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Despite losing “lockout insurance” case, union wins nearly $7 million in damages

The NFL has prevailed as to the thrust of the effort by the players’ union to block network payments to the league during a work stoppage.  But the union has scored a partial victory in connection with its argument that the league violated the labor deal by securing the ongoing payments during a period of no football in lieu of seeking larger total payments in period of no lockout or strike.

Per a source with knowledge of the situation, the union secured an award of $6.9 million.

Because the written ruling has been placed under seal (which means that it’s being kept secret, not that an oceanic mammal is laying on top of it), it’s presently impossible to analyze the details of the ruling in order to understand why a portion of the union’s argument was deemed to be successful.

Said the union in a statement:  “The Special Master, who is appointed by a federal judge, found violations of the [Collective Bargaining Agreement] with respect to the NFL’s negotiation of Lockout Insurance in its contracts with ESPN and NBC.  Although the Special Master awarded damages, the players intend to file an immediate and expedited appeal before the federal court in Minnesota.”

Since the appeal will be resolved by U.S. Judge David Doty and in light of the fact that the league previously has attempted to disqualify Judge Doty from presiding over the labor deal based on allegations that he unfairly favors the union, the league could still see its $4 billion revenue stream for a lost season of football blocked.  For now, the NFL doesn’t seem to be concerned about that possibility.

“As we have said all along, a new CBA has to be hammered out at the negotiating table, not in the courtroom,” the league said in a statement.  “If the union commits to invest as much time, energy and other resources in negotiations as it has in its litigation strategy, a new agreement could well be reached by March 4.  The Special Master squarely rejected the union’s demand that the NFL be denied access to payments that the league’s television partners are obligated to make for the 2011 season.  We understand that the union intends to appeal the Special Master’s decision, but we are confident that his detailed ruling on this issue will be affirmed.   Now it’s time to get back to the bargaining table.”

They’ll return to the bargaining table with the league preserving the enormous leverage that comes from allowing owners like Jerry Jones to pay the mortgage on their stadiums with television money.

For now.

We (PFT not NBC) continue to see the basic wisdom and appeal of the notion that the league has an obligation to maximize the revenue, since the players receive 59.6 cents of every dollar earned (after roughly $1 billion comes off the top for expenses).  As a practical matter, the league could have gotten more money for the rights fees by sacrificing the provision that ensures ongoing payments to the owners if a lockout or a strike occurs.  By seeking the “lockout insurance” instead of maxing out the dollars paid, the league failed to get as much money as possible for the owners and players to share.

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29 Responses to “Despite losing “lockout insurance” case, union wins nearly $7 million in damages”
  1. lhaveprettyfeet says: Feb 1, 2011 10:29 PM

    That was way over my head.

  2. hail2tharedskins says: Feb 1, 2011 10:31 PM

    Retaining these payments are definitely a benefit to the owners, however even with out them does anyone truly believe that they would not be able to secure low interest loans if necessary to cover them during a strike? After all, that is what the networks did – they basically gave the league a guaranteed low-interest loan in the event of lockout. With all the foreclosures and credit card defaults, does anyone really think banks wouldn’t be falling over themselves to loan money to an NFL club knowing that their loan is 99.9% guaranteed of being repaid? It would be about the safest loan possible next to government treasury backed loans.

  3. johnnyshore says: Feb 1, 2011 10:37 PM

    “Because the written ruling has been placed under seal (which means that it’s being kept secret, not that an oceanic mammal is laying on top of it)”

    This has to be the worst attempt at humor in the history of PFT.

  4. dcninerfan says: Feb 1, 2011 11:01 PM

    Unions are the scourge of endeavor. They served a purpose once, but now they are nothing more than legalized mafia, endorsed by the lazy and the feckless.

  5. stoutfiles says: Feb 1, 2011 11:03 PM

    7 million is nothing when compared to the total amount of money lost if there’s no football next season.

  6. gpete1962 says: Feb 1, 2011 11:14 PM

    7 million, WOW !!!!! Collectively that should last the players about 2 weeks.

  7. richc111 says: Feb 1, 2011 11:21 PM

    Do the players give the owners part of their money they make off of endorsements or any other monies the NFLPA makes? I mean Dumb and Dumber (TO & #85) have their own TV show. How much do they owe the NFL. After all they are making money because they play in the NFL. Sounds like moon lighting to me

  8. burntorangehorn says: Feb 1, 2011 11:26 PM

    Stupid NFLPA. But by all means, blame the owners and Goodell.

