Today’s record-setting, 80-minute edition of PFT Live included an interview with NFL general counsel Jeff Pash. The full text of the interview appears below. (And, yes, I continue to be keenly aware of the fact that my initials are “MF.”)
MF: You’ve likely seen our next guest on television more often recently than Charlie Sheen, and yes I did steal that line from our next guest. He told me that during the break. General counsel of the NFL Jeff Pash joins us on PFT Live. Jeff, thanks for joining us and how are you?
JP: Well after that kind of introduction, what can I say? I’m fine, thanks.
MF: Well, here’s the thing. You’re at least making more money right now than Charlie Sheen. Because he’s making zero, and you’re making $1. And let me start with that, because there are a lot of people who look at the move by yourself and by the Commissioner down to a $1 salary in this lockout as a P.R. maneuver. What’s your response to the perception that it’s all about P.R.?
JP: I told my wife, who has an antiques business here in town, that she better step it up and sell a lot more antiques this year. And I can tell you it’s not a P.R. maneuver. It’s real, and the longer it goes on, the more real it’ll be. It seems like it was the right thing to do because there are people all over the league who are going to be affected by this at the clubs and our office. And my job was to try and get an agreement and I haven’t accomplished that yet so it seems like it was the right thing to do.
MF: And some would say that during this lockout the players lose their benefits. Is the fact that you’re still at $1 an indication that you’re getting all of your benefits?
JP: Actually, Mike, I have to write a check to the league each month to pay for my benefits because the benefits cost that I paid for is normally withheld from my pay. But because there’s no pay I have to write a check every month.
MF: But you still have the same benefits package, it’s just instead of the money out of your check, you’re gonna have to write the check for it.
JP: Yes, that is correct.
MF: Let’s talk about what happened on Friday. The union decertified, filed suit. Lockout came at midnight. Why is it that the league chose to lock out the players after the decertification?
JP: Well, because the agreement expired, and once the agreement expires, there are certain options available to both sides. And we thought in that situation, the best thing to do was to go ahead and implement the lockout.
MF: Were there other alternatives considered?
JP: We considered a lot of alternatives. The most important one was embodied in the proposal that we had tendered to the players. The principal alternative that we had focused on all long, Mike, as you know, is to try to get a negotiated solution here. That’s what we want, that’s what we’ve wanted all along, and that’s what we were trying to accomplish over the course of a long period of time, but certainly in the three weeks or so that we spent with the federal mediators, including the effort we were making that day to have meaningful discussions on a significant and improved proposal to the players.
MF: Was there any specific consideration, Jeff, given to implementing that last offer under federal labor law as the last, best offer given the impasse that apparently exists between the two sides?
JP: We talked about that but we thought that was probably not as effective a solution and might even carry with it other risks and so we felt as though it was best to stay within the confines of the proposal we had made and go ahead and implement the work stoppage.
MF: And isn’t it fair to conclude that the decision to lock out the players is essentially a recognition by the league that there is no decertification, this is a sham, it’s still a union and we’re going to lock out this union?
JP: That is certainly our view. No question about it.
MF: And we had a statement from Gregg Levy over the weekend about – and I don’t want to get into a lot of the nuances; we’ll be talking to David Cornwell about it later – but if I understand it, the league’s position is: Under the CBA, yes, the ability to argue “sham” is waived under certain circumstances, but the NFL Players Association failed to initiate the decertification at the right time. Is that fair to say?
JP: I think that’s part of it. I think it’s also true that there’s no barrier in the Collective Bargaining Agreement to presenting these issues to the National Labor Relations Board, which, as you know, we’ve done. And that really is the appropriate body, in our view, to consider this question. And I think it’s also true that under the Powell case and the Brown case, and again I know we’re not trying to conduct a law school seminar here, but I know you’ve read these cases Mike, and you’ve got a good understanding of their holdings. I don’t think, even if you assumed -- which I think is an heroic assumption -- even if you assumed that the union’s decertification was somehow effective at the moment it began, that that would end the labor exemption, and somehow make our conduct unlawful.
MF: If the labor exemption is still in place, the league can’t be sued for antitrust, and that’s the gist of the lawsuit that was filed by the players on Friday, correct?
JP: That’s correct, that’s correct. And that position has been, as you know, been upheld by the 8th Circuit which governs in Minnesota, and obviously by the Supreme Court in the Brown case, by the 2nd Circuit in other cases. So there’s a lot of precedent that supports that view.
