All 22: Why decertification of the NFLPA and other unions could pay off big

The paradox: Athletes such as Stephen Curry, Zack Greinke and Derek Carr are setting records with average annual salaries of $40 million, $34 million and $25 million … because of sports unions. But those players, and their peers, remain underpaid … because of sports unions.

I understand that arguing for athletes to get paid more irritates most fans. But this is about giving a more accurate account of how leagues use their far-reaching influence to take more than they’ve earned. Maybe the financial gap between fans and top athletes is such that both athletes and owners appear the same. But they are not the same.

Most pro athletes were middle-class and poor kids who dedicated themselves to one goal, worked toward it and sacrificed for many years. They outperformed their peers to get an opportunity as adults for a potentially lucrative, but short, career — which doesn’t mean they are entitled to a certain salary, but they should be entitled to a fair process for deciding that salary.

Instead, the players have no practical response to the owners taking a bigger and bigger share as the leagues get more profitable. And the trend will only get worse for current and future players until they abandon the counterproductive construct of unions in sports.

I have fought to advance athletes’ interests more than any other pursuit in my professional life. I held leadership roles in both the National Football League Players Association (NFLPA) and the National Basketball Players Association (NBPA). I believe deeply in the mission of unions and the many programs and resources they provide for players and their families. I know the solidarity of unions is what facilitated the benefits that players enjoy today. It is because of my appreciation for unions, and my reverence for the players who have sacrificed, that I am making this recommendation:

America’s major professional sports unions should permanently decertify and operate as trade associations instead.

That’s uncomfortable for me to conclude as a former president of the NFLPA, but it is nonetheless necessary. Decertification would be a radical move that comes with higher risk than continuing with the status quo, but the status quo no longer serves the best interests of the current and future professional athlete.

Whether they want to admit it or not, union leaders have had to find novel ways to create leverage in recent collective bargaining agreement (CBA) negotiations, just to slow economic erosion. They’ve made impressive nonfinancial gains that will ease players’ transitions out of their leagues and improve their health, happiness and overall quality of life. I sincerely believe those things are as important as money. But today’s players are too powerful and valuable to be forced to choose between those things. I understand the dynamics of union-league relations well enough to know that the erosion isn’t a result of weak unions or getting outwitted by commissioners at the negotiating table. It is about competing in a game that is rigged. So players need to change the game.

The NFLPA is unfairly called the weakest union. I think it’s as well-positioned as any organization for post-union life. Fact is, the NFLPA, NBPA and MLBPA have different strengths. The NFLPA is the only one of these organizations that can fund itself without player dues, through nine-figure annual revenue generated by Players Inc., its marketing and licensing arm.

NBPA’s biggest strength comes from having a concentration of megastars. And MLBPA’s strength, similar to that of a traditional labor union, comes from the culture created by legendary union leader Marvin Miller and protected by the continuity of leadership and players.

But if you look at the numbers, the power of the leagues is too much for even the MLBPA, which has seen its share of revenues plummet in recent years. Baseball players receive the smallest percentage of revenue of the three major sports. And that happens because the players aren’t up against just the owners. They also have to contend with the media, the fans, Congress and the Supreme Court. But their most devastating opponent? Their own interests.

To understand how each of these league opponents undercut the resolve of the players, you need to understand what I believe to be the three types of leverage that can be applied during negotiations: work stoppage, legal and indirect.

Work Stoppage

Any work stoppage, strike or lockout is a war of attrition. In labor disputes involving nonsports unions, a strike is a powerful weapon. The revenue and the goodwill that a business loses each closed-doors day is significant and cannot be recovered. But for the employees, who could have long careers spanning decades, the loss of pay for days, weeks or months can be recouped over their careers, making a strike worthwhile.

But thanks to antitrust exemptions given to the leagues by Congress and protected by the courts, the leagues face no threat of competition. And because many careers are so short, it’s not worth it for most players, not even if all demands are eventually met. This is most stark for NFL players, with an average career length of less than four years.

