Feb. 3 (Bloomberg) -- National Football League teams don’t have to pay players’ health insurance costs after their collective bargaining agreement expires in March.
A Philadelphia arbitrator denied a grievance filed by the NFL Players Association that sought to force the 32 teams in the U.S.’s most-watched television sport to continue to pay for such benefits after the deal ends, according to a copy of the decision sent by the NFL.
The labor accord says “these benefits ‘are guaranteed during the term of this agreement,’” arbitrator Shyam Das wrote in the decision. “They are not guaranteed after the CBA ends.”
The NFL has said that clubs won’t pay health care costs after the labor agreement expires on March 3. Players have a right to continue their existing coverage at their own, or the union’s, expense, Das wrote.
George Atallah, a union spokesman, didn’t return an e-mail seeking comment on the decision.
NFL owners voted in 2008 to end the labor agreement with players after this season, saying it didn’t account for costs such as those to build stadiums. The league and union are scheduled to meet Feb. 5 “as part of a process to intensify negotiations,” according to a joint statement.
Along with the share of league revenue paid to players, issues between the sides include an owners’ plan to extend the season to 18 games from 16 and a rookie wage scale.
The league will provide long-term care, funded by teams, for about 2,500 retired players between the ages of 50 and 75, underwritten by Aegon NA’s Transamerica Life Insurance Company, said Jeff Pash, the NFL’s chief negotiator in the labor talks.
“It’s something we were urged to do by a number of retired player groups,” Pash said in a news conference on labor issues. “We hope this will be one more program that will be of some value to our retirees.”
If the collective bargaining agreement expires without a new deal in place, the NFL won’t make any change in retiree benefits, including pensions and disability, Pash said.
Financial consequences alone should compel owners and players to reach a new deal quickly, he added.
NFL executives including Pash and Eric Grubman, executive vice president for business operations, said last week that the league may lose $120 million in ticket sales, sponsorship and revenue if there’s no deal by March and $1 billion if it takes until September to reach an agreement.
Players will also suffer financially, Pash said, including about 500 scheduled to become free agents in March who would typically be signing contracts worth hundreds of millions of dollars. Other players are scheduled to receive significant bonuses that month, along with more in the months after, he said.
“If we sustain significant revenue losses, it will be harder, not easier, to make a deal,” Pash said. “The eventual deal will be more costly and more difficult and from every perspective it makes sense to try to get something accomplished sooner rather than later.”
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