NFL’s Jeff Pash: “Forward-looking bargaining about the future of the game” crucial for new CBA

NFL executive vice president Jeff Pash said yesterday that negotiations for a new Collective Bargaining Agreement will take “forward-looking bargaining. It’s bargaining about the future of the game. It’s bargaining to reach a system that will allow growth, innovation, more jobs, more benefits and more pay.”

“We are not looking for an agreement that will swing the pendulum as far in our direction as it currently has been swung in the direction of the players,” Pash added. “We have said to the players, in exactly these words, ‘We do not want four or five years from now you to feel about the agreement the way our clubs feel about it today. We want something that is fair, something that works for both sides, something that will encourage growth in the game and something that will allow both parties and the fans to benefit from what we accomplish at the negotiating table.’”

“We think that there are tremendous opportunities out there – the players have been a very important part of the growth of this league and that can continue and it should continue. If we work together, there is not much that we can’t accomplish but we need to get busy – and we need to get busy now.”

Following is the complete transcript of Pash’s Super Bowl press conference.

NFL Executive Vice President Jeff Pash

Super Bowl Press Conference

February 2, 2011

 

“Good afternoon everyone thanks for coming. Let me just make a few comments about where we are in the negotiating process right now and then I’ll be happy to take your questions. We are just a little bit more than 30 days away from the expiration of our Collective Bargaining Agreement and I think the point we’ve been trying to emphasize particularly in recent weeks is that both sides – and I want to emphasize that – both sides have very substantial incentives to try and get an agreement done by March 4th. We’ve been very open and we’ve commented on it in a number of contexts about what a prolonged delay and uncertainty means from our perspective. We know that we will have adverse revenue effects. We know we will have revenue losses that will be significant – they will grow and they will be cumulative in the sense that they will affect not just the 2011 season but subsequent seasons.

We know, as night falls to day, that if we sustain significant revenue losses, it will be harder not easier to make a deal but the initial agreement will be more costly and more difficult. For everyone’s benefit it makes sense to try to get something accomplished sooner rather than later. I think that is equally true for the players as well because we know that come March, there will be about 500 players who will become free agents. In the ordinary course, those players are many of them would be signing new contracts and hundreds of millions of dollars in bonus payments would be made. If we don’t have an agreement and we are not operating, that won’t happen. Other players who have bonus payments due under existing contracts or salaries, salary advances against the 2011 season, those payments would not be made. We are talking about just in March alone, hundreds of millions of dollars, maybe as much as a half a billion dollars, that will not change hands. As we go forward and March becomes April and May and June, the number of players affected and the number of dollars of pure financial losses will simply grow for both sides. The financial consequences alone ought to be sufficient to compel the parties to get together.

But, beyond that, we have another point which is another factor that we have to be mindful of which is if we do not reach an agreement and there is interruption in NFL football, we have failed to honor the commitment that our fans have made to this League and to this game. Our success as a League and the economic rewards that everyone enjoys only come about for one reason, and that is because of the passion and support that tens of millions of people give to this game. Their commitment is something that we can not ever lose sight of. It is a commitment that is made not just to the clubs, not just to the players, it is a commitment that is made to a game that is bigger than all of us. I know that is something that the Commissioner and our clubs are very, very mindful of and if we can’t get an agreement done, we will have both of us, us and the union, we will have failed to honor that commitment and failed to fulfill our obligation to our fans. We would say again that the time has come for both parties to make a shared commitment to devote all their energy to accomplishing a successful negotiation by the beginning of March. We need intensive, serious on-going negotiations that are characterized by a commitment to reach an agreement. If we can do that, we will honor the commitment that our fans have made. We will spare ourselves and our players extraordinary losses and we will have a game and an economic structure that we can all look back on some years from now and say, we did a pretty good job. We got it right. It is better for everyone.

