What's going on with the TV money?

[Guiness]

Does anyone know what's going on with the $4 billion or so the league was supposed to get, even if there is no football to televise? There was a judge's decision that they couldn't have it, at least temporarily, does that decision still stand? I hadn't heard anything different, but this article confuses me.

http://www.cbssports.com/nfl/story/15056902/players-seek-707mplus-judge-delays-ruling

Maybe the owners haven't started receiving payments towards the money, and won't until games are scheduled to start?

[pbmax]

The judge found for the players in the initial trial. That means the TV money (in the form of an advanced payment) that would have been paid in the event of no games is in limbo. He is now considering the remedies after a hearing last week. The players asked him to escrow the money away for the owners and pay damages to the players. He commented that escrowing the payouts would be putting his thumb on the scale of negotiations. It would give the players the leverage of blocking access to over $4 billion.

But he could still do many different things, including apply previous CBA language to money received during the lockout. Which would mean that segments of cash paid would be subject to a 57.5 (CBS figure) or 59.6 (PFT's figure) percent going to the players. The logic being that this money was left on the table during negotiations in 2009, before the lockout was implemented and would have been paid out in part during that CBA if not for the league seeking to acquire "Lockout insurance".

[Guiness]

Thanks PB.

You cleared up the part that confused my with you 'in limbo' comment. You're saying that this is essentially a continuation of the earlier case which resulted in denying owners access to the money.

Putting the money in escrow would indeed influence the negotiations, but so would releasing the money to the owners.

The thought that he could apply previous CBA language to that money is big BIG Big. Can you imagine if he decided to apply some split to it? 57 or 59, either number would result in the 'players' getting $2billion+.

I put players in quotations, because who, exactly, are the 'players' right now? Where would that money go? How would it be distributed? I mean, the NFLPA is gone and all. If you try and start distributing it, who gets it, and how much? The NFL considers everyone not under contract with a team to be a free agent...meaning I have the same status as Peyton Manning ;-)

[pbmax]

The old NFLPA and the previous CBA still have a stake here since, presumably, some of the money left on the table to provide income during a lockout would have been available to the players during 2009 and 2010. So that percentage of player cost revenue could come into play though it likely would not be for the whole $4 billion. Only a portion of that number would have been spent in 09 and 10 and the rest would have been spent in '11, '12 and beyond, depending on which TV contract you are looking at.

Its also likely that the $4 billion is not the true amount the NFL left on the table for the lockout arrangements. Some of that money (if not all) gets paid back when the league DOES resume games.

But then the players could also collect damages, apart from any contractual money awarded.

[bobblehead]

I ask yet again. Why would or should we do anything under the old CBA. The players decertified and it has no bearing on anything because of that very action. I somewhat supported the douchebag judge who ruled against the injunction, but now we are getting to the point of applying the law in one area and ignoring it in others.....whichever benefits the players.

[Tarlam!]

I ask why should the TV stations pay for nothing? Isn't itlike ordering a pizza that never gets delivere, but the pizzeria is still asking for payment?

[get louder at lambeau]

I ask why should the TV stations pay for nothing? Isn't itlike ordering a pizza that never gets delivere, but the pizzeria is still asking for payment?

Because that pizza might be the difference between eating well and starving. Without the NFL, a network can fall behind the other networks and lose a ton of revenue. It's the biggest piece of live programming in the TV market, by far.

[Tarlam!]

Call me stupid, but, why am I supposed to pay for nothing?

[get louder at lambeau]

Call me stupid, but, why am I supposed to pay for nothing?

You don't have to pay. You just have to watch some Budweiser commercials.

The networks, on the other hand, can't afford to lose an NFL broadcasting contract to a rival, so they have to pay for whatever the NFL tells them they have to pay for, as long as the contract still positively affects their station financially overall.

[Tarlam!]

Over here, I have to pay. It's a package of channels, but I only get to see the featured games. And, damnit, I don't get to watch the commercials you guys do!

Other than that I'm hoping your homeland security screws up or I'm reduced to subscribing to NFL.com. The point is, if there is no football, then there is no figurative pizza. Do the networks still need to pay in that case?

PS: The Super Bowl is broadcast for free, but have you ever heard German commentary of an American sport? YUCH!!!!!!!

[swede]

Tar, American Homeland Security intercepted this cell phone call. The NFL and Homeland Security are both concerned about increasing levels of consumer chatter on cell phones and internet. This chatter may indicate an upswing in unauthorized streaming transmissions of really good football games by American expatriates once the Germans introduce their legally licensed, NFL sanctioned plan called the "Sgt. Schultz Effect" in which German announcers are deliberately selected for knowing nothing. In trial runs of the diabolical plot, several of the announcers thought they were overdubbing "Dancing with the Stars", advancing themselves to the final rounds of consideration.


Ja ja, mutter...Ich bin der neue Ansager für amerikanischen Fußball und ich weiß nichts über amerikanischen Fußball! Ha-ha!

