March 10 (Bloomberg) -- The National Football League and its players union have yet to resolve a 2-year-old impasse about financial transparency less than two days before their labor deal is due to expire.
The NFL has failed to provide the union with audited financial statements for the league and its 32 teams, union president Kevin Mawae said. The request was made in a letter, dated May 2009 and obtained by Bloomberg News, from DeMaurice Smith, executive director of the NFL Players Association, to NFL Commissioner Roger Goodell.
“Anybody that will report that we’ve gotten that information and rejected it is simply not telling the truth,” Mawae told reporters after leaving a mediation session in Washington yesterday.
The sides are at loggerheads over how to divide $9 billion in revenue, the most for any sports league. Talks under the guidance of a federal mediator are headed for a 15th day. Failure to agree on a new labor pact tomorrow may lead to a shutdown of the most-watched U.S. sport a month after the Super Bowl championship game drew the biggest audience in U.S. television history.
The union has said it may abandon its role in the negotiation, starting a process that would let individual players file antitrust lawsuits against a shutdown of the sport. The same tactic was used after a 1987 strike, spawning about 20 lawsuits including one that helped create free agency.
A work stoppage would end 24 years of labor peace and may empty stadiums financed with a combined $7 billion in taxpayer money. It may also interrupt the schedules of the largest U.S. broadcasters and leave fans without a sport that, during the 2010 regular season, was watched by a record 207.7 million people, according to Nielsen Co. data.
In his letter to Goodell, Smith asked for operating income, operating expenses, profit from operations and net income for the league and each of its teams. He also asked to see cash and investment assets, along with dividends paid to owners and their families.
It’s a request Smith has made repeatedly since owners voted in 2008 to opt out of the deal, saying it didn’t account for costs, such as those of building stadiums. The league wants to double to $2 billion a year the amount of revenue set aside for expenses before paying players, according to the union.
Smith said owners haven’t provided evidence to justify their demand.
The union’s investment bankers and advisers said the information the league has offered to provide is “utterly meaningless” in helping evaluate the league’s finances, Smith said last night after nine hours of meetings.
“How much financial information would you want before you were being asked to write a $5 billion check?” Smith said to reporters. “The information that was offered was not what we asked for.”
Jeff Pash, the league’s chief negotiator, said the NFL has provided the union unprecedented access to its finances during the talks.
“The players’ association has received more -- and more detailed -- financial information than in any prior negotiation,” Pash told reporters after leaving yesterday’s meetings. “Has it gotten everything it wants? Evidently not. Have we offered to provide more? Absolutely. And is it a subject that we’re prepared to discuss? Absolutely.”
Harley Shaiken, a labor professor at the University of California at Berkeley, said collective bargaining often includes disputes over financial information. The United Auto Workers, for example, asked General Motors Co. to show proof it needed concessions from workers in the 1940s.
“The fact that the UAW president demanded it garnered public sympathy, because he was essentially saying ‘you’re simply being greedy,’” Shaiken said in a telephone interview. “Americans tend to favor openness and fairness, so the request simply for information tends to elicit a positive response.”
Under the expiring agreement, about $1 billion is deducted before player payrolls are calculated for costs related to stadiums, marketing, NFL.com and the NFL Network, Smith has said.
In addition to retaining a further $1 billion a year, owners want to add two regular-season games, taking the number to 18. The sides have agreed on a rookie pay scale, Yahoo Sports reported yesterday, and another point of contention is health benefits for current and retired players.
The league and players have twice extended the existing deal in a bid to reach agreement on a new pact.
They opted for a weeklong extension three days after U.S. District Judge David Doty in Minneapolis ruled that the league improperly negotiated $4 billion in television rights fees that owners might have tapped in a work stoppage. Doty will consider damages in a yet-to-be-scheduled hearing.
Doty, ruling on March 1, overturned an arbitrator’s decision rejecting a union complaint that the NFL improperly negotiated to receive broadcast rights fees from its most-important television partners -- CBS Corp., News Corp’s Fox, Comcast Corp.’s NBC, Walt Disney Co.’s ESPN and DirecTV -- even if a work stoppage cancels games in 2011.
Mawae said “there are many hurdles” still to overcome in the talks and that his preference is that another extension won’t be needed.
“We’re continuing to work on what we’re trying to get accomplished,” he said. “Anything that works us further and closer to getting a deal done is positive for us and the players and, more specifically, the fans.”
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