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Lockout insurance ruling may not provide lockout insurance for players

DavidDotyGetty Getty Images

If the Eighth Circuit, as is now expected, rules that the lockout will continue beyond the middle of June, the only other short-term source of litigation leverage for the players comes from the damages award from Judge David Doty in the so-called lockout insurance case.

To summarize, Doty found on March 1 that the NFL had breached the CBA (and, in turn, the settlement agreement in the Reggie White antitrust case) by obtaining in the latest TV deals a promise that money will be paid to the owners during a lockout, instead of maxing out the total money to be shared by the teams and the players.  We’ve agreed with the concept of the players’ argument since the case was first filed (actually, the moment of realization came while watching the second act of Jersey Boys, seriously), and we’ve been very intrigued by the manner in which Doty will require the NFL to make things right.

Though it wouldn’t be fair to give the players 59.6 percent of the $4 billion to be paid during a full-season lockout in 2011, since most of that money represents only a loan, the players fairly should recover 59.6 percent of the money that the NFL left on the table for 2009 and 2010.  The challenge will be to determine the right number.

The players’ effort to obtain punitive damages via a trebling (fancy lawyer term for tripling) of the damages seems to be a bit on the aggressive side, since the violation essentially flowed from a breach of contract.  That said, we wouldn’t be shocked by the imposition of a penalty, given that the action also could be characterized as a tort-style breach of fiduciary (fancy term for non-douchery) duty.

Either way, to the extent that the players assume that a large award will be entered by Judge Doty and that the money will help the players get through a full-season lockout without having to take out $500,000 loans at 23-percent interest, they need to realize that they quite possibly won’t see the money until after the 2011 season ends.

And that they may not see it at all.

The decision will be subject to appeal by the Eighth Circuit, and the judges assigned to the case could disagree with Judge Doty on the issue of damages, or even on the issue of liability.  The Special Master, for example, viewed the case much differently that Doty did, and the appeal of Judge Nelson’s order lifting the lockout already has demonstrated the reality that what is clearly right to one federal judge may be clearly wrong to another.

Also, the Eighth Circuit’s decision to expedite the appeal of the lockout-lifting order doesn’t mean that it will expedite the appeal of the lockout insurance ruling.  Typically, awards of money damages are considered in the normal course of court business, with interest accruing while the plaintiff waits for justice to be dispensed.

Thus, even though the chances of getting this entire mess resolved could be enhanced by an order forcing the league to finance the lockout for the players, there’s a good chance the players won’t see a penny of the money until after the 2011 season has come and gone, even if Judge Doty’s ruling is upheld on appeal.

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36 Responses to “Lockout insurance ruling may not provide lockout insurance for players”
  1. benh999 says: May 20, 2011 5:41 PM

    “We’ve agreed with the concept of the players’ argument since the case was first filed”

    There’s a shock.

  2. footballfanatic3431 says: May 20, 2011 5:43 PM

    In other words, players aren’t getting any money for 2011.

    So fire DeMoron, get back to the bargaining table and fix this mess before the fans simply stop caring and I’ll be honest, it has already started for me.

  3. thephantomstranger says: May 20, 2011 5:46 PM

    Can I get CLE credits for reading PFT?

  4. carson9 says: May 20, 2011 5:48 PM

    We already know how the liberal fruit cake Doty is going to rule. The question is “when” its appealed to the 8th, will they finance the players for not playing at all in 2011 and thus giving them no motivation to compromise a CBA, or will they apply common sense yet again and force an agreement?

  5. radrhatr says: May 20, 2011 5:49 PM

    BOO HOO!

    Let’s see. The players want part of a loan that they don’t have to pay back? Where do I sign up for that?

    Maybe the 8th circuit will do the right thing and overrule Doty, so the players will start SERIOUS mediation then, instead of just saying “no” to everything.