Now one thing I should be clear on, we’re just about to have an agreement expire that I think everyone on both sides recognizes is unbalanced and is one-sided. I do not think there is a serious debate about that any longer. We are not looking, and we have been as clear as we can be on this point, we are not looking to replace one unbalanced and one-sided agreement with another. We are not looking for an agreement that will swing the pendulum as far in our direction as it currently has been swung in the direction of the players. We have said to the players, in exactly these words, ‘We do not want four or five years from now you to feel about the agreement the way our clubs feel about it today. We want something that is fair, something that works for both sides, something that will encourage growth in the game and something that will allow both parties and the fans to benefit from what we accomplish at the negotiating table.’ We say that not just because that’s the way agreements should work but because – I know this has been fun for you guys and it has been a lot of fun for me, but I’m not looking forward to doing this again in four years if we can possibly avoid it. I’d like to see if we couldn’t accomplish something and I know our clubs would like to accomplish something – that works in the long term for everybody. One of the reasons why we think we can do that is because the Commissioner and our owners have a fundamentally, optimistic view about the future. We do not think that the best days of the NFL are behind it. We think that there are tremendous opportunities out there – the players have been a part, a very important part of the growth of this league up till now and that can continue and it should continue. If we work together, there is not much that we can’t accomplish but we need to get busy – and we need to get busy now. Let me pause there and I will be happy to take your questions.”

On why it is not a sustainable business model the way it is currently constituted especially when you take into account that the players are paid a percentage of the revenues:

“If the only costs that you have were player costs, that might be a reasonable way to look at it – but there are a great many other costs associated with operating NFL franchises and those costs have tended to increase over the years. We’ve also seen, as you know, some challenges in terms of revenue growth. We’ve seen season tickets going down – many teams are holding the lines on ticket prices. You can’t just assume that your revenues will continue to grow at an endless pace. What we are looking for is a business model that’s not just sustainable but one that will allow the game to grow, that will allow innovation, that will allow us to expand into new markets, that will allow growth in the form of new stadiums, that will allow us to take advantage of new technologies to enhance the fan experience. There’s an awful lot that could be done with a business model that would support that kind of growth and investment.”

On the reluctance to open the books:

“We’ve given an extraordinary amount of financial information to the union. The union has complete access to every penny of our revenue including – and they exercise this right on a regular basis – independent audit rights. They can go into our offices. They can go into the clubs and audit all of their revenue down to the penny. They have full access and full audit rights to all costs that are currently factored into the accounting and the agreement today. We have given them, on a club-by-club basis, information about the costs for every other cost that we would like to have credited going back probably 15 years. They have an extraordinary amount of information about revenues and costs and they understand what the margins are. There’s no disagreement that margins are shrinking. There’s no disagreement that costs are going up faster than revenues. There’s no disagreement – and the President of the union said it last week – that the players got a great deal in 2006. There’s no disagreement that this is an unbalanced agreement and that it needs to be reset. It is a question of where the reset is but on the fundamental facts of the economics of the National Football League, there’s no disagreement. We can have a reasonable discussion – and I agree with you, we could perhaps come to a conclusion quickly on where the changes should be and what the amount and affect of those changes ought to be – but on the fundamental facts, there’s no serious disagreement.”

On whether the League has shown the player’s union the entire financial picture in terms of costs and profits:

“We have sat with the union and we have heard one level of financial analysis after another. The union has presented us with financial analysis that they have done with independent economists that they have hired, that have demonstrated precisely the same facts we have shown them. Since we entered into this agreement in 2006, for every additional dollar of revenue that we’ve generated, 70 cents has gone to the players. The players have gotten 70 percent of the incremental revenue that the NFL clubs have generated since 2006. They know that’s not a sustainable model. They know that. They have sat in meetings with us and said, ‘We know you’re being squeezed. We know your profits are being squeezed.’ They have sat in meetings with us and said quote, ‘You’re getting crushed.’ Close quote, by non-player costs. They’ve said that too us. They know. There is not a difference of opinion on the fundamental facts and that is a reasonable discussion to have, about what do and how much change is appropriate. That’s what collective bargaining is about. But on the basic facts, there is no serious difference of opinion.”

On whether he feels that both sides have made a commitment to getting a deal done:

 “I hope so, I really do. I think that what we are going to see, I hope, is a decision that we are going to have the litigators and the lobbyists stand down and the negotiators take center stage. We both have a lot to lose and we both have a lot to gain. When you are in that kind of a construct, it should be relatively easy to get to a meeting of the minds. We have always done it in the past.”