[SkinBasket]

Essentially the players want a judge to hamstring the owners even further as a negotiation tool. There seems, at least publicly, to be no legal reasoning behind their request, other than they think it'll weaken the owner's position. I'm suuuuuuuuuure the judge will do the right thing. You know, apply law to a case. Right?

The players continue to argue they are decertified while demanding all the rights and privileges of being a union under a CBA. It's almost like this whole decertification was... I don't know... a sham? Maybe?

[pbmax]

The reasoning behind this isn't complicated. The TV contracts were renegotiated in 2009. For two years of those deals, the players were covered by the CBA.

The NFL admitted (Goodell on the stand, among others), and indeed, submitted memo and email evidence under discovery, that they took less money in the extended deals in order to secure payments in the event of a lockout. Doing this, they violated a legally binding arrangement in which the owners are expected to maximize revenues for all parties in all cases. It was a rather straightforward case and another example that the NFL is usually its own worst legal enemy. However, the ruling will still be subject to appeals.

What is far more complicated is how to resolve the financial implication of the case. Assessing damages might be the easiest task, as extrapolating money left on the table (in light of even newer contracts signed since then) will provide guidance.

But how to handle the $4 billion is a much thornier question.

[get louder at lambeau]

The point is, if there is no football, then there is no figurative pizza. Do the networks still need to pay in that case?

Yes, the TV contracts they negotiated say the networks still need to pay them if there is no football for 2011, but the NFL would pay them back at some point in the future. That's how the NFL prepared for a lockout season financially, and the players are saying that it violated the CBA for the NFL to negotiate TV contracts that way instead of trying to maximize the shared total revenue.

[pbmax]

Only a portion of the lockout payments were to be repaid. From Doty's initial decision (via PFT): (http://profootballtalk.nbcsports.com/2011/03/02/in-hindsight-dotys-ruling-was-a-no-brainer/)


Quote, as to the deal with DirecTV: “Of the total amount payable in the event of a canceled season, 42% of that fee is nonrefundable and the remainder would be credited to the following season.”

Interpretation: Of the money that the NFL would collect from DirecTV during a 2011 lockout, only 58 cents of each dollar would be repaid. Thus, to the extent that men like NFL general counsel Jeff Pash have insisted that these payments constitute loans and nothing more, Pash has overlooked the fact that 42 cents of every dollar paid by DirecTV during a lockout would be free money.

Its deal with Verizon for lockout payments was non-refundable. The League also granted an extra year to the contracts if there was a season cancelled due to work stoppage in 2011.

Lastly, the language that speaks against this type of contract (both parties agree to act in good faith in increase Total Revenues) is in the CBA, Article X, Section 1(a)(i).

The courts did not do this to the League, the NFL did this to themselves.

[get louder at lambeau]

The NFL would pay them back at some point in the future, but not completely. From Doty's initial decision (via PFT): (http://profootballtalk.nbcsports.com/2011/03/02/in-hindsight-dotys-ruling-was-a-no-brainer/)

That's the first I've heard of that. Just goes to show how desperate DirecTV was to keep that contract, if they agreed to fucked up terms like that.

[Tarlam!]

Swede, how the hell is your German so good? Perfect punctuation and use of caps. You flaw me.......

[pbmax]

That's the first I've hear of that. Just goes to show how desperate DirecTV was to keep that contract, if they agreed to fucked up terms like that.

The desperation went both ways (Via PFT): (http://profootballtalk.nbcsports.com/2011/03/02/in-hindsight-dotys-ruling-was-a-no-brainer/)


Quote: “Initially, FOX expressed reluctance to pay rights fees during a work stoppage. The NFL considered opposition to the work stoppage provision a ‘deal breaker[].’”

Interpretation: This wasn’t some ancillary, throw-in term. It was one of the primary motivations for extending the network deals in 2009, and that supports the union’s claims that the NFL has been plotting a lockout for at least two years.

And one of the reasons the League needed the terms was the existence of lockout language in their normal course of business loans (via PFT):


Quote: “[S]ome of the NFL’s loan obligations include ‘average media revenues’ covenants which provide that an ‘event of default’ occurs if average annual league media revenues fall below a specific value.”

Interpretation: The league needs the TV money to keep coming during a lockout to avoid defaulting on some of its loans. Even if the money otherwise can be raised to pay the bills, a significant drop in the TV money potentially becomes a “default,” which triggers all sorts of problems for the league.

So the League not only needed the revenue to survive the lockout amid continuing costs, it needed the revenue to avoid defaulting on their loans by definition, even if they had the cash to continue to make payments.

[swede]

Swede, how the hell is your German so good? Perfect punctuation and use of caps. You flaw me.......

Well, I was going to use Katzenjammer Kids German but it was more confusing than amusing. I went to good old Babelfish for the translation.

As for the capitals, I surmised that there must be a German punctuation rule in which proper nouns are not capitalized but nouns that are modified by an adjective are capitalized. That is an interesting Rule.

