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Pablo Torre
Welcome to Pablo Torre Finds Out. I am Pablo Torre and today we're going to find out what this sound is.
Demorris Smith
The story of sport is that management
Pablo Torre
colludes right after this ad.
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Pablo Torre
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Demorris Smith
Reading this again last night just reminded me of how much I hate the league. I had forgotten how. What's the word? Clinical yeah,
Pablo Torre
you're mouthing the words.
Demorris Smith
Them, them. I just. Everybody has fallen into this trap, and I call it a death spiral, where you believe that in order to square your morality, you now talk like you are Johnny Private equity.
Pablo Torre
How the billionaires who run sports, who run the NFL talk about sports and the business is a big part of why I wanted to do this with you.
Demorris Smith
We're living in a country right now where it is undeniable that a large swath of people are broke. So I'm not asking people out there to feel sorry for NFL players. They have it almost better than anyone else in the country. And that's because they have a labor union. Right? They have a Labor Union. So NFL players get about 50 cents on every dollar of revenue that they generate.
Pablo Torre
It is a delight to be across the desk finally from Demorris Smith as he has his marker and is muttering under his breath while going through a ruling. Going through a collusion arbitration ruling.
Demorris Smith
You see how quickly I can go back to gladiator mode.
Pablo Torre
So it's important for me to point out up top here that I have been waiting to get Demorris Smith in studio with us for a really long time. In fact, I had never communicated with D. Smith until after we released part one of our investigation into the NFL Players association, which had started last June when we published what multiple union sources have since characterized as the holy grail of confidential NFL documents, the 61 page arbitration ruling in a collusion lawsuit filed against the league by the union under the previous leadership of Demorris Smith. You were the executive director of the NFLPA for how many years?
Demorris Smith
Almost 15.
Pablo Torre
And so how many, if you were to just back of the envelope this. How many billions of dollars? How many collective bargaining agreements?
Demorris Smith
Roughly two collective bargaining agreements with over $100 billion of money going to NFL players. 100 billion. Now, the owners are also getting their 100 billion fine. But the way that I like to frame it for the crowd out there is players get 50% of every dollar that they generate, and that's because they have a labor union. And I'm not asking anybody to feel sorry for them because not only is the money great, but there's strict limitations on their work rules, strict limitations on how long they can be on the field. So nobody needs to shed a tear for NFL players. You should be angry at the fact that you don't get 50 cents for every dollar.
Pablo Torre
D. Smith notably left his post as executive director in 2023, and he recently wrote a fascinating book about his tenure called Turf wars, which basically serves as the prelude for what happened last summer when the two top officers of the regime that succeeded him, Lloyd Howell and his chief strategy officer, JC Tretter, both resigned amid an ongoing corruption scandal, which involved an FBI investigation and strip club receipts. And also the union's insane decision to suppress that Holy Grail collusion ruling, which was itself about the suppression of guaranteed player contracts as part of a secret agreement with the NFL itself. In other words, the players union attempted to collude with the league to keep the league's attempt at collusion against the players union a secret. And even if no damages were granted to the union, as we'll explain, what we got was 61 pages of explosive texts and emails and slide decks and testimony. And yet, just last month, that same chief strategy officer who resigned, J.C. tretter, ran for D. Smith's old job, executive director, and he won, raising all sorts of new questions and new suspicions about not only the electoral process in which Tretor was the only former player deemed worthy of being one of three finalists, but also the plausibility of Treader's claim that he had nothing to do with the collusion ruling's suppression in the first place. Despite being Lloyd Howell's top lieutenant and chief strategy officer.
Demorris Smith
Pablo Torre is going, by the way. He has courage to go.
Pablo Torre
You said Pablo's got the courage to go.
Demorris Smith
I'd challenge him to have the courage to be right, which he hasn't been for a very long time. So he said a lot of things that factually just aren't true, kind of created this narrative. It was very difficult to go through. Jalen Reeves may have been our president,
Pablo Torre
which led me finally to the former prosecutor whose go to strategy involved suing the NFL for colluding against the players in the first place. So the larger resonance for the average American, for the normal person out there who's not a professional athlete, not an NFL player, I do think this is news they can use. Because all of this, as I like to say on this show, it turns out quite a bit, all of this is both metaphor and reality.
Demorris Smith
Yeah.
Pablo Torre
These are texts. These are cases that have helped us figure out how America conceives of accountability.
Demorris Smith
Sure. And they're also responsibility, not cheating, making
Pablo Torre
it fair, Fair play, fair competition in a era increasingly of unregulation.
Demorris Smith
Sure.
Pablo Torre
And also these are juicy, as this
Demorris Smith
year, the league will do $26 billion in revenue. 26 billion. Let's put it in a frame. There are no 10ks. 10ks are the annual reports that companies have to make under the penalty of Perry to the SEC to basically say that we are operating our business in a fiscally responsible, fair way to our employees. The NFL files no 10Ks. The NFL files no 10Q's. They make no reports to the SEC. They make no reports to the Department of Justice. There is no DOJ oversight. There is no SEC oversight. There is no state attorney general over oversight. This is the largest and most successful socialistic system in America. Why? Because for mom and dad and the kids out there, they socialize their cost to you. You pay for their stadiums, you pay for their profit Centers. You pay PSLs for the right to buy an NFL ticket, personal seats, license. And then they take all of that money that comes from you and they push it into their pockets with their greedy little fingers and they call it capitalism. No, that's profiteering socialism. So at the end of the day, just to pick out a place, if I were a Buffalo fan right now, that's going to end up costing Buffalo taxpayers about $1.4 billion for a stadium that generates profits for Terry Pula while he parks his $100 million yacht in the Hudson yard so he can watch his daughter play tennis.
