Judge rules in favor of NFLPA in TV contract complaint (1 Viewer)

[Jason Wood]

Looks like the players got a nice shot in the arm relative to the leverage as judge Doty overruled the special master and determined that the NFL acted in bad faith on its recent TV deals.

http://sports.espn.go.com/nfl/news/story?id=6172379

While the owners are saying this doesn't change anything, I find a hard time believing that it doesn't. Particularly for the cash strapped owners who would've been making key use of their part of the $4 billion "loan."

 

[eaglesfan7]

Saw this a few hours ago but heard they are still "miles apart".

Also, I don't pay attention to much ESPN says about these news items.

 

[GroveDiesel]

Jerry Jones and his massive amount of stadium debt can not be happy right now.

What other owners have a lot of debt?

 

[Pip's Invitation]

Jerry Jones and his massive amount of stadium debt can not be happy right now.What other owners have a lot of debt?

Probably best to look at teams that got new stadiums recently -- WAS, NYG, NYJ, PHI, NE, PIT, IND come to mind.

 

[shader]

If this doesn't get overturned on appeal, then the owners will not be able to stand firm and have no football in 2011.

 

[GroveDiesel]

Jerry Jones and his massive amount of stadium debt can not be happy right now.What other owners have a lot of debt?

Probably best to look at teams that got new stadiums recently -- WAS, NYG, NYJ, PHI, NE, PIT, IND come to mind.

It depends on how much the owners actually paid for building the stadiums and how much exactly they have to pay in rent if they don't own them.I think that New Jersey paid for almost all of the new Meadowlands stadium. Or at least a gigantic chunk of it. I think that PA/Philly paid for a ton of the Eagles' stadium as well. And that the Eagles got a great deal on rent too.For those owners that have to pay rent to a city owned stadium, what happens if they end up not being able to afford it? Could be some very interesting dynamics playing out.

 

[renesauz]

If I read that right, it basically says the NFL accepted less money on a yearly basis in exchange for networks meeting the demand of having the loan (lockout) money in the TV deal. IE: The NFL did not maximize the yearly profits of the TV deal because they were more interested in the lockout clauses.

If that's true, then the NFL made a pretty significant breach of the last CBA......and things could get real ugly for the owners if they lockout.

I've been 80% on the owners side and happen to believe unions in general are over-powered, but this changes that at least a little bit. Bush league manuever.

 

[Andrew Garda]

The part that kills me is the proviso with DirectTV where the league gets MORE money from them if there is a lockout.

 

[Orange Crush]

Jerry Jones and his massive amount of stadium debt can not be happy right now.What other owners have a lot of debt?

Probably best to look at teams that got new stadiums recently -- WAS, NYG, NYJ, PHI, NE, PIT, IND come to mind.

It depends on how much the owners actually paid for building the stadiums and how much exactly they have to pay in rent if they don't own them.I think that New Jersey paid for almost all of the new Meadowlands stadium. Or at least a gigantic chunk of it. I think that PA/Philly paid for a ton of the Eagles' stadium as well. And that the Eagles got a great deal on rent too.For those owners that have to pay rent to a city owned stadium, what happens if they end up not being able to afford it? Could be some very interesting dynamics playing out.

Actually, the New Meadowlands Stadium was 100% funded by the Giants and Jets. Those two teams have massive amounts of debt from that -- a combined $1.4 BILLION.Other teams that have a lot of debt are Miami, Detroit (both of whom have more than $350M in debt), and Minnesota, Atlanta, New England, and Baltimore (each of whom have more than $250M worth -- Pittsburgh and Washington just miss the cut).This is according to last August's Forbes analysis of NFL financials.

 

[bicycle_seat_sniffer]

If this doesn't get overturned on appeal, then the owners will not be able to stand firm and have no football in 2011.

Not true at all. The owners have been preparing for this for 3 years.

 

[fatness]

If I read that right, it basically says the NFL accepted less money on a yearly basis in exchange for networks meeting the demand of having the loan (lockout) money in the TV deal. IE: The NFL did not maximize the yearly profits of the TV deal because they were more interested in the lockout clauses.

In other words the owners were basically trying to borrow money, part of which was going to belong to the players.