On how the agreement became unbalanced and what shift the League is asking for:

 “I’m not going to and I never have been willing to get into the specifics of the bid and ask, especially now. Especially now, when we are entering a critical and sensitive stage of the negotiations where I hope we are going to drive to some conclusions. I think, to get into the specifics of what we are saying and what they are saying would be a mistake. We need to talk to each other. We need to have that conversation together.

In 2006, there were a number of fundamental changes in the nature of the agreement, which I would be happy to go through with you; (Senior Vice President/Treasurer of Club and Labor Finance) Joe Siclare, (Senior Vice President of Labor Relations) Peter Ruocco and others can go through it as well. It had the effect of both broadening the base of revenue on which the salary cap was calculated and increasing the percentage of that base that went to the players. The effect was a very substantial increase in player costs, almost immediately, combined with continuing growth in other costs, combined with, what no one anticipated at the time which was the worst economic conditions, certainly in our lifetimes and probably for a good 70 or 80 years. You had, in many ways, a perfect storm. As a result of that, we have said there needs to be some economic modifications. You don’t have to go farther than what (NFLPA President) Kevin Mawae said last week in his description of the deal. He is right. He got it right. I can’t quarrel with him.”

On whether the League is trying to get back what they gave up in 2006 in terms of revenue:

“This has nothing to do with get backs. This has to do with creating a business model that will allow us, not to look backwards, but to look forward, to have an economic system that will fuel growth. Over the last 10 years, player compensation has doubled. If we have an economic system that works, we could do that again. We wouldn’t have to just play one game a year in London. We could play multiple games. Maybe we’d have a franchise in London. We wouldn’t necessarily have to have rosters where they are now. We could have bigger rosters and more jobs. We wouldn’t have to have benefit levels where they are now; we would be able to expand benefits. We would be able to expand research. We would be able to expand health and safety programs. We would be able to have stadiums in Los Angeles. That would be a nice thing for California’s, current or displaced. It would be nice to have a stadium there. We could have a new stadium in the San Francisco Bay area. We could have a new stadium in Atlanta. We could have a new stadium in Minnesota. There is a lot out there, things that small minded lawyers can’t even dream of, but we need to have a system that fuels it.”

On whether an 18-game season would be part of the new business model:

“An 18-game season could be a part of a new business model. It doesn’t have to be. It could be. We think, and we’ve said that if you are going to have an 18-game season, there should be changes in the offseason structure and in the preseason structure to make up for that. We do think the economics of an 18-game season could be compelling. The best reason for an 18-game season is that it is responsive to fan interest. If the fans have been clear on anything, it’s that they have little use for four preseason games. They don’t like them. They don’t want to pay for them. They don’t get much value out of them, so in an environment where you have challenges anyway giving your fans more value for their dollar would be a good thing. I’ve said that it is easier to accomplish that with an 18-game regular season. I certainly think that’s true.”

On what the League has told future Super Bowl organizing committees and how this situation has affected them:

“We are telling everyone what I am saying to you today, that our focus is 100 percent on reaching an agreement with our union. We can reach an agreement. We will reach an agreement and we are committed to doing so and committed to having uninterrupted football. That is our goal.”

On why there was not a bigger commitment for the two sides to come together up until this point:

“I can’t speak for the other side. We have been pretty clear about wanting to do that. I think some of that is timing. Some of it is how people view their leverage, but what is past is past. We need to concentrate on the next few weeks and whatever has happened up until now, put it aside. Let’s get together and work as hard as we can. If we put the effort into negotiating that we have put into litigating, news conferences, and pep rallies, and everything else, we really could get something accomplished that could be pretty good.”

On if a season with 16 regular season games and two preseason games is an impossible revenue situation:

 “On 16-2, I think – and part of negotiating is – you have to be open to any range of possibilities, but you also have to be realistic about what those possibilities are.  16-2 is, I would think, a lower value proposition in some ways than 16-4 or 18-2, and if all your costs are the same, which they probably would be, or certainly the majority of your costs would be the same if you had a 16-2 season, you’d have to make that up somewhere.”