Pablo Torre
And she's a really good tennis player.
Demorris Smith
She's fantastic. My wife loves tennis. We root for her every time. I'm just saying, hey man, while you're trying to make sure that you can send your kid to college or your kid goes to a public school in, in the Buffalo area, at some point, shouldn't you scratch your head to wonder, hey man, should our taxpayer money go towards improving our schools or should it go to a guy who parks his hundred million dollar yacht? And the reality is New York and upstate New York. And again, I'm a fan of the Democratic governor. They made the choice that frankly does not benefit the taxpayers. That's just true.
Pablo Torre
Well, look, now we're at the point at which you've given us the landscape broadly of how hard it is for governmental oversight to factor in.
Demorris Smith
Right.
Pablo Torre
The conversation around can this be different? Can it change? And the recurring theme of your tenure as executive director, which is different, certainly in ways that I want to discuss from what has happened since you left.
Demorris Smith
Yeah.
Pablo Torre
Has been a familiar obsession with chasing documents.
Demorris Smith
I spoke to a group of lawyers two weeks ago and I opened up the speech by saying, let's just level set for all of us. We're dorks. We, we are. I mean, I was a homicide prosecutor. It was great. I had the swagger. But at the end of the day, yeah, we're just A group of dorks
Pablo Torre
and, you know, we walk into a locker room, which one the jock is.
Demorris Smith
Yeah, there was. There was.
Pablo Torre
Yeah.
Demorris Smith
And which one? Who's not? But, you know, look, we're lawyers and we are trained to do what? What's the evidence? We might feel a certain way about something. We might want to bang the table about something. We might want to crawl into a bunker and pretend like something doesn't happen. But lawyers are trained to know and to look for evidence, and that's what we do. We want to hold people accountable.
Pablo Torre
Well, you want to figure out which is the tool, the instrument that has some sort of edge to it such that change might actually be enacted.
Demorris Smith
Yeah.
Pablo Torre
What I did not know until I got in the business of really reporting not only on the NFL, but also the NFLPA itself, is that the owners, these masters of the universe, they love
Demorris Smith
to write stuff down, man. They have a absolute obsession with documenting their crimes.
Pablo Torre
Let's say it shocked me because one would assume that a key part of trying to get away with the things we are alleging and describing is you just wouldn't put it on paper. But that's the story of how I got in touch with you, is that I got the thing that had all of this insane, mind blowing level of candor.
Demorris Smith
And again, I invite our fans. You can go online and you can find the case that I filed against the owners back in 2010. Once we thought that they had worked with the networks so that the networks would pay them $1 billion each in the event that there was no football as a result of the NFL lockout. It's written down. It's in the documents. And by the way, all of those documents, what? Weirdly, because the NFL forgot to file a motion to seal. All of those are public now.
Pablo Torre
Oh. And I'm happy to say we have them here today. Yeah.
Demorris Smith
I mean, it's unbelievable flowcharts of how we're gonna leverage the TV networks because they're gonna pay us. It's gonna give us leverage over the union in bargaining.
Pablo Torre
I mean, and what you can't say about the owners is that they're not clever, they're diabolical, they are strategic.
Demorris Smith
Yeah.
Pablo Torre
In. In all of this. And so what they had done was they had opted out of cba.
Demorris Smith
Yep.
Pablo Torre
By this point already.
Demorris Smith
Before I got elected. Yep.
Pablo Torre
The clock starts ticking and they go around to cbs, to fox, to NBC, to espn, and they're trying to renegotiate the TV rights with a certain goal.
Demorris Smith
The goal was we're going to renegotiate these rights. We've already opted out of the collective bargaining agreement. It's going to end on a certain date in March of 2011. We're going to lock the players out because we want three things. We want the players to play a 17th and an 18th game for free. We want to take away their pensions, and we want to cut 20% of their salaries. So the league knew that no one is going to walk into a negotiation room and go, hey, you know, that's the best deal I've ever heard. So what do they do? They go to the networks and they literally fund themselves so that in the event that there is no football, no games, no games for the season of 2011, they will have $4 billion to service the debt on their stadiums. And let's take everybody a giant step back, man. 2009 to 2011 was after the Great Recession. You couldn't borrow $4 million, let alone $4 billion. But they knew that they could leverage the networks in giving them the money because the networks need to have NFL football. And we talk about how clever they are. The only reason I started down this road and another lawyer from Latham and Watkins started down this road, because Jerry Jones bragged that they had $4 billion to lock the players out. Lehman Brothers is gone, Bear Stearns is gone. The world is on the verge of economic collapse, and you're bragging about a $4 billion war chest in the future.
Pablo Torre
Right.
Demorris Smith
That got us thinking, well, wait a minute. This couldn't be a loan from a bank. Where could it come from?
Pablo Torre
So the question of how we get to the documents that I'm going to show here in a second. The, the case that is filed for people who did not know this, because certainly it's very easy somehow for even the most die hard NFL fans to not remember this.
Demorris Smith
Yeah.
Pablo Torre
Who are the plaintiffs?