  9. oldbrowndawg says: Feb 1, 2011 11:35 PM

    It’s really going to be intersting to see which side blinks in this game of “chicken”. I think the owners will declare an “impasse” which will likely be upheld in court and will force the union to bargain in good faith or lose a lot of benies for the players. Time will tell, but this is getting tedious!

  10. phillyhomer says: Feb 1, 2011 11:47 PM

    Will the NFLPA collectively take that $7 mil to the strip club and make it rain?

  11. dannymac17 says: Feb 1, 2011 11:48 PM

    That was not over my head. If it was over yours, maybe you should avoid blog entries such as these.

  12. gpete1962 says: Feb 2, 2011 12:01 AM

    Just out of curiosity, Does anybody know where all the money goes to that Goodell fine the players for ?

  13. cappa662 says: Feb 2, 2011 12:16 AM

    Not really fair for the owners to get paid while they lockout the players. It should be placed in an escrow account. I bet if the all of the money is put into an escrow account, a deal gets done quickly.

  14. jc1958coo says: Feb 2, 2011 12:54 AM

    7 million wonder who’s in charge of that!! hopefully not hines ward, thats a lot of lap dances!!!

  15. sirgregmac says: Feb 2, 2011 2:20 AM

    @richc111 so if the owners get a cut of the player’s off the field money, do the players get a cut of the owner’s non NFL earnings? There’s a reason they got to buy half billion+ dollar teams, cuz they got rich somehow, spread that to the players if you want owners to take some of the players’ money.

    @gpete1962 It goes to charity, i.e. United Way. Though Hines Ward, who I don’t like, said that it should go toward retired player’s health care instead, if the league cares so much about player safety.

  16. thetooloftools says: Feb 2, 2011 2:38 AM

    The NFL owners find $7 million in the cushions of their chairs from pocket change falling out.
    The players better get in line.
    For every player in the NFL their are 100 to take their place.
    For every OWNER in the NFL…

  17. stanklepoot says: Feb 2, 2011 3:40 AM

    gpete1962 says: Feb 2, 2011 12:01 AM

    Just out of curiosity, Does anybody know where all the money goes to that Goodell fine the players for ?
    _____________________________
    Yes, it goes to a collection of charities.

  18. stanklepoot says: Feb 2, 2011 3:47 AM

    oldbrowndawg says: Feb 1, 2011 11:35 PM

    It’s really going to be intersting to see which side blinks in this game of “chicken”. I think the owners will declare an “impasse” which will likely be upheld in court and will force the union to bargain in good faith or lose a lot of benies for the players. Time will tell, but this is getting tedious!
    ______________________________
    A likely enough scenario, but if the league doesn’t change things up a little, it’s too transparent of a tactic. The league has yet to offer the players a deal. If they wait until the last minute and offer a cba that they know is completely unacceptable in order to declare an impasse, a rational judge just might recognize that there was never an actual negotiation, and therefore no impasse. For there to be an impasse, there needs to be a series of negotiations and offers and counter-offers that leads to a deadlock where the two sides simply can’t come to an agreement.

  19. chapnastier says: Feb 2, 2011 7:19 AM

    “Not really fair for the owners to get paid while they lockout the players.”

    The players are choosing to be locked-out. They can agree to a more fair pay out agreement instead of trying to get more of what already is one of the highest percentages of profit sharing of any company in the country and likely the world. Name me one other company that actually it’s employees 59 cents on the dollar. I’ll save you time, you can’t. This is being ignored by the union supporters who think the same unions from the 30′s that got people more money for working in a coal mine are working for employees of today.

  20. patmcrotch says: Feb 2, 2011 7:48 AM

    SO, is this correct?

    Right now the league pays 1 billion in expenses, then 60% of income goes to players. I have no idea what percentage of income is network payments so I’ll just guess 50%? The other being merchandise, tickets, etc. So for easy math lets just say the league brings in 100B, 50B in network, 50B in other. The “other” income would be lost without a season so the league only brings in 50B. Knock the 1B in expenses, they are left with 49B.

