Why the NFL Needs Binding Arbitration

EXECUTIVE SUMMARY:

If We Had Binding Arbitration We Would Look Like This All The Time

This paper discusses the current NFL labor disagreement and critiques the decisions made by the two sides thus far during the negotiation process.  Specifically, it tackles the inability of either side to practice effective negotiation techniques. Finally, it concludes by proposing an ADR model which could be applied to future labor disagreements between the parties.

The NFL generates $9 billion dollars in revenue each year and only continues to grow.  Thus, while the average American is struggling to make ends meet, the Owners and the Players are squabbling over how to distribute this unprecedented amount of revenue.  This means, unfortunately, that the approach Players and Owners are taking is tremendously counter-productive.  While each side fights to make the other look like the bad guy, in reality they are alienating the public into feeling that both are the villain.  Public consensus seems to be “we just want to see football played again, and sooner rather than later.”  The fans don’t care about the accounting practices of the Owners, or how the two sides are going to split the revenue.  Really what they want is to be able to spend Thursday, Sunday and Monday talking with their friends about the games, to join fantasy football leagues and draft players and follow their favorite teams.  And, as much as the lockout affects the Players, it affects the viewing public far more.  This is because for many, the NFL symbolizes hope.  It brings people together and keeps people together.  That’s why when the representatives for the Owners and Players stand in front of the cameras on ESPN and act like bickering children, no one really has much sympathy for either side.

The purpose of this paper is to emphasize how each side needs to refocus and divert its efforts away from disruption and more towards productive negotiation.  In addition to critiquing each party’s efforts (or lack thereof), it also proposes a model to help correct them.  This model is centered around using binding arbitration as the necessary step towards eliminating labor disagreements in the future.  Binding arbitration, and even the threat of binding arbitration, will ideally provide enough incentive for the two sides to put aside their pettiness and actually sit productively at the negotiating table.  The model also looks at different mediation models and techniques as well as the system of binding arbitration from major league baseball and draws from their strengths.

The goal here is prevention.  That is, while the model being proposed may not be applicable to the current dispute, it could be applied to help prevent disputes in the future.  After all, the NFL is at its best when people are talking about the football, and not about the finances.

Lockout in the NFL: Why Binding Arbitration is Necessary for the Future.

I. INTRODUCTION

“Depositions. Legal briefs. Injunctions. Mediation. And money, money, money.”[1] The 2010 – 11 season was indeed a historic one for the National Football League (“NFL”).  Revenues for the sport were at an all-time high[2], and during the year, Forbes estimated that the average NFL franchise was valued at $1.02 billion.  Television viewership was off the charts[3], never more so than when 111 million people in the U.S. watched Super Bowl XLV, making it the largest television audience to watch a single show in U.S. television history.[4] Even women, a demographic not commonly associated with watching football, found themselves drawn to their televisions in record numbers to watch games.[5] The sport’s incredible popularity growth has even spawned a cultural phenomenon, fantasy football.

All of these good things, however, are now vastly overshadowed by the labor dispute currently raging between the NFL Players Association (“Players”) and the Owners (“Owners”) of the 32 NFL teams.  There are many issues that are driving the two sides apart.  The reason that the two sides have been unable to reach an agreement, however, is clear.  They lack a solid dispute resolution model.  In order to develop a solution, however, it is imperative to first understand how the negotiations got so bad.

II. HISTORY OF COLLECTIVE BARGAINING IN THE NFL

Prior to the current labor dispute, the last time that the NFL had a work stoppage due to labor issues was in 1987.[6] In a story told to the San Francisco Examiner by Carmen Policy, the representative for the San Francisco 49ers at the time of the 1987 work stoppage,[7] Policy recalled a conversation that he had with the Commissioner of the NFL at that time, Pete Rozelle.  During that particular work-stoppage, the big issues between the Players and the Owners were the establishment of a salary cap for the teams,[8] and free agency[9] for the players.  That particular work-stoppage continued into the NFL season, and went on for so long that replacement players were eventually called in to play games in place of the NFL players.[10] Glenn Dickey, a writer for the San Francisco Examiner, remembers attending a 49ers game played by the replacement players during the work-stoppage.  He estimated that there were only about “38,000”[11] people in attendance that day, “far below the sellouts the Niners had been getting.”[12] He expressed doubt “that many [of those attending] were season-ticket holders”[13], indicating how far the team’s popularity had fallen.

