Blog Entry

The threat that changed everything

Posted on: July 15, 2011 12:14 pm

Earlier I wrote on how the players made a threat that proved somewhat jarring to ownership and forced them to make concessions. Well, Sports Illustrated just reported what that threat was and it was a game changer.

The details I've heard are slightly different but the core facts are the same. The NFLPA had secured lockout insurance (there is such a thing?) for each player in the amount of $200,000 (one player told me the amount was $300,000) in the event the season was missed.

The union told the owners this late Wednesday night and, I'm told, it shook the owners. The next day, on Thursday, is when progress was made so quickly.

This is a huge deal and explains why the owners made concessions. While $200,000 or even $300,000 isn't a lot of cash to Peyton Manning, it is for most of the rank and file.

By playing this card, the players, at the last minute, outmaneuvered the owners. I'm told it completely stunned ownership.

Wow. Just wow,

This is the second biggest piece of news to only the fact a deal is all but done.

This was the players saying "checkmate."

Category: NFL
Tags: Lockout

Since: Jan 24, 2007
Posted on: July 15, 2011 2:51 pm

You believe this story,you will believe anything

Season was always going to be played and $300k for players making $1 million or more was not to sustain them. It is human nature to live a lifestyle that currently reflects your income. To have a 70% reduction or more would have hurt most players-they do NOT save half their income. To have a salary cap and a rookie cap will NOT significantly affect a player's pay. The good players will get their money if not from current team. I like the movement of players and I like that GM's now have to do more due diligence so fewer rookie busts(J Russell and Leinarts) and overpaying veterans who have played their best football for other teams(hello Tiki Barber,T.O.).

Since: Jul 26, 2009
Posted on: July 15, 2011 2:35 pm

The threat that changed everything

My guess is the owners were aware of the fund and that losing millions if the Hall fo Fame game wasn't played was more of a motivator.
PS - Freeman you are about worthless. It took you this long to copy this little gem from someone else? Must have had another deadline, huh? I'll be glad when the lockout is over so I don;t have to read all the garbage you spew out during the day.

Since: May 9, 2008
Posted on: July 15, 2011 2:19 pm

The threat that changed everything

@one&dun - okay i am a tax attorney and the answer to your question is, yes there is income tax on insurance policies that cover lost income.  If you think about it logically, if you earned the $ as income, you would be taxed, so why wouldn't you be taxed if the ins co replaces the $.  However, that being said, there are many times when insurance proceeds are not taxable.  Usually, this is when the insurance proceeds make you whole (e.g., you lost money through medical expenses etc) and the ins co is replacing them.  In that case, the money you used to pay for medical expenses was post-tax dollars so it would be unfair to tax the ins proceeds which merely replace them.  Another type of insurance that is not taxable is life insurance to the beneficiary.  There is no real logic to that - its just a little mana from congress b/c they feel bad about your loss.

Since: May 10, 2007
Posted on: July 15, 2011 2:19 pm

The threat that changed everything

Pretty slick maneuver.

Risk is everything in negotiation. The players took the club out of the owners hand by insuring their biggest risk. Those of you who downplay this move do not understand negotiation. This was a sophisticated move that was very well timed.

The biggest winners are the fans who get a season, and the insurance company. The players got the concession they wanted, but what was the cost of the insurance? The owners loose, to the extend its possible to be a billionaire cutting a deal to make hundreds of millions per year, to watch a pro football team you own from lofty suite with silk stockings and 40 y/o scotch while laughing about being taxed at a lower rate than the "other America." God bless 'em.

Since: Aug 21, 2006
Posted on: July 15, 2011 2:14 pm

The threat that changed everything

So the owners decided to fold. I thought billionaires weren't stupid. Darn.

Since: Oct 31, 2006
Posted on: July 15, 2011 2:12 pm

The threat that changed everything

Why the fuck did it take over 100 days for this to come out?  Good job NFLPA.  Morons.

Since: Oct 17, 2008
Posted on: July 15, 2011 2:11 pm

The threat that changed everything

Why do you hate the players so much? 

Since: Sep 30, 2009
Posted on: July 15, 2011 2:01 pm

The threat that changed everything

"Checkmate" and "changed everything" is pretty silly, but insurance worth about a quarter of the median salary is enough to help along a final push. It lets Smith say at the eleventh hour, "I can take this to my guys but they're gonna vote no unless we make it a little better for them, because half the players get a good portion of their salary without even playing. If they think it's too unfair it's easy for them to vote no. Let's change this and that a little and then I can sell it to them."

Since: Sep 10, 2007
Posted on: July 15, 2011 2:01 pm

The threat that changed everything

Chances are this insurance policy cost the former NFLPA about 20 to 40 million dollars to secure.  That most likely took some time to secure and allocate the funds, and that is most likely why the card was not put on the table before.  An insurance company played a gamble, and we win, the players win, the insurance company wins, and the owners lose.

Since: Dec 28, 2006
Posted on: July 15, 2011 1:50 pm

The threat that changed everything

One thing to consider is that there are no taxes on insurance payments, right? If so, $200k is close to the post tax take home of the league minimum without them having to get out of bed. Also, I don't see why the players would have had to disclose this any sooner than they did or why the owners could have known about it the players didn't want to tell them. This could have been all that Freeman is saying.

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