By MICHAEL CUNNINGHAM Fort Lauderdale Sun-Sentinel February 29, 2004

Players pay PRice for booming nfl   NFL Players Union members lag behind their Pro Counterparts

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The New Jersey Nets, well aware of Alonzo Mourning's kidney disease, signed him to a four-year, $22.6 million contract last summer. He was forced to retire when his condition worsened 12 games into the season, but the Nets, who couldn't insure the contract, must pay the remainder of it.

If Mourning had played in the NFL, his team would have cut him when he relapsed. He might have received an injury settlement that was a fraction of his 2003 salary, and his team would have had no responsibility for the rest of his contract.

Baseball superstar Alex Rodriguez, seeking to facilitate a trade from the Texas Rangers to the Boston Red Sox earlier this year, was willing to accept a cut in his $252 million contract in lieu of other proceeds. The baseball union objected, saying a reduction in value of the contract was a violation of the labor agreement and set a bad precedent.

The deal eventually fell apart. Rodriguez recently was traded to the New York Yankees and will make the full $252 million.

If the Rangers were an NFL team, they would have asked Rodriguez to take a pay cut. If he refused, they could release him and owe no future salary, a fate several NFL players face as teams scramble to get under the salary cap by Wednesday.

Television ratings, game attendance and revenues suggest the NFL is the most popular sports league in the country. The league didn't seem to be affected by the recent economic slump, said Washington State University economics Professor Rodney Fort. The NFL, which shares most revenues equally among the 32 teams, has enjoyed steady growth to the point that "it is almost impossible for an NFL owner to lose money," Fort said.

But has the success come at a price for players, who have lower salaries than players in the other three major professional leagues and don't have guaranteed contracts like they do?

Labor expert Marvin Miller says it has. As former head of the Major League Baseball players union, Miller helped win many of the guarantees those players enjoy today.

"Football players don't starve," Miller said, "but given the fact that [the NFL] is a more prosperous industry than baseball or basketball or hockey, given the fact that careers are shorter than in any other sport, given the fact that injuries are more numerous and more serious, they're really getting screwed, if you excuse my language."

There are indications that when the NFL Players Association meets with owners later this month for negotiations on a fourth extension of the labor agreement, guaranteed contracts will be a major part of its proposals for the first time since 1974.

"Absolutely," said Jeffrey Kessler, outside counsel for the NFL and NBA player unions. "We think owners can afford more, like more money and like more guarantees."

BETTER THAN IT WAS

There is no question conditions have improved considerably for NFL players since the 1993 agreement, which expires after the 2007 season.

Salaries and benefits have increased significantly, and players have drastically improved their ability to pursue free agency. They also now get more than 40 percent of their salaries each year in the form of guaranteed signing bonuses, after getting less than 20 percent in the years before the current agreement.

But average football salaries ($1.3 million in 2003), held down by a salary cap, lag behind those of other sports: $4.9 million in the NBA and $2.4 million in baseball in 2003, and $1.8 million in the NHL in 2002, the latest year available.

The other leagues have forms of free agency like the NFL, plus fewer salary restrictions. The NBA has a "soft" salary cap with multiple exceptions, baseball has a luxury tax only on the highest payrolls and the NHL has no cap or taxes.

The NFL, buoyed by a rich television contract, made nearly $5 billion in revenue in the past season, more than the other leagues. And though they have shorter careers and greater risk of major injury, NFL players don't enjoy the same security.

"If you don't have guaranteed money, I don't know why NFL players even sign contracts," said New York Mets pitcher Al Leiter, a union representative. "I think everybody should be a free agent year-to- year. To me, their basic agreement is not committed to the players, to say the least.

"There are plenty of players who don't like it, who go along with player leadership. I know a lot of NFL guys that are not happy with it."

Economists and labor experts say it is simplistic to blame the NFL Players Association for the comparatively lower salaries and fewer guarantees for its members. They say other factors help explain it, including the differing natures of the sports.