[get louder at lambeau]

The desperation went both ways (Via PFT): (http://profootballtalk.nbcsports.com/2011/03/02/in-hindsight-dotys-ruling-was-a-no-brainer/)



And one of the reasons the League needed the terms was the existence of lockout language in their normal course of business loans (via PFT):



So the League not only needed the revenue to survive the lockout amid continuing costs, it needed the revenue to avoid defaulting on their loans by definition, even if they had the cash to continue to make payments.

That's interesting. It makes me think that the NFL wasn't quite as shady as it initially appears with the lockout guarantee stuff. If they need that revenue to avoid defaulting on loans by definition, it would seem like a somewhat reasonable contract provision to include in those TV contracts. I doubt the old CBA mandated that they have to maximize shared revenue in the short term even to the point that it could endanger their financial health in other ways. That would be very short-sighted.

As far as the lockout being something that is done at the discretion of the owners, it is, but it is a tool that they need to have available when dealing with a union. If they can't lock the players out without defaulting on large loans, and the players know they can't, the players can demand anything they want; and the NFL would face the option of either accepting whatever terms the players dictate by the start of the season, or defaulting on their loans. Both are options that could potentially jeopardize the financial health of the league. It seems unfair to allow the players the leverage to put the NFL into a lose-lose situation like that. Assuming those loans are significant, anyway.

[SkinBasket]

Doing this, they violated a legally binding arrangement in which the owners are expected to maximize revenues for all parties in all cases.

Has this point been decided, or is it simply the argument of the [not]union? Because it seems that it would be hard to prove that this wasn't simply a result of negotiations with the networks, which were aware of the costs of a lockout to their own interests, and was, in fact, the best financial decision for all involved. Without another contract that the NFL didn't sign with the same networks they ended up signing with worth more money without lockout provisions, there really isn't any kind of baseline for any kind of "damages." Assuming, of course, that the players can show there are actually any damages to be had and that the contract that was signed didn't lead to the best financial result for all parties. Until then, these are the same ambiguous "damages" as were the ambiguous "harms" that no one can define, much less assess.

When one of the principle reasons that the supposed damages were incurred were the actions/intentions of those seeking the damages, and when the owners were, in fact, trying to protect themselves, and their financial well being against damage, I don't think that this is quite as uncomplicated as you make it out to be.

[get louder at lambeau]

Well said, Mr. Basket.

[pbmax]

That's interesting. It makes me think that the NFL wasn't quite as shady as it initially appears with the lockout guarantee stuff. If they need that revenue to avoid defaulting on loans by definition, it would seem like a somewhat reasonable contract provision to include in those TV contracts. I doubt the old CBA mandated that they have to maximize shared revenue in the short term even to the point that it could endanger their financial health in other ways. That would be very short-sighted.

As far as the lockout being something that is done at the discretion of the owners, it is, but it is a tool that they need to have available when dealing with a union. If they can't lock the players out without defaulting on large loans, and the players know they can't, the players can demand anything they want; and the NFL would face the option of either accepting whatever terms the players dictate by the start of the season, or defaulting on their loans. Both are options that could potentially jeopardize the financial health of the league. It seems unfair to allow the players the leverage to put the NFL into a lose-lose situation like that. Assuming those loans are significant, anyway.

Your first paragraph is the most interesting remaining question in this case. The old CBA did not say they needed to maximize short term revenue at any cost. It stipulates good business practices and emphasizes the interests of both the players and the League need to be considered. So the question becomes how do you square keeping the loans in good standing with labor disruption preparedness?

PFT skips over the details of this question in its breakdown of the ruling, but it seems to suggest that there was labor disruption language in the previous TV deals. But that the precise language of the old deals would not have covered the owners in a lockout. The inference I take is that the owners got something if there was a strike or replacement games, but that an owner declared lockout wasn't covered. Its going to be a little thorny to get the players to agree to language that would allow TV payments in a lockout.

Your second question is even more intriguing, but likely won't get answered clearly. Exactly who has loans that go bad by definition when TV revenues drop to a certain level?

Is it teams who are under that gun or the League? And how common is it? Is it stadium loans or the NFL line of credit? Are poorly run teams placing the League in that bind or is it common for well run teams/other leagues?

Because if it is financially troubled teams that have these loans, then the League really has itself in a pickle.

[pbmax]

Has this point been decided, or is it simply the argument of the [not]union? Because it seems that it would be hard to prove that this wasn't simply a result of negotiations with the networks, which were aware of the costs of a lockout to their own interests, and was, in fact, the best financial decision for all involved. Without another contract that the NFL didn't sign with the same networks they ended up signing with worth more money without lockout provisions, there really isn't any kind of baseline for any kind of "damages." Assuming, of course, that the players can show there are actually any damages to be had and that the contract that was signed didn't lead to the best financial result for all parties. Until then, these are the same ambiguous "damages" as were the ambiguous "harms" that no one can define, much less assess.