Demorris Smith
The plaintiffs in this case are all of the players of the National Football League. Because we have an agreement with the National Football League owners called a collective bargaining agreement. That's a contract between both parties that says, hey, we're gonna, we're gonna execute this contract in a fair way. And because it has to be fair, the NFL owners who negotiate those television contracts have a fiduciary duty to the players to maximize revenue. We made the argument to a judge that when the owners cut these deals with the networks, the argument was they obviously took less money for those contracts because they wanted future money in the bank. And the arbitrator ruled against us at the first instance. And then we filed an Appeal of that case, a judge ruled that there was enough evidence to show that the league violated its fiduciary duty, that the league breached the collective bargaining agreement by cutting these secret deals with the networks and officially, effectively froze that $4 billion.
Pablo Torre
These are the receipts from those secret negotiations with the networks that emerge because you filed this collusion suit. Yep. Collusion, which is a word we will say a lot here today, I think,
Demorris Smith
and people should know outside. When you file a lawsuit, you initiate something called discovery. And discovery simply means that we file a request for documents on the other side. And we basically say you have an obligation to turn over all of the documents that are relevant to this proceeding. So discovery happens right after you file the lawsuit, and then you have a fight over what the documents mean and
Pablo Torre
the discovery you make. I mean, here's a slide deck from the owner's meetings.
Demorris Smith
This is my favorite document in 15 years. I mean, I'm not even kidding.
Pablo Torre
For those who aren't watching on YouTube or Apple podcast videos, D. Smith will help sort of narrate what we're looking at here.
Demorris Smith
So this is an internal document. You see the NFL logo at the bottom? This is a slide. The shield that they. The shield. This is a slide that they created in order to basically walk through a decision tree.
Pablo Torre
It says decision tree in the top.
Demorris Smith
Right there at the top. What do we do with respect to this upcoming fight with the players over the collective bargaining agreement? What decision should the league make? Literally, it's a yes or no.
Pablo Torre
You start with the left. There's one single circle. It says, should league move forward with deal?
Demorris Smith
Yeah, with cba deal.
Pablo Torre
And then it's a yes or no. There's a fork, and you choose. If it's no, you go up. If it's yes, you go down. And what do you learn as you follow the Steps here? From March 2009, this presentation on the
Demorris Smith
right, you will see a dot called season restructuring. And basically, what they have walked through this entire document, along with key findings, strategic leverage, leverage over the union. When we talk about this idea that they wanted to make the players play two extra games for free, that bottom box means if we do these things, including the decision about changing the structure of the TV deals, it will ultimately help us get season restructuring.
Pablo Torre
So the middle circle says, by the way.
Demorris Smith
Oh, this is lovely.
Pablo Torre
Does deal completion advance CBA negotiating dynamics?
Demorris Smith
I mean, come on, man. Just to put it in plain speak, if we do these or if we restructure these television deals, does a renegotiated TV contract help? Us with CBA bargaining. And they actually do bullet points on how doing these deals in a favorable way to them gives them leverage over the nflpa. And again, for the people at home, because there's always a. Yeah, but. Guy. Yeah, but D. I mean, they're strategic. They're just being smart. I mean, these are a group of billionaires. This is what they.
Pablo Torre
Yeah. What's wrong with this? What's wrong with this? Strategic.
Demorris Smith
All of this is a violation of our contract. I mean, the fact that you would take money from a deal where the players share in the money from that deal in order to give you an advantage in bargaining is a violation of our contract.
Pablo Torre
And we don't know about this.
Demorris Smith
Correct.
Pablo Torre
Unless we sue in this way under the terms of the collective bargaining agreement, the cba.
Demorris Smith
And by the way, man, you know what you love? If you're a. Again, a lawyer who thinks like a prosecutor, man, you just want people to write stuff down. And please give me a decision tree for why I should engage in a breach of contract. That's what this is. But this, out of 15 years, this was always my favorite document because I was frankly stunned at the extent to which someone would say, hey, we're gonna create a slide deck that demonstrates our deliberate effort to violate our contract. Man, nobody does that. Well, actually, somebody does.
Pablo Torre
Well, why do they do it?
Demorris Smith
You know, I always try to employ a certain amount of empathy towards them. And the result that you get when you try to step into their shoes. Not sympathy, empathy. Why would they do this? Get into their brains. When you answer to no one, and you have never answered to no one, you never think that a document like this is going to reach the light of day. The league has never been audited. There's never been a dissent of SEC lawyers executing search warrants. They've never been in a world where they've had to turn things over, frankly. Unless it was a fight between another owner. Yeah, I mean, just the historical context of all of this. There are no audited financial statements for the National Football League. They don't create them. They just don't. The only time a set of decent financial statements made the light of day was when Al Davis sued the league when he wanted to move his team from Oakland to Los Angeles, and the league prevented it. And you know what kind of case that Al Davis filed? He filed a collusion case, an antitrust case. And then the documents came to light, and you know what happened? The league settled. Because this is also a league that does not want its secrets to become
Pablo Torre
Public the pressure points on a league that has a shield that is largely impervious to the oversight you're describing. I mean, yeah, it explains why. Also there's this slide.
Demorris Smith
Current television packages, short term extension alternative.
Pablo Torre
And just read the. It says again on the left, rationale. And on the right, the bullet point
Demorris Smith
says, yeah, concept and then rationale. Rationale shifts leverage in labor negotiations away from the union capital U ability to pull money into a work stoppage year. So once again, this is a public document. Some of it has been blacked out. And yes, you want to know. It's all.
