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CBA Updates: Union wins a fight, and Extension Likely

Over the last two days, there have been some fairly significant developments in the ongoing negotiations between the players' union and the NFL owners. First and foremost, the players and owners have agreed to a 24-extension for negotiations. That means while the current CBA was set to expire at midnight tonight and the lockout was to begin, they'll push that deadline back one day to allow further negotiations. If they fail to reach an agreement before Friday at midnight, which is likely, they can agree to extend the deadline further, or allow the CBA to expire and the lockout to begin. Perhaps more significant in terms of the negotiating dynamic is a decision that was handed down on Tuesday by District Court Judge David Doty.

As most people are aware, the NFL owners make the vast majority of their money from TV broadcast contracts. The NFL sells the right to broadcast football games to the major media networks (CBS, NBC, ESPN, and DirecTV), and annually these contracts bring in billions of dollars, which are then divided between the teams. Normally, if there are no games being played, then there are no broadcast rights to sell and no money to be made for the NFL. This would be of some concern to the owners, because if there is a work stoppage (like a strike or, in this case, a lockout) then no games get played and therefore, no money.

The NFL recognized this, and in their last round of negotiating with the media networks, essentially brow-beat the networks into giving them lockout protection. They forced new clauses into the broadcast contracts which required that the networks pay the NFL $4 billion in advance for future broadcast rights, even if no games were actually played in the current year. Technically these would be considered loans that the NFL would have to pay back with interest, but there was essentially no time-frame for repayment, thus allowing the NFL to ride out a work stoppage while still being able to pay the bills.

The NFLPA saw what the owners were trying to do, and went to court over it. At the arbitration level (the "special master"), the players lost, and the NFL was allowed to keep these advance revenue clauses in the contracts. The union appealed to the Federal District Court in Minnesota, which has had jurisdiction over these disputes for a couple decades now. Yesterday, Judge Doty ruled that the lower court got it wrong, and that what the NFL tried to do was illegal. If you want details, I'll write them in the comments. Suffice it to say, the players are on top of this one right now, and the owners don't get their $4 billion lockout fund.

The owners, of course, immediately claimed it would have no effect on their resolve and that they were going to appeal, but the fact is that not having access to $4 billion that you thought you were going to is going to hurt. Especially when those mortgage payments on Jerry World come due.

It's possible this has had an effect already, as yesterday actual NFL owners, including Dean Spanos, arrived to participate in the negotiations. This means that actual decision makers, on both sides, are in the room talking to each other, and it sounds like real progress is being made. Personally, I think it's unlikely a deal will be struck before tomorrow night, and we'll be right back where we are right now. There probably will still be some kind of lockout, though its length is anyone's guess.