DeMaurice Smith has Media believing owners pay nothing to retired player pensions and benefits

On Thursday, March 17, 2011, in an interview on WFAN radio, DeMaurice Smith had the following exchange of words with the program host, Mike Francesa:   (click here to listen to the Podcast)

Francesa: I’m also for your current players and you DeMaurice, taking better care of the indigent older players of which you and the owners have both done a poor job.

Smith: Mike, I put a proposal on the table that guarantees $100 million dollars for players that played before 1993, so what does that make the commitment to those former players by current players look like?

Francesa: It’s not nearly enough, but it’s a start.

Smith: It may not be enough, but right now as we speak Mike, How much money do the NFL teams provide to the former player pensions? The answer is zero.

Francesa: And that’s a disgrace.

Smith: It’s a disgrace.

Francesa: And your money [NFLPA] is disgraceful and your money is not nearly enough either.

Smith: If that’s a disgrace Mike…..teams pay nothing to former player pensions right now, and it’s been that way since 19…..it’s been that way since history…..I was going to date myself, but it’s been that way since the AFL and NFL merged.  So I think it’s disgraceful that teams don’t pay anything to the former players who made this game great.

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Now let’s do some fact checking on what DeMaurice Smith said.

First of all, the NFLPA’s own website – under the section Former Players Frequently Asked Questions regarding the Pension Plan – it states that The increased benefits, and a new 88 Plan for retired players with dementia, will be funded by about $250 million of owner contributions over the next six years.”

So as you can see, DeMaurice Smith and the NFLPA acknowledged on their own website, that the owners are contributing money to the Pension Plan.

Hasn’t DeMaurice Smith ever wondered why the Pension Plan is named after two former NFL Commissioners?

It’s not called the NFLPA DeMaurice Smith Pension Plan.

It’s named after Bert Bell and Pete Rozelle because they were the owner’s representatives that were responsible for negotiating the NFL pensions that players receive now and in the future.

In a January 25, 2010 email to George Martin, the NFLPA Assistant Director, Clark Gaines also acknowledged that the owners fund the Pension Plan when he said “But you better than anyone know, that this union had to strike in 1974, and force a work stoppage in 1982, and strike again in 1987 to get pension fund contributions from the Owners.”

I think George Martin is well aware of that, considering the fact that he spent twelve of his 14 years in the NFL as Player Representative. He was NFLPA President for two years and worked to lay the groundwork for the 1993 CBA, which included the landmark grant of retirement benefits to NFL players that played prior to 1959.

In talking about this, Mr. Martin said “Negotiating sorely needed benefits for the men that truly laid the foundation of the NFL was my proudest accomplishment as President. I know first-hand what it means to put one’s livelihood and the fortunes of one’s family on the line to fight for what is right.”

Every time the NFLPA tries to demonize George Martin and call him a pawn of the owners, they need to remember that he actually got the owners to contribute money to the Pension Plan for players that played 30 years before he came into the NFL.

The 2006 CBA – and all previous CBA’s – have clearly stated that the owners are responsible for all contributions to the Pension Plan. You can read it in Article 3 – Contributions – of the Bert Bell/Pete Rozelle NFL Player Retirement Plan.

 

In addition to having the power to give – or not give additional money to the Pension Plan – via collective bargaining, the owners also have all the “liability” that is connected with operating the pension plan.  As a lawyer, I’m sure that Mr. Smith knows exactly what that liability represents.

 

Let’s say the owners and players can’t come to an agreement and the worst case scenario occurs and no football is played for a year – or maybe two years.  Guess who is still required to fund the pension plan?

It isn’t DeMaurice Smith and the Union……it’s the owners.

 

According to AON, the actuarial consultant for the NFL Pension Plan, the NFL owners contributed $187.8 million to the NFL Pension Plan in 2009 and $166.7 million in 2010.

In 2010, the Pension Plan paid out more than $63 Million to retired players currently receiving Pensions.

For the record, I agree with Franseca and Smith – it’s a disgrace and not nearly enough, but the fact remains – the owners make the payments to the Pension Plan and those contributions are negotiated through the collective bargaining process.

So how does DeMaurice Smith continue to get away with making the statement that owners don’t contribute anything to retired player pensions?

Well, just look how Francesa responded to Smith’s rhetorical question and answer How much money do the NFL teams provide to the former player pensions? The answer is zero.”

Francesa: And that’s a disgrace.

DeMaurice Smith has been telling this fairytale for such a long time, that some people in the media are actually starting to believe it.

In addition to getting the media to buy into this falsehood, he has many retired players believing it too. Charles Mann and nine other former players – including past President Jean Fugett, issued a statement on January 15, 2010 where they said “Individual owners and teams have spent exactly nothing on retired player benefits.”

In the Francesa interview, DeMaurice Smith also said it’s been that way [no owner contribution] since the AFL and NFL merged in 1966.

Well, here’s a little history lesson for Mr. Smith.  In the 1957 Radovich v. National Football League lawsuit, the court ruled that the NFL did not enjoy the same antitrust immunity that Major League Baseball did, so rather than face another lawsuit, the owners granted most of the players’ demands – including a pension plan, but did not enter into a collective bargaining agreement with the association or formally recognize it as their exclusive bargaining representative.

“What I did opened doors”, Radovich said. “It’s the first time that any professional sport was ever taken to court and beaten.” After the court case, he never worked in football again and died in 2002.

So, from 1959 until 1966 when the AFL and the NFL merged – the owners were contributing to a pension plan. That’s 8 years before Mr. Smith said the owners were contributing “zero” to pensions.

