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Patrick Hruby

Opaque Union

The upcoming NFLPA head election is turning ugly and shady.
By Patrick Hruby | VICE Sports | March 2015

The upcoming election for the National Football League Players' Association executive director will decide who leads NFL players in working with—or against—league owners and commissioner Roger Goodell. It will set the future course of professional football.

It also seems to be a bit of a mess.

Five candidates currently are running against incumbent NFLPA head DeMaurice Smith. Three of them—labor attorney Andrew Smith, labor attorney James Acho, and former NFL punter and Navy Admiral John Stufflebeem—told VICE Sports that the union hasn't provided basic information on its finances or other important business matters. A fourth candidate, retired player Sean Morey, sent a six-page letter to NFLPA president and Cincinnati Bengals lineman Eric Winston last week, requesting an extensive list of documents and asking detailed questions about the organization's legal relationships, pension plan, health care programs, staff compensation, and more.

In an email response, Winston rejected Morey's request, telling him that the information already available to the candidates was "enough."

"I just feel like there are a lot of pressing questions," Morey says. "And it's critical to understand the job you're walking into."

"There needs to be transparency," Andrew Smith says. "No one really knows what's going on."

"What Sean [Morey] is after is exactly right," Stufflebeem says. "But I'm not surprised he was rebuffed. That's the culture of the NFLPA."

"Have I gotten any information?" Acho says. "Not at all. I've been told I'm basically on a need-to-know basis. You go to the United Auto Workers' or Teamsters' websites, you can glean a lot of the information you need. But the NFLPA is like the Kremlin."

If you think this sounds like boring pro football office politics—hardly as noteworthy as Jameis Winston's combine 40-yard dash time—think again. An opaque union with secretive leadership and uninformed rank-and-file members is a weak union. A potentially corrupt union. An easily-manipulated union. A union that lets Goodell and league owners run roughshod, all while failing to advance and protect its members' fiscal and physical best interests. And since NFL players ultimately make the game—you're not exactly trading Bob Kraft for Jerry Jones in fantasy football, are you?—a flailing union with authoritarian governance is bad for the sport, too.

As such, DeMaurice Smith's challengers have a right to be frustrated. VICE Sports reviewed Morey's request for information, and asked the other three candidates to do the same. (A fifth, former player Sean Gilbert, received the request but did not respond to questions via email prior to publishing this article). All agreed that Morey's questions were reasonable, that they deserved answers, and that players themselves needed to hear those answers as much as anyone. Because taken as a whole—and you can read it here—the letter suggests that the NFLPA's house is in disarray, and may just need to be gutted.

Start with money. Two years ago, Ben Volin of the Boston Globe argued that league owners "obliterated" DeMaurice Smith and the union during 2011 collective bargaining agreement negotiations, pushing through a deal that slashed rookie salaries, locked young players into below-market contracts, pushed out veterans, and helped the Green Bay Packers—the NFL's only publicly-controlled team, providing a window into league finances as a whole—go from a net income of $22.3 million in the two years before the CBA to a net income of $85.5 million in the two years following its adoption. More recently, Gilbert has claimed that the deal will cost players a total of $10 billion over its 10-year span.

Last summer, NFLPA spokesperson George Atallah defended the CBA, noting that the salary cap rose to $133 million in 2014—an 8.1 percent jump from the previous season, and the largest spike since 2006. Thing is, the long-term numbers tell a less sunny story. Since 2009, the cap has gone from $128 million to a projected $143 million, a 10 percent increase. Using the consumer price index to adjust for inflation over the same time period, however, that $143 million represents a paltry 0.38 pay jump over six years.

According to the consulting firm AT Kearney, league revenues have grown 40 percent over the same time period.

Then there's the matter of the union's internal finances. Morey's letter makes a simple request: please provide a summary of all revenue and expenses for each year from 2009-2015. Why is he asking?
Because from the outside, things look mismanaged. Maybe even fishy. Between 2009 and 2014, the NFLPA's total assets as reported to the federal government are up 19 percent to $329 million—but the organization's total liabilities are up 63 percent to $106 million. Meanwhile, its total disbursements are down from $272 million to $152 million—a 44 percent drop—and its total receipts have plummeted from $263 million to $168 million, a loss of $95 million.

In other words, the union appears to be taking on additional debt—lots of it—even as less money seems to be flowing in and out of its doors. What's going on? Where did the $95 million go?

Like Andrew Smith says, no one knows. His campaign platform calls for a full review and audit of the NFLPA's books. For his part, Stufflebeem has sat on corporate boards. He says that annual outside financial audits are standard operating procedure—both as a first line of defense against fraud and abuse, and as a way for company leaders to get a clearer picture of what their organizations are actually doing. "You see what's happening with money and what problems might be coming," he says. "[The NFLPA] ought to have an annual outside audit delivered to the board of player reps. [Not having one] makes we wonder what we would find. When any organization starts to get into trouble is when it does not do those things. "

Possible case in point? The union pension plan, which in 2013 had assets of $1.4 billion and liabilities of $2.8 billion—a funding gap large enough to earn an "endangered" designation from the federal government. Why is that gap so big? How did it get that way? Without a forensic accountant, it's hard to say. According to retired player advocate Jeff Nixon, the plan's deficit has actually grown during DeMaurice Smith's tenure—a feat that seems almost mathematically impossible, given that pension funds generally invest in the stock market in order to outpace inflation, and the S&P 500 index is up 180 percent since Smith took over the union in 2009.

Small wonder, then, that Morey's letter contains the kind of questions any former player would want answers to, such as does Mr. Smith contemplate implementing any adjustments to the pension plan that would reduce future payments to retirees? and given the terms of the NFL Concussion Settlement, how does the NFLPA propose to offset the massive increase in disability costs jointly shared with the league?

