Nov. 26 (Bloomberg) -- The executive director of the National Football League players union said a player lockout next season is a “near certainty,” and that it would cost the U.S. economy an estimated $5 billion in lost wages, taxes and other revenue if the entire season is canceled.
In an interview on “Political Capital With Al Hunt” airing this weekend on Bloomberg Television, union chief DeMaurice Smith said if NFL owners lock out players in order to get concessions in a labor dispute, it would be devastating to local communities as the country struggles with a 9.6 percent unemployment rate.
“The magnitude of the loss would be at the very least about $160 million to $170 million per team-city,” Smith said. “That is a conservative estimate of the economic impact.”
NFL spokesman Greg Aiello challenged Smith’s numbers, saying they came from union projections rather than a government agency, investment bank or noted economist.
“It is a series of numbers pulled from thin air in a misguided attempt to inject politics into the collective bargaining process,” Aiello said in an e-mail. “There is a fair deal to be done and soon if the union will bargain with the same fervor it displays in creating economic fairy tales.”
NFL owners voted unanimously in May 2008 to opt out of their labor contract with the players at the end of this season -- two years early. The players were satisfied with the agreement and wanted to complete the contract.
The 32-team league says NFL stadiums are getting more expensive to build and operate, and has asked the players to reduce the pool of money used to calculate their salaries by $1 billion, according to the players.
The union has asked the league to prove it needs the money by opening its books. The league has declined the request.
“The owners have told us that no team is losing money,” Smith said. “The owners have told us that no team is facing economic peril. They haven’t even told us that teams have a smaller amount of profits this year.”
If the league wants to sign a new labor contract by the end of the year, there needs to be “a substantial increase in the amount of economic information that’s turned over,” Smith said.
Other issues being negotiated include: the amount of money paid to rookies, extending the 16-game regular season schedule by two games, health coverage and drug-testing requirements, according to the union.
Smith said about 1,900 players will lose their health-care coverage if players are locked out when the labor contract ends in March.
He said the union estimates there will be about 300 expectant mothers and an unspecified number of children awaiting heart transplants and kidney dialysis at that time.
Aiello said a lockout triggers rights under the COBRA federal law that allows employees to continue their existing health insurance coverage without interruption either at their expense or the union’s.
“This means that no player or family member would experience any change in coverage for so much as a single day because of a work stoppage,” Aiello said.
Smith says if the labor dispute comes down to a lockout, the NFL has financial leverage.
The league negotiated agreements with broadcast networks News Corp.’s Fox, CBS Corp., General Electric Co.’s NBC, Walt Disney Co.’s ESPN and DirecTV that will pay the NFL about $4 billion in television revenue whether games are played or not.
The union has saved about $200 million in a lockout fund, Smith said.
“We know they have an economic leverage over us,” Smith said. “Those TV contracts … (are) a huge economic hammer that hangs over the players.
“But when it does come to leverage, about understanding the necessity of sacrifice, teamwork, our players believe they are this game. I believe that we have a tremendous amount of leverage.”
Much of that leverage comes from the game’s popularity and the fame of the players. The union also reached out to political leaders and other unions before the current season to argue that a lockout isn’t just bad for the NFL, it’s bad for America.
The NFL on Nov. 23 responded with a statement that attacked the union for wasting Congress’s time on the league’s labor negotiations when the nation’s leaders could be working on more serious issues.
“The union’s request for state and local political leaders to intercede in the negotiations ignores and denigrates the serious and far more substantial problems that those leaders, and that state and local workers across the country face,” the statement said. “We can resolve our own issues as we have done many times in the past.”
The NFL has had labor peace since work stoppages during the 1982 and 1987 seasons.
The league, which has a political action committee, has contacted members of Congress regarding the current labor dispute and Commissioner Roger Goodell recently went to the White House, where he met with officials including Peter Rouse, the interim chief of staff, and Valerie Jarrett, a senior adviser to President Barack Obama, Aiello said.
Goodell’s mission was to “just update and cover the basic issues and keep the lines of communication open,” Aiello said.
He also said the NFL is simply playing defense through such visits. He e-mailed a comment NFL Vice President of Government Relations Jeff Miller made to the Associated Press.
“If they’re spending a lot of time on Capitol Hill trying to encourage Congress to engage in our collective bargaining negotiations, we can’t just abdicate the playing field,” Miller told AP.
To contact the reporter on this story: Curtis Eichelberger in Washington at email@example.com
To contact the editor responsible for this story: Michael Sillup at firstname.lastname@example.org