The 1987 work-stoppage was tremendously taxing on both sides.  However, the Owners were thought to have persevered because of one thing.  Money.  Everson Walls, at that time an all-star player for the Dallas Cowboys, remembers being alone on the picket line after only two weeks.[14] At the time of the strike, the Cowboys were one of the best, and most popular teams in the entire league.[15] However, even superstars like Tony Dorsett and Randy White, both future hall of famers, could not last more than two weeks without a paycheck, especially as the Owners staged three weeks of games featuring replacement players and 89 veterans who decided to cross the picket line.[16] Many of those who crossed, did so because they were afraid that “they would lose annuities included in their contracts if they refused to work.”[17] And, because many of those who crossed the picket line were superstars, the Players lost much of the leverage they had.  Eventually, they decided to return to work, voting to end their strike without a new collective bargaining agreement (“CBA”).[18]

Rather than working out a deal at the negotiation table, the Owners forced the hand of the Players and the labor issues were left for the courts to decide.  As a result, a new CBA was not signed until 1993, six years after the previous one expired.[19] During those six years, the Players Union decertified, the NFL instituted an illegal free agency plan,[20] and was also accused of bribing the Players with payments for their “marketing rights.”[21]

III. THE COLLECTIVE BARGAINING AGREEMENT

The recently expired CBA between the Players and the Owners was extremely complex.  For purposes of this article, however, it is most important to understand that the CBA governed player salaries and their abilities to negotiate with teams by placing them into three different tiers.

The first tier was comprised of first-year players “rookies” who were selected by a team via the NFL Draft.  Players selected during this process were allowed to negotiate with only the team that drafted them.  Thus, the only leverage that could be exercised by the players who were in this category was to threaten to hold out.[22] Although this did not seem like a very credible threat, it was particularly effective when used by players who were picked very high in their respective drafts.  Teams select a player because they feel that he will be an asset on the field.  Teams are also smart enough to know that such assets are useless if they are not signed under contract and who stand around on the sidelines during games.  As a result, top players would sometimes wait until those that got drafted around them signed contracts, and then negotiated their contracts based on the amount of money received by their contemporaries.

The second tier was made up of players who had played three full seasons in the league and whose contracts had expired.  These players were considered to be “Restricted Free Agents”, and had the right to negotiate with any team.  However, their current team had the right to match any offer that they received and thus could prevent them from leaving.

The last tier consisted of players who had played four or more full seasons in the league and whose contracts had expired.  These players were considered to be “Unrestricted Free Agents” and could negotiate with any team.  Their current team had no right to match the offer that the unrestricted free agent received.

The last important part of the CBA is a team’s ability to place a “franchise tag” on a player.  This is a one-year contract that guarantees that the player receiving the tag will get paid a salary which is the average of the five highest paid players at his position in the league or 120% of his previous year’s salary, whichever is greater.  Players receiving the franchise tag are guaranteed to receive millions of dollars.  While this sounds both enticing and lucrative, the reality is that there is quite a bit of tension between the players who receive the franchise tag and the teams that place it upon them.

Franchising a player eliminates all of his rights as an unrestricted free agent.  Thus, while the player will be guaranteed millions in salary, he will be blocked from receiving a long-term contract, as well as the large signing bonus that comes with it, from another team.  This is important because unlike other professional leagues,[23] where player’s contracts are guaranteed, NFL players’ contracts are not.  Therefore, the best chance for a player to earn money is through the signing bonus he receives when he signs a new contract.

IV. ISSUES

The issues herein are discussed in three parts.  The first are the issues surrounding the content of the new CBA.  The second are the flaws in the negotiation process. The last is the lack of communication between the two sides.  All three issues have contributed significantly to the current impasse between the Players and Owners which prevented them from entering into a new Agreement.

1. Issues Involving the Content of the New Collective Bargaining Agreement.

There are several critical collective bargaining issues being debated by the Players and Owners: revenue sharing, convincing the Owners to open their books and having more transparency, the establishment of a player retirement fund, an expanded 18 game schedule and the institution of a rookie salary scale.  Currently, neither side has been willing to publicly concede any of its desires to the other.