  6. stevecmh says: May 20, 2011 5:50 PM

    Remember…the judges who will be assigned to any appeal of Judge Doty’s lockout insurance damages case cannot be known in advance.

    The case could be assigned to any combination of three of the 15 judges currently on the bench.

    It’s highly unlikely that the three judges reviewing Judge Nelson’s lockout injunction case will also be assigned to any appeal of Judge Doty’s decision.

  7. eagleswin says: May 20, 2011 5:51 PM

    Thus, even though the chances of getting this entire mess resolved could be enhanced by an order forcing the league to finance the lockout for the players, there’s a good chance the players won’t see a penny of the money until after the 2011 season has come and gone, even if Judge Doty’s ruling is upheld on appeal.

    ——————————–

    I’d say there’s ZERO chance of the league financing the lockout for the players. Best case scenerio for the players if they win in Minnesota is that the league runs out of appeals before 2015.

    Seriously though, how great would it be if the 8th circuit continues to find that the district justices in Minnesota really don’t know the law? Kind of makes you wonder what the requirements are to become a district judge in Minnesota? Willingness to be seen in public in a black robe? Check. You’re hired.

  8. jimphin says: May 20, 2011 5:58 PM

    Of course…we know that all of the players know all about this possible reality because we know that De Smith has been completely up front with union members about this likely outcome of no money this year.

    Oh snap.

  9. justanotherdummy says: May 20, 2011 6:23 PM

    This drags on and becomes more and more painful…

  10. nineroutsider says: May 20, 2011 6:38 PM

    DeMo Smith has to be the biggest idiot making millions in America. The 8th Circuit Court might as well have a big, fat elephant on its seal. Out of 15 judges, 2 were appointed by Democrats.

    Hey DeMo…I guess you have to like your chances?

    I hope the players revolt and force him to sit down and make a deal before that dumbsh@t weakens their position further by yet another Court loss.

    The strategy of waiting until all of their leverage is gone and the players are broke seems flawed to me…

  11. voyager6 says: May 20, 2011 6:39 PM

    It has intrigued me on how damages will be found. The judge has ruled the owners can’t have any of the lockout insurance, right? so they had no benefit. So what should the penalty be?

    I think the only way you can determine a penalty would be to get each TV network (and DirecTV) into court and have them testify how much more they would have paid, then give the players 59.6 percent of that for 2010 only.

    That has a couple problems. First, the TV networks will not want to give an honest amount, because that will be the starting point for the next TV contract, since the judge has basically, if not technically voided the current deals.

    The judges cannot order the NFL to play in 2011 under the 2010 TV contracts as that would force the owners into paying additional damages to the players, something that would make the ruling instantly appealable and force the owners into violating anti-trust laws.

    But if there are no games in 2011, then there would be, in normal times, no TV revenue, and the union doesn’t exist in 2011, so the players shouldn’t be owed anything for 2011.

    If the judges force the 2011 season and the continuance of the 2010 contracts, then the judges are intentionally forcing the owners to take additional anti-trust damage which should be instantly appealable.

    The second major issue is if the agreements are voided, then the NFL has to renegotiate. Without a CBA, the NFL is subject to anti-trust laws. The only thing that could be done is for each team to negotiate a contract with the networks and DirecTV. In many cases, the small market teams will get little for their TV rights, shrinking the total pie. This would represent a Catch 22 for the players. Dallas might be televised in every market and get $2Billion of the TV money, and a Cincinnati may get $50 million. The networks will play one team against the other and the overall TV revenue has to shrink.

    Because of these issues, I see the ruling on damages delayed until there is a new CBA. Then the possibility of forcing the owners into a violation is abated, and the players will be protected as the CBA would allow the NFL to negotiate a fair value for all (not just for the haves). However, the owners won’t sign a CBA unless there is an out of court settlement on the TV contract.

    See why this is so head-splitting? Me, I’d award the players 1 dollar and let it go.

