NFL Collective Bargaining Agreement

Appendix F
Accountants' Review Procedures

The information included in the Schedule of Team Salaries, Benefits, Player Costs, Cash Player Costs, and All Revenues (“AR”) of the NFL and its member clubs (the “Schedule”), which is not intended to be a presentation in accordance with generally accepted accounting principles, is to be prepared in accordance with the provisions of this Agreement. The information on the Schedule is to be the responsibility of the management of the Clubs and the NFL.

The NFL and the NFLPA are to retain a national accounting firm (the “Accountants”) which will have the responsibility to perform certain procedures on the Schedule and report on the results of these procedures. The Accountants are to conduct procedures as agreed upon by the parties (the “Procedures”). The Procedures shall include examining, on a test basis, evidence supporting the amounts and disclosures in the Schedule. The Procedures shall also include an assessment of the significant estimates made by management, as well as an evaluation of the overall Schedule presentation. The Procedures to be conducted by the Accountants shall be as described below and in the Accountants’ engagement letter with the parties, dated March 27, 2019, as amended from time to time by the parties.

A committee is to be established, the Salary Cap Review Committee (the “Committee”), consisting of six members with three representatives designated by each of the NFL and the NFLPA. The Committee is to meet with the Accountants at least twice during the year, once prior to December 31st to review the scope of the Procedures described in the preceding paragraph and again to review the results of the Procedures reasonably before issuance of any Special Purpose Letter for that playing season.

The procedures referenced herein and/or as otherwise agreed by the parties are and shall be designed to determine whether the Schedule represents, in all material respects, the Team Salaries, Benefits, Player Costs, Cash Player Costs and All Revenues of the NFL and its Clubs for such League Year in accordance with the provisions of this Agreement. The Accountants will perform the Procedures with respect to the Schedule for each League Year.

The Accountants may rely on the procedures performed by each member club’s local accounting firm (“Local Accountants”), as agreed upon by the parties, or may test the procedures on a scope basis so as to permit the Accountants to obtain a reasonable basis to report upon the Procedures as referred above. The procedures to be conducted by the Local Accountants shall be as described below and in the 2018 Local Accountants Agreed-Upon Procedures, distributed by the Accountants to all parties on April 30, 2019, as amended from time to time by the parties.

The Accountants will have access to and receive copies of the Local Accountants’ workpapers of the Schedule (the “Workpapers”). If the Accountants need to review the financial audit workpapers or the corresponding financial statement of any Club or the League Office, this information will be held in confidence and not be part of the file subject to review by the Committee.

Procedures provided by the NFL and the NFLPA to be performed by the Accountants

General

  • This Agreement and all relevant side letters should be reviewed and understood.
  • See Exhibit F.1 for the form of the Accountants’ Report.
  • Examine the National Television and Cable contracts at the League Office and agree to amounts reported.
  • Schedules of international broadcast should be obtained from the League Office. Schedules should be verified by agreeing to general ledgers and testing supporting documentation where applicable.
  • All loans, advances, bonuses, etc. received by the League Office should be noted in the report and included in AR where appropriate.
  • The Player Compensation and Revenues Reporting Package and instructions for the playing season should be reviewed and understood.
  • All workpapers of the Accountants relative to its report on the Schedule shall be made available for review by representatives of the NFL and the NFLPA prior to issuance of the report.
  • A summary of all findings (including any unusual or non-recurring transactions) and proposed adjustments must be jointly reviewed with representatives of the NFL and the NFLPA prior to issuance of the report.
  • Any problems or questions raised should be resolved by the Committee.
  • Estimates should be reviewed in accordance with this Agreement. Estimates are to be reviewed based upon the previous year’s actual results and current year activity. Estimates should be reconfirmed with third parties when possible.
  • Revenue and expense amounts that have been estimated should be reconfirmed with the Controller or other team representatives prior to the issuance of the report.
  • Where possible, team and League Office revenues and expenses should be reconciled to audited financial statements. This information is to be held in confidence.
  • The Accountants should be aware of revenues excluded from AR. All revenues excluded by the teams or League Office should be reviewed to determine proper exclusion. The Accountants should perform a review for revenues improperly excluded from, or included in, AR.

Procedures provided by the NFL and the NFLPA to be performed by the Local Accountants

General

  • The Local Accountants shall conduct procedures as agreed upon by the parties.
  • This Agreement and all side letters should be reviewed and understood by all Local Accountants.
  • See Exhibit F.2 for the form of the Local Accountants’ Report.
  • Special rules for Salary Cap counting such as annuities, loans, guarantees, deferrals, signing bonuses and the like should be reviewed and understood.