Baseball players and hockey players, for instance, usually spend years toiling for little pay in the minor leagues before reaching the top level, and most don't make it. Drafted NFL players usually play right away.

The NFL has more players to pay than the other sports, about twice as many as baseball and hockey and more than three times as many than the NBA. There also are the different histories of the unions and the results of their past labor confrontations, both in court and in strike actions.

"We want to say, because we are humans, that this is because the [football] union is stupid, or the [other sports'] players got the owners over the barrel, or because the decision-making process in the [football] union let it happen," said Fort, the Washington State professor.

"But we can't forget the fundamental issues. Sometimes, uncertainty is just a bear. If owners and players had a reasonable predictor of injuries, there would be more [guaranteed] long-term contracts."

Still, because players are made to take on most of the risk of non-guaranteed contracts, it suggests they are getting a raw deal, said Stanford University Professor Roger Noll.

"Probably they are in the sense of precisely the obvious reason," said Noll, whose research includes the economics of sports. "The absence of guaranteed contracts transfers the risk of injury or deterioration of skills from the team to the player."

The NFLPA acknowledges the imbalance and even highlights it in the literature its research department disseminates to counter the perception that players are not doing well.

"There's no argument that no-cut contracts in the NFL have been a rarity," the NFLPA says. "For a lot of reasons. Mainly, owners just said `No.' ... The NFL was `unique,' owners argued, because injury rates to players were so high that there was no desire to have [to] keep on paying players no longer in the league."

But the NFLPA adds that the current labor agreement, in which players can earn some measure of security through big signing bonuses and also enjoy true free agency, is better than before 1993. Then, players were forced to sign a series of one-year, non- guaranteed contracts and had little hope of testing the market.

In addition, the NFLPA says player benefits have increased significantly under the current deal, from a total value of $123 million in 1993 to more than $300 million in 2003. The benefits package, which includes long-term disability plans and pension eligibility after four seasons, is better than those in the other leagues.

"The NBA and baseball, they have a better contract situation," said Dolphins wide receiver James McKnight, a union representative. "Their contracts are guaranteed. But our insurance, our pensions, are hands-down the best in professional sports."

LOOKING FOR SECURITY

Things have improved for NFL players, but some grumble they should have guaranteed contracts because they face greater injury risks and have shorter careers. Yet there appears to be no organized effort for change. Many players interviewed for this story seemed to accept they might never get guaranteed contracts.

"It's the only sport that doesn't have guaranteed money," said Tampa Bay defensive end Dewayne White, a drafted rookie in 2003. "It is a contact sport, and careers are not that long. You knew that coming into the league. One person is not going to change it."

If NFL players want better security, it is up to the NFLPA to push for it, according to players in other sports, labor and sports economics experts and player agents.

The labor agreement doesn't expire until after the 2007 season, but because of its structure, players could put pressure on owners by refusing to extend it, though such a move would depress salaries in the short term.

But if the issue comes to a head, the NFLPA's relationship with the league raises questions as to whether its leadership would aggressively push for something owners have rejected since the 1950s. And since its members have undercut the union in past confrontations, it's uncertain whether players would support such an action even if it came to that.

The NFLPA is the least adversarial of all the pro sports unions. Gene Upshaw, its executive director since 1983, considers the union "partners" with the league's owners and Commissioner Paul Tagliabue.

That is in stark contrast to the confrontational attitude and tactics of the baseball union, which date back to Miller. He took over as executive director in 1966 after working for years in the steelworkers' union. Miller said baseball players at the time didn't understand why they were being exploited or how to get more from owners.

Eventually, baseball's union became the most unified in sports, winning every labor confrontation with owners. Players agreed to a luxury tax and increased revenue sharing in 2002, but those concessions are expected to put little drag on top salaries and are not viewed as a major victory for owners.

The football union has won most every major court case against owners but has lost every major strike action. Miller said he considers the NFLPA a "company union" with leadership that has failed by not agitating to get more from owners.