  12. xxxfixxxerxxx says: May 20, 2011 6:43 PM

    With each passing minute the players lose more leverage.

    I would like to see how De spins this one, and for once a hint of what his plans are for the guys that are really suffering in this mess. (the second year players, UFDAs and such)

  13. tommyf15 says: May 20, 2011 6:43 PM

    radrhatr says:
    Maybe the 8th circuit will do the right thing and overrule Doty, so the players will start SERIOUS mediation then, instead of just saying “no” to everything.

    Simply stated, the owners owe the players money, the court now has to determine how much.

    The owners breached the CBA and they owe the players damages for it. Doty cannot withhold those damages as a means to give the owners leverage.

    It kinda surprises me that I have to spell that out.

  14. time2speakup says: May 20, 2011 7:10 PM

    My head is spinning. But then, I was confused before this impasse. Oh, well.

  15. time2speakup says: May 20, 2011 7:12 PM

    “Can’t we all just get along.”

  16. eagleswin says: May 20, 2011 7:48 PM

    tommyf15 says:
    May 20, 2011 6:43 PM

    Simply stated, the owners owe the players money, the court now has to determine how much.

    The owners breached the CBA and they owe the players damages for it. Doty cannot withhold those damages as a means to give the owners leverage.

    It kinda surprises me that I have to spell that out.

    ————–

    Simply stated, just because Doty thinks the owners have violated the law doesn’t make it so (See : Judge Nelson).

    The special master ruled that the owners were not in violation so the players went over his head.
    The owners will in turn, if they don’t like the verdict, go over judge Doty’s head.

    It kinda surprises me that I have to spell that out.

  17. vahawker says: May 20, 2011 8:13 PM

    voyager6 says: May 20, 2011 6:39 PM

    That was an extremely impressive Princess Bride, iocane powder post. VERY impressive.

  18. mikeyhigs says: May 20, 2011 8:28 PM

    The players don’t deserve a dime of that money. The owners negotiated that deal with the interest of the long term health of the league. The NFL is a business and negotiated it as a business decision. Even the owners had to give up something to get the “lockout insurance,” and they will pay it back in future deals. It is basically, a loan. The players aren’t partners because they don’t own the team. What’s next? Do the players get to vote on whether or not a ticket sales rep deserves a raise? Or whether free coffee should be made available to administrative aids? Maybe the Director of Player Development isn’t a necessary position and the players can eliminate that position. Because that will eat into team profits too.

  19. vahawker says: May 20, 2011 9:07 PM

    Sorry, Mikeyhigs, CBA required them to maximize amount of TV money. They didn’t. Regardless of intent, they failed to live up the terms of the CBA.

  20. eagleswin says: May 20, 2011 9:33 PM

    vahawker says:
    May 20, 2011 9:07 PM
    Sorry, Mikeyhigs, CBA required them to maximize amount of TV money. They didn’t. Regardless of intent, they failed to live up the terms of the CBA.
    ———————-
    Actually, and i could be wrong, but i don’t think the CBA specified anything of the kind. I think Doty thought they should’ve done in his opinion but i don’t think it was a black and white, this is what the cba said ruling.

  21. tommyf15 says: May 20, 2011 9:37 PM

    eagleswin says:
    Simply stated, just because Doty thinks the owners have violated the law doesn’t make it so (See : Judge Nelson).

    The special master ruled that the owners were not in violation so the players went over his head.
    The owners will in turn, if they don’t like the verdict, go over judge Doty’s head.

    It kinda surprises me that I have to spell that out.

    It kinda doesn’t surprise me that you’re confused, and need the simplest things explained to you.

    The owners violated the CBA, not the law, and you’re mistaking this case with another one- this case went straight to Doty.

  22. jimphin says: May 20, 2011 9:38 PM

    59.6 percent ??? C’mon, how can that be fair? I thought DeSmith only wanted 50%. All your other post have said “roughly” 50%. I guess 59.6 percent is roughly 50%…very roughly.

