WHAT WE KNOW ABOUT THE CBA DISCUSSIONS: A LEGAL ANALYSIS

All eyes are on the NFL as the full NFL player body will soon vote on the proposed collective bargaining agreement. In his article summarizing the issues on the table, Dom Cosentino notes the following highlights, to which I have added my own legal analysis. 

  • An additional $80 million in payments in the next three years from the NFL to the Legacy Fund, which provides pension assistance for those who played before 1993. The Legacy Fund was established in 2011, with the league and the union setting aside $620 million.

This seems to be the NFL’s way of making a good faith effort to help players after retirement, given that lifetime health insurance is a no-go. However, this piece discussed in light of the CBA, only benefits a certain group of retired players – those who played before 1993. As we now know, players of all ages are suffering severe physical and mental symptoms from their time in the NFL. What about those players?

Is this partially a PR move by the NFL, as players began threatening to boycott the annual Hall of Fame induction ceremony? Maybe. But as long as they get what they are asking for, the players most likely do not care about the motive. Regardless, the issue here is that this is great, but it may only cause more uncertainty and concern for post-1993 players. With an expectation by ownership of ten years of labor peace once the new CBA is adopted, players must really put it all on the table now.

Another legal concern revolves around the fact that the NFL insists that the retirement increases will be for life, not just for the duration of the CBA. Although this sounds great, this guarantee will need to be included in a contract and inevitably, there will likely be a conflict with this arrangement and future CBA arrangements. In light of a conflict, which governs?  

  • Something to be concerned about on the health front: An eventual phaseout of automatically qualifying for total and permanent disability benefits based on eligibility for Social Security disability. Also a “trigger reducing future recipients’ benefits in 2026 if costs spiral.”

Given that lifetime health insurance is not an option (but it is in other leagues – see the MLB where anyone on an active roster for 1+ day gets health insurance for life and the NBA where any retired player who played 3+ years receives health insurance for life), this should concern the players. Now, automatically qualifying for total and permanent disability benefits based on eligibility for SS disability is on the chopping block? Legally, this seems concerning. On the surface is looks like the NFL wants to limit its players’ cost for long-term healthcare, but in reality, they can’t show us the money.  

In the past, giving in on what players want right now gave the NFL the opportunity to sweep long-term issues under the rug. However, they may not be so lucky this time. Former players have brought the long-term effects of playing in the league to light in the past ten years. Younger players seem much more knowledgeable on what playing long-term means health-wise. Furthermore, a “trigger’ that reduces future recipients’ benefits screams LAWSUIT. However, from a legal standpoint, technically once the CBA is agreed upon it is set in stone and binds all parties. So what happens to those who adamantly oppose certain issues such as this? They just accept it or don’t play? They hold out and don’t get paid?

  • 70% of incremental revenues to the players for the new stadium that’s being built for the Rams and Chargers in Los Angeles, with ownership taking no additional stadium credits off the top. It’s not clear what’s meant by “incremental” revenues, but this would be the first time the players would have a defined share of revenue following the construction of a new stadium.

It will be interesting to see how this will play out. From a legal perspective, players must demand these guaranteed revenues be written into players’ contracts and the term “incremental” will need to be clearly defined. Will ownership find a way to take additional credits off the top without it being considered such? How this reads in writing and how it will play out practically may very well end up to be two different things.

Another question is whether this will become the new model to follow when a new stadium needs to be constructed? Will we see more agreements where the players will see “incremental revenues” on new stadiums? Will this take some pressure off of the owners when considering expansions and relocations and instead, put it on the players? Will this be the door that will open other opportunities to players such as investing (along with owners) in football and non-football projects? From both a legal and business perspective, players seem to be acting in a much more business-like capacity and do not want to be seen simply as a player only, but a partner.

  • Players will get a share of “revenues related to legal gambling operations in stadiums – not limited to gambling on NFL football.” It’s likewise not clear what that share will be.

Again, this plays into the idea that players seem to be acting in a much more business-like capacity and do not want to be seen simply as a player only, but a partner. However, this is by far one of the most interesting “deals” to come from the CBA discussions. Some basic questions that come to mind are: What will the share be? Will this guaranteed amount be written into players’ contracts? Will only “home” teams see these revenues? What about away teams? Will it go into a big pot split between all NFL players? Will it only benefit players whose home states have legalized gambling? What are the other gambling operations included in the “not limited to NFL football?” How will the parties involved in that gambling agree to share revenues with NFL players?

Aside from these basic questions, there is one monumental legal question – how will this be regulated? Some type of compliance system will need to be put in place. The first large concern revolves around game rigging, such as point shaving. By having the guarantee of shares from legal gambling, will this entice players to maximize the money that lands in their pockets in ways that affect the integrity of the game? Another large concern comes from whether revenues are split evenly among all players. If not, what is the chance of stacking teams such as the Las Vegas Raiders where gambling is rampant, which will likely result in those players seeing large revenues from legal gambling operations?

  • There’s a chart that shows the growth in minimum salaries, which will exceed $1 million by the end of the deal. Another provision, however, states that each team will get additional money that can be used to increase minimum salaries to help them keep pace with revenue and salary-cap growth. In addition, the rookie pool will be tied to cap growth. These are actually potentially important developments for minimum-salary players and drafted rookies, whose annual pay increases under the current CBA lagged far behind the cap’s gargantuan growth.

Does this pose an issue for top-paid players who have big concerns regarding pensions, healthcare, and the 17 game issue? A large number of players are on minimum salaries. Such a large bump in the minimum could result in a large number of players voting “yes” in their best interest, despite being concerned about other issues. This leaves the higher paid players in the minority, which may result in them getting locked into a CBA they aren’t ready to agree to. This could create a significant divide between players on minimum salaries and those with the highest salaries. Legally, that is a concern because some big names such as Rodgers and Sherman are adamantly opposed to the 17th game and requirement for every No. 2 seed to play an additional playoff game. If the players on minimum salary (who clearly outweigh the big names) vote the CBA in, will these big names hold out? What could that do to the NFL? Not only do these players have a good bit of leverage, but the momentum behind proper long-term healthcare and the overall wellbeing of players has never been so strong before.

  • Pension increases of 10% for current players, with pre-2012 players receiving a “uniform and increased pension benefit of $550 per month per credited season, increasing to $575 or $600 per month per credited season depending on increases in the revenue.” In addition, players with three credited seasons would become pension eligible.

Again, this seems to be the NFL’s way of making a good faith effort to help players after retirement given that lifetime health insurance is a no-go. However, as was an issue with the Legacy Fund, the uniform increase only benefits pre-2012 players. The paramount concern is for the long-term health and wellbeing of all players – including those yet to even be drafted. As we now know, all players of all ages are suffering severe physical and mental symptoms from their time in the NFL. What about those players? The pension increase of 10% sounds rather fair, but given that players are retiring earlier, they will naturally need more money to sustain them through into old age.

The concern is about history repeating itself. As we can now see, pre-1993 players can’t even survive on their pensions (prior to these CBA talks). Although a 10% increase for current players sounds nice, in thirty years will this be enough? It certainly wasn’t for those who retired in the early ‘90s. Furthermore, this begs the question if the players will have to bargain for fair pensions and health care every single time it comes to negotiate the CBA.

It is speculated that the players will vote by the end of March. We will continue to track this process as it progresses.

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