Before getting into Cornwell’s arguments, it is worth taking a moment to consider who David Cornwell is and how he is so delicately connected to the NFLPA and the players that the association represents.  First of all, Cornwell went up against DeMaurice Smith for the title of Executive Director after the late Gene Upshaw had passed away, leaving an opening at the top position in the NFLPA.  Cornwell has over 20 years of expertise in the professional sports industry, representing professional athletes and sports agents in their legal affairs.  To be clear, Cornwell is not an NFLPA Contract Advisor himself, but he has been retained by NFL players and NFLPA Contract Advisors for various types of legal matters, including representation with regards to grievances through the NFLPA’s mandatory arbitration process.  In the past, Cornwell was Vice President and General Counsel of Upper Deck Company and Assistant General Counsel for the National Football League.  Suffice it to say, Cornwell knows the ins and outs in the world of professional football.

Cornwell’s observations are cleanly broken up into various sections.  The longest section of his memo concerns the new NFL Collective Bargaining Agreement (CBA) that was signed in 2011.  The other sections include a discussion of Terrelle Pryor’s suspension, the new NFL Drug Policy, the NFL’s Conduct Policy, and the NFLPA’s apparent lack of care for enforcing agent regulations.

As stated, the bulk of Cornwell’s memo reveals his dismay about the newly established NFL CBA.  He explains that players were misguided into believing that they would receive 47% of literally all NFL revenues, when in fact, that percentage is based on net revenues, and not gross revenues as was contemplated by the previous agreement.  Cornwell also states that the use of the term “True up” is misleading and that the idea of “Revenue Buckets” is a red herring.  Other issues are discussed at length.

Cornwell was tacitly involved in Terrelle Pryor’s suspension as Pryor’s retained attorney.  Cornwell’s main issue is the way that DeMaurice Smith accepted a five game suspension for Pryor without following up with Pryor and/or Cornwell after Pryor answered some questions posed to him by Smith.  The way that Cornwell explains it, the NFLPA advised the media that the NFLPA urged Pryor and Cornwell to reject the five game suspension (which Cornwell says was false), Cornwell announced that he would appeal the decision, and then DeMaurice Smith demanded Pryor’s agent to provide Smith with a letter promising that the suspension would not be appealed.  Cornwell uses words like “baffling” and “deceptive” in his memo.  The story he paints makes me question what was going on behind closed doors.

I’ll skip the Drug Testing and Conduct Policy issues and jump right to Cornwell’s final section: Agent Regulations.  The following excerpt from Cornwell’s memo will probably not surprise the readers of this website.

In the Conclusion section of Cornwell’s memo, he wrote, “Despite my greatest hopes, my personal experience reveals that De’s vision in 2008 was little more than an inside Washington political campaign — high on style, low on substance. De’s grandiose pronouncments did not translate into meaningful progress in the business of playing football. Rather than  advancing the partnership between players and team owners, the new 10 year CBA relegated NFL players’ status to mere employees.”  Cornwell is “stunned at what the NFLPA has become under De’s leadership.”  Cornwell recognizes that DeMaurice Smith is not required to answer the memo, and in all likelihood, Smith will probably resist making any comment.

David Cornwell Stunned At What NFLPA Has Become Under DeMaurice Smith’s Leadership from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Photo by Garrett Ellwood/NBAE via Getty Images

The biggest news of the weekend was undoubtedly the proclamation that there will be a 2011-12 NBA season (albeit reduced from 82 regular season games to 66 regular season games). The announcement was made between 3 a.m. and 4 a.m. early Saturday morning. The season will tentatively kick-off with 3 Christmas Day games, including the Dallas Mavericks vs. Miami Heat.

While the big problem regarding the split of Basketball Related Income (BRI) between the players and owners has been rectified, there are still a variety of “B issues” (including drug-testing and whether players will have to be 20-years old and 2 years out of high school to be eligible for the NBA Draft) that remain to be resolved. Once the parties come to an effective agreement on all issues, a majority of the owners and a majority of the players must vote to approve what will become the NBA’s next collective bargaining agreement. The NBPA must also reclaim interest in representing the players as their official bargaining entity. If a majority of either the owners or players are not in favor of the agreement, then the announcement of a 2011-12 season starting on Christmas Day was all for naught, and the players’ lawsuit filed in Minnesota against the NBA and its member teams will resume (the lawsuit has not yet been dismissed).