When one of the principle reasons that the supposed damages were incurred were the actions/intentions of those seeking the damages, and when the owners were, in fact, trying to protect themselves, and their financial well being against damage, I don't think that this is quite as uncomplicated as you make it out to be.

According to DirecTV, that lockout language came at a price:


Quote: “DirecTV would have considered paying more in 2009 and 2010 ‘to have [the work-stoppage provision] go away.’”

Interpretation: The league left money on the table with DirecTV that could have and would have been shared with the players.

While it certainly is in the League's interest to keep payments coming in the event of the Lockout they were planning, it came at a cost from the networks. A provision that could only have benefited owner's coming at the expense of the players (and owners).

And its clear the Networks had nothing to gain in this negotiation other than a lower price because DirecTV and Fox, among others, wanted no part of it until it was made clear it was non-negotiable.

I think damages could be calculated to a reasonable degree with the following information:
1. Previous contracts prior to extension (TV contracts didn't expire in 2009, they were renegotiated, so figures exist for TV revenue without lockout protection in 2009 and 10)
2. New contracts since lockout language first added (for instance ESPN's new deal)
3. Whatever proposals were traded prior to the parties agreeing to include lockout language

But what to do with the $4 billion is still an open question, because that money exists outside the damages award. And only part of it would have been available in the first two years (09 and 10) of the new deal. And even that calculation is tough because while $4 billion is the lockout protection, the amount of actual broadcast revenue left on the table for that provision is likely very different. If for no other reason, the payback provisions of a portion of it.

Then think about this: how do the players and owners differ in their view of the payback dollars? Will that be part of the costs deducted before the calculation of Total Revenue? Or do the owners foot that payback with the money left after the salary cap calculation?

[get louder at lambeau]

While it certainly is in the League's interest to keep payments coming in the event of the Lockout they were planning, it came at a cost from the networks. A provision that could only have benefited owner's coming at the expense of the players (and owners).

I wonder if the league could argue that the prospect of defaulting on those loans wouldn't benefit anyone, league or players, so it was in the interest of both parties to have a provision in the contracts that would avoid those defaults in any possible situation, including either lockout or strike.

[Tarlam!]

It seems easy enough to play the season as per last year all tghe while the litigation goes on. Obviously some provisions need to be made. And I'd like a rookie salary agreement to protect the clubs from Russell types deals.

But, I want my Packers to repeat and threepeat! they have a legitimate chance!

[SkinBasket]

While it certainly is in the League's interest to keep payments coming in the event of the Lockout they were planning, it came at a cost from the networks. A provision that could only have benefited owner's coming at the expense of the players (and owners).

The fact that the networks didn't want the provisions demonstrates that the league was probably acting in it's best financial interests. You say they have to act in the best interests of all parties. They're still one of those parties. You'd have to demonstrate that the damage outweighed the benefit to all parties involved as a collective. You can't ask the league to work in the interests of everyone while splitting off the parts that don't benefit the other parties and weighing them independently. Otherwise acting the interest of everyone simply becomes acting in the interest of everyone but themselves. In other words, the players.

[MJZiggy]

The fact that the networks didn't want the provisions demonstrates that the league was probably acting in it's best financial interests. You say they have to act in the best interests of all parties. They're still one of those parties. You'd have to demonstrate that the damage outweighed the benefit to all parties involved as a collective. You can't ask the league to work in the interests of everyone while splitting off the parts that don't benefit the other parties and weighing them independently. Otherwise acting the interest of everyone simply becomes acting in the interest of everyone but themselves. In other words, the players.

Don't jump down my throat because this is a question I actually want the answer to. If the league is the negotiator with the networks, then isn't it the league's responsibility to either work for what's best for both the league and the players or at least give the NFLPA a voice while bargaining for a contract that affects the players as well?

[pbmax]

The fact that the networks didn't want the provisions demonstrates that the league was probably acting in it's best financial interests. You say they have to act in the best interests of all parties. They're still one of those parties. You'd have to demonstrate that the damage outweighed the benefit to all parties involved as a collective. You can't ask the league to work in the interests of everyone while splitting off the parts that don't benefit the other parties and weighing them independently. Otherwise acting the interest of everyone simply becomes acting in the interest of everyone but themselves. In other words, the players.

Perhaps, but who was holding the gun to the team's head that made them take out loans that had an "average media revenue" threshold and default? Forbes rated the teams to be able to last one season with no game/TV revenue, but I doubt at the time they knew of loans with that stipulation. Without those loans, the league would still be able to stand a lockout longer than the players. We may never find out, but I would love to know who put the league in that kind of bind. I could be wrong and those types of loans may be typical, but I have never heard of a team (or League) having loans like that.

Giving the players a seat at the table does not mean giving up. No one expects the League to angle it's contract negotiations for revenue to fuel an NFLPA strike fund. And the players have passed (or perhaps lost a previous case) on objecting to the League having a strike fund in its TV deals, which it did.