  23. rcali says: May 20, 2011 9:45 PM

    Still don’t understand why an NFLPA* rep wasn’t part of the tv negotiations considering they would be involved in the payout. Do any employees really think their companies are looking out for their best interests when it comes down to money?

  24. nflfan101 says: May 20, 2011 10:13 PM

    Since the NFLPA theoretically no longer exist, how can the case continue? Who is the plaintiff? Who do the lawyers represent? If there is a court ordered award, who will get the money? Assuming the money would go to the players, how will it be distributed to the players and how much would each player receive?

    This is just another case that will take a long long time to go through the court system.

  25. eagleswin says: May 20, 2011 10:28 PM

    tommyf15 says:
    May 20, 2011 9:37 PM

    It kinda doesn’t surprise me that you’re confused, and need the simplest things explained to you.

    The owners violated the CBA, not the law, and you’re mistaking this case with another one- this case went straight to Doty.

    ——————————

    Posted by Rosenthal on Feb 1 :

    NFL Special Master Stephen Burbank ruled on Tuesday that the NFL can have access to 2011 TV revenue, to the consternation of the NFLPA.

    The so-called “lockout insurance” case was raised by the union, who argued that guaranteeing ongoing payment in the event of a work stoppage violated the Collective Bargaining Agreement.

    The league quickly announced the decision as a victory on Twitter. With that said, they stressed in a media session last month that they will ultimately have to pay back the television contract money with interest if games are missed.

    NFL chief negotiator Jeff Pash compared the money to a home equity line of credit.

    While the NFLPA is sure to appeal the ruling, it’s a line of credit that the league now can expect to receive, if games ultimately are canceled.

    Imagine that, looks like you didn’t know what you were talking about, again. Seriously, do you ever do any research?

    Special Master ruled in favor of owners. Players appealed to Doty.

  26. nflfan101 says: May 20, 2011 10:33 PM

    voyager6 says: May 20, 2011 6:39 PM

    “I think the only way you can determine a penalty would be to get each TV network (and DirecTV) into court and have them testify how much more they would have paid, then give the players 59.6 percent of that for 2010 only.”
    ———————————

    I did not follow this case initially, but a judge cannot just “pick” figures out of the air. Either there is already evidence/testimony as to the “discount” that networks were given in exchange for paying even if there are no games in 2011 or there are no damages. The judges’ award cannot be based on speculation, it must be based on facts presented in court.

    =============================
    tommyf15 says: May 20, 2011 9:37 PM

    “The owners violated the CBA, not the law, and you’re mistaking this case with another one- this case went straight to Doty.”
    —————————————-

    Per PFT and according to what I have read elsewhere, you are wrong. The case was originally heard by a Master and then heard by Doty after the players appealed the Master’s ruling.

    PFT said: “The Special Master, for example, viewed the case much differently that Doty did …”

  27. commoncents says: May 20, 2011 10:41 PM

    The whole thing should be thrown out because the key plaintiff hasn’t shown up once.

  28. xxxfixxxerxxx says: May 20, 2011 11:01 PM

    Don’t mind tommyf15, he couldn’t be more wrong even if he tried harder.

  29. mikeyhigs says: May 20, 2011 11:51 PM

    vahawker says: “CBA required them to maximize amount of TV money. They didn’t. Regardless of intent, they failed to live up the terms of the CBA.”

    I dont have a copy, but please tell me where the CBA “required them to maximize” TV money? Under that reasoning, the players could sue because the NFL isn’t maximizing revenue when they put a Thursday night game on NFL Network. Is it up to the players to decide how the league wants to grow it’s brand? Every decision the league makes, good or bad, could be scrutinized. If it was bad it cost the players money. If it was good, it wasn’t good enough. Wait, I have an idea. Maybe the players should start their own league, and then they could make those decisions

  30. voyager6 says: May 21, 2011 7:15 AM

    @nflfan101

    Re: damages

    The TV networks, and DirecTV in particular, asked the court not to request contract details as it would then put the contracts into public record, availabe to their competitors and put them at a disadvantage the next time the Sunday Ticket is negotiated.