From what I have read, it seems that the players and owners have agreed to a 50/50 split in BRI with the possibility of that split sliding to 51/49 in either direction, year-to-year, based on meeting certain projections, which will be fleshed out once the agreement is finally (hopefully) signed. Players had been taking 57% of the BRI under the previous deal.

An important note for agents – free-agents will be permitted to sign with NBA teams as early as December 9, 2011 under the new agreement, if executed. December 9 will also be the official opening of training camps, although I am told that many agents working with their clients to put together more organized “un-official” workout program.

Another thing to follow – what will happen to the NBA players who signed in China? The biggest name to sign was Wilson Chandler, who is playing for Zhejiang Guangsha in the Chinese Basketball Association (CBA). Due to the fact that Chandler, and all other NBA players who signed in China this offseason, acquiesced to China’s demand that no opt-out clause exist in his contract, he is effectively prevented from leaving his CBA team and signing with an NBA team.

NBA and Players Close To New Deal; Is Wilson Chandler Happy? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Baseball

• “I am embarrassed for the people who are behind this. I want to make sure that people hear that.” [Pujols sticking with Lozano as his agent].
• Can’t wait to see the policy governing the use of Social Media [Summary of MLBPA-MLB Labor Agreement]
• It may be difficult for teams to justify drafting two-sport stars [CBA Reactions: Marlins, Twins, Amateur Draft

Basketball

• Bartelstein says what we all know – it’s not fun to not be getting paid [NBA lockout costs Chicago agent, but he says it’s worth it
• Key question: Is the disclaimer of interest enough to end the non-statutory labor exemption and lower the antitrust shield? [NBA Lockout: The NBA’s Nuclear Winter — Where Do We Go From Here?
• Maurice Clarett’s counsel could be involved [Extended NBA lockout could lead to legal challenges of draft eligibility rule

NCAA

• It would be nice if states then decide to drop their registration systems.. [NCAA nears revamp of sports agent oversight to include runners, eyes national registration
• More pub for Arkansas [UAAA Summit reinvigorates agent oversight

Shabbat Shalom: Friday Wrap-Up (11/25/11) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Hockey

• Unlike baseball, hockey’s system isn’t final offer arbitration [Why Shea Weber’s arbitration win was good for hockey].

Shabbat Shalom: Friday Wrap-Up (8/19/2011) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Before 31 NFL team owners approved (1 owner, Al David of the Oakland Raiders, abstained in the vote) what they called a comprehensive agreement, there were a lot of rumblings on Twitter regarding sources telling reporters that the new deal will include a reduction of the ceiling for NFL agent fees on negotiated rookie contracts.  Prior to the lockout, no agent could take more than a 3% commission on any negotiated team contract, rookie or veteran.  The rumor is that for rookie contracts alone, the new cap on agent fees will be 2%.  This could have far reaching negative effects on the agent community.

While initially it may seem as though a mere reduction of a single percentage point is negligible, realize that we are talking about percentage points on contracts worth 6-to-8 figures.  Let’s throw round values and length of contracts out of the window.  If you represent someone who is making $10,000,000 and you take 3%, you earn $300,000.  A mere one percentage point reduction and you forfeit $100,000.  Maybe that is not a big deal to a large agency with a huge client base, but to the smaller agents who are struggling to pay training costs alone and representing players who are drafted in the later rounds without those large contracts, that percentage point could be the difference between surviving to practice another year and calling it quits.

People who think that most agents have not been charging the 3% maximum commission are wrong.  The NFLPA has stated that the average commission charged by a certified contract advisor is roughly 2.9%.  Further, the fees that are typically reduced are for players selected in the top 10 picks of the first round.  Again, we are not talking about the small agents here.

It remains to be seen whether the rumor of a change in the commission cap on rookie deals turns out to be true.  As of right now, there is no deal in place – the players believe that the owners have voted on a collective bargaining agreement with provisions that were never agreed to by the players.  However, in the meantime, there are many people who are less than thrilled with the rumor of reducing the cap on agent fees.

I have provided some of the better Tweets from last night on this subject, below.