The issue at the forefront of the public eye is revenue sharing, in part because of the huge discrepancy between the money made by the Players and Owners, and the money made by the average American.  With the economy struggling to recover, record unemployment and many people still finding it difficult to make ends meet, fans of the game seem to be running out of patience over the Players’ and Owners’ “inability to figure out how to divvy up $9 billion in revenue.”[24] Indeed, the longer the lockout lasts, the greater the risk the league carries of alienating the public.  Jerry Crowe, a writer for the LA Times, warns the two sides: “Don’t slaughter your cash cow.”[25]

A blogger for Forbes.com named Maury Brown chronicled the revenue sharing issue very well.  The concept is quite simple.  The NFL makes billions of dollars every year in profit which gets split between the Players and Owners.  The issue with revenue sharing however, involves where that split occurs.  Under the expired CBA, the players and the owners split “all revenue”[26] that the NFL generated 60/40, respectively.  However, this is slightly misleading.  Before the income was split, the owners would take off a certain percentage for “operating costs.”[27] Thus, there were two distinct categories of revenue under the old CBA: “all revenue”[28] and “total revenue”[29].  “All revenue” is the total amount of profit that the NFL had generated.  Last season, this number was $9.3 billion.[30] “Total revenue” is the profit that actually gets split between the Players and the Owners.  Last season this number was $8.2 billion.[31] That means that in 2009, the cut for “operating expenses” that the owners took for themselves before the revenue was split was $1.1 billion.  Under the new proposed CBA, the Owners are asking for an “additional $1 billion off the top”[32], citing a further increase in “operating expenses.”[33]

The second issue relates directly to revenue sharing.  While the Owners are asking for additional money, they have balked at the Players request to “open the books”[34] and “back up their requests with the proper financial data.”[35] Although the Players have been given financial data regarding revenue,[36] they have not been given access to data regarding team costs.[37] As a result, the Players feel as though they are being asked to give up more money without really knowing why.[38] Dominique Foxworth, a player for the Baltimore Ravens, feels that “the idea that they [the Owners] can ask for a billion [more] dollars from us without giving us the opportunity to crawl through their numbers is somewhat disrespectful.”[39] He likens this to “buying a car while only being allowed to look at it through the showroom window and not being able to drive it around.”[40]

The thirdissue involves pension plans for former players.  Currently, the Player’s position is that “the league doesn’t, and hasn’t, contributed to pension plans.”[41] Specifically, “teams pay nothing to former player pensions right now, and it’s been that way since 19…it’s been that way since history.”[42] DeMaurice Smith, the representative for the Players, describes this as “disgraceful that teams don’t pay anything to the former players who made this great game.”[43] Of course, the NFL and the Owners refute this contention, claiming that they “have contributed more than $2.7 billion towards various NFL benefit plans for current and retired players.”[44] However, the NFL paid $10 million less in benefits per team in 2010 than it did in 2009, despite revenues increasing substantially.[45] This has led to past and current players questioning the NFL’s commitment to ensuring the health, safety and welfare of its players.[46]

The Owners have also proposed expanding the NFL regular season from 16 games to 18 games, in part to help generate the revenue necessary to increase the funding of pension plans and to generate more profit.[47] However, because of the tremendous safety concerns involved, the Players have stated that they “cannot justify [the addition of more games]”[48] They remain adamant that the 18 game idea must be taken off the table and not be included in any future proposal between the two sides.[49]

The last topic being disputed is the institution of a Rookie Salary scale.  This is, however, one of the few issues that the two sides were able to come to an agreement on.  The new plan will “replace the current rookie salary cap and limit the amount of guaranteed money and signing bonuses available to draft picks.”[50] Although not all of the specific details have been revealed, the Owners and Players are rumored to have negotiated a deal where draft picks would receive less money upon signing their initial contracts with their respective teams, but would qualify for free agency faster, allowing them to sign larger contracts at that time.[51]

1. Issues Involving the Negotiation Process.

Apart from the specific CBA issues, and perhaps the key to ensuring labor peace in the future, are the flaws in the bargaining process itself.  The Owners decided to opt out of the current CBA on May 20, 2008.[52] This means that from the time of the opt out, until the CBA officially expired on March 13, 2011, the Owners and Players had almost three years to work out a solution on an extension.  However, because there was no sense of urgency from either party, working out a new CBA seemed to continually get delayed until it was too late.  This lack of urgency illustrates one of the many problems with the negotiation process.  Neither side felt compelled to meet and discuss the issues in any serious manner.  Additionally, even when they did meet, without the threat of any binding ruling from a judge, there was no serious progress made.