On if there is one aspect of the negotiations that he thinks will kick-start the momentum towards an agreement if progress is made:

“I think the overall economics and how we structure the cap going forward is a critical issue, the concept of having a more sustainable business model, one that fuels growth.  I think we can have a common understanding of something that I mentioned before, which is that there’s a lot of reason to be optimistic about the future.  This is not a stagnant business.  It’s not a business that’s done as well as it can do and we’re going into some sort of inevitable decline.  If both sides accept that and recognize that and want to take advantage of those opportunities, then we can put a business model together and other pieces fit in place.  There is probably more common ground on a number of key issues than people may realize, but obviously the fundamental economics have to be addressed and we have to come to a conclusion on it.”

On if there has been a change in how each side views leverage:

“I don’t know.  That’s a good question.  I think just to take maybe not even 30 seconds, there was a decision that the Special Master handed down about our television contracts.  The union had filed a claim saying that the provisions in the television contracts that provide for financing in the event of a work stoppage were a violation of the Collective Bargaining Agreement and other agreements.  They wanted the special master to enter an order barring us from having access to any of those funds in the event of a work stoppage, and he issued a decision which the union has appealed to Judge Doty.  In the decision, the Special Master declined to grant that relief.  He did not bar us from having access to any of those funds.  He did find that the payment for one game with NBC which we were getting in 2011 should have in fact been received in 2010, so he entered a modest award of damages in favor of the players of about six million dollars, but in all other respects, he left the television contracts and everything else unchanged.  So we will have access to the full amount in the event it’s needed, but we’ve been clear that we’ve never been counting on this money.  It’s not something that we were depending on for any of our own planning.  We are fully prepared for all the contingencies without regard to the television money.  When you think about it for just a moment, the television money, if we take any of it, we have to pay it back with interest.  It’s not money that we get to keep, so it goes to the point I made earlier.  When we do get to a deal, if that television money has already been used, that’s less revenue that is available to pay players.  It’s not good for us.  It’s not good for them.  So again, there’s a shared, common incentive to avoid a work stoppage, to avoid revenue losses, to avoid financial pressures which will inevitably be negative for both of us.”

On the player’s union saying that they’re only allowed to audit the revenue and if it’s a staring contest at this point:

“No.  I mean no disrespect, but we’re correct on that.  They are allowed to audit the revenue and they are allowed to audit all the costs that are currently factored into the agreement.  We have said that with respect to any additional cost that we want credited, if they are prepared to agree to include those costs as part of the new agreement, they will have full audit rights on those items as well.  That’s only fair.  We’ve never contested.”

On if he knows why the player’s union is saying that:

 “I do not know.  Well, it’s a good rhetorical point, but I don’t know otherwise.”

 

On if he has a reaction to DeMaurice Smith’s characterization that this is a war and if there is an effort to tone down some of the negotiation talk this week in order to put more attention on Sunday’s game:

“On your last point, the attention should certainly go to the game this week.  These two teams have accomplished something quite extraordinary.  Two old-line franchises like this, two small-market franchises like this, coming together for the Lombardi Trophy, it’s incredible and it’s something that should be celebrated.  I would guess that the hundred million-plus people who are going to watch this game, they’re going to be watching the game.  They’re not going to care very much about what we’re talking about, and that’s as it should be.  On what DeMaurice said, I don’t know.  I just go back to what the Commissioner said.  This is not a war, it’s a business negotiation.  I don’t even know if I’d call it a business dispute. It’s a business negotiation.

We need each other.  We can’t accomplish anything without players, and the players can’t really accomplish much without the clubs.  If you look over the past 15 years, we’ve done an awful lot when we’ve worked together.  We ought to be approaching it in that spirit.  I guess the thing about that interview as I think about it that concerned me a little bit more were the statements that you don’t negotiate your way to strength and no one ever talked their way into a good deal.  That was kind of disconcerting because I think if that really reflects the union’s mindset, then we have a big problem ahead, because that’s not at all where we are.”

On how the League can ensure that players will benefit financially from an 18-game season:

 “Again, I don’t want to get too specific about bid and ask. But obviously, if there is additional revenue coming into the League and the players are getting a substantial percentage of that revenue, you would expect it to flow into their contracts. There would be ways in which you could have play time, performance bonuses where you could have supplemental payments. You could devote additional payment into enhanced benefits. If you expand the rosters, that’s another way of taking care of guys who might feel like they’re on the bubble because their expanded rosters will give them enhanced career opportunities. There are a lot of ways to make sure that the players get a full and fair share of the additional revenue that you earn.”