The owners signed onto this deal and didn't abandon it until they had to add a formula for revenue sharing. Don't forget, this battle about cost reduction is being fought without anyone knowing the future of the supplemental revenue sharing. While those loans changed the landscape of what the League could do to prepare for a lockout, I think the major factor here is revenue sharing and low revenue teams. If the owners get the kind of deal they wish to get, supplemental revenue sharing will likely get gutted. I suspect this is the very reason Upshaw and Tagliabue pushed for revenue sharing to be added before the last CBA was hammered out. Because it pitted teams against each other.

If supplemental revenue sharing goes away, the entire league gets to pay what the least successful franchise can afford to pay for salaries.

Ironically, the test of all this conjecture is to take the League to bare bones agreements and fight for all resources as 32 individual clubs. It would look more like baseball, but it would weed out weaker teams and markets and probably finally put a team in LA.

[SkinBasket]

Don't jump down my throat because this is a question I actually want the answer to. If the league is the negotiator with the networks, then isn't it the league's responsibility to either work for what's best for both the league and the players or at least give the NFLPA a voice while bargaining for a contract that affects the players as well?

Any decision a business owner makes affects their employees. Does your question infer that you believe employees should have a say in any decision that affects the finances of the business? If a consumer goods company contracts a PR firm to make ads for that company, should they allow their employee unions to dictate the terms of the contract with the PR firm?

I believe the league makes decisions based on whats best for the league, the growth and popularity of the league is ample evidence of that - what will lead to financial success, growth, and stability. The players have no such interest. Their interest lies solely in making as much money for themselves as possible without regard for the success, growth, or stability of their respective team or the league. If they have any such interest, either individually or collectively, I haven't seen it.

As I've said, the league makes the decisions that are best for the league as a whole. Isolating the decisions that don't favor the players over owners and attempting to have a court change those decisions so that they favor the players hardly seems like a sound way to grow, or even maintain, the success of the league.

[Guiness]

That's interesting. It makes me think that the NFL wasn't quite as shady as it initially appears with the lockout guarantee stuff. If they need that revenue to avoid defaulting on loans by definition, it would seem like a somewhat reasonable contract provision to include in those TV contracts. I doubt the old CBA mandated that they have to maximize shared revenue in the short term even to the point that it could endanger their financial health in other ways. That would be very short-sighted.

As far as the lockout being something that is done at the discretion of the owners, it is, but it is a tool that they need to have available when dealing with a union. If they can't lock the players out without defaulting on large loans, and the players know they can't, the players can demand anything they want; and the NFL would face the option of either accepting whatever terms the players dictate by the start of the season, or defaulting on their loans. Both are options that could potentially jeopardize the financial health of the league. It seems unfair to allow the players the leverage to put the NFL into a lose-lose situation like that. Assuming those loans are significant, anyway.

As PBmax pointed out, they put themselves in the lose-lose situation you describe.

They signed loans with the clauses mentioned above.
They signed the CBA that obligated them to maximize revenue at all times.

Then they added 1 and 1, got 2 and did the slow 'oh shit' moment.

[Guiness]

Any decision a business owner makes affects their employees. Does your question infer that you believe employees should have a say in any decision that affects the finances of the business? If a consumer goods company contracts a PR firm to make ads for that company, should they allow their employee unions to dictate the terms of the contract with the PR firm?

I believe the league makes decisions based on whats best for the league, the growth and popularity of the league is ample evidence of that - what will lead to financial success, growth, and stability. The players have no such interest. Their interest lies solely in making as much money for themselves as possible without regard for the success, growth, or stability of their respective team or the league. If they have any such interest, either individually or collectively, I haven't seen it.

As I've said, the league makes the decisions that are best for the league as a whole. Isolating the decisions that don't favor the players over owners and attempting to have a court change those decisions so that they favor the players hardly seems like a sound way to grow, or even maintain, the success of the league.

I don't think you can use the 'any business' argument here. The NFL isn't any business, it's a unique business with unique rules, and a workforce that has a big stake and say in the going ons. I don't think you're going to find too many other businesses out there that determine how much they pay their employees as a proportional %age of revenue! Can you imagine going to your boss, telling him you noticed sales are up 10%, so you expect a raise?

I think in this case, the league made a decision that solely benefited the owners, and not the players at all. They could just of easily made a deal that put $x dollars in their pockets, and $x dollars in the players fund in order to keep both sides afloat in the event of a work stoppage. I doubt they gave that idea a whole hell of a lot of consideration...

[MJZiggy]

Any decision a business owner makes affects their employees. Does your question infer that you believe employees should have a say in any decision that affects the finances of the business? If a consumer goods company contracts a PR firm to make ads for that company, should they allow their employee unions to dictate the terms of the contract with the PR firm?

I believe the league makes decisions based on whats best for the league, the growth and popularity of the league is ample evidence of that - what will lead to financial success, growth, and stability. The players have no such interest. Their interest lies solely in making as much money for themselves as possible without regard for the success, growth, or stability of their respective team or the league. If they have any such interest, either individually or collectively, I haven't seen it.

