Great defense of the NFLPA and Pension benefits

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Defense of the NFLPA: The foremost responsibilities of a labor union are to maximize wages and jobs; on these scores, the NFLPA numbers among the most-accomplished unions ever. Consider NFL wage trends since 1993, when the salary-cap system and current collective-bargaining format were adopted. Stated in today's dollars -- all money figures in this section are converted to 2007 dollars -- in 1993, the salary cap was $47 million. This year, the NFL salary cap is $109 million. That's a 132-percent increase in per-team player spending over 14 years, roughly a 10-percent annual improvement. (Exact amounts disbursed to NFL players can be somewhat above or below the cap, but track fairly closely.) Now add that there are more franchises than in 1993, hence increased employment for football players. In 1993, the NFL paid about $1.3 billion to labor. Between the higher salary cap and more teams, in 2007 the NFL will pay about $3.5 billion to labor. That's a real-dollar rise of 170 percent over 14 years, or 12 percent per year. How many industries do you know where inflation-adjusted payments to workers are rising 12 percent per year?

The unions of professional baseball and basketball are often praised by the same pundits who denounce the NFLPA. Major League Baseball's average salary in 1993 was $1.4 million; the MLB average is now $3 million, a 114 percent increase. The NBA's average salary in 1993 was $2.1 million and now is $4.9 million, a 133 percent increase. The average NFL salary was $790,000 in 1993 and will be $1.8 million in 2007, a 128 percent increase. So since 1993, average player earnings in the NFL have increased slightly less than in the NBA and slightly more than in MLB. Average length of career is shorter in the NFL than in the NBA or MLB, but NFL teams employ far more players than either pro basketball or baseball, so these labor-market differences among the major professional sports roughly equal out.

The sort of labor-management confrontation endorsed by critics of the NFLPA certainly does make for drama, though drama is not necessarily in anyone's interest, and at any rate, its track record in sports is poor. The 1982 and 1987 strikes led by the old NFL union were plenty dramatic, but benefited no one: Games were cancelled, fans were shafted, players (and stadium workers) lost income. Basketball and baseball athletes with longer average careers are only somewhat harmed financially by a partial year of lost wages. In pro football, the average career is three years, so a partial season of lost wages, as with the strikes of the 1980s, is devastating to the average player. From 1987 to 1993, the union reformed as an alliance and used litigation to attain free agency for NFL athletes -- please remember that pro football free agency did not pop out of the air, it was won by the union. Once free agency was achieved, the NFLPA resumed collective bargaining and decided to abandon confrontation for cooperative negotiation. Fourteen years of cooperative negotiation have proven a better model for NFL players, including the retired players, than the confrontation that came before -- much higher pay, no lost wages from strikes or lockouts. The proof is in the pudding: Why are ESPN, CBS, Fox and NBC willing to pay astounding sums for NFL broadcast rights? Labor peace assures the networks a steady supply of quality games. That, in turn, assures NFL players ever-rising income. Rarely has labor been so tangibly rewarded for productivity (good games with high ratings) as have NFLPA members since peace broke out in 1993.

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In some industries, labor has reason to be confrontational. The Service Employees International Union (Justice for Janitors) and the United Mine Workers are opposed by troglodyte owners, so in these areas, confrontation can't be helped. But today in the NFL, management is handing money to workers so fast the bank tellers' wrists hurt from counting out the bills. In that kind of environment, cooperative bargaining makes sense. Some of the older retired players complaining about the NFLPA remember an era when a union had to throw bricks through windows to accomplish anything, and just don't get that cooperative bargaining can work. Meanwhile there's a subtle reverse bias in sports pundits ripping Upshaw for having civil dealings with NFL owners. The pundits won't give Upshaw his due for obtaining 57 percent of the largest money pot in professional sports -- which seems to me the achievement of a bulldog, not a lapdog.

Now let's turn to pensions, and first consider the regular pensions for which all former NFL players are eligible. The pension deal for current players, spelled out here and here, is excellent. Beginning at age 55, current players will receive $5,600 per year for life, per NFL season played. So the average player who's in the league three seasons will get a $16,800 annual pension; a five-year performer gets a $28,000 pension and a 10-year veteran gets $56,000 annually. The start year of 55 is sooner than most corporate and public-sector pensions. And the key point is that they are pensions for only a few years of employment.