On if the NFL is prepared to institute a lockout or if it has alternative strategies in place:

 “Well, the No. 1 strategy, and you put your finger on it, is good-faith negotiations. That’s what’s necessary and that’s what I hope we’re going to see a lot of over the course of the next four or five weeks. If we get to early March and there’s not an agreement, I don’t know what decision the clubs would make, but they’re certainly prepared for the full range of alternatives. Once the agreement expires, I think everybody understands what the options are and we’ll all have to assess the situation at the time. I said last week, if you’re making progress, you can stop the clock. It’s not a Thelma and Louise-type situation where you just go over the cliff and that’s all you can do.”

On if he thinks he has made progress with the players in making March the priority:

“Well, I hope so, because March is a date of very considerable significance. Just think about the calendar. I’ve heard people say, ‘Well, you can make a deal in August or you could make a deal on Labor Day.’ But just think about it. If you make a deal Sept. 1, or something like that, what happens then? There is going to be overwhelming pressure to get the games going as quickly as possible. But you can’t just start playing five days later. How will you put your rosters together? By August or September, you will have more than 1,000 unsigned players out there between draftees, unrestricted free agents, restricted free agents, guys coming back into the league. How will you go about having any kind of an orderly signing period? Then you have to have a training camp of some sort. There will have been no OTAs, no minicamps. You’ll have to have some kind of training camp, some sort of preparatory period. So I think it becomes really quite challenging if you let yourself get to that point. So we think March is a pretty serious date.”

On if an agreement is reached by July 1:

“Well, you could, but again, think about it. It’s July 1, what kind of a free agent signing period can you have? How many preseason games are you playing? How much revenue have you lost by July 1? There’s a lot of reason to get a deal done as soon as possible. It doesn’t get better with time.”

On how much revenue would be lost by July 1:

“A lot of it depends on what kind of preseason you would end up with. What we said is if you lost the entire preseason, it would be upwards of $1 billion. I don’t know how much you would salvage if you had a deal done by July 1.”

On where he stands on benefits for retired players:

“I think that’s a very important part of any new agreement and that’s one where I think there is some common thinking. We have, from the start, proposed benefit improvements, particularly focused at players who left the league before 1993 when the whole new sweep of benefits that current players have began to come into place. One piece of information I can share with you, we have instituted in conjunction with Transamerica insurance company, a new long-term care program for retired players. We estimate that there will be about 2,500 players or so, retirees eligible for that between the ages of 50 and 75.

The long-term care benefit is fully funded by NFL clubs. We did ask the union to participate in it as a shared program and they declined to do so. It was something we were urged to do by a number of retired player groups including NFL Alumni and we discussed the idea with the Gridiron Greats and Coach (Mike) Ditka with Bruce Laird at Fourth and Goal and other advocacy groups for retired players. So we’re hopeful that this will be one more program that will be of some value to our retirees. The one other thing I would say, people have asked this. Even if we get past March 4 and the agreement expires, we are not going to make any changes in the level of benefits currently provided to retirees. So the pension, disability, the player care foundation, all of that will continue to operate just as it is operating today.”

On if the League is still asking for $1 billion dollars in credits in current negotiations:

“Again, I think getting into sort of a point-counterpoint with DeMaurice (Smith) and his people is probably not the best thing to do. That’s a discussion we have to have. Mathematically, if you take the 18 percent, it probably does come to about $1 billion. But we have documented for them, and as I said, given to the union on a club-by-club basis going as far back as 15 years to show them the change and growth over time. I don’t think there is a difference of opinion as to the facts. There may be a difference of opinion as to what the appropriate response to those facts are, but there is no difference of opinion as to the economics.”

On if there will be a salary cap in any new agreement:

 “That’s been the position that we have taken thus far. I think the cap has worked very well. It’s been a part of promoting the competitive balance that makes the NFL as attractive as it is. I think it has been a contributor in allowing us to experience the growth that we have in the past 15 years and we think moving away from the cap would not be constructive for many clubs and many fans around the country.”