Pablo Torre
I would love to know the redactions.
Demorris Smith
Me too. But you know what? I'll live. I'll live with the other stuff.
Pablo Torre
You sort of start with a hypothesis informed by in many cases. And this is where it becomes familiar to me. It's a quote that you saw from Jerry Jones. It's a tip that you receive. It's something an NFL owner tells you. And so I actually just want to skip ahead now in the timeline because now we're in 2012.
Demorris Smith
Yep.
Pablo Torre
And what you find out is that, oh, wait, there was a secret salary cap.
Demorris Smith
Right.
Pablo Torre
So a secret salary cap, right. In 2010. And from whom do you find out about this? Yeah.
Demorris Smith
So to set it up for the folks at home, the 2006 collective bargaining agreement basically had a poison pill in it. Something where if we reach expiration, bad things happen on each side. And that was designed by both Paul Tagliabu, the former commissioner, and Gene Upshaw, my, my predecessor, to basically urge both sides that we don't want to get to this fail safe point because bad things happen. So the bad thing that would happen at expiration for the owners by contract, by contract was that there would be no salary cap in 2010. And the idea there was it was designed to scare the owners to death that all the high market teams would outspend the low market teams. There would be chaos. So the idea of no salary cap in 2010 was to urge owners to get a deal done before 2011. The bad thing on the player side was that if we reach expiration, there will be no benefit paid to players.
Pablo Torre
Right.
Demorris Smith
No 401ks, no health care benefits. All of the benefits packages were suspended in the uncapped year. And that's what we called it, the uncapped year. So we go through the uncapped year in 2010, and I've just been elected in, in 2009. We know we're gonna head into a lockout because Jerry Jones and everybody has
Pablo Torre
said so I just like, by the way, the uncapped year just, it evokes the idea for the owners like this is the perfect purge.
Demorris Smith
Oh, 100% should be.
Pablo Torre
There are no laws, anything.
Demorris Smith
Yeah, no, there's a target on everybody.
Pablo Torre
Man and beast are merely are joined
Demorris Smith
together for the ultimate showdown. Yeah, no, it was supposed to be an absolute epic, you know, and, and again, the salary cap is the core of, of, of the, of the relationship between owners and, and, and players.
Pablo Torre
Yeah.
Demorris Smith
You know, the first salary cap came into being in 1993.
Pablo Torre
A few things are as meaningfully and
Demorris Smith
deliberately contested cap was instituted. The formal salary cap as we know it was instituted in 1993 as the result of a collusion case. So you Fast forward, it's 2010. We audit revenue of the the NFL literally to the penny almost every year. We also look at spending every year. So what do we see in 2010? There is no wild spending for the most part by the teams.
Pablo Torre
It's actually not the purge.
Demorris Smith
It's not. And that's curious. But of course, I have no facts. We do the deal in 2011 and literally as the ink is still smudging on the CBA. On the CBA deal in 2011, this 10 year deal, this kumbaya moment is ruptured because we are told that the union has to sign off on this deal by the owners to punish the then Redskins and the Cowboys for violating an agreement between the owners to keep the salary cap at a certain limit in 2010. Now, you don't have to be the smartest lawyer in the world when you hear from the owners. Oh, hey, by the way, we need to, we need you to sign off on you agreeing to take money. Let's just talk about what this is. Take money away from the players on two teams because the owners, the owners violated the agreement.
Pablo Torre
And the owner in this case that I want to spotlight is the owner of the New England Patriots, Robert Kraft. So first, it's a phone call.
Demorris Smith
It's two phone calls. First, it's a phone call from Roger saying that this is the deal that's on the table. And as you can imagine, given my personality, I do run a little hot.
Pablo Torre
I haven't noticed.
Demorris Smith
I know, I know. It, it's. I'm something I'm trying to work on.
Pablo Torre
The jacket has been off the entire time.
Demorris Smith
But you know, when, when Roger made that call, I, I mean, I'll just tell you, I mean, I, it was, it was one of the more expletive laden calls because again, we'd gone through this torturous, just absolutely brutal, bloody war. We got some things that we needed to write the veto and increase in any more games. We needed that as a group of players. They got what they wanted. Some cost controls. Fine, a bloody deal. Both sides reach a deal that they're not thrilled about, but it's the one that you can live with. And literally, almost an hour later, you get a call from the commissioner, you know, oh, and d, we have to do this deal. I mean, my head exploded because, you know, by the time you reach a deal, you may not believe it, but all of us had taken enough bloodletting and we had kind of reached this deal. And Robert was instrumental in getting that 2011 deal done. I mean, he left his wife, who was dying at his house, in order to get this deal done. And for that, I will always have a certain amount of love and respect for somebody who's willing to do that. But when my head explodes, the first person I pick up the phone is called Kraft, because obviously he knows about this. And, well, you know, when someone says that there's a piece of evidence that demonstrates that they have engaged in collusion, your ears perk up.
Pablo Torre
Noted.
Demorris Smith
You don't cut off the. The conversation. You know, you just. That's not the moment to go, hey, I just need to go get myself, you know, maybe a nice latte. No, you. You just. You let people talk. And. And after that, he sent me an email.
Pablo Torre
I would love to have you read from the email as quoted.
Demorris Smith
I understand your concern. He wrote, but believe me, we did the right thing for the integrity of the game long term.
Pablo Torre
So that's in writing.
Demorris Smith
That's in writing to me. And again, the context here is we're talking about this idea that, that we have to sign this deal in order to take money from the then Washington Redskins and Dallas Cowboys. But the context why we have to agree to this deal is because those two teams did not go along with the collusion scheme.
Pablo Torre
Yes.
Demorris Smith
So, as we would say in good old prosecutor worlds, this is the smoking gun. Not only from the statement, but then there's an attachment to the email, and it is an Excel spreadsheet, and it outlined that the owners had agreed to a $123.3 million cap ceiling, and Dallas, Washington, Oakland, and New Orleans had ignored it. Washington blew past the threshold by $102.8 million, and Dallas had overspent the agreement by $52.9 million. And then Kraft writes, these teams got an unfair competitive advantage, which is not Good for the game, in my opinion. In the long term.
Pablo Torre
Did he know what the meaning of this was? The implication was, legally, I doubt it. You could inject someone, a lawyer with truth serum, and you might not get it with this level of clarity.
Demorris Smith
This was an admission with a chart. And so much so that when this text came over, we filed a grievance based on that. The arbitrator ruled that when we did the deal in 2011, we explicitly agreed to eliminate any litigation that that could be brought with respect to 2009-2011 season. And that was unfortunate. But that's, you know, those are deals that you have to make in the context. Now, I, I took that chart to the Justice Department because, you know, the conservative estimate, if you take the average of what the Redskins overspent and what the Dallas Cowboys overspent, you get to a rough number. Let's just call it $50 million. And let's just say that every team in the league had made a equal decision to spend $50 million more than that secret salary cap. The way the Justice Department calculates a potential damages metric is you just take 50 times 32. That's a crime. That's a theft from the players.
Pablo Torre
Look, I think the big picture context for all of this is that in general, the owners blow out the players in any contest of financial attrition.
Demorris Smith
Sure.
Pablo Torre
And for all the reasons we've covered on this show exhaustively, that they hold the teams forever and pass it down to their kids versus the ever spinning lobby doors of the NFL. Right.
Demorris Smith
We're about to see in a couple of days.
Pablo Torre
And so in that way, the question becomes, as the leader of this union, the only real check on this league. How do you find the spots where you might actually be able to poke at a pressure point?
Demorris Smith
Yeah.
Pablo Torre
And what do you do when you identify one?
Demorris Smith
It's two things. One, you're looking for a violation of the contract. The contract is predicated on no collusion. Look up Bill Radovich, you know, a guy who sues the national football league in 1945 because the Detroit Lions owner blackballs him and doesn't allow him to leave the Lions even though he's a free agency. You fast forward to Curt Flood who sued for collusion and loss. Fast forward to Oscar Robertson in the NBA who sued and won. John Mackey started the lawsuits for the NFL in 1971. It didn't end until collusion lawsuits took us to 1993. So the story of sport is that management colludes. And so you start as A lawyer with this idea that on the other side they are going to cheat.
Pablo Torre
But look, the mentality is, I'm going to operate as if they're cheating. The challenge is, how do I, how
Demorris Smith
do you find it?
Pablo Torre
How do you find it?
Demorris Smith
Well, you look for the tip and sometimes you get the tip because, you know, Jerry Jones brags, sometimes you get the tip because Steve Boschotti says something like, I wouldn't have spent that much money on a guy like Deshaun Watson.
Pablo Torre
Right. This is the Ravens owner talking about.
Demorris Smith
This is the Ravens owner talking about guaranteed contracts for, for, for quarterbacks. Or, or someone sends you an email with, you know, with a chart attached to it. But so you, you start the process by a, you know, filing the lawsuit based upon a, breach of your, your contract. But B, you also file it because that is the role of a sports labor union protecting its players in the long term. And finding that collusion case not only helps you with the current matter that is on the table, it gives you leverage when you are later on moving into collective bargaining because you not only want to solve the immediate problem, but you want to use it for leverage in order to solve all of the other aggrieved issues that you have.
Pablo Torre
Which brings us to the document that we've been muttering over. Yeah, so let's, let's. It's time.
Demorris Smith
It's time. Let's go.
Pablo Torre
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Pablo Torre
So I want to preface this by saying I didn't start talking to you until after I obtained and published what a number of union sources had called the holy grail, a 61 page arbitration ruling that had been buried by the NFL and your successors at the NFLPA. And we published this over on Substack Pablo show as well as of course here on our podcast with Mike Florio. And so this look, I can lay
Demorris Smith
this out for you. I had taken a red eye from Los Angeles and I landed at Dulles about, you know, 7:00am I went to bed, you know, I mean I, you know, I stirred awake about, you know, 11:00 o' clock 11:00am to you know, what charitably could be called 750 text messages saying OMG, you have to look at Pablo Torre. You got to watch this. You got to watch this. Oh my God. I mean literally. And many of them came from people in labor world, not even sports labor. You know, when you're getting texts from people in the AFL CIO who are saying, oh my God, this is why unions exist. I literally said to myself, holy.
Pablo Torre
I just need to be again, super blunt about this. I think that this collusion ruling remains so relatively under discussed given all of the drama we have also covered within the NFLPA with your successors. Yeah. And yet I have been waiting to talk to you about it because you, as I think this whole lineage now makes clear, of course, you're the guy who filed it.
Demorris Smith
Yeah, yeah, I filed this case, was not around for the ruling, but I testified in this case.
Pablo Torre
Yes. So for people who don't remember, I'll just speed run through some of this because we've talked about it so much on the show, but it centers around the three protagonists are three star quarterbacks.
