FACT CHECK: DeMaurice Smith at the University of Virginia’s Darden School of Business

NFL Players Association Executive Director DeMaurice Smith recently spoke with MBA students at the University of Virginia’s Darden School of Business.  Smith discussed a wide range of issues on the NFL’s labor negotiations.

Following is a FACT CHECK on a selection of Smith’s answers:

Smith: “You never stop being a trial lawyer. So, really that is the posture of the case. The league is opposing the injunction. If they win, the lockout continues. 1,900 players and their families will be out of work. Their health insurance has been cancelled.”

FACT: All NFL players are eligible to continue their current NFL health insurance under the federal law known as COBRA, under which affected employees are entitled to continue their employer-provided health insurance coverage at their own or their union’s expense. To date, 1,192 players have signed up for COBRA and they have until May 10 to do so.

Smith: “Not even possibly” – answer to question: “At the end of that two-year negotiation period before the lockout, you called the NFL’s final offer possibly the worst deal in sports history?”

FACT: The proposal owners made to the players on March 11 would have paid players $19-20 billion in cash and benefits over the next four years (2011-2014) – a 14 percent increase representing an additional $2 billion compared to the past four years. In addition, the proposal would have:

• Reduced the offseason program by eliminating five weeks and cutting OTAs from 14 to 10 days.
• Put limits on full-padded practices in the regular season. 
• Increased days off. 
• Increased retirement benefits so that more than 2,000 retired players would have received almost a 60% increase in their pension benefit. 
• Offered players the opportunity to have lifetime coverage in NFL medical plan. 
• Offered for the first time to revise disciplinary system so that a third-party neutral arbitrator resolves all drug and steroids cases. 
• Offered improvements in the disability plan, the 88 Plan, and post-career benefits, including education and career transition programs.

Smith: On how much the March 11 NFL proposal would reduce the players’ share of revenue:  “The day that you sign that deal, the 50 percent number that we had since 1987 goes automatically before the ink is dry on the deal to 45 percent. In Year 1. The deal that we would have signed with the owners would have probably been about a 10-year deal. The ultimate result of us signing this deal would be that within 10 years that 50 percent would be down to 40 percent of all revenue.  As you march forward from that point, by the time we got to the 15^th year of a deal, you could see players getting shares of revenues that were in the 30 percent range.”

FACT: Smith’s statement is based on the flawed assumption that the current deal — which everyone agrees was one-sided for the players — would have stayed in place and just marched ever onward with no re-balancing. It assumes revenue growth that may or may not materialize. No one knows how many, if any, new stadiums will be built, as one example. There are none currently in the pipeline. The statement ignores the explicit commitment in the NFL’s March 11 proposal to a “true up/reset” in 2015, the same year the union wanted to reset the share coming off a player cost of $161 million per club in 2014, which was the union’s requested number for that year. The March 11 proposal had the 2011 cap at $141 million (union was at $151 million;  NFL at $131 million; NFL clubs said “we’ll split the difference”), rising to $161 million in 2014 (meeting the union’s demand for 2014). That’s a 14 percent increase in three years ($20 million per club) and $2 billion more in player costs than was spent in the previous four years. Then the cap would be mutually re-set in 2015. The clubs would guarantee those 2011-2014 numbers even if revenue did not meet projections. Clubs actually spent $140.6 million in 2009 and $138.4 million in 2010 on salary and benefits. So the $141 million proposed cap for 2011 was higher than the actual cash spending of 2009 and 2010.

Smith: “This lockout will cost every team’s city $160 million in lost revenue for a year. $160 million.”

FACT: Those numbers were conclusively refuted by independent economists in a story by Eric Stirgus of the Pulitzer Prize-winning Politifact.com and the Atlanta Journal-Constitution. Stirgus consulted a number of experts and posted links to four of the economic impact studies he reviewed. He concluded: “Each independent expert we talked to believed there will be little economic impact if there is no NFL action next season, since they believe people will find other ways to spend their money. We rate the NFL Players Association’s claim as False.”

Smith: “The fundamental principle of our business model necessarily includes that every player only plays for an average of 3.2 years.”

FACT: The average career length for a player who spends at least three games in one season on the active and/or inactive rosters and/or injured reserve is 5.3 years. In addition, the average career length for a first-round draft pick is 9.3 years.

Smith: “You have a group of owners who don’t want financial transparency, who don’t want us to understand the true financial picture of football.”