"Membership has never been sufficiently aroused to do anything about it," Miller said. "I think people underestimate what happens when [players] have a short career [and] owners have demonstrated an ability to bury you if you are a recalcitrant [but] have no militant leadership."

Upshaw said the union has "broached" guaranteed contracts to owners each of the three times the labor agreement has been extended since 1993. He said owners have resisted because they fear players wouldn't give maximum effort, would spend too much time out with injuries and because owners simply don't want to continue paying players no longer on their rosters.

Upshaw said he doesn't buy those arguments. In a Business Week article last year, he suggested the union would "play hardball" with owners to get more guarantees during negotiations for an extension of the labor agreement.

In Houston for Super Bowl XXXVIII, Upshaw was not as adamant.

"We are going to look at everything, not just that," he said. "I am not at this point ready to say which issue is going to be more important than the other ones because the key is to try to work out a deal that will work out for everyone."

Good guys finish last?

The union's spirit of cooperation with the NFL makes some players wary. In the past, they have criticized the union for not protecting players from stiff fines levied by the league for illegal hits, for its agreement with the league's policy on performance-enhancing supplements and for the appeals process for fines and suspensions.

Upshaw, a former star NFL player, made nearly $3 million in salary in the last fiscal year, according to the NFLPA's disclosure to the Labor Department. That is more than twice as much as the average salary for NFL players and makes him one of the highest- paid union leaders in the world.

Dolphins defensive end Adewale Ogunleye said union officials like Upshaw are comfortable because they're making good money.

"And if it ain't broke for them, they ain't going to fix it because literally they are making more than 50 percent of the NFL guys coming in," Ogunleye said. "I know he's making enough money, where [it's] why would he want to upset Paul Tagliabue and these owners? So he's just going to keep it where it's comfortable for him, I guess."

Upshaw, who has said he will retire when his contract expires in 2007, is aware of such perceptions and criticisms. He said they are not valid because working as partners with the owners to "grow the game" is in the best interests of the players, who share in the revenue.

Upshaw believes labor peace is a major reason the league is healthy. He said television networks, which provide most of the league's revenues through broadcast rights, sign contracts with the assurance that games and fan relations will not be affected by strikes.

Upshaw added that the current CBA is working for players because it includes elements the union had never won before: a guaranteed percentage of most league revenues toward salaries (a minimum of 58 percent in 2003), free agency with few restrictions and a system that allows substantial signing bonuses.

In exchange, players agreed to a salary cap. In 2003, the cap was 64.25 percent of defined gross revenues, which include all proceeds from gate receipts and television contracts and a small portion of revenues from luxury boxes, concessions, parking, advertising and other promotions.

Teams can spend over the salary cap by prorating signing bonuses over the length of the contract, and they do so regularly. Actual salary expenditures have exceeded the salary cap each season since 1993, though the gap between the two has narrowed in the past five years. The NFLPA says that is partly because money has gone to increased player benefits.

Releasing players with large signing bonuses early in their contracts penalizes the team under the salary cap. Only a small percentage of players, however, are able to get signing bonuses large enough to provide any real security.

The NFLPA says a signing bonus of at least $2 million does so. But from 1993-2001, the last period studied in detail, only about 3 percent of league players each year got that much in guaranteed money, and they played an average of 2.4 additional years on those contracts.

The large majority of players have little security.

"When I signed my contract, my uncle called me up and said, `Aare you going to give me a million dollars?'" said Dolphins wide receiver J.R. Tolver, a fifth-round draft pick in 2003. "I said, `A million dollars? I've just got to make the team.'

"People see six-year, $50 million contract and it makes it seem like players get that if they are cut or get injured. It is not like that and, to be honest, it is not really fair. The players are expendable."

Upshaw said the lack of real security for most players is a common complaint.

"If you can't get a substantial bonus up front, you are basically dealing with a one-year contract," Upshaw said. "From that standpoint, it has always been an issue. The way the salary-cap system is set up, if you have a guarantee, [teams] have to fund it."