The first round of mediation took place before George H. Cohen, a renowned former labor attorney and the director of the Federal Mediation and Conciliation Service.[53] His reputation prior to the mediation was very high.  In fact, he was described by one of his contemporaries as in the “top five all-time labor practitioners.”[54] William Gould, a Stanford Law Professor and a former chairman of the National Labor Relations Board, felt that “the parties couldn’t be in better hands”, and that “[Cohen] brings and awful lot in terms of knowledge and temperament to the table.”[55] As the mediation talks began, there was quite a bit of optimism that a deal could get done and as the original deadline approached, many felt that Cohen would be able to negotiate peace.  However, even after “dozens of hours shuffling between the two sides in Washington, D.C., trying to mediate a settlement,”[56] Cohen’s attempts proved to be in vain.

After leaving the mediation table, the two sides found themselves in the courtroom of U.S. District Court Judge Susan Richard Nelson, where she ordered both sides to go back into mediation.[57] The question was asked, “if Cohen didn’t succeed, why would Nelson order the same people facing the same issues back into the same process?”[58] The answer to this is actually quite simple.  Judge Nelson has “a hammer that Cohen did not have: Her court has the players’ request for an injunction to stop the lockout.”[59] This means that her order to return to mediation “carries with it a signal that both sides must analyze and try to interpret…[because] by ordering more mediation, Nelson is warning that one side or the other will be better off with an agreement than with hotly contested litigation.”[60]

As a result of Judge Nelson’s order, the two sides returned to the mediation table.  The current mediator is U.S. Magistrate Judge Arthur Boylan.  After a few days of meetings, he apparently became “frustrated”[61] with the Owners and Players and suggested that both sides “do some homework.”[62] With “few signs of progress”,[63] Judge Boylan informed the parties that “they probably won’t convene again until May 16 because he has a few other matters on his judicial calendar.”[64] In the interim, Judge Nelson and Judge David S. Doty, a District Judge sitting in Minnesota, are each expected to make rulings that could significantly influence the outcome of the mediation.  Judge Nelson was expected to decide whether or not to grant the players’ request for an injunction to immediately lift the lockout.[65] Judge Doty is scheduled on May 12, 2011 to hear the players’ request for damages stemming from a prior ruling he made in this case.[66] These two rulings are expected to add leverage to the mediation, and to help foster an agreement between the parties.

On April 25, 2011, a few days after the second round of mediation talks stalled, Judge Nelson granted the injunction sought by the Players, which finally lifted the lockout after 45 days.[67] Additionally, she denied the Owners’ request for a stay of the injunction, ensuring that it would stand.  This was declared to be a “game-changer”[68], and was considered a monumental victory for the Players.  This victory, however, was very short lived.  On April 29, 2011, a panel of judges from the 8^th Circuit Court of Appeals issued a temporary stay of the injunction ordered by Judge Nelson.[69] This panel is also expected to rule in the next few days whether to issue a more permanent stay of the injunction which would keep the work-stoppage in place pending an appeal.[70]

The inability of the District Court and the 8^th Circuit Court of Appeals to reach a consensus is a microcosm of the negotiations thus far.  Just when one side appeared to be getting the leverage it needed to encourage a settlement, the scales tipped the opposite way.  The lack of continuity has the two sides vacillating between the mediation table and the courthouse, and they often have more incentive to stall than to try to work out a deal.  Rather than showing their hands to one another and negotiating effectively, each side is simply waiting for the court’s rulings to be issued so they can leverage those rulings against one another in the mediation.