As I've said, the league makes the decisions that are best for the league as a whole. Isolating the decisions that don't favor the players over owners and attempting to have a court change those decisions so that they favor the players hardly seems like a sound way to grow, or even maintain, the success of the league.

I don't think that this is quite the same as a manufacturing company contracting a PR firm. This is a decision that cost both the league and the players money for the sole purpose of benefiting the owners in the event of a work stoppage. How far do you think that would have gotten the manufacturing company if the union found out that management was costing the union and the employees money so that management could minimize its own financial risk at the expense of the employees should they choose to have a lockout? That's not working in the financial interests of all parties. It's going to be an interesting summer.

[Guiness]

I don't think that this is quite the same as a manufacturing company contracting a PR firm. This is a decision that cost both the league and the players money for the sole purpose of benefiting the owners in the event of a work stoppage. How far do you think that would have gotten the manufacturing company if the union found out that management was costing the union and the employees money so that management could minimize its own financial risk at the expense of the employees should they choose to have a lockout? That's not working in the financial interests of all parties. It's going to be an interesting summer.

Pile on top of that scenario a company that has an aggressive profit sharing setup, and you're getting even closer.

[SkinBasket]

I don't think that this is quite the same as a manufacturing company contracting a PR firm. This is a decision that cost both the league and the players money for the sole purpose of benefiting the owners in the event of a work stoppage. How far do you think that would have gotten the manufacturing company if the union found out that management was costing the union and the employees money so that management could minimize its own financial risk at the expense of the employees should they choose to have a lockout? That's not working in the financial interests of all parties. It's going to be an interesting summer.

No it's not the same. No example will be. But the players are fighting an anti-trust fight in the hopes of being treated like non-union employees that fall under the exact same labor laws any other non-unionized employee does. Yet, they, and others, still argue they should have special bargaining rights, like having a part in negotiating business decisions to their favor - to the detriment of the owners, that most labor unions could only dream of negotiating into a CBA. You continue to disregard ownership as a "party" in their own negotiations, measuring only the hypothetical damage to the players, who knew a long time ago just as well as the owners did that a stoppage was more than likely this summer.

So the question for you becomes: where do you draw the line between ownership and employee? Using your criteria of "decisions that affect employees" entirely eliminates ownership's ability to make any kind of decision that benefits the business (and by extension, *gasp* the employee), so I think we need something a little less socialistic than that. What rights do an owner have in your mind?

[SkinBasket]

I think in this case, the league made a decision that solely benefited the owners, and not the players at all. They could just of easily made a deal that put $x dollars in their pockets, and $x dollars in the players fund in order to keep both sides afloat in the event of a work stoppage. I doubt they gave that idea a whole hell of a lot of consideration...

And why would they? The players had already bargained for their rights and pay. If they wanted a "rainy day fund" to get paid for not doing work, maybe they should have had the same obvious forethought the league did. It's not like this work stoppage took anyone by surprise. The difference is that the league used it's resources to plan for the possibility of it. The players invested in gold and diamonds, one of which should have been a sound enough investment to see them through the stoppage.

This idea that as a union, the players were entitled to a share of anything they want above and beyond what was in the CBA, and now as a [not]union they have an even greater entitlement to any and all league resources isn't backed by any kind of logic outside of, "Well, that's just not fair!" which is usually derived from nothing more than a pseudo-political socioeconomic belief in workers rights over owner's rights.

[pbmax]

The owner's have all their rights except those they specifically agreed to curtail in the CBA. The same CBA that was in effect during the 2009 TV negotiations. The CBA language did not specify they need to maximize revenue in such a way that benefits the owners long term. You can argue that would be the preferred model. But that wasn't what they agreed to do. The agreed to maximize revenue for both players and owners, not reduce revenue in order to fund an effort to reduce costs. You may not agree with this as a business strategy, but it is what the owners have agreed to do since 1993.

A successful lockout may produce a CBA that ensures a more viable league. But that doesn't mean the owner's were not limited in the actions they could take by language they agreed to in the 2006 CBA.

[SkinBasket]

Ironically, the test of all this conjecture is to take the League to bare bones agreements and fight for all resources as 32 individual clubs. It would look more like baseball, but it would weed out weaker teams and markets and probably finally put a team in LA.

Well, that's kind of the problem I had with your original supposition: that the "damages" the players are seeking are little more than conjecture. Without being able to prove that the league and the players would be better off financially had they negotiated the TV deal more "in favor of the players," or in other words, not hedging their financial risk for a very possible and predictable work stoppage in order to protect their business which answers to a much greater number employees, investors, and others with a financial stake in the team than solely the players, there's not even a way to show that the league didn't act in the greater interest of all parties.

But I also don't think that's the point. The point is for the players to use the courts to hold as much of the league's resources hostage as possible to improve their negotiating position.