If true, and #NFLPA caps #agent fees @ 2% on rookie deals - #agents will be more inclined to poach veterans - sqeeze small agents #nfl

July 21, 2011 7:44 pm via Twitter for BlackBerry®ReplyRetweetFavorite

@jayreisinger

Jay Reisinger

Agent fees drop from 3% to 2% on Rookie deals? Glad I'm outta the business. How can Agents afford 2 pay 4 draft prep? http://bit.ly/r5VRXm

July 21, 2011 7:18 pm via TweetDeckReplyRetweetFavorite

@Joshluchs

josh Luchs

And my favorite:

CBA-drop agent rookie fees from 3 to 2 percent. Sounds fair. Is #NCAA a signatory to the agreement or just a farm system pay back? Geesh!

July 21, 2011 6:50 pm via webReplyRetweetFavorite

@RalphCindrich

Ralph Cindrich

Rumor: NFL Rookie Deal Agent Fees To Be Capped At 2% from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Billy Hunter, the executive director of the National Basketball Players’ Association said the players would not even get back to where they stand now financially until the last year of a 10-year collective bargaining agreement.  The present agreement ends on June 30, so time is limited the parties hope to get a deal done prior to a likely lockout.

The NBA recently proposed something it calls a flex salary cap to the players.  But the players’ union said the flex salary cap is a hard cap, not a flexible one, and the union is not interested in it.  At the moment, the salary cap issue seems to be the biggest hurdling point towards reaching a new agreement.

NBA commissioner David Stern said the flex cap places a limit on spending, but teams would still be able to go over it up to a certain point.  However, the players say there is still a spending limit that eventually comes into play.  Stern added that the players would be guaranteed at least $2 billion every year of a 10-year agreement, which is a little less than what they made this year.

Stern said a player’s average wages would be approximately $5 million and the players and owners would eventually split revenues 50-50. Right now the players are raking in 57% of revenues, and the league wants to reduce that to 54.3% over the first five years of a new deal by reducing salaries by more than $500 million. This includes an 8% cut in pay in the first year of a new agreement.  Stern didn’t say this was the league’s final offer, but did admit it is getting close.

The NBA wants to introduce a salary cap of about $62 million, but allow teams to spend more than that before reaching a limit that they can’t go over.  At the moment, there is a soft salary cap in place and clubs can exceed it as long as they pay a luxury tax when exceeding the limit.  This year’s cap was set at $58 million, but some teams, such as the Dallas Mavericks, spent more than that (well over $70 million).

The league also wanted to introduce non-guaranteed contracts, but later dropped the issue and said it would leave things the way they are now.  But the players said they have had guaranteed contracts for 40 years, so the league is not really making any large concession by dropping the issue.

There is some light at the end of the tunnel, though, as Billy Hunter feels the owners are interested in coming to an agreement and is hoping the NBA will not see its first work stoppage since back in 1998.  But the union and the league said they are still far apart and more meetings will need to take place soon to get things done in time.

The two sides have exchanged a total of 10 proposals since negotiations began and there are likely to be a couple more before a new agreement is executed.

NBA Close To First Work Stoppage Since 1998 from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

All three agents found opportunities with NBA teams on the west coast of the United States, but there is no reason to look too much into that.  The three gentlemen also had law degrees, which is rather interesting to note considering that in the 2008-09 NBA season, only one General Manager had a law degree – Donnie Walsh of the New York Knicks.  However, in addition to the hiring of Myers, Babby, and Levien, Rich Cho (General Manager of the Portland Trailblazers) and David Kahn (President of Basketball Operations for the Minnesota Timberwolves) have been hired by their respective teams in the past couple of years, and each has a J.D.

Many basketball agents and attorneys would consider the title of NBA General Manager to be a dream job, and it seems to be coming more of a possibility in today’s day and age.  Whether you have such an interest or not, I encourage you to read through a recently published article titled, “National Basketball Association General Managers: An Analysis of the Responsibilities, Qualifications and Characteristics” written by Glenn Wong of the University of Massachusetts at Amherst and Chris Deubert of Ginsberg & Burgos, PLLC.  It has everything from the demographics and career paths of NBA General Managers to the Duties of an NBA General Manager.

