NFL Players Discord

Re: OT: NFL Formally Announces Lockout of Players

I posted this in the other thread, but I thought this was a good run-down of the situation:

http://sports.espn.go.com/espn/commentary/news/story?page=munson/110302

 

Re: OT: NFL Formally Announces Lockout of Players

And another that spells out what happens from this point:

http://sportsillustrated.cnn.com/2011/writers/michael_mccann/03/11/whatnext/index.html#

 

Re: OT: NFL Formally Announces Lockout of Players

there will be football.

absolute latest would be october 1st.

 

Re: OT: NFL Formally Announces Lockout of Players

That is a good link, thanks.

 

Re: OT: NFL Formally Announces Lockout of Players

I get that. He who yields the biggest hammer, gets to play by his rules.

 

I can sympathize more with players who give their physical/mental health with little regard from the owners after they're done playing and making them money.

 

Couple of points.

First, it seems that the owners want major financial concessions, but reject financial transparency.

Second, while the owners *in theory* are taking on a risk, the reality is that the NFL is as close to a risk-free investment as there is. The risk assumed by the players, however, is very real. The owners lost any sympathy from me the day they floated the 18 game schedule idea.

 

There has been talk over the past few years about how the owners wanted to "break" the union in the next CBA negotiations, which is why I reject the notion that this is about greedy players trying to victimize the poor, fair-minded owners.

The owners are within their rights to pursue the best deal they can get, but I'm certainly not going to vilify players for going after the best deal they can get, when it's their long-term health on the line in creating the money. Yes, players make far more money than the average American, but the owners have and make far more money than the average American will ever see in total over their lives. A lot of fans see it as (and the owners would certainly like to spin it as) the players versus the fans, where the fans are "the little guy." But it's actually the players versus the owners and, in that, the players are "the little guy." That doesn't mean they should get anything they want, but it certainly doesn't support the quasi-emotional "greedy players" narrative.

 

To me, so long as the players are receiving a fair wage/benefits then I could care less what the owners make. That's why they spent the hundreds of millions to buy the team. And I personally could care less how much they make.

The players union (and forget talk about owners breaking the union- the union comes and goes as the whim of the players depending on if they want to file anti trust lawsuits) wants as large of a slice of the profits as they can get and the leverage they carry is ending the NFL. Of course, that also means ending most of their paychecks as well.

To me the sticking points are:

1) The 18-game schedule. Clearly I side with the players.

2) Better long term health/retirement/death benefits for the players. A better plan is long overdue.

And speaking of those benefits, here is a synopsis:


Retirement Benefits Program
The NFL retirement program consists of three plans. The centerpiece plan is the Bert Bell/Pete Rozelle NFL Player Retirement Plan (Pension Plan), a defined benefit pension plan where a participant earns a monthly benefit for each year of service. Under the current collective bargaining agreement, a participant earns up to $470 per month for each year of service. However, a player is not automatically eligible for the Pension Plan on his first day of work. He needs three years of service to qualify for the plan.

Here are the benefits under the Pension Plan for a 10-year veteran, the average three-year player and a rookie.

10-Year Veteran
$470 x 10 years = $4,700 per month
$56,400 per year

3-Year Average Player
$470 x 3 years = $1,410 per month
$16,920 per year

Rookie
None

An NFL player who plays 10 years will earn $56,400 of pension benefits per year. In comparison, a general layperson under a traditional defined benefit plan (i.e. AT&T Pension Plan, Teachers Pension Plans) will need to work 40 years (4x as much as the NFL player) for a similar pension benefit. Seems like a generous plan, right?

However, the generosity of the Pension Plan is misleading. As noted above, the average length of a NFL player’s career is three years, so the aforementioned 10-year example is really more the exception than the rule. Using the three-year average, a player’s pension benefit will be $16,920 per year. Real money, but not enough to live on, especially if there are additional health care costs (which we will get to shortly). And in the case of the rookie who suffers a career-ending injury in his rookie season, he is out of luck. No pension benefits. In addition, because of financial and health problems later in life, many NFL retirees elect to take an early benefit, which results in a lower amount.

The two other retirement plans are the Savings Plan (like a 401k plan) and the Annuity Plan (a deferred compensation plan). For both these plans, the NFL Owners contribute an amount per year into a player’s retirement account, which he can access at a later date. For the Savings Plan, the teams provide a matching contribution of $2 for every $1 the player contributes to the plan, up to a maximum of $24,000 for 2010. To put this in context, a typical 401k plan company match (i.e. AT&T, Bank of America) will be 3-4 percent of the employee’s contribution. So while a player can earn $24,000 per year, most laypersons will earn a maximum of $500 per year under a similar plan.