Corporate or government employees in traditional plans get their pensions in return for decades of work. The average NFL player who will get $16,800 per annum starting at age 55 worked three years and clocked out for his final time at age 26. "Retired" has never been the right word for former pro athletes, since most players leaving the NFL don't retire, rather, go to some other career for most of their adult lives. Current-player benefits also include an annuity that if invested conservatively would provide roughly another $5,000 annually beginning at 55, and a 401(k) with $20,000 in annual matching payments for those smart enough to use it. Thus even the average player who stays in the NFL only three seasons can put himself in solid long-term financial position if he makes smart choices.

Doesn't Major League Baseball promise retirees a lot more? Yes and no. A currently retiring 10-year MLB player will qualify for a $175,000 pension, versus $56,000 for the 10-year NFL player. But the MLB pension does not start until age 62, so the 10-year NFL veteran is $392,000 ahead on the day the baseball benefits begin. Because the NFL employs many more players than MLB, football's benefits are spread to a larger group of pensioners. Finally, the NFL pension fund is in better financial shape than its MLB counterpart. The NFL fund has $1.1 billion in the bank, while the MLB pension system has roughly $1 billion in unfunded liabilities.

For older NFL retirees, pension benefits are generally about half the level of those for current players. An NFL athlete who retired before 1982 gets $3,000 per year per season played, so a five-year older retired player draws $15,000 annually, a 10-season older player draws $30,000. But bear in mind, many older retired players had few or no pension rights in their contracts, and left the NFL expecting little or nothing when they aged. Before 1959, there were no NFL pensions. A system established for those retiring in the 1960s and 1970s originally paid only about $1,000 per season played and did not kick in unless the veteran had five seasons -- with an average three-season career, the typical player never vested. Retroactive pension increases in the 1993, 1998, 2002 and 2006 contracts upped the older player's pension from $1,000 to $3,000 annually per year played and eliminated the five-year floor. So older players generally get only half what current players will get. But that amount is more than double what older players received before 1993.


He's furious, livid, enraged, fuming that the NFLPA hasn't given him larger gifts.
The older players you've seen quoted denouncing the current union -- Herb Adderley, DeLamielleure, Ditka, Bernie Parrish and others -- never won significant pension rights when they were active members with NFLPA voting power. The big pension increases for older players have come since the advent of cooperative bargaining, while the earlier fist-shaking approach, which the old timers extol, failed to win decent pensions. Older players such as Ditka who today pound the table saying the union should be confrontational are overlooking that it was the cooperative years that got the older players practically everything they have. Had the union remained confrontational, NFL income would not have risen so spectacularly, and there would have been less revenue to assign to the older retirees.

What about the older players' contribution to making the NFL so successful? It is undeniable that current players would not be as well off if older players had not done their part to forge the NFL. But there are many occupations -- medicine, law, Wall Street -- where today's wage-earners are much better off than counterparts of the past, owing partly to the good work of those counterparts. Beyond the Social Security tax we all pay to seniors in general, few professionals today voluntarily reduce their incomes to provide bonuses to those who once held their positions. Among the few who do this are NFL players. The expanded benefits now received by NFL retirees are funded by current players. The average current NFL player's salary has been reduced by about $70,000 per year to finance benefits for retired players. Because the older players never won significant pension benefits when they were running the show, the payments they now receive are essentially gifts from current players -- and it's a bit unseemly to be calling news conferences to complain about the size of your gift.

If anything, the current players set the round of complaining in motion by voluntarily enriching the deals of older retirees. Until the cooperative bargaining era, older players expected little. Once the current NFLPA voluntarily opened up the pot of gold, the older players came to feel that anything less than the maximum was unfair: Though in contract terms, often they were owed nothing. Plus there's simply a power grab factor. Now that NFL prosperity has brought a $1.1 billion pension fund into existence, the older players want to be the ones in charge of that money.