1. Communication Failure.

In an article published in the Nebraska Law Review, Professor John Barkai described how he teaches negotiation and mediation techniques.  He noted specifically that “communication is at the heart of negotiation and mediation.”[71] He felt, however, that it was sometimes difficult to teach effective communication to law students for a number of reasons including that “[they] want to learn about negotiation but not about communication” and that they “often think that successful negotiation depends on tactics and tricks.”[72] He commented that teaching these techniques to business executives and lawyers outside the law school was even more difficult because “many such successful people think they are already excellent communicators.”[73] He evoked a particular image at the beginning of his article which is appropriately applied to the Owners and Players.  He described a cartoon with “three angels…facing three devils.”[74] He analogized this image to the view that “negotiation [is] a conflict between good and evil”[75], and that “in most negotiations, people assume that their perspective on the conflicting issues is the correct, reasonable, rational, and justified position.”[76] It is this “perceptual view”[77], which he feels makes “negotiation and conflict resolution so difficult.”[78] Applying the angel versus devil image to the current negotiation between the Owners and Players makes it clear how relevant it is.  Each side feels that it is playing the role of the angel, and the other the devil.  Thus, each side also feels that their position is the “correct, reasonable, rational, and justified”[79] one while the other is being “incorrect, unreasonable, irrational, and unjustified in their demands.”[80]

Barkai also references the “Ugli Orange Negotiation”[81] as a way that negotiation teachers discuss and teach effective communication techniques. This specific example involves two sisters fighting over a fixed amount of a limited resource.  Each wants an the orange, and perceives that in the negotiation there will be only a winner and a loser.  What they don’t realize is that they could actually both “win” the negotiation.[82] Specifically, although both sisters want the orange they each want different parts.  That is, one needs the rinds and one needs the juice.[83] Thus, as long as they are willing to communicate effectively with each other, this information would come out and it would create a “win-win” situation.[84] Barkai uses this example to show how “good communication skills during negotiations can assist the parties to learn about the needs of the other party and to avoid disruptive, emotional communication that can be a roadblock to a successful negotiation.”[85] This lesson needs to be learned by the Players and the Owners.  If neither side is willing to communicate effectively, then the “disruptive, emotional communication” that is currently taking place will remain an insurmountable roadblock between them.

The importance of effective communication in negotiation is further emphasized in Getting to Yes,[86] a book discussing effective negotiation techniques.  The book’s authors Roger Fisher and William Ury (“Fisher”) describe the “three big problems in communication.”[87] The first of these is that negotiators, rather than trying to “dance with their negotiating partner toward a mutually agreeable outcome, try to trip [them] up.”[88] More specifically, Fisher feels that “effective communication between the parties is all but impossible if each side plays to the gallery.”[89]

Another problem is that sometimes, “even if you are talking directly and clearly, [the other party] may not be hearing you.”[90] Fisher feels that this is a two way street, that as often as “people don’t seem to pay enough attention to what you say, you would be unable to repeat what they had said.”  Part of this is because “you may be so busy thinking about what you are going to say next, how you are going to respond to that last point or how you are going to frame your next argument, that you forget to listen to what the other side is saying now.”[91]

Finally, the last problem is misunderstanding.[92] Although the book specifically references situations where the parties speak different languages, the underlying principle still applies.  Specifically, “even when negotiators are in the same room, communication from one to the other can seem like sending smoke signals in a high wind.”[93]

The communication difficulties between the Owners and Players embody all three of the problems detailed in the book.  In the weeks leading up to the expiration of the current NFL CBA, both sides decided to take shots at each other through the media rather then sitting down and trying to work out a deal.  For example, Jeff Pash, the lead negotiator for the Owners, stated publically that he didn’t think “both sides ha[d] an equal commitment to working out a deal.”[94] Specifically, he felt that “if both sides have a commitment to getting a deal done, it will get done.”[95] When asked to clarify this statement, Pash stated simply, “obviously, we have the commitment…I’m not suggesting anything about the other side.”[96]

