Labor Talks have Broken Off

NFL owners met for less than an hour on Thursday morning and voted - supposedly with a single unanimous voice - to break off further talks with the NFL Players Association.

In short, the league and players union are at an impasse that shows no sign of slowing down. The players association is demanding a bump in revenue sharing to 60 percent of the take, but the owners have not gone above 56.2 percent. NFLPA Director Gene Upshaw called the situation "bleak" on Wednesday. On Thursday, Commissioner Paul Tagliabue took it one step further by calling the situation "dire."

The move effectively shatters the image of labor peace that the NFL has enjoyed over the last decade, and puts in motion a free agency period that could result in some of the most draconian player cuts in recent memory.

In line with's news-breaking reports last weekend, the salary cap will remain at $94.5 million. The two sides had hoped to add $10 million to $15 million to the 2006 salary cap. Many NFL clubs are now in the position of having to shed veteran players in order to be under the cap by midnight Thursday.

"Without an agreement with the union on an extension, the league year will begin as scheduled at midnight Thursday under the current terms of the CBA," the league said Wednesday in a statement.

Many around the NFL had placed the nickname of "Bloody Thursday" on such a turn of events. Notable players such as Chad Pennington and Terrell Owens could be the subject of cuts. Veteran players like DT Trevor Pryce, RB Mike Anderson, and CB Sam Madison have already been released.

A few NFL clubs are in a good cap shape and are in a position to take advantage of the talent windfall. The Bears are among the teams with cap room to allow spending, others include division rivals the Minnesota Vikings and the Green Bay Packers. Thirteen of the NFL's 32 teams are over the salary cap, which means with no salary cap in place for 2007 incentive bonuses can't be rolled over into contracts. Teams like the Washington Redskins and Kansas City Chiefs, are in a position where they will need to release a significant amount of payroll to get under the cap.

While short-term attention is focused on the impact to this year's free agency period, long-term impact is likely to be more significant. The prospect of serious labor strife is now very real, and the NFL's concepts of guaranteed contracts, limited free agency, and even the NFL draft could be significantly changed. At present, the 2007 season will take place without a salary cap, a situation which may cause a significant change in the level of competitive balance the NFL has enjoyed in recent years.

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