On if it would be acceptable for the clubs to receive a greater percentage of revenue in the future and not all at once:

“I think that’s what we’re doing. We’re not asking anyone to write us a check. We’re talking about restructuring the way the cap is calculated and how the revenues are shared going forward, starting in 2011.”

On how far away the two sides are on an agreement:

 “I honestly don’t know because I think the only way you know the answer to that is to really get into the conversations with them. And I’ve said, one of the things about collective bargaining is that you can have a long meeting and all kinds of exchanges and go back and forth. Then the meeting ends and you leave the room and you say, ‘Well, we really didn’t agree on anything.’ But what you did was you gave people and they gave you something to think about. You go back and sit in your office, and they’ll talk to their committee and we’ll talk to our committee and we’ll say, ‘OK, what do you think about this? What if we did this? How might they react?’ And you start building block by block and making progress that way. So I don’t know where we are, but I know where we need to get and we’ve got to get started. We’ve got to kick off before we can score.”

On why they gave the offer to the Players Association four years ago:

“You can ask that and you probably have your own answer. People thought it was the right judgment to make at the time and there’s no point in trying to undo history. It never works. So we’ll just go forward. That’s what we have to do.”

 

On incentives to make a deal:

“I think they’re very substantial incentives on both sides to make a deal. That’s what I said at the outset and I really do believe that to be true. Beyond that, all of us – players, clubs, league staff – the only reason we have any kind of business is because of what support we get from so many millions of people across the country. We have an obligation to them too. We’ve offered concessions on points that are important to the union. We’ve offered to make changes. It’s not concessionary bargaining. It’s forward-looking bargaining. It’s bargaining about the future of the game. It’s bargaining to reach a system that will allow growth, innovation, more jobs, more benefits and more pay. It’s about a status quo –  kick the can down the road five more years – or focus on the future and seize the opportunities, shared opportunities. Not owner opportunities, shared opportunities. Anyone who believes that the best days of the National Football League are behind them in our view is fundamentally wrong. This is a great game. It’s played by great men and it’s supported by great fans. That’s an unbeatable combination if you work together.”

On areas for costs involved:

 “Probably the most obvious example would be stadiums. When we first made the deal with Gene Upshaw in the early ‘90s, there were only two clubs in the league that had substantial amounts of private money in a stadium. Now, obviously, that has changed completely. You can look in our own area where the Jets and the Giants have built a new stadium, which opened this year. They have a debt that they’re sharing between $1.5 and $1.6 billion. That’s debt that has to be paid. Plus, they have tens of millions of dollars in operating expenses every year. There are requirements with respect to maintenance. There are requirements with respect to capital improvements. Jerry Richardson, who was one of the first owners to privately fund a stadium completely, has talked about what it means to keep that stadium attractive in terms of scoreboards, video equipment, refurbishing the concession stands and suites. Things like that. Anyone who has owned a house knows that it doesn’t just maintain itself. You’ve got to put money into it. You’ve got to improve it. You’ve got to keep it going. That’s as true of a stadium as it is to a home.”

On shared opportunities for the players and owners:

 “I don’t accept the fact that they’ll never get them. I also don’t accept the fact that players have a mindset that only extends out three-and-a-half years. I think the players who played in this league in the ‘80s and the ‘90s, for example, are concerned about what the league is like for the players today. Kevin Mawae is a retired player, but he is concerned about what the current players and the future players are going to have. I don’t think that the mindset is quite that narrowly calibrated. I also think that there are a lot of opportunities that could come into fruition quite quickly. If we get a stadium in Los Angeles and a team in Los Angeles, that’s a quick opportunity. The 49ers would be ready to go, either on their own or perhaps jointly with the Raiders on a new stadium. Atlanta is ready to go. Minnesota might be ready to go very soon. There are a lot of opportunities. As I say, we don’t just have to have one game in London. Why can’t we have multiple games in London, or not just London, but Mexico City or Japan? There’s tremendous following for NFL football, not just here, but all over the world. We ought to get out there and develop that. We could develop that and players would get the benefit of that right away. Mark Waller could spend the rest of the day telling you about opportunities and business models and he could do it in the most charming British accent.”

On establishing a division in Europe:

“You’re down the road quite a ways. You know, who’s to say no. That’s the thing. It just emphasizes that there is a bright future out there if we can take advantage of it.”

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