 

[Ksquared]

I am not sure how you would not take less (however slightly) when you negotiate special situations into any contractual agreement, unless the other party is not being very business wise. The questions should be how much difference in $$ was there? I will bet it was less than 2-4% of the final contract.

 

[Jason Wood]

If this doesn't get overturned on appeal, then the owners will not be able to stand firm and have no football in 2011.

Not true at all. The owners have been preparing for this for 3 years.

It's certainly not the ONLY thing they were counting on, but it would be wrong to say it wasn't an important component either. Yes, they've been preparing for this for three years, and part of that preparation was negotiating these TV deals to allow for $4 billion in "loans" that would sustain their cash flow needs during a protracted stoppage.There are owners, I'm quite sure, that don't need this money. But I guarantee you there are other owners that, very much, do.

 

[Kitrick Taylor]

If this doesn't get overturned on appeal, then the owners will not be able to stand firm and have no football in 2011.

Not true at all. The owners have been preparing for this for 3 years.

It's certainly not the ONLY thing they were counting on, but it would be wrong to say it wasn't an important component either. Yes, they've been preparing for this for three years, and part of that preparation was negotiating these TV deals to allow for $4 billion in "loans" that would sustain their cash flow needs during a protracted stoppage.There are owners, I'm quite sure, that don't need this money. But I guarantee you there are other owners that, very much, do.

Agreed. For the first time since they opted out of the current CBA, the owners have taken a hit. Before this ruling the owners had ALL of the leverage. Now they have a real problem if they money train actually comes to a halt. I'm not sure when the owners will start missing out on payments from the Networks, Directv and Verizon etc, but they now know there's a real deadline on their side too.

 

[Bri]

"If we don't offer you anything to televise, we want you to pay us anyway"

"Umm OK, deal!"

"Now go wash my car"

"But I'm the president of DirecTV?"

"So then you have time to buff out some of those scratches too"

 

[GroveDiesel]

I am not sure how you would not take less (however slightly) when you negotiate special situations into any contractual agreement, unless the other party is not being very business wise. The questions should be how much difference in $$ was there? I will bet it was less than 2-4% of the final contract.

The owners better hope that the Judge Doty doesn't determine that they left 4% on the table. 4% of those tv contracts would be something like $640M. And if the owners would have had to pay out 60% of that to the players, then the owners could owe the players $384M!!!

 

[jackdubl]

O

If I read that right, it basically says the NFL accepted less money on a yearly basis in exchange for networks meeting the demand of having the loan (lockout) money in the TV deal. IE: The NFL did not maximize the yearly profits of the TV deal because they were more interested in the lockout clauses.

If that's true, then the NFL made a pretty significant breach of the last CBA......and things could get real ugly for the owners if they lockout.

I've been 80% on the owners side and happen to believe unions in general are over-powered, but this changes that at least a little bit. Bush league manuever.

This reminds me of a joke I just heard. A CEO, a union member, and a tea party member are sitting at a table trying to figure out how to divide twelve cookies. The CEO reaches across the table and pulls eleven of the cookies to himself. He then turns to the tea party member and whispers, "hey, I think that union guy is trying to take your cookie."

 

[GroveDiesel]

So how would Judge Doty determine how much money the NFL left on the table?

As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

 

[FallenHero32]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

From what I've been reading and what is it looking like, is that the NFL strong armed the networks into this type of contract. The NFL has the unique ability to tell networks to go pound sand if they don't agree to their terms. It is such a money making king that they can dictate the terms to the networks. I don't think any network wanted this type of deal, but they had no choice otherwise the NFL would have gone to another network.

 

[Dinsy Ejotuz]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The issue is that the NFL took more money now, when they anticipated they wouldn't have to share it with the players, and less during a future period when they would. In fact that they specifically negotiated LESS money than the networks were offering in order to have the lockout protection (an eventuality they were entirely in control of). For that reason Doty that the owners had not negotiated a TV contract in the interest of their 'major partners' - the players. At least as I read the news accounts.

 

[Grid71]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The issue is that the NFL took more money now, when they anticipated they wouldn't have to share it with the players, and less during a future period when they would. In fact that they specifically negotiated LESS money than the networks were offering in order to have the lockout protection (an eventuality they were entirely in control of). For that reason Doty that the owners had not negotiated a TV contract in the interest of their 'major partners' - the players. At least as I read the news accounts.

