DeMaurice Smith '89: NFL Players Want Equitable Share

April 1, 2011

NFL players turned down the “worst deal in professional sports” last month and are now bearing the brunt of the owners' lockout strategy, said NFL Players Association head DeMaurice Smith '89 during a talk Thursday at the Darden School of Business.

When negotiations over a new collective bargaining agreement between NFL players and owners broke down in March, Smith and the players moved to decertify the union and filed an injunction in federal district court in Minnesota to stop the lockout imposed by team owners.

“Over the 15 days, we met with the owners for probably less than seven hours," Smith said. “The decision to decertify as a labor union was necessary."

“If you root for the players and we win the injunction, we have football. If the owners win, we don't,” Smith told a crowded Abbott Auditorium. “This work stoppage that the owners chose is a lockout that they chose — not the players.”

“In the meantime, 1,900 players, former players and their families are without health insurance and the game they love has been taken away from them," he said. “Although the conflict between the two parties has been contentious, that's the nature of business sometimes," Smith said.

Smith, who was elected executive director of the association in 2009 after a 26-year term by former NFL player Gene Upshaw, said he knew going into the role that a lockout was likely and that it would call for a “different leadership model.”

During his presentation Smith calculated the deal being offered to players on a white board display.

The NFL has weathered the recession with flying colors, enjoying $9 billion in revenue two years ago. Currently players get a 50 percent share of revenue, but under the new owners' proposal, “By the time we got to the 15th year of a deal, you could see players getting shares of revenue that were in the 30-percent range,” he said.

Smith jotted “NOT GOOD!” on the board, earning chuckles from the audience.

Smith pointed to a former player in the audience who said he had 19 screws in his body due to injuries.

“While the 30 percent or the 40 percent of all revenue might still mean that players are making a tremendous salary — and they would — the fundamental question has to be, what's the fair distribution of equity given the limited timetable for which they play, the risk that they live with, and you'll have those 19 screws with you for the rest of your life,” he said.

He defended the players' opposition to a rookie wage scale, noting that the average player is only in the league 3.2 years, and that many of the league's top players are still under rookie contracts.

“If you don't want to pay him $50, $60 million dollars — guess what? Don't,” he said in response to owners' complaints, pointing out that Tom Brady was a sixth-round draft pick. But no owner would propose a system in which rookies have one-year contracts, he said.

Smith said the players would have been happy to continue under the deal first negotiated in 1993 and since extended.

“Our guys want to play football, and that's all we've ever said,” he said. “We'd rather not be locked out.”

Smith said his request for audited financial statements from the owners for the past 10 years was not an ultimatum, but a logical move considering the investment players would be making.

Smith said the players were willing to take lower salaries in exchange for an equity position in the NFL in the form of Class B ownership shares. Under the association's proposal, no one would be allowed to exercise those shares for 10 years, but the owners would not agree to the terms.

“Is it about money?” he said. “It's about control.”

Smith estimated that if the lockout continues, it will cost every team city $160 million in lost revenue, a substantial hit to many cities under stress from a nationwide recession.

“Is that fair to a city like Baltimore, a city like Cincinnati, or a city like Cleveland? No.”

Smith said it was “special” to see the NFL players step up as leaders during the negotiations. Although he has been under fire during the process, Smith said nothing fazes him in light of his wife's own successful fight against breast cancer or the struggles of the victims he helped as a prosecutor. “I don't care what I go through at the negotiating table.”

Although the owners would like to move two games from the preseason to the regular season, Smith said players are concerned over the impact an 18-game season will have on their health.

“If you've played in the National Football League you know that the idea of two preseason games being equal to two end-of-the-season games is wrong,” he said. “The end-of-the-season games are games where your body has been completely beaten up and broken.”

Currently players don't qualify for post-career health coverage until they have worked three years in the league — around the same amount as the league average. With extra games affecting the potential for injuries, the average time in the league might drop below three years, Smith suggested, leaving them without any coverage when their careers end.

Smith began his legal career as a prosecutor in the U.S. Attorney's Office for the District of Columbia. He then served as counsel to then-Deputy Attorney General Eric Holder in the Department of Justice. He later became a partner with Patton Boggs in Washington, D.C., where he focused on white-collar criminal defense and tort liability.

Although Smith never played in the NFL, he did have some experience with organized sports before joining the NFL Players Association — he served as chairman of the Law School's North Grounds Softball League.

“Any time I'm at the University of Virginia, I feel like I'm home,” Smith said. “I met my wife down here, got married down here, had some of the best times of my life, and I owe a tremendous debt of gratitude to the University of Virginia because without [it] I'm pretty sure I wouldn't be here.”

After his talk, Smith answered a few questions about his time at the Law School and the prospects for football in the fall.

How do you feel your legal education prepared you for your career and your current job?

I've always believed that the best gift that a law school can give its graduates is to teach them a way to think. My wife will be the first person to say stop thinking like a lawyer." But the ability to analyze and pull apart a problem, to be able to look at all of the pieces distinctly, but also knowing how they relate, then to be able to put it back together in a way that makes sense is something that is not a gift, it's a learned trait. Its value is limitless.

How do you use your legal training as head of the NFL Players Association?

Every day. People put too much emphasis on problem solving. We spend a lot of time on problem analysis, because you have to first come to a conclusion about whether it's a problem or not. Look, we have at any given time various stages of major league, high profile bet-the-company litigation. I'd like to say that I've stepped away from the day to day lawyer activities, but the lawyers who work for us know that's not true. In fact, we're filing our damages briefs today, so right before I came in here I was sitting down in the parking lot doing the last-minute touches on the brief. But that's just the litigation side of it. The media, the way in which we try to make sure that players understand our message and the way that fans understand their messages, it's probably not a whole heck of a lot different than the way in which I tried cases. I love crowds and people who think, and I think a person's ability to think along with a group of people to reach a conclusion or analyze a problem is the way in which you should do it. That naturally fits into the Socratic method, but it's also a trial lawyer way of doing it. But the other pieces are equally clear — asking for the financial information and justifications for players taking any number of options. I'm not sure you can ever divorce anything of what I do everyday from sort of the core training of being a lawyer.

What law classes or professors influenced you?

[Peter] Low was my criminal professor. It's the process of the analysis; whether it's a crim law class or a civil procedure class, the core thread that runs through it — especially at this university and this law school; UVA's never been a blackletter/hornbook law school — was analyzing why and trying to understand why. Regardless of what class you're in, that's the process of this law school. Like I said, it left with me something that you can't put any sort of monetary value on.

What advice do you have for law students interesting in practicing in the area of professional sports?

I always answer the question this way, and it's on purpose. “Do what you dig. If you don't dig it, don't do it.” The reason is, a lot of people make decisions about what profession to go into without really understanding what it is. You've got to figure out what about it you love. For me, working at the U.S. attorney's office, being a criminal prosecutor is probably one of the best jobs I'll ever have; being a partner in a great law firm — best job I'll ever have; right now, best job I'll ever have. I've been lucky enough to have three jobs where they're the best jobs that I ever thought I would have. At every turn, I spend a lot of time trying to make sure it's something that I would enjoy. For me, it's got to be something that's challenging, something that is high stakes, something that almost puts you in a situation where you can't coast., If someone had said in 1989 when I graduated that I was going to be the head of the NFL Players Association, I would have looked at you and gone, Clearly you're absurd. I mean, that's just insane" — never played the sport, never been involved in sports marketing. What I would say for students who, whether they want to get involved on the sports side or whether they want to get involved in any other profession, [is this]: your ability to analyze a problem and inspire people to come up with solutions — that's what leadership's about. Where schools like Virginia excel is giving you the opportunities and the confidence to know you can get the job done.

Are we going to have NFL football in the fall?

I hope so.

What would a successful resolution to the standoff between players and owners look like?

An equitable share of revenue. We have players who play for an extremely short period of time. We have owners who own teams for decades and have the ability to will or leave or grant that business to their successors. One of the most pivotal, inspirational parts of the mediation was Mike Vrabel — a linebacker who played with the New England Patriots, won three Superbowl rings, now plays with the Kansas City Chiefs. You know Mike's already played three, four NFL careers — and he looks across the table at the owners and he says, There's one critical difference between you and me. I can't will my linebacker spot to my son. The only thing I can do, the only thing I can pass on, is a safer, fairer game to the player who is going to come after me." And you know, that's cool.

What kinds of concerns are players talking about at this stage?

They care about and they're concerned about their ability to play the game that they love. But at the same time they also know that the decisions that they made weren't ones that were made in a vacuum, they weren't ones that were made with the flip of your fingers. This was a two-year process. One of the things that concerns the players the most is when they see documents — internal NFL documents, for example — that show that back in 2008 that the owners were more interested in locking them out. That's a tough thing for a player to take because they engaged in the collective bargaining process seriously. To see that two years ago owners were gaming the TV contracts to give them cash during a lockout, that's a stark reality for a lot of players that I'm not sure they knew or expected. Players live in a world where they understand competition. They understand teamwork, you don't have to teach them about sacrifice. For them to look back and see that the people that they work for took positions that had nothing to do with sacrifice, had nothing to do with competition and had nothing to do with team — it's tough for them. Because they believed that they were all engaged in an enterprise together and I think that for many of them this was the first time that they realized that the owners were not a part of their team.

What are the next steps for the NFL Players Association?

We have a hearing in front of a judge on April 6 — that's next week — there is a remedies hearing in the TV case that we won in mid-May, there are collusion cases out there. At the end of the day, we're working as hard as we can to try to ensure that football's going to be played in the fall, and that remains our focus.

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