Oh, and about that proposed concussion settlement: it's designed to pay out as little as possible to brain-damaged current retirees, and nothing to future retirees. Morey initiated an ongoing court fight against the deal, seeking better terms. The NFLPA has been silent on the matter, even though the final agreement will impact each and every one of its members. Morey would like to know why. A former member of the union's player executive committee and a co-founder of its brain injury committee, he also would like to know why a plan he spearheaded to screen, study, and treat former players suffering from neurological damage was approved by NFLPA player leaders such as Drew Brees and Scott Fujita, only to be scuttled by union lawyers; what, if any, clinical care and research the NFLPA is instead paying for; what a union-funded 10-year player health study run by Harvard University is actually accomplishing; and if players ever have been given copies of a comprehensive concussion report he prepared for the NFLPA in 2012, a 90-page document obtained by VICE Sports that breaks down both the league and the union's failures to adequately address the most serious problem facing both the sport of football and the men who play it.

"If all we do as a union is to wait for this concussion suit to be settled, then what are we doing?" says Stufflebeem, who through the Navy has worked with brain-damaged combat veterans and the Wounded Warrior program. "I don't think that's enough. I think we ought to take ownership of this issue."

One issue all of the NFLPA executive director candidates would like to take ownership of, or at least take away from Goodell? The league's personal conduct policy, which currently gives the commissioner wide latitude to fine and suspend players. Before he ran the union, DeMaurice Smith was a white-collar criminal defense lawyer, a former prosecutor turned expert in protecting companies from Congressional investigations. Why, Morey's letter asks, did he not "foresee the threats posed by giving Commissioner Goodell a free hand in discipline?" Going back in time, how was someone with Smith's background selected as a candidate to run a labor union in the first place—particularly with the NFLPA reeling after the unexpected death of former head Gene Upshaw in 2008, and heading into CBA negotiations with an unhappy group of team owners? Did the union have something to conceal? Was management worried about a potential federal investigation, coming on the heels of a humiliating 2007 Capitol Hill hearing that saw Congress tell the league to fix its stingy, player-frustrating disability and pension programs, or else?

"You bring in a guy who is a seasoned litigator with a background in prosecuting criminals," Andrew Smith says. "Okay. How does that prepare him to read a contract and how it affects 1,600 players? He wasn't prepared for the CBA [negotiations] because he didn't do that for a living. When Upshaw died, how did this guy get anointed? I have a lot of questions."

The union has no answers. Or maybe it does. Just not for Morey, and not for the other candidates, either. Stufflebeam, who did some consulting work for the NFLPA during the 2010 lockout, says this is nothing new. "I would call the culture there one of some arrogance," he says. "There are some people there who have no problem telling the players they are the smartest guys in the room and that the players don't know what's going on." For example? "The players feel exactly the same frustration about the pension plan," he says. "They do ask about it. And no, they never get a response. I know former players who have written to the union and never had a response. I know players who have challenged leadership on floor of conventions and never had a response."

This makes no sense. If the NFLPA is being run both ethically and effectively under DeMaurice Smith—unlike the National Basketball Players' Association under nepotistic former director Billy Hunter, or the National Hockey League Players' Association under the notorious Alan Eagleson—it should want to share information. To open its books. To brag a little. To show that the ship is heading in the right direction, and that the current skipper should be retained. It should welcome Morey's questions, the way a smart and prepared student welcomes a pop quiz as an opportunity to pad her final grade. Why hide?

"I've gone up against big companies my whole legal career," says Andrew Smith. "Billion-dollar banks. Fortune 500 companies. What do they always do? Hit you with red herrings. Pound you with documents you don't need. You have to be able to sort through that. What the NFLPA is doing is the opposite. Not papering you to death, but just not giving you anything.

"That's a part of the Machiavellian formula. How do you keep power? You make sure no one else can figure out how to get it. You control the dissemination of information, so DeMaurice Smith can come into the room in with stats and booklets and say, 'look at how much money we are making and how well we are doing.' That's wrong. If it looks like you didn't provide information and weren't transparent—if it looks like you rigged the election—what does that do? I guess they're not worried about that."

Doesn't seem like it. At the end of his letter, Morey asks that union retain an independent law firm to oversee the upcoming election. He also suggests that the election be postponed until after the NFLPA's annual March meeting in Hawaii, so that "serious matters can be discussed and decided upon in a proper forum, without the added distraction of a tropical vacation." The union's response? Crickets. "From my perspective, too many players are left uninformed, uninvolved and sort of naive to the realities of the business of football," Morey says. "By asking those questions, at the very least, I hope I'm forcing Eric [Winston] and the [player] executive committee to understand what questions they need to be asking."

On Monday, VICE Sports sent Winston an email asking the following:

1. Was the Morey letter circulated to the entire NFLPA board of player representatives?

2. Why did the Executive Committee decline to answer the questions in the letter?

3. Can Winston personally answer the questions in the letter?

4. Does Winston realize that he has a fiduciary duty to be able to answer the questions?

More crickets.

Meanwhile, DeMaurice Smith has been busy penning statements denouncing Wisconsin governor Scott Walker's anti-union politics. Perhaps that's the best use of his time. Perhaps things are just that swell at the NFLPA. There's only one way to be sure. Former Supreme Court Justice Louis Brandeis famously said that "sunlight is the best of disinfectants; electric light, the most efficient policeman." Right now, the union has its potential future leaders—and by extension, its own membership—fumbling around it the dark.

"Put it in football terms," Stufflebeem says. "If you don't know where you are on the field, it's hard to figure out how to get to the end zone."

Read the original article at Vice Sports