The move set the stage for the sixth work stoppage in NFL history and cleared the way for the league's third outright lockout of players.
The negotiations, refereed by federal mediator George Cohen and twice extended beyond the original deadline, have in part been public theater. Both parties have now arrived at what they had been expecting for nearly three years: a lockout that will test the constitution and patience of players, owners, sponsors and, ultimately, fans.
Most dramatically, the decertification of the union allows star players like Tom Brady, Drew Brees, and Peyton Manning to sue the owners of their football teams. The legal drama will play out in the Eighth Circuit Court of Appeals in Minnesota, where federal Judge David Doty – who has already ruled once on behalf of players and against the league – will now hear a flurry of filings and injunction requests from both sides.
Almost immediately, the players are expected to file an injunction to try to stop the owners from locking them out after midnight.
What's at stake
The owners are locking out the players because they want to keep more of the league's revenue for themselves. They say this is necessary for the future health of the NFL. In short they want $2 billion of the NFL's $9 billion in revenue to go directly to them, instead of the current $1 billion. The remainder of the pot is split between the owners and players, with the players currently getting 57 percent.
As one way to split the difference, owners have proposed adding two regular season games to the schedule, which would add revenue so that players' salaries would not decrease. Players see that as being paid the same money for doing more work – not to mention an injury threat.
Fifteen minutes before the 5 p.m. deadline, player representative DeMaurice Smith also said the union wanted 10 years of audited financial information from the league. Players argue that they cannot verify the owners' claims that the league would be headed for trouble if it stayed on it's current financial path.
"The main thing now is transparency," said sports-business expert Andrew Brandt, formerly of the Green Bay Packers, in an ESPN interview. "It's a tough one. I think owners have concerns about showing too much information that would make it seem like things look rosy now, but down the road they're looking at problems, including player costs outpacing revenues."
Closer ... but not close enough
Both sides had moved closer to a deal during 16 days of hard negotiating. Owners offered five years of financial information, including profit information, but the players union turned it down. Moreover, both sides had moved from being $1 billion to $540 million apart in the final breakdown of the $9 billion NFL pie.
Ultimately, sports business analysts say a lack of trust and largely untested chief negotiators on both sides played a role in the breakdown.
"They haven't been able to resolve strongly held competing views that separate them on core issues," federal mediator George Cohen said, leaving the negotiations with "no constructive purpose."
NFL counsel Jeff Pash said owners had agreed to change their stance on a rookie wage scale, offered more benefits for retired players, put off a decision to expand the season to 18 games until 2013, reduce full contact practices, and increase days off for players – all of which, Mr. Pash said, was "evidently not good enough" for players.
Washington Redskins player representative Vonnie Holliday countered that "at the end of the day, the owners wanted money, they wanted to change the breakdown, the percentages, and would not give us audited financial statements. That's big for us. We're not opposed to giving money, but we want to evidence to show why we should do that. We believe we have a system that works, and they could not show us why it does not work."