Demorris Smith
Right.
Pablo Torre
Lamar Jackson, Kyler Murray, Russell Wilson. It expands in the course of the proceedings to examine also 594 players in totality. This had started with fully guaranteed contracts for those quarterbacks.
Demorris Smith
Sure.
Pablo Torre
Then to partial guarantees for the almost 600 players in totality. And what comes back via this legal proceeding in this arbitration ruling is a treasure trove that contains documents that no one had ever seen from owners, from Roger Goodell himself, from his General Counsel to GMs to the players included, to everybody, to everyone.
Demorris Smith
You know, look, I filed this case as, as literally a rifle shot. We had a lot of things that led us to believe that the owners were, were colluding to avoid giving quarterbacks guaranteed contracts. I filed this case. I was gone. I mean, did I want to know the outcome of the case? You know, yes. You know, I had heard that there was no reported decision. I think either you or somebody else, you know, the while back had come out and said that there was a 51 or 61 page decision.
Pablo Torre
I mean, Glorio had been really sounding the bell on where is this?
Demorris Smith
Yeah, and, and, and look, I had also heard, you know, through, you know, through various, you know, players who were still in the league that, that my successor, you know, had told the, the players that we lost the case. So this is that it was a waste of money.
Pablo Torre
And this is Lloyd Howell, who again we've exhaustively covered on this show, as well as his number two, his chief strategy officer, JC Tretter. That's the administration at this time.
Demorris Smith
Let's put it this way, given your reporting, I have nothing to say to add to Lloyd Howe.
Pablo Torre
Well, they have both resigned. JC Treader got elected, which is so perfect for what I want to discuss here. But the point is this holy grail, which includes all of the stuff that I want to just briefly recap, it was via confidentiality agreement with the NFL. Buried. Yeah. And your reaction to hearing that? Oh my God, here it is. And also, oh, my God, secret agreement. The union and the league together. Buried it was what?
Demorris Smith
I honestly didn't believe it. Through your reporting and others, you know, Don Van Nata and others, that there was a secret agreement. I heard about the secret agreement first and read the document second. And again, for people who are listening and trying to figure out, you know, why I would react so viscerally against a secret agreement with respect to collusion. That's how important collusion is. It's not this weird sort of cute economic. You just being clever. No, collusion means that you are treating people as a piece of property and, and absolutely stifling their freedom. A secret agreement to me is an anathema to that. It can't coexist in the same world as a union's duty to do everything to increase the freedom of the people who work.
Pablo Torre
Again, for those who don't know, we get slides. We're back to getting PowerPoint decks, the equivalent we get Commissioner Roger Goodell emailing his general counsel, Jeff Pash, to give notes on this presentation to be given by the NFL's Management Council to owners at the NFL owners meetings.
Demorris Smith
Yep.
Pablo Torre
And slide 17, as just one example, says, quote, if guarantees continue to grow in both amount and number of players, then there's a risk that they become the norm in contracts regardless of player quality.
Demorris Smith
Let's do that one. Again, this is the general counsel saying in paraphrasing, if we continue to do this, we run the risk of giving players a lot of money even if their quality declines. And once again, you're sitting in the, the, the, the bar, and there's the guy at the end of the bar and he says, first of all, I would play this game for free D if I could. And my response to that was always, you can't play. And, and the second thing is, well, well, why should we pay these guys, you know, and give them contracts, you know, if, if their quality might decline? And somebody always says, Jamarcus Russell, I
Pablo Torre
mean, with always any number of busts. But that's, that's, that's a go to. That's a go to ex.
Demorris Smith
And I always respond this way. My guys take a job where they are well paid and they have a union that protects them. And yes, they get 50 cents on every dollar that they generate, but their job means that they're standing in oncoming traffic and getting hit by cars and buses, and when they break their legs or when they have concussions or when they unfortunately might develop cte, none of that is a accident. It's a deliberate and necessary job consequence of their job duties. So would you want your son or daughter, if they made a decision that their job duties were to stand and get hit by oncoming traffic, what kind of contract would you want them to have? Would you want them to have a contract where even though the player is taking all of the risk, the owner gets the reward? Or do you want them to have a contract that is commensurate with the risk that they are taking? Fast forward to Deshaun Watson. He gets a fully guaranteed contract, and then what happens? These three guys do not. First of all, everybody should now understand, if I had some evidence of collusion, I'm filing that for those three players. Collusion is so important. There is no scenario where I would have agreed to keep it secret.
Pablo Torre
I was gonna ask. So the stuff that's in the ruling. So you have the quote.
Demorris Smith
This is bananas, by the way.
Pablo Torre
You have the quote from Roger Goodell to Jeff Pash. You have the back and forth actually leading to the notes on that slide that get presented to all of the owners at the owner's meetings, at a meeting. Adam, again, in front of everybody with the intent to shape the strategy of the entire league.
Demorris Smith
Right.
Pablo Torre
You also get texts. You get text messages between Dean Spanos, the owner of the Chargers, and Michael Bidwill, the owner of the Cardinals. And this is just one of the great exchanges, I would say, in collusion in. In discovery sports history. Dean Spanos says, congratulations on signing. Mary. Bidwill says, again, these are competitors. Bidwill says, supposed to be. Thanks, Dino. These QB deals are expensive, but we limited the fully guaranteed money and have some pretty good language. Thankfully, we have a QB that's worth paying. Spanos comes back, your deal helps us for our QB next year. Bidwill comes back. I think many teams will be happy with it once they have a chance to review Cleveland employers. Signers of Deshaun Watson really screwed things up, but I was resolved to keep the guaranteed relatively quote, unquote, low, period. And it goes on.