In 1968, the players organized as an unaffiliated union that was finally recognized by the owners. On July 3, 1968, after CBA talks with the owners stalled, the NFLPA voted to strike, and the owners countered by declaring a lockout. But on July 14, the owners relented and the brief strike was over. Although the players could celebrate winning a collective bargaining agreement from the owners, the concessions they received were small. The owners compromised by agreeing to contribute about $1.5 million to the pension fund, but maintained minimum salaries of $9,000 for rookies, $10,000 for veterans and $50 per exhibition game.

We’ve come a long way since then, but make no mistake about it, former players were instrumental in getting the owners to make contributions to the Pension Plan.

From 1959 to 1992, all owner contributions to the pension plan were made through collective bargaining agreements, but in 1993 Gene Upshaw and the active players agreed that all pension plan contributions would come out of the newly created “salary cap”.

To a certain degree, this put a wedge between retired players and active players, because any increase in retired player pensions directly reduced the amount of money available to active players.

DeMaurice Smith has called for a “Legacy Fund” that is asking the NFL owners to contribute additional money that is outside of the Salary Cap. and as such, would not reduce the overall pot of money that active players receive in salaries and benefits. Before the owners opted out of the CBA the cost of benefits was $700 MILLION annually. Only a small portion of that annual cost supports retired player benefits.

In a September 23, 2009 email DeMaurice Smith’s Former Player Director, Andre Collins told retired players that “the NFLPA can only increase benefits with new money. No new money means no pension increases and no new benefits!”

New money!  Heck, the owners have been asking for cutbacks in the money they are currently giving, so what does that mean for retired players.

DeMaurice Smith has said “We have a moral obligation to the retired players, we have a fiduciary obligation to the retired players. That obligation has to be both in words and deeds. If you fail in either one, you fail.”

Please Mr. Smith, do not fail.

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About Jeff Nixon

Jeff was a first team consensus All-American from the University of Richmond in 1978. He is 7th in NCAA history with 23 career interceptions. Played for the Buffalo Bills 1979-1984. Led the team with 6 interceptions in Rookie Year. Holds Bills record for 4 takeaways in a single game - 3 interceptions and a fumble recovery. Tied Bills record with four consecutive games with an interception. After 5 knee surgeries Jeff retired from pro football in 1985. He worked for 13 years (1988-2000) as the Youth Bureau Director for Buffalo and Erie County. He has worked for the past 11 years as the Youth Employment Director for Buffalo. Plays guitar and was voted best R&B guitar player by Buffalo Nightlife Magazine in 2006, 2007 and 2008.

Posted on March 23, 2011, in NFL Alumni News and tagged , , , , , . Bookmark the permalink. 6 Comments.

  1. I think the moral of this story is that the owners have to be forced to make contributions to a pension plan its not through the goodness of their hearts. The NFLPA has over the years made it abundantly clear that they do not represent retired players and only seem to exhort rhetoric instead of action. My problem with this article is that in reality, ALL FUNDS, come from the pockets of the owners because they are the ones through which all revenues flow. The NFLPA does have some licensing rights but the overwhelming majority of the money flows through the owners. Frankly, since the NFLPA could not generate the types of monies it would take to fund a pension plan, and from its history I don’t think they would want to try, retired players should not place their trust in what the NFLPA may or may not do. Nor should we trust that the owners have our best interests at heart. We should see this from the last CBA in that pre-93 players, the ones that went on strike, were left out as the current players at that time got their benefits raised, so “thanks NFL and NFLPA!”

    • Just an idea, but instead of the NFLPA funding it’s current players over 500 of the 700 million annually that goes into the Benefits Plan, and funding the Retired Players at under 200 million it would seem, that since the Retired Players number 5000 that maybe more funding should be used for Retired Players Benefits. I was wondering Jeff if this could be negotiated in the CBA. For instance could the owners say we will not have deal unless you allocate at least half of those disignated funds to Retired Players Benefits. Particularly those Pre 93 Benefits. Or last but not least we come back to a Rookie Wage Scale of which 200 million a year could go into the fund. The Union fights against a Rookie Wage Scale, why?

  2. Please ask D Smith where the money for the pension comes from and have him describe the sourcing in detail. The Owners are the MAKERS of the GAME and the PLAYERS ARE THE GAME! Without the Players ….there is no game, NO Freedom No Football and finally Percemtage of the Gross; These were the “battle cries” of the Past, for all the Football Brotherhood, those that came before(pre-93) and those that have come after and those in the future…look how far we’ve come…don’t let GREED separate the very foundation of the strides we’ve made…TOGETHER WE STAND…DEVIDED WE FALL..some wise man in history said that…look back, take care of the Past and when you get their someone will take care of you!!!! Why? Because it’s RIGHT.

  3. If there was ONE group that represented former players, Mike Francesa might want to speak to a leader of that group, to dispel the myths perpetuated by the NFLPA.

  4. This is certain, D. Smith is a lawyer and the number 1 thing lawyers love is conflict! What are the legal fees for both sides? This is what needs to be looked at!!! What we need is an equitable resolution for the owners as well as the players. Period! Not more conflict.

  5. The rhetoric between DeMaurice Smith and the NFL Management Council is so thick you can spread it with a spatula. Who do you believe. Smith emphatically insists that owners contribute zero to former player benefits while NFL counsel Jeff Pash stated the owners offered to raise retired players benefits and pension over 60% and that the NFLPA rejected that offer. I heard Pash’s statement on local TV after talks collapsed last Friday. It’s a sad commentary when you don’t know who is telling the truth.

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