Now, add a factor the older players would rather not discuss -- some have low pensions because they claimed early eligibility. Everyone approaching Social Security eligibility knows that the earlier you file for benefits, the less you get. DeLamielleure receives a roughly $12,000 annual pension because he began drawing benefits at age 45 -- knowing that taking early eligibility would reduce his benefits. Had DeLamielleure waited until age 55, his pension would be about $44,000. Thus in order to receive the $120,000 he drew from ages 45 to 55, DeLamielleure surrendered an additional $32,000 per year (the difference between the pension levels) for the rest of his life. That's not sound financial planning, but was DeLamielleure's free-will choice; now he wants the NFLPA to grant him the higher amount anyway. Leroy Kelly and other older players cited in recent media coverage as receiving low pensions get the amount they do because they filed early. Kelly began drawing $9,600 annually at age 45; had he waited until age 55, his pension would be $30,000 annually. It seems likely Kelly was warned not to file early, yet he calls the NFL pension system "really terrible" because it won't re-qualify him as if he had waited. If even one player took early eligibility and later received full payments anyway, every player would take early eligibility then demand full payments.

Some of the older players quoted as sad stories in media coverage of the NFL pension issue are, in truth, sad stories. Many aren't telling you they cashed out early, regret a bad decision, and now want special favors. Both the sports press and the regular press have presented a highly distorted view of the pension issue by treating pensions to players such as DeLamielleure as typical, when actually they are exceptions -- often exceptions the retirees brought on themselves. At any rate, the NFLPA no longer allows members to cash out early. Now players must wait until full benefits at age 55, and this rule is very much in the members' interest.

What about disability payments? There is some evidence, presented to a congressional committee in June, that the NFLPA has not approved enough disability claims by older players. But disability claims are notoriously hard to evaluate, even for physicians who examine a claimant. Some who seek disability benefits are bona-fide disabled, others miraculously cured whenever they approach a golf course. Recent media coverage of disability-benefit complaints by former players took on face value that anyone who claims to be disabled must be disabled, which is an extremely naïve assumption.

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In recent congressional testimony, Ditka said there are 300 former players who unfairly have been denied disability checks. When asked for his source, Ditka "acknowledged he might not have been correct on his estimate and quickly changed the subject," the Chicago Tribune reported. Ditka further declared the NFLPA disability claims process onerous because "If you make people fill out enough forms, if you discourage them enough, make them jump through enough hoops, they're going to say, 'I don't need this.' " Certification of an NFL disability qualifies one for up to $224,000 a year for life -- it's an awful burden to fill out some forms in return for $224,000 a year? Disability claimants should be required to prove their conditions are bone-fide, otherwise those who aren't really disabled would file for the money. Former players protest that the NFLPA uses a law firm to review disability claims, which in turn means they need legal advice. Yet the Social Security Administration uses law firms to review disability claims, and advises claimants to hire a lawyer. In response to older players' requests, the NFLPA just announced that disability eligibility will be based on Social Security Administration rules. That should standardize the process, though not necessarily increase awards. As of June, four percent of the NFL's 8,000 former players were receiving disability payments. The Social Security Administration approves about three percent of disability claims.

This brings us to the area where the NFLPA has let its former players down: Health care. Current players and their families receive four years of health insurance after leaving the NFL, previous players got less or nothing -- but even the current deal is far short of sufficient. Former NFL players are more likely to have health complications than the population as a whole. And because former pro football players represent bad risks to insurers, it can be very expensive for them to buy individual health plans.

Every former NFL player should receive high-option health insurance for life. The megabucks NFL can afford this. And the equity case is strong -- a player who gets smashed around in the NFL for a few years should be expected by society to pay his own way in life by starting a second career, but fairly asks that the highly profitable NFL sees to whatever health complications he developed. Two weeks ago, the NFL and NFLPA quietly agreed to fund joint-replacement surgery for all retired players. That's a start, but goes nowhere near far enough. Lifetime health care insurance should be the first priority in the next round of friendly, cooperative labor-management bargaining.

http://sports.espn.go.com/espn/page2/story...terbrook/070807