On Wednesday, the NFL Players Association made a surprisingly aggressive challenge to the league’s most recent round of television contracts, which contain beefed-up language aimed at ensuring that payments worth multiple billions of dollars per year will continue in the event of a work stoppage. (The league has called the allegations “meritless.”)
When I saw the posting on my Sprint device during a Cracker Barrel break somewhere between Chambersburg and Harrisburg, I suspected that the effort simply reflected the union’s frustration that the owners have found a way to ensure that payments can still be made on the significant debt from the purchase of franchises and/or the construction of stadiums in the absence of games actually being played.
But then it occurred to me during the early portion of the second act of Jersey Boys, when the guys were trying to figure out how to pay off Tommy DeVito’s $150,000 debt to Norman Waxman. The entire player compensation model arises from the league’s ability to generate revenue. So the league arguably — if not actually — has a fiduciary duty to maximize revenue. By securing leverage-building terms like ongoing payments during a work stoppage, the league necessarily has failed to maximize revenue, since the right to ongoing payments in the event that games aren’t being played has an inherent value that could have been converted to dollars and cents paid to the league, and shared with the union.
The posting at the union’s website demonstrates that, indeed, the NFLPA has made that very argument.
As we see it, one potential flaw in the union’s position comes from the timing of the action. A provision of this nature has appeared in the league’s broadcast contracts for as long as 30 years. The union’s failure to challenge the tactic at some point since the establishment of the current Collective Bargaining Agreement structure (it arose as the settlement agreement to the Reggie White antitrust lawsuit) arguably means that it’s too late to do so now.
Even if the union successfully can argue that the renegotiation of the broadcast contracts re-sets the clock to zero, they can’t sit on their hands indefinitely. Accounts of so-called “lockout insurance” appeared in connection with the league’s extension with DirecTV, which was finalized nearly 15 months ago. It’s quite possible, then, that the union simply has waited too long to advance its current claim.
Of course, the ultimate decision will come from Special Master Stephen Burbank and then from U.S. District Judge David Doty, whom the league tried not that long ago to have bounced due to an alleged bias in favor of the union. Whether or not such a bias exists, the league wouldn’t have tried to disqualify Doty if the league generally were pleased with his rulings in controversies arising under the CBA.
Speaking of biases, we need to point out that, yes, we have a partnership with NBC, one of the networks that has agreed to pay the league during any work stoppage. Our analysis of the present situation does not reflect — and should not be interpreted as — any sort of admission or acknowledgment by NBC that the league’s actions constitute bad faith and/or a breach of any legal duty, fiduciary or otherwise. We’re merely fulfilling our duty to the audience to apply logic and common sense (or our closest impersonation thereof) to situations like this in an effort to help football fans understand what’s going on.
Bottom line? If the union wins this argument, guys like Jerry Jones won’t be able to afford a lockout — or a strike. And so the pendulum would swing strongly in the players’ favor.
Given the league’s recent experiences in the StarCaps case and American Needle, we suspect folks are feeling a little nervous right now at 280 Park Avenue.