After hearing Pash’s statements, and reading between the lines, DeMaurice Smith, the representative for the Players responded by alluding to evidence from the “lockout insurance”[97] as proof of the Owners ulterior motives.[98] He asked the public to, rather than listen to Pash express “questions or doubts about [the NFLPA’s] commitment to the negotiation process,”[99] that they should instead “stick to the facts.”[100] In the aftermath of Pash and Smith trading public barbs, people involved on both sides took to Twitter to express their frustrations and reservations over the negotiations thus far.[101] Indeed, the lack of progress and the “steady leaks of information from both sides”[102] have succeeded only in “escalating the tension.”[103] Each side has, to this point in the negotiation, seemed more concerned with playing out the mediation in court of public opinion rather then in private with one another.  In fact, the public jabbing got so bad that George Cohen had to issue an order to both sides to “stay silent on the mediation.”[104]

The decisions made here are a perfect example of the type of ineffective communication techniques that both Barkai as well as Fisher, suggest greatly inhibit any successful negotiation proceeding.  Specifically, Barkai notes that “it is almost impossible to over-emphasize the importance of good listening and communications skills for conflict resolution.  The failure to effectively communicate during negotiations can be both deal-breaking and conflict escalating.”[105] By trying to win over the public, rather then negotiate seriously, neither the Players nor the Owners were practicing effective communication, and the consequences have been clear.  As of today, the two sides are no closer to reaching an agreement than they were three years ago.

V. SOLUTIONS

The reason for going into such depth about the negotiation so far is to really emphasize its flaws.  Currently, the two parties are cycling between the courts and the mediation table, with each side using any leverage it can to help strengthen its position.  What is needed now is for both sides to take a crucial step forward towards to eliminating extended periods of labor unrest in the future.

Attached to this paper is the draft of a Dispute Resolution model, adapted specifically to the fit needs of the NFL.  The purpose of this model is that it should be attached to the next CBA to help govern future labor disagreements.  While many of the provisions in this model are standard in an ADR clause in a contract, it is important because it includes a step that the NFL does not currently apply to its labor negotiations. That step is binding arbitration.

1. Binding Arbitration in Major Professional Sports.

Currently, Major League Baseball is the only major sport to employ an alternative dispute

resolution (“ADR”) model to help run its business. This model is in place to “create a system of checks and balances and breed parity.”[106] More specifically, it “establishes a system in which salaries from top to bottom are reviewed and adjusted to mirror those of equal players.”[107] Currently, baseball uses three different binding arbitration models to help run its business, Salary Arbitration, Night Baseball Arbitration and Grievance Arbitration.  Salary Arbitration and Night Baseball Arbitration both involve players re-negotiating their salaries with their teams.  In Salary Arbitration, eligible players[108] have the option of filing for either normal Salary Arbitration or Night Baseball Arbitration if they cannot agree on contracts with their teams.  Under normal Salary Arbitration, the “last-best offer approach”[109] is used.  Both sides submit their final salary figure to the arbitrator and are then given the chance to argue their respective positions for one hour, with thirty minutes of rebuttal each. [110] Then, within 24 hours and without a written opinion, the arbitrator must pick one side or the other.[111] The arbitrator has no flexibility and cannot average the two amounts, he must pick one of the numbers submitted by the parties.[112]

In Night Baseball Arbitration, the process is the same as the normal arbitration process with one distinct difference.  In Night Baseball, the arbitration numbers for each side are not revealed to the arbitrator.  The arbitrator issues what he feels is a fair number and whichever side submits the figure which is closest to the one the arbitrator decided on is the one who wins.  Proponents of this type of arbitration feel that it is the most equitable.  This is because both sides are encouraged to submit their best offer.  They know that the arbitrator will be issuing a number and that it is in their best interests to submit a number as close as possible to what they think the arbitrator will choose.

The foundation for Grievance Arbitration dates back as far back as the nineteenth century, “as a reaction to the management practice of blacklisting players who engaged in unapproved conduct.”[113] Essentially, grievance arbitration is in place as a method to help “players who are subject to disciplinary proceedings.”[114] Although most of these cases are “nickel and dime” matters, for example cases dealing with the quality of hotel rooms and travel expenses,[115] it also has been successful in dealing with larger cases like that of John Rocker, a former pitcher for the Atlanta Braves.  Rocker was suspended by Major League Baseball in 2000 for making a number of controversial, racist, homophobic and sexist comments.  His suspension was originally imposed for spring training and the first 28 games of the season.[116] After going through grievance arbitration, however, his suspension was cut in half by the arbitrator which allowed him “to begin the 2000 baseball season more or less on schedule.”[117]

