize the costs of generating revenue, does not afford the clubs sufficient incentives to invest in the future of the game.
Q. Are owners asking veteran players to take an 18 percent pay cut?
A. Absolutely not. Between reductions in outrageous salaries for rookies and anticipated increases in revenue, current players should not see their compensation decline under the clubs’ proposal. The goal is to create a system that will allow for growth in revenue and player compensation.
Q. When does the CBA expire if there is no extension of the agreement?
A. In March of 2011.
Q. Will there be a college draft in 2011?
Q. Is the NFL a non-profit organization as NFLPA executive director DeMaurice Smith has stated?
A. The NFL League Office is a not-for-profit organization. The NFL League Office receives funding from the 32 member clubs to cover its non revenue overhead activities such as office rent, League Office salaries and game officiating. In addition, the NFL League Office collects revenues on behalf of the 32 member clubs and distributes those revenues to the clubs. All national revenues (e.g. broadcast TV payments) collected and paid to the member clubs, as well as local revenues earned individually by the clubs, are subject to tax at the club level. This structure is not unlike that of any partnership where the net earnings of the partnership are passed through to the partners where it is taxed.
Q. What is the “Final League Year” in the current agreement?
A. The “Final League Year” is the term used in the CBA to refer to the last year of the agreement. Without a further extension of the CBA, the “Final League Year” would be the 2010 season, which begins on March 5.
Q. What would be the differences between the 2010 and any other “League Year?”
A. The principal differences are that in the “Final League Year” (1) there is no salary cap; (2) there is no minimum team payroll; (3) there are substantial additional restrictions on player free agency; and (4) there are reductions in active player benefits.
Q. Will current player benefits be affected in 2010 if there is no new CBA?
A. The union agreed that in the Final League Year, clubs would be relieved of their obligation to fund numerous benefit programs for current players. Examples include second career savings (401K), player annuity, severance pay and performance-based pay. The total league-wide contributions to such plans in 2009 were in excess of $325 million or more than $10 million per club.
Q. Are retired player benefits affected in the Final League Year (2010 season)?
A. Commissioner Goodell has stated in a letter to the NFL Alumni Association that there will be no reduction in pension or disability payments to retired players during the Final League Year (2010).
Q. What determines whether a player is an unrestricted free agent in the Final League Year (2010 season)?
A. In capped seasons, a player whose contract has expired becomes an unrestricted free agent if he has four or more accrued seasons. In the Final League Year (2010 season), a player whose contract has expired becomes an unrestricted free agent only if he has six or more accrued seasons. An unrestricted free agent is free to sign with any club with no compensation owed to his old club.
Q. What determines whether a player is a restricted free agent in the Final League Year?
A. In capped seasons, a player whose contract expires becomes a restricted free agent if he has three accrued seasons. In the Final League Year (2010 season), a player whose contract expires becomes a restricted free agent if he has three, four or five accrued seasons.
Q. In addition to the right to designate a franchise (or transition) player each capped year, will clubs be able to designate additional players if 2010 is uncapped?
A. Yes, one additional player can be tagged. In capped years, a club may designate a franchise player or a transition player. In the final league year (2010), a club may designate one additional transition player.
Q. What is the Final Eight Plan?
A. During the Final League Year (2010 season), the eight clubs that made the Divisional Playoffs in the previous season (Arizona, Baltimore, Dallas, Indianapolis, Minnesota, New Orleans, New York Jets, and San Diego) have restrictions on their ability to sign unrestricted free agents from other clubs. Those clubs are limited in the number of free agents that they may sign; the limit is determined principally by the number of their own free agents signing with other clubs.
Q. Is there an Entering Player Pool in the Final League Year?
A. The CBA provides that the league has the unilateral right to keep or eliminate the rookie pool in the Final League Year (2010 season). There has been no decision to eliminate the rooke pool.
Q. Is there a Minimum Team Salary in the Final League Year (2010 season)?
A. There is no Minimum Team Salary in the Final League Year (2010 season). The Minimum Team Salary in 2009 was $107,748,000, meaning each team was required to allocate more than $107 million to player costs (not including benefits). The team salary cap in 2009 was $123 million.
Q. Are there individual player minimum salaries in the Final League Year (2010 season)?
Q. Do any player contract rules from capped years remain in place for the Final League Year?
A. Yes, some rules like the “30% increase rule” are still in effect in the Final League Year (2010 season) for player contracts signed in capped years. That rule restricts salary increases from 2009 to 2010. For example: a player with a $500,000 salary in 2009 would be limited to annual salary increases of $150,000 ($500,000 x 30%) beginning in 2010.