Players, meanwhile, take on most of the risk of injury and sign contracts that bind them to the team for the length of the deal but really don't bind the team to them.

The NFLPA, however, insists that "salary-cap cuts" are just a handy excuse for teams and a misconception advanced by media. Some players don't buy cap cuts, either, saying a team can keep a player if it really wants to.

That's true in that creating cap space can be as simple as guaranteeing a base salary, which pushes the potential cap hit into the future.

"It is a myth that anyone gets cut because of the salary cap," said M.J. Duberstein, who heads the NFLPA's research department. "It is jut more expedient for teams to tell that to players that no longer fit in their plans."

But when a team chooses to release a player with a high cap number or forces him to accept a lower salary, the team is taking advantage of a system that doesn't require it to pay money it agreed to in the contract.

"Where it becomes very difficult for the NFL player is, once you sign a contract, it becomes a one-way contract," said agent Mark Bartelstein, who represents NBA and NFL players. "Teams can choose to keep you or threaten to release you if you won't take a lower salary. But if the player plays at a higher level than the contract, the player can't control the contract. There is a ceiling for the player, but no bottom for the team."

SMALL STEPS

The union has made small gains in recent years to address those concerns, including a performance-based bonus pool and salary-cap rules that benefit certain veterans. It believes the real gains were made in 1993, when it got a guaranteed percentage of most revenues and significant free agency for most players.

Figures in the other sports are difficult to pinpoint, but NHL players appear to be the only ones who get a bigger piece of their league's pie than NFL players. The NHL, currently engaged in a labor dispute with players, says 76 percent of its total expenses go to salary, though the players' union disputes that figure.

Miller, the former baseball union leader, argues that too much is excluded from the formula used to set the percentage NFL players get. He said, for example, baseball pays for a minor league system while the NFL gets its players from colleges.

"If you make the appropriate adjustments, you'll find football players get the smallest percentage of revenue dollar," Miller said.

Charles P. Korr, a professor of history at the University of Missouri-St. Louis, said the union's arguments don't address the lack of security for players.

"The [NFLPA] will tell you how successful they are, [that] they get percentage of gross, the same as or more than the baseball players," said Korr, who specializes in the social history of sport. "An individual player might make the money as part of the gross, but the way he is treated as a commodity, you don't do gross analysis of how individuals are treated."

Football players clearly are not hurting in the real-world sense.

The averages of $1.3 million in salary and a little more than three years in career length mean the typical NFL player will earn more than $4 million in his lifetime. It still looks good for players when using the salary median, which reduces the effect of very large salaries: The median NFL salary in 2003 was $590,000.

Experts say the issue for players is getting a fair share of the revenue they produce.

"It doesn't seem fair, but that's the entertainment business," said Paul Staudohar, a professor of business administration who teaches industrial relations and labor at California State-Hayward. "[Professional athletes] are unique. They create games that are very popular, they have television and corporate support. There is a lot of money generated for a small number of players."

The lack of widespread player unrest suggests players are happy with their current labor agreement, said Fort, the Washington State professor.

Fort said the NFL union is more democratic than those in the other sports. So, he said, if players who would benefit most from guaranteed contracts aren't seeking them, it must be because they don't want to give up what it might take to get them, such as more restrictions on free agency.

Noll, the Stanford professor, said guaranteed contracts can benefit players and owners.

He said a business principle known as "least-cost avoider" says that the party in a contract best able to take on risk should do so. NFL owners who guarantee contracts would be better able to control their costs on an annual basis, and also would have more incentive to protect their investment, Noll said.

That means making conditions safer for players through better equipment, more protective rules and better field conditions. Noll said that could lead to fewer injuries.

Also, because teams employ a large number of players, the risk of injury or skill decline is averaged out over the entire roster. Fort said it is similar to investors reducing their risk by acquiring a portfolio of stocks.

He said the trade-off for players is that they would have to accept longer contracts that delay free agency, make less up-front money, and earn lower annual salaries. Noll said players would make less on average but would enjoy greater security.

