SBD/February 18, 2011/Leagues and Governing Bodies

Motion Granted To Hold Hearing Concerning Unsealing Docs About NFL Using TV Money

U.S. District Court Judge David Doty has granted a motion by the NFLPA to hold a hearing next week on whether to unseal some of the documents in the union's case challenging the NFL’s use of television rights money. The NFLPA argued that the NFL players and public have a right to the information and Doty scheduled a hearing for Feb. 24 in federal court in Minneapolis, the same day oral arguments will be held on the union’s appeal of the Special Master’s decision in the case. The Special Master awarded the NFLPA about $6M in damages in the case, but did not grant the union the injunction it was seeking to stop the NFL from receiving more than $4B in television revenues that would be paid whether or not games are played. The case is of great interest to the sports industry, but the hearing before the Special Master was closed and the documents have been sealed. The NFL in a statement said, “We advised the union prior to its filing that we are amenable to submitting a public version of the union's brief and the Special Master's opinion as long as certain commercially sensitive information of our network television and other business partners remains confidential as required under the protective order governing this litigation.” The NFLPA said it was not seeking to unseal any information about the NFL’s television partners’ proprietary business information. “Moreover, this motion does not seek to cause the disclosure of any third party information (e.g., information produced by DirecTV, CBS, Fox, NBC, ESPN) pursuant to the stipulated protective orders governing such information,” the NFLPA said in its papers. Sensitive information about the networks’ business has been redacted and the NFLPA is seeking to make public the unredacted portions of the case. The NFLPA alleged in the case that the NFL violated the CBA by making a deal with TV networks that did not maximize revenues that are shared by the players and the league, as required by the CBA and the Stipulation and Settlement Agreement (SSA) of the Reggie White v. NFL case.

TRYING TO SHOW PLANNED USE OF SSA REVENUE: The NFLPA in court papers said that the information it is seeking to have unsealed “describe the NFL’s development, implementation and execution of its plan to use the shared SSA revenues through the TV contracts to finance a 2011 lockout that, in turn, would be used as immediate and overwhelming bargaining leverage against the players.” The NFLPA said in court papers that there is nothing in the unredacted documents “that can overcome the strong public policy against secrecy in the federal court proceedings. … The NFLPA (has) an institutional interest in communicating with NFL players to inform them about efforts to vindicate [their] rights under the SSA and CBA. This is especially important because the NFL has made several extremely inaccurate public statements about this proceeding to divide players from their representatives, and to persuade players not to pursue their legal rights.” The NFLPA in its motion cited public statements made by Patriots Owner Robert Kraft, including a statement on BostonHerald.com in which he said, “Remember, when the players union lost its case, which was a bogus case to begin with, I had to give a deposition. They collected $15 million in fees that the players paid, think about that!” The NFLPA’s motion said, “It is highly misleading and very troubling to NFL players that Mr. Kraft could make such public proclamations in a case in which he knows the NFL was found guilty of two SSA violations that the NFL is not even challenging on appeal.”

EBERSOL, MCMANUS AMONG WITNESSES: The heads of three major television companies testified on behalf of the NFL last month in the NFLPA’s action against the league’s use of media fees, said NFL outside counsel Gregg Levy. NBC Sports Group Chair Dick Ebersol, CBS Sports President Sean McManus and News Corp. Deputy Chair, President & COO Chase Carey each provided testimony during the trial, Levy said, presumably backing up the NFL’s contention that requirements in TV deals to pay the fees even in a work stoppage are standard features of sports media contracts. Each side had five witnesses. The other two for the NFL were TV consultants Neal Pilson and Doug Perlman. The NFLPA utilized five economic witnesses: Stanford Univ. professor Roger Noll, Univ. of Chicago professor Kevin Murphy, Wharton School professor Thomas Donaldson, former inDemand and USA Network exec Steve Brenner and Chilmark Partners Founder David Schulte. CBS declined to comment on behalf of McManus. Carey, Murphy, Donaldson and Schulte could not be reached for comment. The remainder confirmed their roles.
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