[pbmax]

This idea that as a union, the players were entitled to a share of anything they want above and beyond what was in the CBA, and now as a [not]union they have an even greater entitlement to any and all league resources isn't backed by any kind of logic outside of, "Well, that's just not fair!" which is usually derived from nothing more than a pseudo-political socioeconomic belief in workers rights over owner's rights.

No one has made this argument except you. The players bargained for what they got and made concessions to get there. At no point did any party get "anything they want and beyond" and there is no evidence that they players will get money that was not covered by the 2006 CBA. This is simply hyperbole.

If the owners wanted to be able to structure contacts any way they saw fit, then they shouldn't have signed on to the language. Through concessions, they could have changed the language to be open to lockout funding.

My suspicion is that the owners liked the language because it would entail the cooperation of the players in securing more revenue for the League (likeness rights, video games, rebroadcasts, PR, etc.) This is simply another battle about what is permissible given the agree to contract language.

[pbmax]

Well, that's kind of the problem I had with your original supposition: that the "damages" the players are seeking are little more than conjecture. Without being able to prove that the league and the players would be better off financially had they negotiated the TV deal more "in favor of the players," or in other words, not hedging their financial risk for a very possible and predictable work stoppage in order to protect their business which answers to a much greater number employees, investors, and others with a financial stake in the team than solely the players, there's not even a way to show that the league didn't act in the greater interest of all parties.

But I also don't think that's the point. The point is for the players to use the courts to hold as much of the league's resources hostage as possible to improve their negotiating position.

Is there really a difference between using the court to provide leverage and protecting their rights? If there was nothing to be gained, who would be in court?

I think there is evidence already entered of the potential for contracts without that language. Both the previous TV deals and the extensions after the fact. Measuring the damage will be comparatively easy than deciding what to do about the actual payments.

[SkinBasket]

No one has made this argument except you. The players bargained for what they got and made concessions to get there. At no point did any party get "anything they want and beyond" and there is no evidence that they players will get money that was not covered by the 2006 CBA. This is simply hyperbole.

If the owners wanted to be able to structure contacts any way they saw fit, then they shouldn't have signed on to the language. Through concessions, they could have changed the language to be open to lockout funding.

My suspicion is that the owners liked the language because it would entail the cooperation of the players in securing more revenue for the League (likeness rights, video games, rebroadcasts, PR, etc.) This is simply another battle about what is permissible given the agree to contract language.

What CBA? There isn't a union. Like I said, the players want to be a [non]union, are arguing in court and in front of the NLRB that they are not a union, and still want to get everything they bargained for as a union, without a CBA. Not sure how the 2011 TV money would be covered by anything except whatever contract is in place between the league and the networks, which the players may have been able to grieve when they actually were a union with a CBA for which the league to violate.

[SkinBasket]

It comes to mind that I should clarify what money I'm talking about here. I'm talking about the players rights to the 2011 money, not the damages. If there are damages levied to those previous seasons - the 7 million or whatever was ruled before this judge overruled that decision, that would be money that I don't have a problem being awarded. Not sure how the players make the jump from 7 million to 700, but then again, you can't really ask the courts to hold the entire 4 billion hostage if you're only on the line for 7 million.

[SkinBasket]

At no point did any party get "anything they want and beyond" and there is no evidence that they players will get money that was not covered by the 2006 CBA. This is simply hyperbole.

Really? They only want 70% of the 2011 TV contract...


The players’ request for compensatory damages was redacted in court documents, and their lawyers never specified the amount while in open court Thursday. Thomas J. Heiden, co-counsel for the players, revealed the figure, $707 million, to reporters after the hearing. The players are also seeking three times that amount in punitive damages, about $2.1 billion.

[swede]

The players’ request for compensatory damages was redacted in court documents, and their lawyers never specified the amount while in open court Thursday. Thomas J. Heiden, co-counsel for the players, revealed the figure, $707 million, to reporters after the hearing. The players are also seeking three times that amount in punitive damages, about $2.1 billion.

Hmmm...




DeMaurice Smith: Mr. Goodell, after I destroy the Washington Redskins... I will destroy another major team every hour on the hour. That is, unless, of course, you pay me... one hundred billion dollars.

Roger Goodell: [bursts with laughter] Mr. Smith, this isn't 3011! That amount of money doesn't even exist in the NFL. That's like saying, "I want a kajillion bajillion dollars."

DeMaurice Smith: Fine. I'll take 2.1 billion dollars.

[pbmax]

What CBA? There isn't a union. Like I said, the players want to be a [non]union, are arguing in court and in front of the NLRB that they are not a union, and still want to get everything they bargained for as a union, without a CBA. Not sure how the 2011 TV money would be covered by anything except whatever contract is in place between the league and the networks, which the players may have been able to grieve when they actually were a union with a CBA for which the league to violate.

Can't any contractual obligations as a legal matter extend beyond the expiration of a deal? If I owe you money as a result of a contract covering 2009, certainly it would be within your right to attempt to collect that money through legal means beyond calendar 2009?

[pbmax]

Really? They only want 70% of the 2011 TV contract...