He said total salary costs would be the same for owners; all that would change is how the money is distributed among the players over their careers.

"This phenomenon is understood by other sports, and I don't see why [NFL owners] don't see this," Noll said. "It is sort of textbook business finance that the best practice is to have long-term contracts. When facing substantial uncertainty in the future, those who can control risk should bear the risk."

Noll said he has explained the principle to NFL owners, whom he said tell him, "Well, that is just the way it is."

That's what owners have told the NFLPA since 1958, too. If Upshaw and other union leaders don't accept that answer next month, it could be the start of NFL players getting the same guarantees as the other pro sports.

WHAT THEY'RE SAYING ABOUT THE NFL LABOR AGREEMENT

"The average NFL career is 3.2 years. So next time around, we're going to play hardball to get greater guarantees." Gene Upshaw, NFLPA executive director, quoted last year in Business Week Magazine

"The median [salary] is sort of meaningless because you have two groups of players. About half the league is controlled by an entry- level wage plan that has strict rules. After four years you can negotiate on the free market." M.J. Duberstein, NFLPA researcher

"The attitude of players in football is more accepting of management than in other sports. It also manifests itself in the frequency of player rebellion. It is much rarer in football. ... It is much more common in other sports for players to be openly disaffected by team management." Roger Noll, economics professor, Stanford

"The [baseball] players stuck together because they were willing to sacrifice. Star players were willing to lead the charge. The Tom Glavines, Joe Torres, Tim McCarvers, Jim Bunnings." Charles P. Korr , history professor, University of Missouri-St. Louis

"You see a five-year, $30 million contract, and people think you are getting that, but then it is backloaded with all this money you probably won't get. People don't look at it like that." Zach Thomas, Dolphins linebacker

"Football, the injury margin is just too high compared to other sports. Hockey is physical, but the injuries are not as serious as football injuries. So they're never going to guarantee the whole contract in football. I don't see that happening, ever." James McKnight, Dolphins wide receiver

"I don't think owners should have to pay when players are hurt. I don't think that is fair. They invest a lot of money in players. It is not fair for them to give a guy $10 million over six years and then they get hurt." Derrick Mason, Titans wide receiver

"There is no free lunch. `I want my current salary and I want it guaranteed,' that is just not going to happen." Allen R. Sanderson, Economics professor, University of Chicago

"I would never trade any of the benefits we have. [But] I would want some guaranteed money. Because we really put our bodies through some hell. The banging, the running. We put our bodies through a lot more than other sports, and we don't get the guaranteed money." Jay Williams, Dolphins defensive end

"Football is just one of those sports where you've got to dig and scratch and fight for it. But I think that just comes from each sport, the way it's ran. Take the good with the bad. Baseball, the union is stronger, and the money is really good up there. And football, not saying the union's not strong, but if push came to shove, you should say football players should be making more money." Corey Jenkins, Dolphins rookie linebacker in 2003

"We kill each other, and how come we don't get no guaranteed money? And I know they've got to pay 53 guys plus coaches, so I mean it's a huge difference. And we have a good benefits program and retirement fund. But I still think our contracts should be guaranteed." David Bowens, Dolphins defensive end

"There is too much disparity between what Brett Favre and what the tackle makes. We used that during the [1982] strike. If the quarterback is not supporting the union, then all the offensive linemen should turn around and say, `Look out!' The ultimate team sport is football, so why should there be this disparity? Ed Garvey, former Executive director, NFL Players Association

"Short-term payoffs are much more important to players than long- term payouts. If the issue is go on strike or sign a contract, the median player is looking down a year or two as far as the amount of time in a career." Roger Noll

"Almost every football player has been a big man on campus. Everybody tells him how wonderful he is. The vast majority of baseball players spent time in the minor leagues. It's hard. They don't want to tell you how wonderful you are. Minor league experience has done wonders to harden players' attitudes. They have every reason for distrusting and disliking management." Charles P. Korr

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© 2004 Fort Lauderdale Sun-Sentinel