Demorris Smith
It's two people talking about their willingness to engage in collusion. I have seen a lot of evidence, frankly, that that colloquy between the two of them is about the only thing I know of that can beat the NFL flowchart that we started this contract with. And so, again, there is no way on God's green earth that I would keep such a ruling from the players.
Pablo Torre
So I was going to say it's really important to point out that this was not merely a secret to the public and to not tell the plaintiffs, to not tell the quarterbacks or the rest of your membership.
Demorris Smith
You have an obligation of a lawyer to tell your clients that one. Feels kind of weird, right?
Pablo Torre
Truly insane.
Demorris Smith
Look, it could be a matter for some bar association if they want.
Pablo Torre
Yeah. The arbitrator's quote here was the NFL mc, the NFL Management Council's message was not purely educational and informational as the NFL contends it unmistakably encouraged the owners to reduce the trend of increasing player guarantees. End quote. The issue being that. Yeah, how can you prove that harm as a direct result of that incur.
Demorris Smith
Correct.
Pablo Torre
And I want to set this up by saying one of the hilarious things that happened after we published the ruling and after this whole news cycle is ignited that tips over the dominoes that lead to the resignations of both Lloyd Howell and J.C. treader is the fact that of course the union, your successors, then decide it is time to appeal the ruling.
Demorris Smith
Let's just say that the fact that is, it was secret. It. It became not a secret. And then the union appealed then, not, not immediately after then. And. And so they appeal that ruling. That ruling just recently came back and
Pablo Torre
this is sitting in front of us
Demorris Smith
today and the three judge panel which is an appellate panel that hears NFL appeals. They write, based largely on the foregoing, talking about all of the text, all of the presentations, everything that was said by both the owners to each other and from the general counsel to the owners. Based largely on that foregoing, the arbitrator concluded that the Management Council. This is the board of directors of the NFL. That the NFL's board of directors presentation contemplated and invited concerted action by the clubs. This presentation went well beyond presenting historical information and quote, unmistakably encouraged the owners to reduce the trends of increasing guarantees. Unquote. That is a finding.
Pablo Torre
Yeah.
Demorris Smith
That is a conclusion by a group of arbitrators that we jointly pick. This is not D. Smith's language. This is not the union's language. This is not the NFL's language. This is a conclusion by the three judge panel ruling consistently with the arbitrator who first heard the case, even though he ruled that there was no proof of harm. What the arbitrator ruled and what this three judge panel ruled was that there was a deliberate encouragement to engage in collusions. And here's the most important thing. It doesn't say when it started.
Pablo Torre
So what it says, and I'll quote this further, is we cannot fathom these sophisticated business people did not comprehend they were being encouraged to limit or reduce guaranteed contracts. But your brain. And so again, you're reading this, you're processing this, and the question I had was, let's say you were privy to this. Let's say you had the power.
Demorris Smith
Yeah.
Pablo Torre
You were still in the job, you were still in charge.
Demorris Smith
Yeah.
Pablo Torre
What the would you have done? Because we know what happened in this timeline, what happens in the other one.
Demorris Smith
You know, the next move by, you know, my brain would be, we. I would have asked our lawyers, based on this, do we have enough evidence to file a claim against the NFL dating back to when Kirk Cousins got his fully guaranteed contract?
Pablo Torre
You would have expanded the scope.
Demorris Smith
Well, 100%, because now we know that basically the reaction to Deshaun Watson's contract is all of this.
Pablo Torre
And you know the history of how,
Demorris Smith
and you know the history of collusion. And you say to yourself, I want to know what their reaction was to the Kirk Cousins contract. When the owners knew that at least four to five first ballot hall of Famer quarterbacks were going to have renegotiations of their contracts within 18 to 24 months of Kirk Cousins breaking the. The glass ceiling of no guaranteed contracts in the National Football League because those
Pablo Torre
quarterbacks, relatedly, did not get those fully guaranteed contracts.
Demorris Smith
No. And, and so I would say to myself, the owners probably are going to do whatever they can to make sure that Tom Brady doesn't get a fully guaranteed contract, that Aaron Rodgers doesn't get a fully guaranteed contract. And I'm gonna sit there and say, you know what if they reacted this way?
Pablo Torre
By the way, part of that reaction was apparently only a couple teams expressing interest to the Ravens about Lamar Jackson.
Demorris Smith
Two things happened in the Lamar Jackson case. That one raises your ire about cheating, but also, you know, this history of collusion. He is the most electric quarterback in the National Football League.
Pablo Torre
Yeah.
Demorris Smith
Mvp. The, the Ravens give him a franchise tag, which means that other teams could come in and if they offered $1 more to him, they could have the best player in the National Football League. Not only did no team, not one, make an offer to Lamar Jackson. For the first time in my history, I watched league and team executives give press conferences. You know what? I'm not really interested in him. I mean, one of them was from the Washington team that is 30 miles to the south that did not have an MVP quarterback.
Pablo Torre
The Falcons were saying this people were
Demorris Smith
saying, ah, I'm not interested in that guy. You know what? I don't care how much you believe in either the competence or the quote unquote myth that all of these owners want to win equally. The fact that no one even made a call to say, hey, here's an extra dollar.
Pablo Torre
Which raises a question. I think an operative question for me, which is you're the guy who filed this thing.
Demorris Smith
Yeah.
Pablo Torre
Did anyone from the nflpa, that regime, did they reach out to you to tell you to consult on this at any point?
Demorris Smith
No.
Pablo Torre
Do you have any idea why, for instance, the Chief Strategy officer JC Treader, let alone the executive director, Lloyd Howell, why they did not push to make this a bigger case?
Demorris Smith
No, no, I don't. No, I, I can say, right.
Pablo Torre
I can sense the non disparagement peeking out here.
Demorris Smith
I have a non disparagement agreement, you know, against the union. Frankly, I'm not interested in.
Pablo Torre
But I just gotta ask also, do you have any idea why the executive committee of players did not ask to read this once they were informed?
Demorris Smith
No, I. No, I mean, all I can say is, is this. I can talk about the executive committees that I had and the presidents that I had. You know, Kevin, my Dominic Foxworth and Eric Winston would if, if I had filed a, a collusion case. And, and, and the three of them certainly understood, you know, the importance of collusion. Any one of those three people would have grabbed either one of my legs and made a wish if I had told them that there was a secret agreement and I couldn't tell them this idea that this ruling existed from January until the day that you broke it. Apparently without a group of players who are the player leadership not asking to read it, and maybe they did. But all I can say is I had, I had a group that would have demanded to read it. I can only tell you what I would do. It would be both barrels every day. Both barrels every day.
Pablo Torre
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Pablo Torre
The sort of like thought I have near the end here is that why should a fan really give a sh about this? It's because I don't know if you believe that competition is a principle that we should enshrine in America. Which is to say that we get better stuff, we get better products, we get better games, we get better sports when everyone is competing.
Demorris Smith
Yep.
Pablo Torre
The question becomes what are the mechanisms to make sure that competition is, in fact, being respected.
Demorris Smith
I would have looked at this ruling in any case that we subsequently filed as leverage for a better collective bargaining agreement. And that's the last piece. We haven't really talked about, that leverage piece.
Pablo Torre
Oh, right. There's a CBA coming up.
Demorris Smith
Well, it's coming up in 2030. That's. That's an hour away. We started thinking about the 2020 deal. Seven years, six years before it came. And you're looking for leverage in that deal. And, and especially if one side or the other side is looking for an ability to do an early deal, the leverage dramatically shifts to the players. If there is this massive case pending, dating back to when Kirk Cousins got his fully guaranteed contract that maybe the
Pablo Torre
public might even care about.
Demorris Smith
Well, because the leverage changes dramatically. Because now if you're the owner again, think about it from a. From a financial standpoint. Think of the hundreds of players that could have had guaranteed contracts that didn't take the delta between whatever amount of money they signed for and the actual amount of money that they got. And that's a reasonable way to calculate damages. The damages calculation for a case like that is in the hundreds of millions of dollars. And remember, for an antitrust case, you're allowed to triple it. Yeah, tribal damages. So think as an owner. Now you're heading into an early deal. There's this huge potential calamitous money judgment that's coming against you. What does that do with your incentive to want to do a deal where you are now agreeing to a number of player terms on all sorts of other issues that you otherwise wouldn't want to agree to? And you know what? That's capitalism, right? I mean, again, let's just get the. Let's ground it back to Chili's and everywhere else.
Pablo Torre
The more, you know, shooting star graphic over. And that's capitalism.
Demorris Smith
And that's capitalism. Ding, ding, ding.
Pablo Torre
This has been Pablo Torre Finds Out a Meadowlark Media production. And I'll talk to you next time.
Demorris Smith
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Here's a show that we recommend
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Episode: The Man Who (Relentlessly) Sued the NFL Has Receipts: A Sitdown with DeMaurice Smith
Date: April 28, 2026
Host: Pablo Torre
Guest: DeMaurice Smith (former Executive Director, NFLPA)
Network: The Athletic
This episode dives deep into the hidden machinations between the NFL and its players union (NFLPA) through the lens of DeMaurice Smith’s tenure and legacy as a relentless litigator against the league. With Pablo Torre at the helm, the conversation unpacks the so-called "holy grail" of confidential NFL documents: a 61-page arbitration ruling revealing explosive text messages, emails, internal slide decks, and testimony shedding light on league collusion, especially around player contracts. The episode explores why this ruling was buried, what it means for labor, competition, and capitalism in America, and the consequences for both NFL players and everyday workers.
"Everybody has fallen into this trap... I call it a death spiral, where you believe that in order to square your morality, you now talk like you are Johnny Private Equity."
— DeMaurice Smith (02:34)
“They socialize their cost to you... and they push it into their pockets with their greedy little fingers and they call it capitalism. No, that's profiteering socialism.”
— DeMaurice Smith (09:39)
"We're talking about this idea that... we have to sign this deal in order to take money from the then Washington Redskins and Dallas Cowboys... because those two teams did not go along with the collusion scheme."
— DeMaurice Smith (31:21–31:45)
“A secret agreement to me is an anathema... It can't coexist in the same world as a union's duty to do everything to increase the freedom of the people who work.” (44:14)
Even if you don’t follow the NFL or labor law, this episode exposes universal lessons about power, negotiation, and the necessary vigilance against collusion—on or off the field. The biggest surprise? Sometimes the best evidence is hiding in plain sight... in a PowerPoint.