If the league used money that would have been available to them from the Networks to purchase the lockout payments, then some portion of the underpayment would have otherwise flowed to the players. I might be missing something, but how does the request for $707 million mean that money is from the 2011 fees?

[Guiness]

If the league used money that would have been available to them from the Networks to purchase the lockout payments, then some portion of the underpayment would have otherwise flowed to the players. I might be missing something, but how does the request for $707 million mean that money is from the 2011 fees?

There was a decision for $6million at some point. I thought it was the special master, but can't seem to find that. I wonder how it relates.

[pbmax]

That was for the inclusion of one additional Sunday Night Game, opposite the World Series. I am not sure how that came to be, but that was the basis of the finding.

[get louder at lambeau]

Here's an article that mentions what you guys are talking about with the Special Master and all-
http://news.yahoo.com/s/ap/20110512/ap_on_sp_fo_ne/fbn_nfl_union_tv_contracts

[SkinBasket]

There was a decision for $6million at some point. I thought it was the special master, but can't seem to find that. I wonder how it relates.

That was the ruling this judge decided to overturn.


Doty’s decision on March 1 reversed much of a ruling in February by Stephen Burbank, the special master who determined the N.F.L. could have access to the broadcast money and awarded the players only $6.9 million. The players have accused the league of renegotiating broadcast contracts for 2009 and 2010 in anticipation of a lockout, which the league has denied...

Gregg Levy, the lead lawyer for the league, said the players were not entitled to damages because they never asked for any before the special master. He also said the league never intended to finance a lockout with the television money and planned to use only a small portion of it. Levy declined to say how much.

Should be interesting to see if the procedural point raised by Levy is ignored by this judge. Of course, all the players want is for the judge to play keep away with the money anyway, so it probably doesn't matter.

[MJZiggy]

No it's not the same. No example will be. But the players are fighting an anti-trust fight in the hopes of being treated like non-union employees that fall under the exact same labor laws any other non-unionized employee does. Yet, they, and others, still argue they should have special bargaining rights, like having a part in negotiating business decisions to their favor - to the detriment of the owners, that most labor unions could only dream of negotiating into a CBA. You continue to disregard ownership as a "party" in their own negotiations, measuring only the hypothetical damage to the players, who knew a long time ago just as well as the owners did that a stoppage was more than likely this summer.

So the question for you becomes: where do you draw the line between ownership and employee? Using your criteria of "decisions that affect employees" entirely eliminates ownership's ability to make any kind of decision that benefits the business (and by extension, *gasp* the employee), so I think we need something a little less socialistic than that. What rights do an owner have in your mind?

Interesting logic, but at the time the deals were made, there most certainly was a union. Non-union is a non-issue here. They were trying to set themselves up to maximize their benefit should there be a labor dispute that they fully expected there to be. Because of the setup between the union and the league, it was at the expense of both the league and the union. I fully understand that ownership should have ability to make decisions that benefit employees. This just isn't one of them as it not only doesn't benefit the employees, but works to their detriment.

[SkinBasket]

Interesting logic, but at the time the deals were made, there most certainly was a union. Non-union is a non-issue here. They were trying to set themselves up to maximize their benefit should there be a labor dispute that they fully expected there to be.

You're going to have to make a distinction here. You were arguing that the association should have the right to a place at the table in negotiating business deals with the league going forward, I thought. At least that's what you said. So is this about the 2011 money, or the previous deals?


Because of the setup between the union and the league, it was at the expense of both the league and the union.

You'll need to explain that one a bit. So any decision the league makes that doesn't benefit the union, or [not]union now, is inherently against the league's own self-interest? The league negotiated a network deal that hedged their business interests against a work stoppage. Turns out they were right to do so.


I fully understand that ownership should have ability to make decisions that benefit employees.

I know you do. Really, I do.


This just isn't one of them as it not only doesn't benefit the employees, but works to their detriment.

Not every decision that is best for the business of the league as a whole is going to benefit the players. In fact, as I've pointed out, the owners have the interests of the continued success of the teams, and the league, as their top priority. The players are only looking to get as much for themselves as they can as quickly as possible without any regard for the present or future of the financial well-being of the league. They've made that abundantly clear. The players are not, by default, right. Nor do they have a business plan, no matter how nice Tom Bradey's smile is or how endearing Drew's birthmark is. Them getting paid more does not translate to greater league success. In fact the inverse is true, that greater league success, has, and will continue to be, the golden goose that leads to larger salaries. The same golden goose they are so desperately trying to assfuck and throw in the ditch.

[mraynrand]

Can't any contractual obligations as a legal matter extend beyond the expiration of a deal? If I owe you money as a result of a contract covering 2009, certainly it would be within your right to attempt to collect that money through legal means beyond calendar 2009?

Mr. Hart, do you know the difference between a condition on a promise and a promise? I am waiting, Mr. Hart!

http://usedbooksblog.com/blog/wp-content/uploads/2008/06/the-paper-chase-john-houseman.jpg