1. Best Alternative to a Negotiated Agreement.

Players begin the negotiation process at a severe disadvantage against the Owners (who own all the capital).  They can help offset this disadvantage by developing a very clear BATNA[118] so that they will not be caught “negotiating with [their] eyes closed.”[119] There are three distinct operations that are required of a BATNA.  “(1) Inventing a list of actions you might conceivably take if no agreement is reached; (2) improving some of the more promising ideas and converting them into practical alternatives; and (3) selecting, tentatively, the one alternative that seems best.”[120] There are two things, however, that the Players should be cautious of when developing their BATNA.  The first is to make sure they do not “psychologically see the alternatives [to playing football] in the aggregate.”[121] Fisher talks about how people make the mistake of combining all their alternatives into one.  He uses the example of an individual negotiating a salary agreement who reasons that if he can’t reach an agreement, he could “go to California, or go south, or go back to school, or write, or live in Paris.”[122] The risk here, according to Fisher, is that by aggregating all these alternatives, it may seem “more attractive than working for a specific salary in a particular job.”[123] This aggregation, however, is not real.  In reality, the individual will only be able to select one of these alternatives, not all of them.  Thus it is important to keep the alternatives in perspective.  This is something that several players have succeeded in doing quite well.  For example, Chad Ochocinco, a receiver for the Cincinnati Bengals, joined a major league soccer team,[124] and Tom Zbikowski, a safety for the Baltimore Ravens, has scheduled several professional boxing matches.[125] Some of the lower profile players like Troy Bergeron and Rod Windsor, have even decided to take their skills to the Arena Football League, just so that they could continue playing the sport.[126]

Fisher believes that the biggest risk of developing a BATNA, however, is being “too committed to reaching an agreement.”[127] That is, even while developing a BATNA, the party may remain “unduly pessimistic about what would happen if negotiations broke off.”[128] This is what happened during the NFL work stoppage in 1987.  The Players did not develop a solid BATNA, and thus, when the owners began to use replacement players and move on without them, had no choice but to cross their own picket lines.  That meant Owners did not have to seriously consider any of the Player’s demands.  It is possible that such a scenario could happen again this year.

While the Players have remained steadfast in making sure that their interests are heard at the negotiating table, it remains to be seen whether they can keep up their resolve for much longer.  Since there is no CBA, none of the Players are currently getting paid.  In addition, none of them are able to receive any sort of medical treatment for either themselves or for their families.  The Players were warned as far back as 2009 to start saving money in preparation for the lockout which they knew could be coming.[129] However, for many of them, especially rookies who hadn’t yet signed a lucrative long-term contract, saving money proved particularly difficult.  It is these players who will be most affected as the current work-stoppage progresses and who remain “unduly pessimistic” about what would happen if they cannot reach an agreement with the Owners soon.

In the NFL, unlike other sports like Major League Baseball, players’ careers are much shorter and their contracts are not guaranteed.  According to Bloomberg Businessweek, the average NFL career length is 3.5 years.[130] However, an article in the NY Times estimates that the average MLB career is 5.6 years.[131] This 2.1 year difference is huge considering that the average player salary in each of these sports is well over a million dollars a year.[132] Because of their relatively low shelf life, any paycheck lost to a work stoppage is a substantial blow to a Player’s ability to be financially stable in the future.  Thus, the threat of losing paychecks makes it incredibly difficult for them to maintain their bargaining position, something which the Owners realize, and are relying upon.  They realize that if there is no football played in 2011-12, or if there is a treat that no football will be played in 2011-12, that “the players will lose all leverage”[133] and as a result, give the Owners all the power.  Thus, the Player’s BATNA must keep this in mind.

1. Mediation.

Normally after developing a BATNA, both sides would then begin negotiating. Unfortunately negotiation between the Players and Owners was fruitless.  Thus they moved on to mediation which they are currently in their second round of.  The basic mediation model has three steps, “1) identify, clarify, and communicate the issues and interests in dispute, 2) effectively negotiate with each other, and 3) structure a settlement that is fair and workable from [the parties] perspectives.”[134] There are several different mediation models that rely upon the basic model as a starting point, and which have developed effective mediation strategy.  Specifically, these models include the Hawaii 6-stage Model and the Pepperdine “STAR” 5-stage Model.

The Hawaii Model takes the core of the basic mediation model and expands it into two separate phases, the “Forum” phase and the “Negotiation” phase.[135] Each of these phases has three stages.  The Forum’s stages include “the mediator’s opening statement, the disputants’ statements, and private caucuses.”[136] The Negotiation’s stages include “a second round of private caucuses, a joint session with all disputants, and a drafting session which results in a specific, written agreement.”[137]

The Pepperdine “STAR” model of mediation involves 5 stages.  “Convening the Mediation, Opening Session, Communication, The Negotiation, and Closure.”[138] This model is very systematic, with each stage involving three things, a “task”[139], an “action”[140] and a “result”[141].  The purpose of this model is so that “once you have gone through all Five Stages of the mediation, the goal is to achieve a final and durable settlement of the dispute.”[142]

The problem with each of these models, however, is their heavy reliance on communication for their success.  And, as discussed in Section IV(C) above, both the Owners and the Players have made very little effort during the negotiations to communicate effectively.  It seems even, that they are treating the negotiation proceedings as adversarial rather than cooperative. This lack of effort will likely render any attempt to apply a productive mediation model essentially futile.

1. Binding Arbitration.

Given the lack of success by either of the mediators, clearly what is needed is for the parties to move onto binding arbitration. Binding arbitration is a “private, informal process by which all parties agree, in writing, to submit their disputes to one or more impartial persons authorized to resolve the controversy by rendering a final and binding award.”[143] For purposes of ensuring labor peace now and in the future of the NFL, binding arbitration should be applied.[144]

Arbitration is a critical, and necessary last step because it creates a legitimate incentive for both parties to reach a solution.  Ideally, even if the arbitration stage is never reached, the threat of its existence serves as the “hammer” to encourage better communication and negotiation tactics.  Under binding arbitration, there will be no forum shopping or long wait in the courtrooms.  Both sides will be well aware that under the arbitration clause, their fates will be decided by an impartial panel who will not have the same level of information as a judge.  Specifically, although the Uniform Arbitration Act gives the arbitrator the ability to subpoena witnesses and permit discovery,[145] it is very limited in scope.  For example, the arbitrator is only allowed to permit, based on the UAA, a hearing deposition when that deposition will insure that the proceeding “is fair, expeditious, and cost-effective.”[146] This limitation also applies to pre-hearing discovery[147] and pre-hearing subpoenas.[148] In other words, arbitrators will have less information than a judge would.  This does not work to the benefit of either party.

The attached ADR model has been drafted to avoid many of the problems plaguing the current negotiations.  More specifically, the primary concerns are that both sides are talking too much to the press, and, are currently embroiled in a long, endlessly drawn-out negotiation process.  By making it a breach of the agreement to discuss anything related to the negotiation, mediation or arbitration, (under Section 10.14) the parties will be forced to focus their efforts purely on dispute resolution rather then on dispute proliferation.  The ADR model also eliminates the public distraction caused by representatives and members of the two sides playing out the negotiation through the press.  Furthermore, by imposing deadlines on the decisions of the arbitration panel (under Section 10.13), the Owners and Players can be assured that there will be a speedy conclusion to the dispute resolution process.  If one side fears that they will not receive a favorable ruling from the arbitration panel, it will only add to their incentive to work things out on the negotiating table.  One of the purposes of dispute resolution as a whole is to avoid costly, time-consuming litigation and, by applying this model, the Players and Owners can do just that.

VI. CONCLUSION

There are clearly no easy answers to the NFL’s collective bargaining problem.  No one can seem to agree on any solution, except that there needs to be a solution.  The longer that the NFL’s labor dispute drags on in court, however, the longer that people’s lives, jobs, and families are at risk.  This is why a complete ADR model is so necessary here.  With other major sports seeing a rise in popularity and revenue streams, the longer the NFL lockout lasts, the greater the risk becomes that they will alienate their fan base and push them towards other sports.  Expediting the negotiation process through an ADR model is therefore in the best interests of creating a fair CBA as well as preventing fans, and their money, from slipping away.  After all, collective bargaining is only useful when there is revenue to bargain for.