    So I am not sure what part, if any, of the TV contracts were made part of the evidense. Certainly not the “What would they pay without the lockout insurance clause”?

    So a damage figure just may be pulled out of the air by the judge.

  31. oldbyrd says: May 21, 2011 8:53 AM

    How’s De Moron working out for all you thumbs down bloggers? I said and will continue to say…..He is a bigger Dufus than Joe Biden. He has no interest in helping the players. He is all about himself. He has hurt football and the players. He is way way way over his head. An unqualified big mouth. One liners won’t help the players or get a agreement. Remember the players are not partners they are employees.

  32. camp69 says: May 21, 2011 9:35 AM

    We all know what the Republican appointed judges will do, corporations first, citizens second. Oh wait, I forgot, corporations are individuals. Oldbyrd, your the MORON! Players are not only partners, they are the PRODUCT. Lets see how much money the owners make if they life the lockout and the player don’t show up! The players always have the real and final leverage, no matter what the courts rule!!!

  33. eagleswin says: May 21, 2011 10:33 AM

    mikeyhigs says:
    May 20, 2011 11:51 PM
    vahawker says: “CBA required them to maximize amount of TV money. They didn’t. Regardless of intent, they failed to live up the terms of the CBA.”

    I dont have a copy, but please tell me where the CBA “required them to maximize” TV money? Under that reasoning, the players could sue because the NFL isn’t maximizing revenue when they put a Thursday night game on NFL Network. Is it up to the players to decide how the league wants to grow it’s brand? Every decision the league makes, good or bad, could be scrutinized. If it was bad it cost the players money. If it was good, it wasn’t good enough. Wait, I have an idea. Maybe the players should start their own league, and then they could make those decisions

    ————————–

    The league could also point out that they could maximize revenue by having an 18 game season.

  34. eagleswin says: May 21, 2011 10:36 AM

    camp69 says:
    May 21, 2011 9:35 AM
    We all know what the Republican appointed judges will do, corporations first, citizens second. Oh wait, I forgot, corporations are individuals. Oldbyrd, your the MORON! Players are not only partners, they are the PRODUCT. Lets see how much money the owners make if they life the lockout and the player don’t show up! The players always have the real and final leverage, no matter what the courts rule!!!

    ——————————–

    Where are all the player supporters who were saying that the law is the law when they were winning court cases in Minnesota? Now that it looks like things are going the other way, the player supporters are pretty much saying the players should ignore the courts?

  35. eagleswin says: May 21, 2011 10:38 AM

    voyager6 says:
    May 21, 2011 7:15 AM
    @nflfan101

    Re: damages

    The TV networks, and DirecTV in particular, asked the court not to request contract details as it would then put the contracts into public record, availabe to their competitors and put them at a disadvantage the next time the Sunday Ticket is negotiated.

    So I am not sure what part, if any, of the TV contracts were made part of the evidense. Certainly not the “What would they pay without the lockout insurance clause”?

    So a damage figure just may be pulled out of the air by the judge.
    ——————————————
    Wouldn’t it be funny if the 8th circuit ruled that Doty had no jurisdiction since this was a labor dispute that was to be settled under a special master in the previous CBA? Much like they did with Judge Nelson?

  36. CKL says: May 21, 2011 11:34 AM

    eagleswin says:
    May 20, 2011 10:28 PM

    Imagine that, looks like you didn’t know what you were talking about, again. Seriously, do you ever do any research?
    _______________________________
    I think he means well and at least he’s not prone to personal attacks and nastiness (that I’ve seen)like other posters are on this issue. That said, I stopped thinking he had any facts on his side when he said Goodell was a lawyer.

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