MF: Jeff, there’s one thing that really struck me on Saturday morning when I woke up and read the statement from the league. There’s language in there – the statement regarding the lockout, the decertification, the litigation – the league says that the players forced the lockout by decertifying, and that seems to imply that a lockout wouldn’t have been implemented if the players hadn’t decertified. Is that what the league is saying, that there wouldn’t have been a lockout if the players hadn’t decertified?
JP: Yeah, I mean, the point was that we were trying to negotiate a solution here, and in fact had already extended the deadline once. And we were certainly prepared to extend the deadline again and continue negotiating.
MF: But if the players had said at 5:00 p.m., “We’re not going to extend the deadline, the agreement is going to expire, we’re not going to decertify, we’re not going to sue, NFL, the ball is in your court,” what would’ve happened?
JP: I don’t know. We would’ve had to talk about it. We had not made a decision to lock the players out as of 5:00 p.m. because we were still in the process of negotiating. We were meeting with them after 4:00 p.m. on Friday. We went upstairs to talk about what they had said to us across the bargaining table. We were on the phone with other owners. And we all of a sudden got a letter by e-mail that said, “As of 4:00 p.m.” -- in other words, before our negotiating session finished -- “As of 4:00 p.m., we have renounced our bargaining status.”
MF: What would be your response to the critics who say that a lockout has been in the works for 2 or 3 years, and it was all pointing towards a lockout, and there’s no other reasonable conclusion that can be drawn?
JP: I think it’s a like a lot of things in life. It’s easy to plan for a good outcome. And so we were planning for every alternative. But the number one alternative we were planning for was a negotiated agreement and that’s why we made the proposals that we made, which we thought would help get these negotiations to a point where they could continue; we could get another extension. Did we prepare for a possible work stoppage? Of course we did. And honestly, and again I know you understand this, there’s nothing wrong with that. When the players went on strike in 1982 and 1987, they weren’t bad people. It wasn’t a morality issue. And when we locked the players out, it’s not a morality issue. It’s lawful, it’s recognized, it’s part of collective bargaining. So, just like the players planned, we planned. And just like the players considered alternatives, we considered alternatives. But it doesn’t make one side “good” and one side “bad.”
MF: What impact, if any, do you think that the “lockout insurance” ruling from a couple weeks ago from Judge Doty had on the talks over the past couple of weeks?
JP: Well in terms of the practical significance of it, it really has very very little impact, because as we’ve talked about you understand, it was a loan, it was never money in our pockets, it had to be paid back with interest. And we weren’t planning on making use of any fo that money in 2011. So in that respect, it had very little practical significance. I don’t doubt that it had a strong psychological effect on the players and on their litigation attorneys. But in terms of the practical significance I would say very very little.
MF: What was the interest rate on the money that was going to be loaned?
JP: Honestly, I don’t know Mike.
MF: And just so we’re clear, and we’ve studied the opinion and there was a nice chunk of money that was going to go to the league without any repayment obligation, right? $420 million from DirecTV?
JP: From DirecTV, yes. From the broadcast networks, no. And from cable companies, no. But from DirecTV, that one slice which was probably less than 10% of the television money, yes. And as you know, that would’ve gone in to the players’ share.
MF: I think some people assume that what’s going on now, because the litigation started and the mediation ended, there’s really no forum in which the two sides can talk. Isn’t it true that if you guys really wanted to sit down and continue these talks, that could happen?
JP: Well, you made that point before you went to break, and we’ve been clear on that. We would be prepared to resume the talks. We’d be prepared to go back to the mediation offices. And I thought the mediators did an extraordinary job. And they certainly pushed us to reconsider our positions and look at alternatives. And we’d get back together with them tomorrow if the union wanted to do that.
MF: What would be your thought -- because I think one of the big arguments that you’ve raised and touched on it a little bit and we may touch on it a little more; I know we’re getting low on time -- the idea that the union was just positioning to litigate and not bargaining in good faith and not wanting to try and work out a deal. Has the league given any thought to submitting the case to mediation to whichever judge ends up responsible for the new case that was filed, because then there would be a presence, there would be someone who could actually hold someone accountable, and not just be a voluntary figure in the discussions like George Cohen was?
JP: Well, we haven’t really thought about that. We do have proceedings at the NLRB which go to the bargaining dynamic, and I think it’s sort of denigrates, and I know you don’t mean to this, but it denigrates a little bit the effectiveness of the federal mediation service to refer to it as sort of a voluntary thing. Because these are people who are very, very experienced. George Cohen practiced labor law and represented sports unions, including in basketball and baseball and hockey, for decades. He’s got an understanding of these issues that a rather small number of people in this country have. I think that’s what makes him so effective, particularly in this context.
