The TV Deal

[aabtec]

Well like I said, I have too much time on my hands.

I was listening to 98.5 last night and there is one thing that the NFLPA is suing about that is a bit of a surprise. The TV Deal. The Players Association say that the deal is a walking anti-trust violation.

If the TV deal is thrown out of court and each team has to do its own deal then the weaker teams in smaller markets are in big trouble.

I have to admit that I have to wonder what is going to be left of football.

 

[jmt57]

Well like I said, I have too much time on my hands.

I was listening to 98.5 last night and there is one thing that the NFLPA is suing about that is a bit of a surprise. The TV Deal. The Players Association say that the deal is a walking anti-trust violation.

If the TV deal is thrown out of court and each team has to do its own deal then the weaker teams in smaller markets are in big trouble.

I have to admit that I have to wonder what is going to be left of football.

I didn't hear the segment but my understanding is that the players are not suing in regards to the NFL having the right to collectively make deals with the networks. Instead, they are suing because they did not deal in good faith. They left money on the table in exchange for the so-called 'lockout insurance'. In other words they did not attempt to maximize the revenue in those deals - money which was to be shared with the players.

I don't believe that if the players win that case it automatically means that each team could then make their own TV deal.

 

[DaBruinz]

One of the things that I don't understand is that the "lockout" insurance has always been there. In fact, previously, if the NFL missed games, the league was not required to make any repayments.

The new deals all stated that the league WOULD have to make repayments, either monetarily or with additional games.

Now, what may have changed is how the payments were made. As in, all the money up front for a given year instead of spread over the different weeks.

What we haven't heard is how much money was supposedly "left on the table." And whether that is truth or just funny accounting..

 

[McCourty Island]

What we haven't heard is how much money was supposedly "left on the table." And whether that is truth or just funny accounting..

Who knows how much it would have been but logically if you have insurance added (being paid with no football) then you are receiving a lesser rate than if you didn't have the insurance. I don't think the amount really matters though, just that the owners aren't allowed to use the money during a lockout.

 

[DaBruinz]

Who knows how much it would have been but logically if you have insurance added (being paid with no football) then you are receiving a lesser rate than if you didn't have the insurance. I don't think the amount really matters though, just that the owners aren't allowed to use the money during a lockout.

The owners had access to the money during a lockout was the case under the old contracts as well. This is something that is getting overlooked.

What changed was that there would have been an owners' pool and a players' pool. The owners would have access to their pool, but the players' wouldn't since, during a lockout, they'd have no access.

But it still doesn't change the fact that the money would have had to have been repaid if any games were missed. And it would have come from both pools.

 

[Ring 6]

One of the things that I don't understand is that the "lockout" insurance has always been there. In fact, previously, if the NFL missed games, the league was not required to make any repayments.

The new deals all stated that the league WOULD have to make repayments, either monetarily or with additional games.

Now, what may have changed is how the payments were made. As in, all the money up front for a given year instead of spread over the different weeks.

What we haven't heard is how much money was supposedly "left on the table." And whether that is truth or just funny accounting..

I read the judgment and think I understand it pretty well, so let me add to this.
My understanding is that the issue is as follows:

The CBA and SSA (settlement of the last anti-trust lawsuit by players) states thar because the league and teams share revenue that they must (while the CBA is in effect) use "good faith" and with 'sound business judgment' maximize revenues in each season.
The case came down to the difference between good faith and sound business judgment.
Essentially Doty said Good Faith overruled sound business judgment after the special master said the opposite.

The arguments on either side included
GOOD FAITH
-Basically the NFL gained an advantage in todays negotiations by the way the deals were structured
-While doing so, they did not maximize revenue in 09 and 10
-No business reason for the decision allowed them to step outside of good faith

SOUND BUSINESS JUDGMENT
-If the league receives no TV revenue in a year, there are covnenants in some of their financing that would cause that to put them in defualt, therefore keeping the business from ruin comes before good faith
-The rules ended when the CBA did, so the deal calling for 2011 payments is after the CBA is already expired (Doty said no, becuase it was negotiated while the CBA was in effect)
-The NFL believed the agreement meant that sound business judgment was the priority criteria and good faith secondary

My opinion is that (and I am not a lawyer, so I am going on common sense not legal precedent) the NFL believed it was operating within the rules and made deals that would essentially keep them in business if a lock out was necessary, but did in fact violate the terms. I do not believe they did so without good reason to believe they were in the right, and stop well short of Dotys finding that it was not a legitimate business decision because they could choose not to have loans and not to lock out.