NFL’s TV deals hedge against work stoppage
The NFL has structured its media contracts to continue paying the owners in the event of a work stoppage, the same controversial mechanism used earlier this decade and which a federal court judge ruled against in 2011.
The current CBA expires after the 2021 season, and the two sides have begun financially preparing for what appears to be another tough set of negotiations and the potential loss of games.
Asked at the league’s recent meetings in New York whether those media contracts have the work stoppage provision, Green Bay Packers President Mark Murphy replied affirmatively. Murphy is a member of the eight-owner labor negotiating committee.
Previously, the NFL in 2008 had re-negotiated those TV contracts to contain the provisions, meaning at the time those contracts were only a few years old when the four-month lockout occurred in 2011. The Hall of Fame game was the only preseason contest lost to the lockout.
In 2011, the provisions would have paid owners for up to two years of lost games. But because the current contracts are longer than the previous ones, the number of seasons the owners would now get paid for without games is longer as well.
Asked if the union knew about the current work stoppage provisions, NFLPA spokesman George Atallah wrote in an email, “We are not going to comment on it, but you know that we won that case obviously. We will follow the story with great interest, obviously.”
When Minnesota federal judge David Doty ruled late in the evening of March 1, 2011, the decision exploded across the NFL. The CBA was three days from expiring, and the two sides were engaged in marathon federal mediation sessions in Washington, D.C.
“The record shows that the NFL undertook contract renegotiations to advance its own interests and harm the interests of the players,” Doty wrote. “The facts underlying this proceeding illustrate another abuse of that market power wherein various broadcasters of NFL games were ‘convinced’ to grant lucrative work-stoppage payments to the NFL if the NFL decides to institute a lockout.”
Doty’s language helped fuel the players’ decision to walk out of CBA talks on March 11.
The players argued that the NFL had taken less for the broadcast contracts in return for the work-stoppage provisions. The NFL appealed, but ultimately the case was settled as part of the end to the lockout that resulted in the current 10-year CBA.
There are a few differences now compared to the earlier situation. First, the media contracts were not suddenly renegotiated as they were in 2008. Second, Doty ruled on the basis of the antitrust agreement settlement that had governed NFL-NFLPA relations from 1993 through 2011. That agreement was eliminated as part of the CBA deal, so any new claim against the provisions would have to arise from other legal doctrines.
And third, Doty, whom the NFL saw as favorable to the union, no longer oversees their cases. Instead, disputes are randomly assigned to judges in the jurisdiction where cases are filed, likely the Southern District of New York, where the NFL is headquartered.
“No one but Doty would buy it,” said a well-placed source close to the NFL on whether the league should be worried. “I would expect the union to challenge anything and everything.”
The NFLPA has been preparing for a potential work stoppage, holding back group royalty fees from players and encouraging them to save their money. And there remains no love lost between the sides, which rarely see eye to eye.
“I represent the players and Roger [Goodell] represents the bad people,” NFLPA Executive Director DeMaurice Smith on Oct. 19 told the University of Michigan Sport Business Conference. Pressed if he actually believed the commissioner of the NFL represented “bad” people, Smith replied affirmatively.