Well said. Owners were planning to create the lockout before the ink was dry and structured the TV deal to line their pockets even more. Great call by Judge Doty to remove this unfair incentive for the owners to prolong a lockout.

 

[BassNBrew]

If this doesn't get overturned on appeal, then the owners will not be able to stand firm and have no football in 2011.

Not true at all. The owners have been preparing for this for 3 years.

Well Jerry Richardson certainly was.As I've stated since last off season, his goal was to win the lockout year.

 

[cobalt_27]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The issue is that the NFL took more money now, when they anticipated they wouldn't have to share it with the players, and less during a future period when they would. In fact that they specifically negotiated LESS money than the networks were offering in order to have the lockout protection (an eventuality they were entirely in control of). For that reason Doty that the owners had not negotiated a TV contract in the interest of their 'major partners' - the players. At least as I read the news accounts.

Could Doty not actually order the owners to pay additional compensation to the players in lieu of this judgment? I think PFT suggested that an escrow account could be established that might compensate both players/owners with the monies, as soon as the legal wrangling is completed. Nevertheless, it certainly doesn't appear the owners are going to enjoy the 4B cash flow they were expecting/hoping for. Ugh, this is just getting messier and messier. I was siding with the owners and troubled by DeSmith. I might be in the mood these days to change my mind.

 

[renesauz]

I'm still on the owners side, and still have disdain for unions in general, but if the owners left $1.00 on the table in exchange for this insurance, then Doty's right...they did the players wrong and they should be held accountable.

TO be clear, I have no problem with the "loan" itself. I have a problem with them not acting in good faith to maximize the real $$$$ of the deal. The loan cost should have come out of their own pockets, not the general funds before the players got their (albeit ridiculously high) share.

 

[Shutout]

The teams with stadium debt IS the focus, but it extends to all the teams being hit harder than what people may think on the surface. even for teams that don't have the debt like a Jerry Jones might have, that loan money was likely being ear marked for expenses that are incurred regardless. things like non-football personnel, general upkeep, contracts that are busines related but not necessarily "in-season football" related.

I have not read the linked article but I would have to agree that the crux of this is that the owners did not attempt to maximize the deal (which spreads more money to players). If that occurred and they did so hoping that the trade off is the war chest money that they benefited from, but not the players, then I applaud the decision. I still side with the owners overall, but like to see fairness.

If nothing else comes from this, I hope they reward players who perform versus the mad money given to unproven rookies. If I heard right last night, Vernon gholston earned $12-14Million off his guaranteed and salary and never recorded one sack. Isn't that more money than Aaron rodgers earned last year and a half (without his contract guaranteed $$ for signing the extention)?

 

[dickey moe]

O

If I read that right, it basically says the NFL accepted less money on a yearly basis in exchange for networks meeting the demand of having the loan (lockout) money in the TV deal. IE: The NFL did not maximize the yearly profits of the TV deal because they were more interested in the lockout clauses.

If that's true, then the NFL made a pretty significant breach of the last CBA......and things could get real ugly for the owners if they lockout.

I've been 80% on the owners side and happen to believe unions in general are over-powered, but this changes that at least a little bit. Bush league manuever.

This reminds me of a joke I just heard. A CEO, a union member, and a tea party member are sitting at a table trying to figure out how to divide twelve cookies. The CEO reaches across the table and pulls eleven of the cookies to himself. He then turns to the tea party member and whispers, "hey, I think that union guy is trying to take your cookie."

I've seen that joke a lot lately. It's horrible.

 

[Jason Wood]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

 

[Deranged Hermit]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

How can something like that be proved though. As far as I know, this is the first time that the NFL gave out such rights, so no mmarket value was established. I also don't see a problem with the NFL 'covering their butt' with the 'loan'. Hell, if someone is willing to give you something in negoiations, take it. I dunno, this Doty guy really seems pro union in everything I've read about him, so I don't doubt the NFL will appealthis ruling.

 

[CletiusMaximus]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

How can something like that be proved though. As far as I know, this is the first time that the NFL gave out such rights, so no mmarket value was established. I also don't see a problem with the NFL 'covering their butt' with the 'loan'. Hell, if someone is willing to give you something in negoiations, take it. I dunno, this Doty guy really seems pro union in everything I've read about him, so I don't doubt the NFL will appealthis ruling.