For the Annuity Plan, the team contributes $65,000 into an account for each year of service. However, for both these plans, a player needs minimum years of service (two years for Savings Plan; four years for Annuity Plan).

These minimum years of service, or eligibility, requirements are likely of concern to players. Since the average NFL player career lasts three years, there is a fine line for which players become eligible for these lucrative benefits. For most layperson retirement plans, one year of service usually suffices for benefits, and because their jobs don’t involve a risk of injury, almost all such people qualify. For NFL players, qualifying is not so automatic.

One suggestion that could level the playing field on this qualification issue is to examine how to measure plan qualification. Year of service is too broad a measurement. For example, is it fair that a running back that starts every game and take all snaps be treated the same as a reserve player who plays occasionally on special teams? By the time that running back is in his third year, he is probably worn down, whereas the special teams guy is fresh.

A suggestion would be an alternative plan qualification requirement, based on the number of “snaps” or “plays” the particular player is involved in. That would be a more exact measure of a player’s contribution and thus worthiness of qualification than simply a year of service. A federal law called ERISA (Employee Retirement Income Security Act) offers protection such that a work stoppage will not impact benefits already earned under the retirement plans, both for current players and retirees. So a retiree who is currently receiving a benefit under the Pension, Savings and Annuity Plans will not have those benefits impacted by the work stoppage. They should receive the same amounts in the same time frame.

The same treatment applies for current players. A work stoppage will not reduce or eliminate retirement benefits earned prior to the work stoppage. If a current player has earned a certain monthly benefit amount under the Pension Plan and his accrued benefits under the Savings and Annuity Plan, they should be not affected.

However, retirement benefits earned for years of service in future seasons can be amended, which includes reduction or elimination. This will be negotiated in the new CBA. Thus, the current $470 monthly benefit under the Pension Plan, the $24,000 per year contribution under the Savings Plan and $60,000 contribution under the Annuity Plan can be reduced or eliminated for years of service in the 2011 season and beyond. Players who are involved in long-term financial planning should take note. Assumptions made for years prior may be invalid due to the new CBA.

Health Benefits Program
The aforementioned ERISA law provides fewer protections to health plans than retirement plans. Unless they are otherwise contractually bound, employers are under no commitment under law to provide or continue to provide health benefits. The majority of such benefits can be suspended upon a work stoppage and both current players and retirees and former players, which would result in difficulty as a result thereof.

The medical plan for current players can be suspended at the beginning of the work stoppage. In such event, current players who are covered under the medical plan may be treated as terminated from the plan as of such date. Thereafter, a player may elect so-called COBRA coverage, which allows a player to remain on the medical plan for up to 18 months after the termination. However, the catch under COBRA is the entire burden of the insurance costs can shift to the player, which would result in a dramatic cost increase to the player.

The medical plan also provides coverage to qualified retirees for up to five years after retirement, with such retirees paying similar rates as the currently players. Upon a work stoppage, these retirees may also be treated as terminated from the plan and will also have to pay the high COBRA premiums if coverage is desired under the plan.

However, there is another plan that could help ease the burden of such high COBRA payments. The Health Reimbursement Account plan, commonly known as health savings accounts, allows participants to pay health care costs from an account (like a 401k account). Similar to the Savings Plan for retirement, players are credited $25,000 into an account for each year of service ($50,000 for first year of service after the 3 year eligibility requirement). A player that has five years of service should have approximately $100,000 in his account, assuming that money has not been touched. Any of these amounts earned prior to the work stoppage will not be affected. These accounts are intended to pay for health care costs, including medical insurance premiums and thus can be accessed to make COBRA payments. So any player that is a participant under this plan and has a balance thereunder can use those amounts to offset the COBRA payments they cannot make out of pocket.

One plan for which the CBA indicates will survive under a work stoppage is the so-called 88 Plan. It is a plan that provides money for specialized care to retirees with dementia or Alzheimers. Retirees who are currently receiving benefits before the work stoppage will continue to receive such benefits. However, it is unclear whether retirees who are diagnosed with such conditions after the work stoppage are covered. This would require further clarification from the NFL.

One issue that is consistently raised by former players is the inability to receive affordable medical insurance coverage after the five-year retiree window is closed. Because of that, players often have to reach into their cash savings (including prematurely collecting their retirement benefits at a lower amount) to fund their medical costs.

A recent article also indicated that often times these players go on the public dole for medical benefits, costing taxpayers lots of money supporting an industry where the players and owners are compensated handsomely. It is a challenging issue, as on the one hand, these retiree medical benefits are very expensive and for owners who are looking to cut costs, expanding retiree medical benefits for more years would meet resistance. On the other hand, the costs to players and society as a whole for retirees’ medical conditions are enormous. The newly formed Health Reimbursement Account plan is a step in the right direction. More innovative solutions are needed.