MF: Well, I don’t mean to denigrate him, but Jeff, he was ultimately impotent. He couldn’t enforce the vow of silence, it became a joke last week the extent to which both sides were violating it. And he had no power over anyone. Isn’t that the case?
JP: Well, if you’re talking about having a federal judge mediate, mediation is itself a voluntary process. The President of the United States during the baseball strike had both sides in the Oval Office trying to mediate, and ultimately couldn’t accomplish a settlement. Mediation is a voluntary process designed to facilitate agreements. And I would think that George Cohen, who’s steeped in the issues and who understands every aspect of the bargaining dynamic, I would think he’s as capable of doing it as anyone else.
MF: If whichever judge gets this case in Minnesota, if the union were to say, “We’ll defer to that judge or any mediator that judge appoints, so the mediation occurs under the umbrella of that litigation,” would the NFL be willing to do that?
JP: I don’t know Mike, I can’t say one way or another right now on the hypothetical like that. I’d have to talk to our counsel, I’d have to talk to our ownership and we’ll figure out what the right answer will be.
MF: A couple more quick ones before we let you go and I appreciate you hanging around. The issue of transparency -- where does that stand right now? I just feel like the union wants what it wants, and you’re willing to give what you’re willing to give. And I’m trying like heck to find a middle ground that would work for everybody, and I don’t know that there is one. Do you think that there is a middle ground?
JP: It’s hard to say. I thought what we offered was pretty good. I mean, the union has been saying for a long time, ‘Show us that there’s a decline in profits,’ and we offered to do that. We told them that we’d give a third-party accounting firm the individual club audited financial statements for fiveseasons to be reviewed and analyzed. So I think we went a long way towards satisfying their financial transparency demands. And frankly, I’m not convinced that they want to see the numbers. I think they like it better as an issue to whack us upside the head with than to actually look at the numbers.
MF: How does the profitability calculation take into account money paid to owners and owner families in the form of salary, bonuses, other things that would go into expenses and not necessarily show up in profits?
JP: Well that’s something that we were prepared to talk to them about, and prepared to work with a third-party accounting firm to make sure that issue was included in the analysis.
MF: Is it fair to say at this point that audited financial statements just, that’s a non-starter, that they’re not going to be given?
JP: I think I just said exactly to the contrary. I think I said exactly the opposite, that we offered to give five years of individual club audited financial statements to a third-party firm to review and analyze and to report on.
MF: When was that offer made?
JP: The offer has been made on any number of occasions, but most specifically it was made last week in writing.
MF: And maybe I’m confused, because it was my understanding that there was a limited offer made last week - total profitability of the league, and also an identification of the number of teams that have lost profits, seen profits drop, over the past five years. You’re saying there was an offer made to submit audited financial statements to a 3rd party who would analyze them and then produce -- what, this profitability number or something else?
JP: We would have to define what the assignment of the third party was, obviously, but the two things that you mentioned -- yes we did offer that but we also offered to go beyond that, and that was what they said they didn’t want to take from us. That’s why I say I’m not really certain that they want the numbers.
MF: And one last point, just so we’re clear because I know there’s a lot of detail and maybe there’s a middle ground that can be worked out. But from the standpoint of surrendering audited financial statements in their current form to the players for 10 years, is that something you envision the league ever doing?
JP: I don’t currently envision it but I hope that I have a broader vision than that going forward.
MF: How soon do expect a ruling on the preliminary injunction that’s pending in Minnesota?
JP: I don’t know. I don’t know that there’s even been a schedule set for briefing and hearing so I can’t say when that would happen. I think we first need to figure out which judge is hearing it and what the schedule is that the judge is going to follow.
MF: Do you have concern at all about the perception that the case is being passed around like a hot potato over the past couple of days?
JP: Well, no, because the two judges that recused themselves, it was perfectly understandable that they would do so. And so that doesn’t surprise me.
MF: What if the union goes into Judge Nelson and says, “We think this case goes to Judge Doty”? Are you aware of any authority to allow a case to be transferred from one judge to another in the same district just because the other judge may have a greater familiarity with the subject matter?
JP: I have not, but I don’t pretend to be an authority on the local rules in that court. So the fact that I’m not may not mean much one way or another.
MF: I have a feeling that you’ll become an authority, as will I, as will a lot of other people on those local rules in the coming days and weeks. I really appreciate you taking the time, I know we did twice what we thought, but we got a lot of good stuff, and hopefully folks better understand what’s going on. Thanks again, and hopefully we’ll talk to you again.
JP: Happy to do it, anytime you want, Mike.