    2010 same thing, the league brings in 100B BUT has to pay 60% to players. So that leaves the league with 39B. (of course this only works if network pay is equal or more than half the total income)

    On top of that, they are sitting back talking about “if the union would put this much effort into the CBA we would have a deal”. Genius, they get more money AND get to look like they are the ones who want the season next year.

    This is why you dont have a bunch of guys with multiple concussions negotiating for you.

  21. Caldon says: Feb 2, 2011 8:06 AM

    The owners were smart to protect what is ultimately a BUSINESS they run, something everyone here forgets from time to time. Not having the revenue stream from games could have led to owners not being able to pay down on debt, perhaps defaulting or having to make other business decisions such as not going after free agents and giving them their big contracts when the season starts up again, raising ticket prices and/or mass firings.

    Public businesses, who also report to and have a fiduciary obligation to maximize shareholder value in a similar manner also make decisions all the time that do not maximize shareholder value for the short term but do over the long term or to protect the core business. The NFL is no different and you are barking up the wrong tree on this point and the mediator in this case clearly disagrees with you.

  22. dccowboy says: Feb 2, 2011 8:20 AM

    LOL so, the Players get 6.9 mil and the Owners are guaranteed 4.1 billion if games aren’t played, sounds like the Union won that exchange.

    A deal gets done quickly because the players now know that the Owners are going to get money if there is a lockout/strike and the players aren’t.

    I also don’t believe the Owners will call a lockout on March 4th. Why should they? The players don’t lose much from March 4th to the beginning of the season. I predict they simply declare an ‘impasse’ on march 4th and impose their LBO on the players. The players can then choose to strike or come to work under the LBO terms. If at any time a lockout won’t come until the beginning of the season, when the lockout would affect players.

    I expect the routine will be much gnashing of teeth and posturing in Feb, Owners impasse in March, Union decertifies in April, individual lawsuits are filed by players in April, settlement achieved in April, Union ‘recertifies’.

  23. harrisonhits2 says: Feb 2, 2011 8:38 AM

    “Just out of curiosity, Does anybody know where all the money goes to that Goodell fine the players for ?”

    It goes to NFL charities.

  24. armchairgm9 says: Feb 2, 2011 9:28 AM

    “Just out of curiosity, Does anybody know where all the money goes to that Goodell fine the players for ?”

    It goes to NFL charities.

    ******************

    And therefore all tax deductible…

  25. armchairgm9 says: Feb 2, 2011 9:33 AM

    And as a side note to this story, the union spent more than $7 million on pursuing this litigation hearing. So they still lost money.

    If only the NFLPA put as much effort into negotiations as they have put into litigation, PR plans, and pleading with congress to get involved, I wonder how things would be going.

  26. FoozieGrooler says: Feb 2, 2011 10:04 AM

    dcninerfan says: Feb 1, 2011 11:01 PM

    “Unions are the scourge of endeavor. They served a purpose once, but now they are nothing more than legalized mafia, endorsed by the lazy and the feckless.”

    And once the powers that be successfully brainwash enough idiots and abolish them altogether, we can all enjoy the next few centuries as we return to the days of feudal lords and serfs.

    The “Middle Class” only exists because of the bargaining power between labor and management.
    No unions? No Middle Class. It’s as simple as that.

    Have health insurance? A retirement plan? Personal and/or vacation days? Thank a union, unless you’re foolish enough to believe that companies give you these things out of the goodness of their heart. Think “Level Playing Field”.

  27. broncsfan says: Feb 2, 2011 10:17 AM

    If the players were willing to man up and miss some games if necessary, the Special Master’s (how can I get that title?) ruling wouldn’t be a blow at all. I doubt the owners have the fortitude to spend a season digging themselves into massive debt with TV networks.

  28. raven4life21 says: Feb 2, 2011 10:28 AM

    don’t have a clue what i just read

  29. dcninerfan says: Feb 2, 2011 6:31 PM

    FoozieGrooler -

    “The “Middle Class” only exists because of the bargaining power between labor and management.
    No unions? No Middle Class. It’s as simple as that.”

    Yes, unions like SEIU care SOOOO much for the “Middle Class”, as you put it. Well, at least they have dupes like you that believe their are for the common workers, otherwise how would they run their scams and mafia like activity? Takes all kinds, I suppose… *sigh*

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