First Look podcast: World Congress 2017 PBC plots path to maximize distribution NBA Turnstile Tracker Baseball returns to Kinston, N.C. David Stern investing in tech startups NBA regular season sees ratings drop Faces and Places at World Congress Are sponsors wary of outspoken athletes? On Deck With: Mike Unger, USA Swimming Labor & Agents: Rosenthal takes charge
SBJ/June 2-8, 2014/Law and PoliticsPrint All
It’s been nearly five months since a federal court judge sought more information to determine whether a proposed settlement of concussion litigation brought against the NFL includes sufficient compensation. Under terms of the settlement, players would directly get $675 million over 65 years, with an additional $85 million provided for education and medical treatment.
For many, that $675 million is not seen as enough. And last week, in a new wrinkle in the case, a group of seven retired players who contend the settlement does not properly account for their situations, charged that the $675 million is not even a true reflection of the value of the settlement compensation because the cash would be paid over many years.
“[T]here is no defense of the $675 million monetary award fund — already questioned by this Court — which, of course, is not really a $675 million fund,” the players stated in a court filing last week. Later in the filing, the players state, “Given that the settlement would have permitted the NFL to spread its monetary award fund payments over 19 years … and ‘not be subject to any interest obligation or inflation adjustment,’ … the true net present value of the settlement is far less than $675 million.”
The lawyer for the seven players, Steven Molo, declined to comment when asked whether he had his own figure for the settlement. There could, however, be several such estimates for a different calculation.
“Net present value” essentially tabulates what today’s money is worth in the future when it is invested or bearing interest. It’s why lottery winners can choose to receive a lump sum payment that is far less than what their total winnings would be if that sum were spread over years. How the calculation is done, though, involves several assumptions, like the rate of return.
The issue is hardly uncommon in settlements, said John Goldman, a sports lawyer with Herrick Feinstein. The judge could order the NFL to pay the money right away, he said, but this could carry risks if the money is invested unwisely.
Attorneys Chris Seeger and Sol Weiss, co-counsel for the class of players in the case, said in a statement, “We continue to work at the direction of the Court and Special Master as they review the settlement agreement and rightfully ensure that all members of the class are protected. We look forward to finalizing this agreement so that former players can soon begin taking advantage of its benefits.”
The NFL said simply in an email, “We are continuing to work with the court.”
The seven players, all recent retirees, criticize the settlement because it will not pay for new cases of chronic traumatic encephalopathy once the pact is approved by the court. Seeger has told SportsBusiness Journal that this is a non-issue because the symptoms of CTE are covered.