The entire published article is embedded below, but first, here are a few notes I took while reading it:

• In 2008, the average NBA salary was $5.34 million, the highest in pro sports.
• NBA General Managers are generally involved in almost all operations of the team, including finances, marketing, stadium issues, media, public relations, coach selection, scouting, contract negotiations, and player personnel decisions.
• The NBA was the first U.S. pro league to implement a salary cap.  The cap was $3.6 million per team in the 1984-85 season.
• The salary cap in the 2010-11 NBA season was $58.044 million.
• Under the current collective bargaining agreement, which is about to expire, players are guaranteed at least 57% of Basketball Related Income in total salary and benefits.  Teams must spend at least 75% of the cap.
• Salary cap exceptions include the Bi-annual Exception, Mid-Level Salary Exception, Minimum Salary Exception, Traded Player Exception, Veteran Free Agent Exception (aka the Larry Bird Exception) – all discussed at length in the article.
• The average playing career of an NBA GM is more than double the average NBA playing career.
• Only 4 GMs in the 2008-09 NBA season had not played college basketball.
• In the 2008-09 NBA season, 50% of the then GMs had NBA coaching experience.
• Only 4 GMs in the 2008-09 season had advanced degrees.
• The average age of an NBA GM in 2008-09 was 50.1.  Only two GMs were under 40.

Twenty-First Century NBA General Managers from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Football

• Quinton Coples the next UNC player under investigation [2011 draft may have created another problem for UNC].
• Doubt Joe Linta is successful with his request [Agent Wants His Players to See Latest Offer].

Baseball

• Good read about two groups not discussed much with regards to the lockout [Assistants and agents caught in the crossfire].
• Roughly 230 players project to be eligible [Arbitration Eligible Players For 2012].

Basketball

• Being prepared by Don MacLean, who trains Priority Sports clients [Feeling the draft: Leuer preps for NBA dream].
• The NBPA wants an injunction against what it says is the NBA’s unlawful bargaining practices and its unlawful lockout threat [Players' association files unfair labor charge against NBA].
• My man Marc Isenberg put this together with Rick Rhoads [Master the Basketball Recruiting Process With Compete].

Sports Law

• At least one person likes Texas’ new agent law [Lauding Texas’ Sports Agent Law, a Great First Step].

Shabbat Shalom: Friday Wrap-Up (5/27/2010) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Baseball

• Michael McCann does not see Selig doing it unless it is negotiated into the next collective bargaining agreement [New Sports Illustrated on whether Bud Selig can punish players for alcohol & DUI related issues].

Football

• 26% of people will take up a new hobby if there is an NFL lockout [NFL Lockout: Social Media Users Weigh In [INFOGRAPHIC]].
• “That’s why he’s Drew Rosenhaus. He gets paid to do what he needs to do. And that’s’ why in my eyes he’s one of the best.” [DeSean Jackson talks lockout, offseason and contract]
• And how exactly were they exploring NFL opportunities during this Lockout? [Lockout has some undrafted players heading to Canada]
• Are up to 25% of NFL players in regular contact with assistant coaches? [NFL players, coaches violate lockout by staying in touch]

Basketball

• Has Bosh become any more marketable during the playoffs? [The Miami Heat made Chris Bosh a king, but only James and Wade reign in endorsements].
• Less than 2 months until the NBA CBA expires.. [Stern, union chief Hunter hold weekly meetings as lockout looms].
• After having already paid $395,000 in legal fees [K-State settles with Ron Prince for $1.65 million].

Shabbat Shalom: Friday Wrap-Up (5/13/2011) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

I knew that with Gary Wichard’s passing, Pro Tect Management would see many of its clients leave for new representation.  On March 22, 2011, I reported that Calais Campbell of the Arizona Cardinals switched from Pro Tect to Creative Artists Agency (CAA).  A month later and another Pro Tect client has made his way to CAA.  Antonio Cromartie, most recently of the New York Jets, is now a client of Tom Condon and Ben Dogra at CAA.

Cromartie is coming off what was probably his best professional year since racking up 10 interceptions in 2007.  He was a pass deflecting machine, deflecting a total of 17 attempted passes in 2010.  Only 43.9% of the passes thrown in Cromartie’s direction were completions.  Once/If a new collective bargaining agreement is signed, CAA has to expect a nice pay day for defensive back who will become a free agent.

Will more Pro Tect players leave the agency, and will those players pick CAA as their destination?  We know of one who recently picked a different agency.  Come back at 10 a.m. EST to find out more.

On To The Next One: Antonio Cromartie from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules