He is facing a class action lawsuit over the misuse of tens of millions in revenue generated by player images –
Retired Players Class Action Lawsuit
– as well as allegations of denying retired NFL player access to their own pension and disability benefits –
Congress scolds NFL and Union – but instead of asking for his head the NFL Players Union rewarded its head, Gene Upshaw, with a new four year contract recently worth at least $6.7 million a year.
Upshaw is, by far, the highest paid union leader in the country (well, for that matter, in the entire world). It has only been a few months since I noted here that Upshaw was at the top of the union salary league tables at $3 million a year! But hold on, there is now more. Apparently (at least according to the small print found in the union’s Labor Department filings) that salary is now heavily augmented by bonuses linked to deals negotiated by Players Inc., the for-profit subsidiary of the non-profit football players union. Labor’s Richest Man. Actually, only 79% of Players Inc. is owned by the Union – the other 21% is owned by the union’s charitable arm (thanks to Dan Kaplan of Sports Business Journal for this information). Unfortunately, according to the retired players lawsuit, very little of the tens of millions in annual revenue from the licensing deals signed by Players Inc. reaches retired players themselves. The lion’s share seems to go to the union parent and to the union’s staff.
Last year, the then head of Players Inc. and Players Union #2, Doug Allen, now with the Screen Actors Guild, took home $1.9 million. Allen is scheduled to be a key witness in the class action lawsuit filed against the union set for trial in September 2008. Joining him on the stand to try to explain the behavior of Players Inc. will likely be his wife Pat, another former NFL Players Inc. official, as well as Howard Skall, the third (of four) Players Inc. officials to leave the NFLPA last year. (Like the Allens, Skall recently moved to LA, joining the Creative Artists Agency as head of their football division). In a federal court decision last month, an attempt by the union to move the lawsuit (which was filed in San Francisco) back east was denied given the location of these three officers in California. The union’s effort to dismiss the lawsuit also failed – indicating that it has merit and increasing pressure on the union to enter settlement negotiations with the suing retired players. A well known and respected law firm based in Palo Alto is representing the players.
Meanwhile, at the heart of Congress’ concern with the union are the paltry pension and disability payments to aging players. The tragic conditions facing such players are recounted here: NFL retirees feel forgotten as fight for benefits rages and here:
Super scars of the NFL borne on retirees’ knees. One sorry fact that comes out: the lawyers helping the NFL union block players access to their OWN pension and disability fund earned more than $8 million in fees last year.
Recently Hall of Fame player Jerry Kramer was so moved by the terrible conditions in which many retired and injured players are living that he decided to auction off his (replica) Super Bowl ring to raise money for the players. Kramer to establish fund for retired players in need.
In addition there were arguments made in a hearing late last month in front of the US House of Representatives that the process used by Upshaw and Allen to decide on disability payments were unfair. A video of the hearing can be seen here: Congressional hearing on football.
Upshaw contends he does not have an obligation to represent retired players yet he and Allen recruited those players to join the Players Inc. effort to license players images to big gaming companies like Electronic Arts. However, only a few hundred out of the more than three thousand retired players have received any revenue from the licensing effort. But the union itself, as well as its senior staff, received millions.
Upshaw seems in a feisty mood about these developments – he threatened to “break [the] damn neck” of one of the players complaining about the union’s practices. Now, that’s union democracy in action.