Retired NFL Players have heard a lot of talk coming out of the NFL Players Association about the need for NFL Owners to open their books and reveal all of the revenue that is coming into the NFL. That is a reasonable request when you consider that almost 60% of the NFL owner’s revenue is given to the active players, who then make decisions on how much they set aside for salaries and benefits, including benefits for retired players.
What the NFL Players Association hasn’t told anyone is that there are specific procedures outlined in the Collective Bargaining Agreement to ensure that the TR -Total Revenues of the NFL are reported to the NFLPA on an annual basis. Without the process, there would be no way to establish the Annual Team Salary Cap. For sixteen (16) straight years, the NFLPA has agreed with the NFL on the annual amount of money to set aside for the Salary Cap.
But how do the NFLPA, the active players and the retired players know we are getting accurate financial information from the NFL owners? It starts with getting independent accountants to look at the books. So who’s looking at the books?
In the CBA, under Article XXIV – Guaranteed League-Wide Salary, Salary Cap & Minimum Team Salary, Section 10 – Accounting Procedures, which is attached, it states that “The Accountants shall be a nationally recognized accounting firm jointly appointed by the NFL and the NFLPA.”
It also states that “The Reporting Package to be used by the Clubs and the League in providing information to the Accountants (“Revenue Reports”) in each of the NFL playing seasons covered by this Agreement shall be agreed to by the parties.”
The Accountant’s report is known as “Special Purpose Letters”. After receiving a Special Purpose Letter, the NFLPA has the right to conduct an audit of the League and any of its Clubs to further verify the accuracy of the information!
In the event of any dispute concerning the amounts of any revenues, expenses, or player costs to be included in the Revenue Reports, including any dispute concerning any findings or determinations concerning expenses made by the Accountants that cannot be resolved, then both the NFL and the NFLPA have the right to contest the Accountant’s report by commencing a Special Master Proceeding.
The Special Master is appointed by the Court pursuant to the Final Consent Judgment in White v. NFL and shall have exclusive jurisdiction to enforce the terms of Articles I, XIV, XVI-XXI, XXIV-XXX, XXXVIII-A, XXXVIII-B, and LVI-LVIII. The Special Master can make findings of fact and recommendations of relief including, without limitation, damages that are binding upon the parties unless stayed, reversed, or modified by the Court, or by an appellate court. In the event that a Club or anyone acting on its behalf fails to materially report or materially misreports Total Revenue, the Special Master may impose a fine upon the Club of up to $3 million.
SO LET’S GET THIS RIGHT: The NFLPA jointly chooses the accountants; jointly agrees to the reporting procedures; has the right to conduct an audit of the League and any of its Clubs to further verify the accuracy of the information in the accountant’s reports; can dispute the accountant’s reports and commence an independent Special Master Proceeding to resolve the dispute. And best of all, if the NFLPA wins, the decision is binding upon the NFL unless stayed, reversed, or modified by the Court, or by an appellate court.
What more can the NFLPA ask for!
If the NFLPA has any reason to believe the NFL Owners are, or have been hiding revenues from them, then they have a great way to find the truth. The NFLPA agreed to this process in the Collective Bargaining Agreement.
The NFLPA Executive Director, DeMaurice Smith needs to stop telling the media, the active players and the retired players that the NFL won’t open its books. The NFL owners have opened their books annually to the NFLPA using the process they both agreed to in the Collective Bargaining Agreement.
If the NFLPA wants to dispute the Accountant’s financial report of NFL revenues, they can commence a Special Master Proceeding against the NFL. The NFLPA just won a case against the NFL on revenue sharing, so what are they waiting for?
The owner’s main complaint is that they’re not making enough money. Some of them are obviously making more than others. They have the freedom to cry the blues, that’s what businessmen do, but to say that they haven’t opened their books, is simply just not true.
As Chris Carter, Mike Ditka, Tom Jackson and Chris Berman would say to DeMaurice Smith……….. “C’MON MAN!”
Can retired players see the NFLPA’s books?
No they can’t. Here is what the CBA says on that issue. The NFLPA Auditor may not show any such copies to anyone other than its partners, employees, and agents. The documentation made available
and the information contained therein shall be held in strict confidence and may be discussed only with
individuals authorized in this Subsection, or as jointly authorized by the NFL Management Council and the
NFLPA. The NFLPA Auditor may prepare one or more written or oral reports for the use of the NFLPA in
connection with this Agreement, which may refer to and discuss the contents of documents reviewed, but which
may not include copies of any such documents. Any such report shall not be referred to or distributed to anyone
outside of the NFLPA or the NFLPA Auditor for any other purpose. If the NFLPA determines in the exercise of
its judgment that matters discussed in the NFLPA Auditor’s report may indicate a violation of this Agreement,
then the NFLPA Auditor may show a copy of such documents that it considers in the exercise of its judgment to be relevant to such potential violation to counsel for the NFLPA (who as of the date hereof are also serving as Class Counsel), the Executive Director and General Counsel of the NFLPA, up to three NFLPA staff personnel
(whose authority to receive such information shall be disclosed in advance to the NFLMC) and up to three
members of the NFLPA Executive Committee (whose authority to receive such information shall be disclosed
in advance to the NFL Management Council). In addition, a copy of such documents may be presented to the
Special Master and/or a court in any proceeding to enforce this Agreement. At least four (4) business days prior
to commencing any such proceeding based upon such documents, the NFLPA will advise the NFL Management
Council of the alleged violation upon which the proceeding would be based; the parties shall stipulate to
reasonable protective order terms and conditions to protect the confidentiality of such information. Except in
connection with a proceeding as described in the preceding sentence, the NFLPA, its representatives and agents
shall not refer to or distribute such copies to anyone outside of their organizations for any other purpose.
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Thank you in advance.