With league revenue at about $12 billion, gaining 1 percent from the league would be worth $120 million a year for the players. If it were divided evenly among 1,800 NFL players, that would equal $67,000 per player per year. That amount would increase with growing league revenues, but it’s hard to imagine a scenario where it would be rational for players to endure a lockout or strike over a few percentage points of revenue, especially given the fact that many owners will own the teams forever and bequeath them to their children. For players, missing one of a few prime earning years is significant. And the return is relatively insignificant on a per-player basis. But for owners, enduring a work stoppage has less impact. And the return is enormous. It’s currently about $3.75 million in revenue per owner into perpetuity. Factoring in the inevitable growth in annual revenue and franchise values, 1 percent is worth hundreds of millions of dollars.

Although the leverage created by lopsided timelines is starkest in football, the same thing happened to the NBA players, whose salary cap has gone down by 6 percent in recent years to 51 percent of revenue. The MLBPA’s capless system is the envy of all other unions.

It is the result of MLBPA’s incredible resolve during work stoppages. They have been through several, most notably sitting out the entire 1994 season to resist a salary cap. And the players benefited, until 2002. With the longest average careers among the major sports, maybe baseball players’ incentives are slightly different. But in 2002, the players may have succumbed to the same pressures as the other sports. Although they didn’t accept a salary cap, they accepted changes that acted like a cap. According to a 2015 article on fangraphs.com, changes in the CBA near the turn of the century have sent the players’ share on a precipitous plummet from their 56 percent peak in 2002 to 38 percent in 2014. And it hasn’t improved much since then.

Legal leverage

In part, unions are meant to help the members obtain better benefits and working conditions. Unions also exist to protect their members from unfair labor practices. Sports unions have made tremendous progress on both fronts. However, in the world of sports, the unions’ ability to protect is not just reserved for the players. Counterintuitively, the owners benefit from the existence of a union as well. The existence of unions allows leagues to operate under rules that are in violation of federal antitrust law, which is why decertifying has been the most impactful threat to leagues.

In 1987, with Junior Bridgeman as the lead plaintiff, players filed suit against the NBA, challenging what they considered antitrust violations such as imposing a draft and salary cap. When the players threatened to decertify, strengthening their case and exposing the league to massive damages, the NBA settled the case favorably for the players.

In football, after a failed strike in 1987, the NFLPA brought a lawsuit against the NFL for violating antitrust law. The courts found that the NFL was exempt from particular antitrust laws because the restrictions were in the CBA. So in ’89 the players actually decertified their union, forming an association instead. Back to court they went, challenging the NFL’s restrictions on free agency with the aptly named lead plaintiff Freeman McNeil. No settlement was reached, and in 1992 the players won McNeil v. NFL. They were awarded damages.

Reserving their right to challenge the league’s restrictive work rules, the players remained as an association, not a union. In 1993, the players attacked again. This time it was Reggie White v. NFL. That case led to the most substantial gains for football players in history. The league was without recourse in antitrust cases. So, as a condition of the settlement, the owners insisted that the players form a union. That’s right. The players were thriving for years with an association, not a union. The league needed the protection the union provided more than the players.

One of the other cases at that time, Brown v. Pro Football, was meant to protect practice squad players from having a cap of a $1,000-a-week salary imposed on them. It went to the Supreme Court, where the core question was whether the league would maintain its labor exemptions if the two sides reached an impasse in negotiations. The court found in favor of the league, as it often did. This decision wasn’t a big deal at the time, but it is now. More on that later.

The MLBPA has never decertified. Even if it had, it would have done no good before the Curt Flood Act of 1998. Signed by President Bill Clinton, it exposed MLB antitrust violations as they apply to player employment issues. The Supreme Court protected MLB’s antitrust exemption in 1922, 1953 and 1972. In 1969, Flood, a black outfielder for the St. Louis Cardinals, challenged the restrictive reserve clause, which kept players from ever becoming free agents. Their rights belonged to the team that drafted them for their entire career, giving them no leverage to negotiate. After 12 years with the Cardinals, Flood was traded to Philadelphia. He sued over the reserve clause in part because he didn’t want to play for the Phillies’ openly racist owner. The Supreme Court ruled against Flood in 1972, so he retired. Thurgood Marshall was one of the dissenting justices.

