Colorado Fisherman Forum banner

1 - 10 of 10 Posts

·
Registered
Joined
·
11,877 Posts
Discussion Starter #1
Good news! The NFL Players Association has won a ruling from the US District Court handling their challenge to the leagues $4 billion in guaranteed TV payments during the lockout. I haven't read the entire opinion yet, but based on the news accounts, in a nutshell, the judge appears to have ruled as follows:

- Under the collective bargaining agreement, the NFL had an obligation to obtain maximum immediate revenues for the benefit of both owners and the players.
- In negotiating the TV contracts which would continue to pay the owners during a work stoppage (lockout) benefitting only the owners, the league violated its contractual obligation to the NFLPA to maximize immediate revenues for the benefit of both the league and the players. It was protecting only the owners' interests.

That means that the league may not be entitled to draw on this $4 billion warchest and might be more financially strapped during the lockout than most folks had assumed. The judge has yet to decide what will be done with the $4 billion. The players have asked that it be held in escrow until a new CBA is reached.

If that is what happens, it may level the playing field at least a little more during the lockout.

Fun stuff! Nice job NFLPA!

http://www.cbssports.com/nfl/story/14757584/federal-judge-nfl-cant-keep-tv-revenue/rss
 

·
Registered
Joined
·
11,877 Posts
Discussion Starter #2
More on this interesting development:

While talks continued into Tuesday night in D.C., one development early in the evening has the potential to have a significant impact on the negotiations: Federal Judge David Doty ruled that the NFL violated the CBA by agreeing to $4 billion worth of network TV rights fees that would be payable even in the event of a work stoppage in 2011.

Doty, however, did not yet rule whether the league owes the players financial damages due to the TV agreements, or specify whether the funds will be placed into an escrow account and kept off-limits to owners during a lockout, as the players' have sought. Doty has ordered a hearing with the league and the players union to settle those issues.

While the Doty ruling is a victory for the players and gives them more leverage in their showdown with owners, there is some debate whether it will have as much as an impact on leveling the playing field in the negotiations as the union hopes. A Standard & Poor's report this week said based on findings connected to the state of teams' stadium debt service, the NFL could go at least a year into a lockout without needing the $4 billion in revenue that the TV contracts provide for, and in the case of some stadiums, even a second year. League estimates had called for a lockout of at least one year in length before the owners would need to access the TV money, which eventually has to be paid back to the networks in the event of no games being played in 2011.

Thus, while Doty's ruling is a blow to the NFL, it is not seen as a potential kill shot that immediately changes the dynamics of the ongoing CBA negotiations. League sources painted the Doty ruling as somewhat expected, and said it would potentially hurt the NFL's bargaining position if Doty locks up the TV money in an escrow account and awards a significant amount of damages to the players. But those key details are not yet known until the hearing before Doty.

While it may not have an immediate impact on the tone of negotiations, Doty's ruling weakens the league's hand. The owners considered the $4 billion generated by those 2009 extensions of the league's TV contracts a key component of their preparation for the labor showdown to come in 2011, and they considered the absence of such income a deal-breaker in negotiations with the networks. Clearly the availability of that money was important enough for the NFL to draw that line in the sand with its TV partners.

http://sportsillustrated.cnn.com/2011/writers/don_banks/03/01/labor.situation/index.html?xid=cnnbin&hpt=Sbin
 

·
Registered
Joined
·
7,804 Posts
What I don't understand is how the TV companies got duped into a deal that would pay out 4 billion dollars, without the guarantee of any games ever being played.... ???

Who's stupid enough to make a deal like that?
 

·
Registered
Joined
·
11,877 Posts
Discussion Starter #4
Mrwigglestheworm said:
What I don't understand is how the TV companies got duped into a deal that would pay out 4 billion dollars, without the guarantee of any games ever being played.... ???

Who's stupid enough to make a deal like that?
The NFL wields that kind of economic power. Itr's that simple. Some of the testimony from network officials on this subject is mentioned in some of the articles about this opinion. When I get a little time min the next day or so, I'll find the opinion itself and post a link to it.
 

·
Registered
Joined
·
2,269 Posts
Mrwigglestheworm said:
What I don't understand is how the TV companies got duped into a deal that would pay out 4 billion dollars, without the guarantee of any games ever being played.... ???

Who's stupid enough to make a deal like that?
The networks pay the NFL about $20 billion a year when the games are being played. You have to imagine they make substantially more than that in ad revenue or they would not be too profitable. So with those numbers floating around, the $4 billion they pay in the event of a lockout is not that much money, especially if it means that the networks will have the right to broadcast the games once they start playing again.
 

·
Registered
Joined
·
11,877 Posts
Discussion Starter #7
Mrwigglestheworm said:
What I don't understand is how the TV companies got duped into a deal that would pay out 4 billion dollars, without the guarantee of any games ever being played.... ???

Who's stupid enough to make a deal like that?
It's not stupidity, it's who wields the power. From Judge Doty's opinion:

According to one network executive, “[y]ou know you’ve reached the absolute limits of your power as a major network ... [when] the commissioner of the National Football League calls you ... and says ... [w]e’re done, pay this or move on ....
[the NFL has] market power like no one else, and at a certain point in time, they’ll tell you to pack it up or pay the piper.”


It's a really interesting opinion. The Judge's findings really spank the league, in terms of its breach of the current CBA.

Next question: What will happen in view of the breach? An award of damages to the NFLPA for breach of contract? Some sort of injunction to prevent the league from having access to the $4 billion? Some combination?

Stay tuned. Pretty interesting to a litigation junkie.
 

·
Registered
Joined
·
79 Posts
People are too football crazy. Theres a ton of other great sports out there... mix in a baseball or basketball game. The sun doesn't rise and set on the NFL. Hopefully this upcoming lockout wakes people up a little and spreads the viewers around a little.
 

·
Registered
Joined
·
11,877 Posts
Discussion Starter #9
Baseball is boring and the NBA is unwatchable IMHO. >:D

I want my NFL football. :mad:
 
1 - 10 of 10 Posts
Top