FACT: The NFL publicly released its proposal to the players on March 11. We offered to show the union five years (2005-2009) of year-by-year league-wide operating profits based on audited club reports reviewed and confirmed by Deloitte & Touche. We offered to show the union the number of clubs that had declines in operating profits from 2005-2009, and by how much on a cumulative basis, again based on audited financial statements. We offered the NFLPA the ability to review Deloitte’s work. We also offered to give five years (2005-2009) of audited individual club financial statements to a third-party accounting firm to verify for the union the profitability data provided to the union. And there were no conditions put on the information offered, meaning that they could have asked for more.  But the union’s concern was giving up its public relations position. As linebacker Hunter Hillenmeyer wrote in an NBC Chicago blog post on April 1, “It’s true, the NFL did offer some financial info towards the end of mediation. We rejected it, not because nothing is better than something, which it is not, but because the perception would then be that we got what we needed.”

NFL Charities awards $1 million in grants to current & former players as part of annual player foundation grants

NFL Charities, the charitable foundation of the National Football League, has awarded $1 million in grants to support 87 charitable foundations of current and former players.

Players receiving grants this year include New Orleans Saints quarterback Drew Brees, Indianapolis Colts quarterback Peyton Manning and Kansas City Chiefs guard Brian Waters and former players Derrick Brooks, Kurt Warner and Steve Young.  The grants, which are distributed in amounts up to $50,000, are part of NFL Charities’ annual player foundation grant initiative.

“We are proud to support current and former player foundations and applaud all players’ efforts to make their communities healthy, happy, and safe,” said NFL Commissioner Roger Goodell, president of the NFL Charities board of directors.

The NFL has long supported players’ philanthropic endeavors, and NFL Charities has awarded more than $17 million to player foundations over the course of two decades.  Current and retired players that have received NFL Charities grants in previous years include Carolina Panthers wide receiver Steve Smith, free agent Jason Taylor and Dallas Cowboys tight end Jason Witten and former players Troy Aikman and Dan Marino.

NFL Charities is a non-profit organization created by the 32 member clubs of the National Football League to enable the teams to collectively make grants to charitable and worthwhile causes on a national scale. Since its inception, NFL Charities has granted more than $140 million to more than 1,400 different organizations. NFL Charities’ primary funding categories include: sports-related medical research and education grants; player foundation grants in support of the philanthropic work of current and former NFL players; impact grants to support national youth health and fitness education initiatives as part of a league-wide commitment to fight childhood obesity; financial assistance for former NFL players in need via direct support to the NFL Player Care Foundation; and team program grants that supplement the charitable and community activities of the 32 NFL clubs.
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Panthers’ Jerry Richardson & Packers’ Mark Murphy send letter to all retired players highlighting benefits proposed on March 11

Carolina Panthers owner Jerry Richardson and Green Bay Packers president Mark Murphy — both former NFL players and members of the NFL’s negotiating team – today sent a letter to all retired players outlining the benefits they would have received in the NFL’s March 11 proposal to the NFLPA.

Below is complete text of the letter.

Dear Retired Player:

On March 11, the NFL Players Association – which states that it represents players “past, present and future” – walked away from the bargaining table, announced it was giving up its status as a labor organization, and sued the NFL in Minnesota.  As retired players who are members of the owners’ bargaining committee, we have a unique perspective because we understand these issues from all sides.  More importantly, we understand the challenges former players and their families face. 

The union walked away from mediation, cutting off negotiations on an offer that was made by the clubs to avoid a work stoppage and that would have provided important improvements in retired player benefits.  We know some former players have struggled financially.  This was a real attempt to address those financial concerns.  We are committed to making sure that when we reach a new agreement it better addresses the needs of our retirees.  It’s the fair thing to do.  It’s the right thing to do and it recognizes and respects your contributions to our game.

One of Commissioner Roger Goodell’s highest priorities has been meeting with retirees, their families, and those who advocate on behalf of retired players.  Leaders including Mike Ditka of Gridiron Greats, Bruce Laird of Fourth and Goal, and George Martin of NFL Alumni have met with NFL owners face-to-face to discuss issues affecting former players and their families.  We have developed a constructive relationship with these men and others who promote the interests of retired players.  Our bargaining proposals reflect the concerns we have heard, and we want to help.

George Martin was invited to speak to NFL owners at our recent league meeting in New Orleans. He again stressed the need for increased pensions and other improvements for retired players. George also reported to his board and chapter presidents that his subsequent meeting with the NFLPA-Retired Players Group in Florida did not go as well.  In a letter to his board, he described the atmosphere as “defiant, accusatory, and outright disrespectful.”

It is important to us that you know the facts about what we offered the union.  Among the elements of our March 11 proposal that would have improved benefits for former players are the following:

• A new pension supplement for retired players aged 55 or above.  This supplement would give more than 2,000 retirees an immediate increase in pension payments averaging almost 60 percent.
• Improvements in the Disability Plans and the 88 Plan to ease the qualifications for disability benefits and increase the value of those benefits to qualifying retirees.
• Expanded career transition programs to assist former players in developing second careers, both in and out of football.
• A new rookie pay system that would re-allocate more than $300 million per draft class to fund benefits for current and retired players.

These are significant offers that would have a measurable impact on the people who made football great.  Sadly, the players’ union wasn’t listening.

Nobody, least of all Commissioner Goodell and the owners, is pleased that negotiations broke down and that a work stoppage has begun.  But even though current players are locked out, the clubs will fully honor their commitments to you.  You didn’t cause this dispute, and you won’t have to pay for it. 

This means that despite various reports or comments to the contrary, there will be no reduction in any retiree benefit programs. We will continue to make all pension payments and contributions.  If you are currently receiving post-career medical benefits, you will continue to do so. There will be no reduction in payments or coverage under the disability plans or the 88 Plan.  And we will continue to accept applications from retired players for all benefit plans.  We’re serious about our commitment to you and we will keep our word.

For example, you asked for greater access to long-term health care, and so we recently instituted a new program to provide long-term care insurance for retirees.  Because the union refused to participate, this insurance program is being funded entirely by NFL owners. Transamerica Life Insurance is now contacting retired players to solicit applications.  Coverage may also be available to your spouse at a reduced premium. 

Further, the NFL will maintain the benefits available through the NFL Player Care Plan.  The plan provides joint replacement and assisted living benefits, a discount prescription drug card, neurological and spine treatment programs, a Medicare supplement program, and vested-inactive life insurance.  We did this to improve your quality of life off the field because you gave so much on the field.

An independent organization primarily financed by the NFL owners, the Player Care Foundation (PCF) was established to improve the quality of life for former players through financial grants and research.  PCF provides monetary grants to former players experiencing financial hardships, including grants to those who need assistance in paying for the costs of Player Care Plan programs such as joint replacement, spine treatment or neurological care.  PCF also sponsors cardiovascular and prostate screening programs.

For information regarding any of the above retired player benefits, programs, and services, please call the NFL Player Benefits Department at 1-800-NFL-GOAL (1-800-635-4625).

We want you to be fully informed, and to know the facts.  The NFL Players Association recently stated that NFL owners contribute nothing to the pensions of former players. (DeMaurice Smith on WFAN Radio in New York: “How much money do the NFL teams provide to the former player pensions? The answer is zero.”) In fact, in the past 10 years alone the NFL owners have contributed $2.7 billion to the funding of benefit plans for current and former players.  On March 30, NFL owners paid almost $180 million to fund pension, disability, medical and other benefits for the 2010 season. 

Commissioner Goodell and the owners are prepared to resume collective bargaining immediately.  The longer we wait, the more economically difficult it will be to reach an agreement.  When we do resume negotiations – and we will – our top priorities for a new agreement will include the benefit improvements described in this letter.  We do not know what the NFLPA may seek for current players, but we will not set aside your needs.  Your voice needs to be heard, and we will listen.

Sincerely,

NFL owners pay $245 million into player benefits

The NFL clubs will complete their contributions toward 2010 NFL player benefits on Thursday, bringing the total amount funded by owners for the 2010 season to $245 million.

NFL owners will deposit $177 million on Thursday with BNY Mellon to complete the funding for the 2010 season. Ownership contributions fund player benefits that include the pension plan, group medical insurance, the disability plan, and the ”88” program for retired players with dementia or related conditions.

“NFL ownership is proud of the outstanding benefits that NFL players have enjoyed in recent years and the improvements that have been made for retired players,” said Carolina Panthers founder and owner Jerry Richardson, a former NFL player who co-chairs the NFL Management Council Executive Committee. “We have more work to do, especially for the retired players, and look forward to further improvements being part of the new NFL Collective Bargaining Agreement.”

In the past 10 years alone, NFL owners have contributed more than $2.7 billion for the funding of the various NFL benefit plans for current and retired players.

BNY Mellon is a leading investment management and investment services company based in New York City. It was established in 2007 from the merger of Mellon Financial Corporation and The Bank of New York Company.

