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A close affiliate of the National Football League Players Association has been unable to collect $41.8 million of licensing and sponsorship revenue and pay it to the union as of the close of its fiscal year, the organization disclosed in its annual report filed last week with the U.S. Department of Labor. The figures appear tied to the collapse of the crypto marketplace, a person who has been involved in NFLPA dealings and a representative of another sports union who are both familiar with the process, and likely underscore similar issues at other sports unions and leagues.

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The figure represents roughly a quarter of the NFLPA’s commercial revenue based on an analysis of its annual report (that percentage does not include the $75 million marketing agreement payment from the NFL, including that the hit comes to under a fifth of the union’s commercial haul). Divided among the 2,135 active NFL players noted on the annual report, the absent payments could deprive each of $19,578.

“As of Feb. 28, 2023, there is uncertainty surrounding collection of certain accounts receivable from OneTeam Partners, LLC. Therefore, an allowance has been recorded as of that date for those amounts,” the union wrote in a footnote at the end of the annual report. Earlier in the report, the NFLPA listed $41,799,008 for OneTeam next to accounts receivable, a category for funds owed by customers.

OneTeam Partners is a joint venture started in 2019 by the NFLPA, the Major League Baseball Players Association and private equity to oversee sports unions’ commercial enterprises. The group, in addition to the baseball and football unions, now oversees business operations for the U.S. Women’s National Soccer Team, Major League Soccer Players Association and the Women’s National Basketball Players Association, among others. It also recently moved into the college name, image and likeness space with a deal to pay players $500 to allow their use in the upcoming college football video game.

The venture has thus far been successful, with original private equity investor RedBird Capital Partners cashing out last year with an estimated $600 million profit. The unions control group licensing (meaning commercial rights to multiple players) for businesses like video games, trading cards and apparel at a time when demand for sports consumer items has soared.

OneTeam Partners, for example, is listed as paying the NFLPA a year ago $66 million, a figure that jumps to $105.3 million in the most recent report (the NFLPA’s fiscal year ends Feb. 28, so the most recent year reflects the 12-month period that ends on that day). It’s unclear if the nearly $42 million of nonpayments is included in that figure.

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OneTeam referred questions to the NFLPA, which did not reply for comment. An MLBPA spokesman said the union is aware of the issues of nonpayment by OneTeam. In the MLBPA’s annual report for the calendar year 2022, no mention is made of missing payments from OneTeam, which paid the union $36.4 million.

The unpaid bills appear tied to the news in Sportico last month that Dapper Labs, the platform for the NBA’s and NFL’s sputtering nonfungible tokens, and DraftKings’ Reignmakers NFTs had each engaged the NFLPA to renegotiate their deals in light of the plummeting value of the digital assets. Then came a report this month that Dapper Labs’ NFL NFT was badly missing financial goals.

“OneTeam would have expected around $60 million from Dapper & DraftKings, of that, $41 million would go to the NFLPA,” the person who has been involved in past NFLPA dealings wrote in a direct message. “Now, NFTs are relatively new, so most of the money typically comes from Madden and trading cards.” By that, this person means the bread-and-butter licensing businesses like video games and trading cards at the NFLPA remains healthy. Cryptocurrency is a relatively new category for the unions and has not been a relied-upon source of revenue. Still, this person described the nonpayments of $41.8 million as “horrific.”

Cryptocurrencies like NFTs were all the rage two years ago, skyrocketing in value. Leagues and teams were inking cryptocurrency deals with companies like now-bankrupt FTX, and touting a wide range of NFTs. But crypto crashed along with NFTs, which are essentially authenticated digital duplicates of something real, like a highlight, a trading card or a work of art.

The true value of an NFT has long been debated, and the naysayers appear to have the stronger hand now. But in 2021 they did not, and that’s when the NFLPA and NFL reached their deal with Dapper.

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“The irreplaceable nature of the NFT captures what is special about sports fandom,” said Steve Scebelo, president of NFL Players Inc., the marketing and licensing arm of the NFLPA, in the 2021 release announcing the partnership. “Our players are immensely excited for the NFLPA — in working with our enterprising partners at Dapper Labs and OneTeam — to make this significant push into the digital collectibles market.”

Unions like the NFLPA built their commercial arms to create war chests for labor battles with the leagues. In the years leading up to the expiration of a collective bargaining agreement, the unions typically will hold back some licensing payments to build a work stoppage account. The NFLPA and MLBPA have long-running existing CBAs, and as noted, NFT revenue is not a mainstream source of revenue. So while concerning, the loss of NFT payments does not present any great threat to the unions’ health. Indeed, the NFLPA’s assets grew from $1.003 billion to $1.055 billion in the most recent fiscal year, according to the annual report.

The more recent developments emerge as the NFLPA prepares to select its new executive director. The union scheduled a meeting for next month when a new executive director might be selected by the 32 player representatives. It’s unclear exactly who is in the running.

Whoever is chosen will take over for DeMaurice Smith, who has held the post since 2009. The latest annual report shows him earning $9.3 million, of which, $5.6 million came from deferred retirement compensation. He still has $4.3 million remaining in his retirement account, the NFLPA report shows.

(Photo: Rich Graessle / Icon Sportswire via Getty Images)