NFL LEGACY COSTS A HUGE CONCERN IN CBA NEGOTIATIONS

By on February 15, 2011

St. Petersburg, Fla. – (RSE) As the National Football League (NFL) and its player’s union (the NFLPA) enter into discussions for a new collective bargaining agreement (CBA), there are bound to be issues that will become contentious. One of those issues is certain to be healthcare benefits for retired players.

I would like to offer some cautionary advice to the leaders of the owners and players: Be very wary of the system you put in place regarding “legacy” healthcare costs and benefits for players no longer in the league.

The mishandling of this issue, in hindsight, was a death knell to the American auto industry’s profitability by resulting in an increased hourly cost of $15-20 on a per-car basis when compared to non-unionized competitors. Similarly uncontrolled legacy costs for federal, state and local government employee retirement plans has also been an exacerbating factor in budgetary deficit concerns for many American states.

There has been a lot pressure placed on the NFL and the NFLPA about providing care for former players. Gut-wrenching stories detailing the plight of retired, broken-down athletes being denied coverage because of pre-existing conditions coupled with the ridiculously high cost of coverage procurement for these high-risk individuals have been widely reported by the media. As a result, the new system to be negotiated has been raised considerably in profile and must be addressed during current negotiations this offseason.

The question at hand is not whether former players should receive coverage; it’s who should actually be held responsible for covering the costs. I contend that it’s incumbent upon the NFLPA to maintain a “war chest” to cover the costs of their members (active or retired). Most current players truly respect the players who paved the way for them to make the money they earn today. Thus, it seems logical that they should be open to contributing a percentage of their exceedingly lucrative salaries to address the health concerns of those former players.

Nonetheless, I’d like to offer a possible solution for both sides.

Just as companies contribute a percentage of realized earnings to retirement plans, the NFL should redirect a percentage of its yearly revenue into a legacy healthcare fund. Concurrently, each player should give a small percentage of their compensation to help cover costs for retired colleagues. This creates a compromise in which both sides have a vested responsibility to assist former players and neither side in the negotiation is hamstringed to shoulder the burden alone. After all, the league – both owners and players – would not be nearly as popular or profitable without the sacrifices of the players of yesterday.

DeMaurice Smith, the newly elected head of the players association charged with replacing the iconic, late Gene Upshaw (1945-2008), is under a microscope right now in this labor negotiation. As it is Smith’s first CBA deal, I fully expect him to employ a much more aggressive approach in pushing for a player-friendly deal to legitimize his leadership. However, an imbalanced agreement for either side on the healthcare issue could be a nail in the coffin for the NFL in years to come.

Just ask the automakers in Detroit. Those that fail to learn from history are doomed to repeat it.

Categories: Football, NFL Football
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