Team Salaries - Schedule 1

  • Trace amounts to the team’s general ledger or other supporting documentation for agreement.
  • Foot all schedules and perform other clerical tests.
  • Examine the applicable player contracts for all players listed, noting agreement of all salary amounts for each player, in accordance with the definition of salary in this Agreement.
  • Compare player names with all player lists for the season in question.
  • Determine method used to value non-cash compensation is in compliance with methods outlined in this Agreement.
  • Examine trade arrangements to verify that each team has properly recorded its pro rata portion of the players’ entire salary based upon roster days.
  • Inquire of Controller or other representative of each team if any additional compensation was paid to players and not included on the schedule.
  • Review “Miscellaneous Bonuses” to determine whether such bonuses were actually earned for such season.
  • Review signing bonuses to determine if they have been allocated over the years of the Contract in accordance with this Agreement.
  • Review contracts to insure that any guaranteed amounts for future years are allocated, if applicable, over previous years in accordance with the provisions of this Agreement.
  • Compare the balances of player loans from the end of the prior period to the end of the current period and reconcile to the respective payment schedule in effect at the end of the prior period.

Benefits - Schedule 2

  • Trace amounts to the team’s general ledger or other supporting documentation for agreement.
  • Foot all schedules and perform other clerical tests.
  • Investigate variations in amounts from prior year through discussion with the Controller or other representative of the team.
  • Review each team’s insurance expenses for premium credits (refunds) received from carriers.
  • Review supporting documentation as to the following expenses:
    • Players Pension
    • Workers Compensation
    • Severance Costs
    • FICA Social Security/Medicare
    • Disability Insurance
    • Unemployment Insurance
    • Medical/Dental/Life Ins.
    • Other Allowable Benefits

Player Costs - Schedule 3

  • Perform procedures provided in Schedules 1 and 2 above and deduct amounts not includable in the definition of “Player Costs” in this Agreement.

Cash Spending - Schedule 3A

  • Perform procedures provided in Schedules 1 and 2 above and calculate Club’s “Cash Spending” and amounts committed to be spent by Club in the year under review for Player Benefits, to determine the Club’s contribution to Cash Spending (as defined in Article 12, Section 8) for such year.

Revenues - Schedule 4

  • Trace amounts to team’s general ledger or other supporting documentation for agreement.
  • Foot all schedules and perform other clerical tests.
  • Trace gate receipts to general ledger and test supporting documentation where appropriate.
  • Gate receipts should be reviewed and reconciled to League Office gate receipts summary.
  • Luxury box revenues should be included in AR in a manner consistent with this Agreement. Amounts included in AR, and any deductions against such revenues should be verified to supporting documentation.
  • Examine local television, local cable and local radio contracts. Verify to amounts reported by teams.
  • When local broadcast revenues are not verifiable by reviewing a contract, detailed supporting documentation should be obtained and tested.
  • All loans, advances, bonuses, etc. received by the team should be noted in the report and included in AR where appropriate.
  • All amounts of other revenues should be reviewed for proper inclusion/exclusion in AR. Test appropriateness of balances where appropriate.

Questions

  • Review with Controller or other representatives of the team the answers to all questions on this schedule.
  • Review that appropriate details are provided where requested.
  • Prepare a summary of all changes.

Revenue Reporting Procedures and List of Related Entities

  • Review with Controller or other representatives of the team all information included on both schedules.
  • Prepare a summary of any changes, corrections or additions to either schedule.

EXHIBIT F.1
ACCOUNTANTS’ AGREED-UPON PROCEDURES REPORT

We have performed the procedures as described in the accompanying Schedule A, which were agreed to by the National Football League and the National Football League Players Association (collectively, the “Parties”) with respect to the National Football League Office Reporting Package and the Reporting Packages of the Member Clubs of the National Football League, for the [insert] League Year, solely to assist the Parties in evaluating whether the Reporting Packages were prepared in accordance with the provisions and definitions contained in the Instructions to the Reporting Package. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described in Schedule 1 either for the purpose for which this report has been requested or for any other purpose.

Our findings are set forth in the accompanying Schedule B.

We were not engaged to, and will not perform an audit or examination, the objective of which would be the expression of an opinion on the Reporting Packages. Accordingly, we will not express such an opinion. If we were to perform additional procedures or if we were to perform an audit or examination of the Reporting Packages, other matters might have come to our attention that would have been reported to the Parties.

This report is intended solely for the use of the National Football League, the National Football League Players Association and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes.

EXHIBIT F.2
LOCAL ACCOUNTANTS’ AGREED-UPON PROCEDURES REPORT

We have performed the procedures as described in the accompanying Schedule A, which were agreed to by the National Football League and the National Football League Players Association (the “Parties”) with respect to the Reporting Package of the [Member Club Name], a Member Club of the National Football League, for [insert] League Year, to assist the Parties in evaluating whether the Reporting Package was prepared in accordance with the provisions and definitions contained in the Instructions to the Reporting Package dated [insert]. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of management of the Parties. Consequently, we make no representation regarding the sufficiency of the procedures described in Schedule A either for the purpose for which this report has been requested or for any other purpose.

Our findings are set forth in the accompanying Schedule B.

We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the Reporting Package. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to the Parties.

This report is intended solely for the use of the [Member Club Name], the National Football League, the National Football League Players Association and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes.