Substitutes' snafus put NFL referees' pension issue on goal line
By Bloomberg | September 25, 2012 3:57 pm
The National Football League on Tuesday was inundated with pleas to settle with the officials' union, whose members had been locked out by the league since the start of the 2012 season over pension issues.
The criticism against replacement officials accelerated Monday night after a disputed call gave the Seattle Seahawks a last-second win over the Green Bay Packers. Las Vegas bookmakers said the disputed call had caused a $300 million swing in payoffs worldwide.
Sports management professors and labor lawyers argued that the Seahawks' 14-12 nationally televised victory would hasten a settlement to the contract dispute. The $9.3 billion-a-year NFL left no doubt on the outcome of the game. “The result of the game is final,” the NFL said in its statement explaining the ruling.
NFL spokesman Greg Aiello declined to comment on the status of contract talks. Michael Arnold, chief negotiator for the officials, didn't immediately return an e-mail seeking comment.
Jeff Pash, the NFL's general counsel and lead negotiator, said in a memo to teams earlier this month that the league proposed replacing the officials' $75 million defined benefit plan with a 401(k) plan, with contributions beginning at about $16,500 in 2012 and increasing to $22,000. He also wrote that that the NFL originally offered to increase officials' pay 7% to $161,000 from $149,000 and to more than $189,000 in 2018.
The officials want to continue receiving a traditional pension plan, the memo said.
Mr. Arnold said in a news release this month that continuing a DB pension plan for officials would cost the NFL about one-third of 1% of its revenue.
Mr. Pash wrote in a separate memo this week that significant economic and operational issues remained after a weekend of negotiations.
Monday night's conclusion was exactly the kind of conclusion, one determined by officiating, that might lead the league to find a way to reach a deal with the NFL Referees Association before any further damage is done to the game, said Paul Haagen, a professor of sports and contract law at Duke University School of Law.
“Is this the sort of thing that can break jams, yeah, it is,” Mr. Haagen said. “Whatever the amounts at stake are, they're less than the damage they're doing to their brand. It's quite possible this could be it.”
Frank Hawkins, former senior vice president of business affairs for the NFL and founding partner of Scalar Media Partners, said Monday night's controversy won't affect the league's bottom line. Today's “water cooler talk” is a benefit to the league, which has seen no dip in viewership or attendance, Mr. Hawkins said.
“From a financial standpoint, I don't understand how the NFL is making the strategic decision to maintain the farce that the replacement referees have become,” Warren Zola, assistant dean of graduate programs in the Carroll School of Management at Boston College, said in a telephone interview. “Doesn't seem worth it to hurt the image of a league that has been so successful.”
Mr. Haagen said the officiating errors might eventually drive a wedge into management's unified front.
“What it's likely to do is have the potential to fracture the interests of the individual employers,” Mr. Haagen said in telephone interview. “The Cowboys might see this quite differently than the Steelers. It puts a lot of pressure on the multiemployer bargaining.”