Indirect conflicts, opportunities

Unlike the direct conflicts of strikes and lawsuits, indirect is about creating circumstances where the pressure comes from a third party, e.g., fans, government or sponsors/partners. Historically, in sports labor disputes, fans turn against the players.

Even understanding now that my perspective is biased, as a former player, I am still surprised owners didn’t receive an overwhelming proportion of media and fan anger. Truth is, media outlets fear angering the leagues, and fans don’t care about the details. And, most importantly, the leagues, especially the NFL, have shown that public anger doesn’t matter to them.

The only third-party group that can influence the leagues is partners and sponsors, the money. Any action that weakens the leagues’ leverage in negotiating with partners and sponsors would be impactful. However, weakening their ability to generate revenue shrinks the pie for players too.

The Answer

Decertify. Now. It is important to understand that decertifying the union does not mean that the players’ associations would dissolve and be nonexistent. As I mentioned earlier, for several years during the most successful period for football players, the NFLPA was a trade association, not a union. Players associations would still be able to carry out most of their important player service functions. And the players would continue to work. But they would be working under rules imposed by the leagues, not agreed upon with the players — rules that are clear violations of federal antitrust law: franchise tag, salary caps and luxury tax, maximum salary limits, MLB service time, drafts and age restrictions, the NFL’s infamous commissioner power in Article 46, etc. It would force the leagues back into a world they fear, a world where they have to follow the same laws as other businesses or be exposed to the risk of treble damages.

Thanks to a pair of laws from the 1960s, decertifying will not remove all of the leagues’ antitrust law protections. The leagues can still operate as a monopoly when negotiating broadcast deals, which means decertifying shouldn’t hurt the leagues’ ability to negotiate big broadcast rights deals.

Dangers

During the 2011 NFL CBA negotiations, the NFLPA decertified. But, the 8th U.S. Circuit Court of Appeals pointed to the case I mentioned earlier, Brown v. Pro Football. They found that the NFL could not be stripped of its antitrust protection as a result of the decertifying when negotiations were at an impasse. The league called what we did a “sham.”

Though I am not a lawyer, I talked to several sports and labor lawyers and they agree that decertifying now, well in advance of any negotiations, is a more than sufficient “distance in time” to avoid the “sham” accusation.

Without being a union, the players’ associations lose the ability to regulate agents. Although most agents are decent, some are not. And allowing the unethical minority loose on young players is scary. But there are a couple of laws that could help to protect them: the Uniform Athlete Agents Act and the Sports Agent Responsibility and Trust Act.

Going from union to an association is risky financially because dues currently are withdrawn directly from players’ checks. Associations would have to get players to write dues checks. This is where the NFLPA’s Players Inc. revenue is crucial. Unlike other unions, the NFLPA generates enough revenue every year to run NFLPA operations without dues. NBPA and MLBPA don’t have that luxury, but they do have massive savings. And with older and wealthier players, who figure to have longer careers, soliciting dues may be less challenging.

The biggest danger is that the league facilitates the creation of a separate organization that unionizes the players and signs a CBA. This risk is the most concerning to me, as there is nothing other than loyalty, faith in leadership and trust in each other stopping players from joining a shadow union that could offer an attractive CBA.

So where are we?

The truth is, life is good for the top athletes. They are making more money than they ever have, so I am aware how my lament about the erosion of the players’ share will be received by some. But for me, it is about protecting the legacy of the players who made this possible and properly rewarding the people with the rare talents: the people who decided, as children, to fully dedicate their lives to reaching one unlikely goal. Those people who took risks, outperformed their peers and now deteriorate their bodies to entertain. Those people deserve to negotiate on a level playing field. As revenues grow for sports leagues, the players deserve not to have owners, whose talents are not the driver of revenues, claim a larger and larger share of the pie.