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NFL reaction to NFLPA’s comments about recent court ruling on workers compensation:

“The NFLPA’s statements regarding the court’s ruling are completely inaccurate. The federal court decision issued last week concerned only the question of the proper calculation of workers compensation benefits received by NFL players who also have received from their clubs injury protection payments under the recently expired CBA. The court ruled that a prior arbitration decision on how such offsets should be calculated under the NFL Player Contract should be enforced. The NFL clubs have fully abided by that decision. Contrary to the NFLPA’s statement, there was no finding by the federal court of any ‘unlawful’ conduct or any finding that an NFL club has failed to pay workers compensation benefits due to players under state law. It should also be noted that this subject was extensively discussed in the recent CBA negotiations that were abruptly terminated by the NFLPA.”

Former Patriots center Jon Morris: “I give the Krafts all the credit for making the alumni feel so special”

Former New England center Jon Morris discussed the outstanding relationship that the Patriots and the Kraft family maintain with the team’s alumni following his recent selection to the Patriots Hall of Fame.

“I consider this the crowning achievement of my football life and I am so thankful to the Kraft family and the selection committee for allowing me to experience this feeling,” said Morris, who played the first 11 of his 15 NFL seasons with the Patriots (1964-74).

“When I first retired from the Patriots, the alumni were not meant to feel welcome,” Morris continued. “I don’t say that to be critical, it was just different. Once your career was over, it was over. You cannot be a player forever and we understood that.

“But, when the Kraft family came along, they changed all that. It hasn’t been just a one-time thing, either. They have maintained a relationship with the alumni since he bought the team. I just think that is the neatest thing that has ever happened. It is one of the reasons that being in the hall of fame is such a big deal. They have made it a big deal. I give the Krafts all the credit for making the alumni feel so special and I look forward to being a part of this year’s hall of fame ceremony.”

Morris was selected by a 10-person senior committee which includes longtime Patriots beat writers and staff. The committee was approved by Patriots Chairman and CEO Robert Kraft to ensure that early-era players receive consideration for Patriots Hall of Fame induction.

In his Patriots career, Morris earned seven consecutive All-Star appearances with six AFL-All Star games (1964-69) and was an AFC Pro Bowl center in 1970. His seven league All-Star selections rank second in Patriots history behind Pro Football Hall of Famer John Hannah (9).

FACT CHECK: Despite union claims, NFL clubs contributed more than $350 million for retired player pensions in last two years

Former Buffalo Bills defensive back (left) Jeff Nixon recently wrote a column to set the record straight on the funding of retired player benefits. Throughout the story, Nixon, a member of the national advocacy committee for the “Fourth and Goal” organization of NFL Alumni, corrects statements made by NFLPA executive director DeMaurice Smith last week on WFAN Radio in New York.

“Right now as we speak, how much money do the NFL teams provide to the former player pensions? The answer is zero,” Smith said in the interview with WFAN’s Mike Francesa.

“Teams pay nothing to former player pensions right now, and it’s been that way since 19…it’s been that way since history,” Smith continued. “So I think it’s disgraceful that teams don’t pay anything to the former players who made this game great.”

“Now let’s do some fact checking on what DeMaurice Smith said,” Nixon writes.

“First of all, the NFLPA’s own website – under the section Former Players Frequently Asked Questions regarding the Pension Plan – it states that “The increased benefits, and a new 88 Plan for retired players with dementia, will be funded by about $250 million of owner contributions over the next six years.

“So as you can see, DeMaurice Smith and the NFLPA acknowledged on their own website, that the owners are contributing money to the Pension Plan,” Nixon continues. “Hasn’t DeMaurice Smith ever wondered why the Pension Plan is named after two former NFL Commissioners?”

“It’s named after Bert Bell and Pete Rozelle because they were the owners’ representatives that were responsible for negotiating the NFL pensions that players receive now and in the future.”

“The 2006 CBA – and all previous CBAs,” Nixon notes, “have clearly stated that the owners are responsible for all contributions to the Pension Plan. You can read it in Article 3 – Contributions - of the Bert Bell/Pete Rozelle NFL Player Retirement Plan.”

“According to AON, the actuarial consultant for the NFL Pension Plan, the NFL owners contributed $187.8 million to the NFL Pension Plan in 2009 and $166.7 million in 2010,” Nixon adds. “In 2010, the Pension Plan paid out more than $63 million to retired players currently receiving pensions.”

For the complete story, click here.

NFL Alumni’s Jeff Nixon: Current players offered lifetime health benefit

Former NFL player Jeff Nixon (left) writes under the header “Current players offered lifetime medical.” Nixon, a member of the national advocacy committee for the “Fourth and Goal” organization of NFL Alumni, notes that under the proposal from NFL owners on March 11, “current players were offered the right to continue participating in the NFL’s medical plan after they retire.”