I think its a very interesting topic and a worthwhile discussion, but really rather difficult in my opinion to form any sort of meaningful opinion on these and other related issues without the benefit of having actually read Doty's and Burbank's rulings. I recall reading that Burbank's ruling is confidential. It would seem to me that Doty's ruling should be publicly available, assuming he issued it in his role as a federal district court judge. I did some digging on Tuesday and could not find it. I think reading that ruling, at a minimum, is a necessary starting point for anyone who would like to get answers to these questions.

 

[Andrew Garda]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

How can something like that be proved though. As far as I know, this is the first time that the NFL gave out such rights, so no mmarket value was established. I also don't see a problem with the NFL 'covering their butt' with the 'loan'. Hell, if someone is willing to give you something in negoiations, take it. I dunno, this Doty guy really seems pro union in everything I've read about him, so I don't doubt the NFL will appealthis ruling.

I think its a very interesting topic and a worthwhile discussion, but really rather difficult in my opinion to form any sort of meaningful opinion on these and other related issues without the benefit of having actually read Doty's and Burbank's rulings. I recall reading that Burbank's ruling is confidential. It would seem to me that Doty's ruling should be publicly available, assuming he issued it in his role as a federal district court judge. I did some digging on Tuesday and could not find it. I think reading that ruling, at a minimum, is a necessary starting point for anyone who would like to get answers to these questions.

Doty's ruling is definitely on the web. I perused it briefly yesterday - attaching it here for your own read. Hope I did that right...LockoutInsuranceCaseDecision.pdf

 

[CletiusMaximus]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

How can something like that be proved though. As far as I know, this is the first time that the NFL gave out such rights, so no mmarket value was established. I also don't see a problem with the NFL 'covering their butt' with the 'loan'. Hell, if someone is willing to give you something in negoiations, take it. I dunno, this Doty guy really seems pro union in everything I've read about him, so I don't doubt the NFL will appealthis ruling.

I think its a very interesting topic and a worthwhile discussion, but really rather difficult in my opinion to form any sort of meaningful opinion on these and other related issues without the benefit of having actually read Doty's and Burbank's rulings. I recall reading that Burbank's ruling is confidential. It would seem to me that Doty's ruling should be publicly available, assuming he issued it in his role as a federal district court judge. I did some digging on Tuesday and could not find it. I think reading that ruling, at a minimum, is a necessary starting point for anyone who would like to get answers to these questions.

Doty's ruling is definitely on the web. I perused it briefly yesterday - attaching it here for your own read. Hope I did that right...LockoutInsuranceCaseDecision.pdf

Thanks Andrew.

 

[Addai's Adidas]

Whatever. They'll just negotiate it later.

 

[moondog]

So how would Judge Doty determine how much money the NFL left on the table?As far as I can tell, the agreement basically gave the owners a $4B advance in the case of a lockout. That money was then taken out equally from the remaining years of the contract. So the money is essentially paid back over the remainder of the deal via the reduced payouts to the league. Now, since the utility of money in the present is more than it is in the future, the networks obviously wouldn't do this for free. Did the NFL give up something tangible in exchange for this insurance, or was the total contract just reduced by the amount that the interest on that money would have been? (In which case the owners also would have lost out on both the benefit and the extra potential total contract).

The real issue is that the NFLPA felt that, in exchange for this $4 billion "loan", the NFL gave internet streaming and broadband rights for much less than they otherwise would have. The NFLPA argued that the NFL didn't act in good faith, because had they not negotiated the $4 billion for "play or no play" this season, they would've been much tougher on the adjunct streaming/broadband rights negotiations and, therefore, cost the NFLPA (who shares in that revenue pile) monies.

How can something like that be proved though. As far as I know, this is the first time that the NFL gave out such rights, so no mmarket value was established. I also don't see a problem with the NFL 'covering their butt' with the 'loan'. Hell, if someone is willing to give you something in negoiations, take it. I dunno, this Doty guy really seems pro union in everything I've read about him, so I don't doubt the NFL will appealthis ruling.

If you read Doty's ruling the reasoning/laws that apply to his ruling are pretty straight forward.

 

[Andrew Garda]

Thanks Andrew.

No prob.