NFL Executive Vice President Jeff Pash outlined that portion of the proposal last week in an interview on Sirius NFL Radio.

“One of the benefits that was created in the last agreement, which we would be continuing, was a health savings account where players, over the course of their career, can build up hundreds of thousands of dollars, in a benefit fund, sort of like a 401k, but for medical expenses which they could then use to pay the premium to stay in the medical plan so there would be no issue of preexisting conditions.,” Pash said. “There would be no issue of trying to buy insurance as an individual or having to pay the higher rates when you are outside the group.  You’d have the same quality of care and the same network all over the country.  We thought that the reaction of the players and the reaction of union officials to that proposal was really very positive.  That is obviously the first time that the opportunity has been available from the NFL.”

Nixon also discussed the heath reimbursement account that active players can draw upon to pay for health insurance.

“The Gene Upshaw HRA (Health Reimbursement Account) was a benefit that former NFLPA President Troy Vincent and Gene Upshaw were successful in negotiating into the 2006 CBA,” Nixon wrote.

“A player is eligible for the HRA Plan if (a) he earned a credited season under the Bert Bell / Pete Rozelle NFL Player Retirement Plan for 2006 or for any year after that (if a Salary Cap was in place) and has a total of three or more credited seasons, or (b) his last credited season was either 2004 or 2005 and he had a total of eight or more credited seasons,” Nixon continued. “Players receive $25,000 for each of their credited seasons and an additional $50,000 when they achieve their third credited season.

“Eligible players did not receive $25,000 in 2010 because it was an uncapped season and under the CBA rules that were agreed to by the NFL and the NFLPA, the owners were not required to contribute to the fund.”

For the complete story, click here.

FACT CHECK: Players eligible for health care under COBRA & were offered lifetime health benefit

Jacksonville Jaguars running back Maurice Jones-Drew wrote on Twitter earlier today about what he called the lack of available health care for NFL players.

“I’ve been hearing a lot about players and health insurance so I want to clear it up,” Jones-Drew wrote. “It’s not that we can’t afford it. The insurance companies won’t take us [because] of all the injuries we have. I’ve been denied twice trying to find an insurance company for my family and I.”

In fact, all NFL players are eligible to continue their current NFL health insurance under the federal law known as COBRA, under which affected employees are entitled to continue their employer-provided health insurance coverage at their own or their union’s expense.

Furthermore, in a letter to players yesterday, Commissioner Roger Goodell detailed a new post-career health benefit the NFL proposed to the NFLPA last Friday.

“For the first time,” Commissioner Goodell wrote, “players and families would be able to purchase continuing coverage in the player medical plan after retirement for life, and could use their health savings account benefit to do so.”

Commissioner Goodell letter to players: “We believe the offer presented a strong and fair basis for continuing negotiations”

Commissioner Roger Goodell yesterday sent a letter to all NFL players, detailing the proposal that NFL clubs made to the NFLPA last Friday.

“We want you to understand the offer that we made to the NFLPA,” Commissioner Goodell wrote. “The proposal was made to avoid a work stoppage.  Each passing day puts our game and our shared economics further at risk. We believe the offer presented a strong and fair basis for continuing negotiations, allowing the new league year and free agency to begin, and growing our game in the years to come.”

Among the details of the proposal detailed by the Commissioner:

• A salary cap for 2011 that would avoid a negative financial impact for veterans.
• Extensive changes in off-season work requirements that would promote player health and safety while also encouraging players to continue their education and promote post-football career opportunities.
• Reduction in preseason and regular-season practices with pads and with contact and increased days off.
• Expanded injury guarantees – including a guarantee of up to $1 million of a second year of a contract for players injured who can’t return to play.
• Lifetime access to medical coverage for players and their families after a player’s retirement.
• Enhanced retirement benefits for pre-1993 players. More than 2,000 former players would have received an immediate increase in pensions averaging nearly 60 percent, funded entirely by owners.

“In that spirit, we are prepared to negotiate a full agreement that would incorporate these features and other progressive changes that would benefit players, clubs, and fans,” Commissioner Goodell concluded. “Only through collective bargaining will we reach that kind of agreement.  Our goal is to make our league even better than it is today, with the benefits shared by all of us. 

“I hope you will encourage your Union to return to the bargaining table and conclude a new collective bargaining agreement.”

Click here for the Commissioner’s letter to players.