Judge Rules NFL Improperly Negotiated USD4bn if Lockout Occurs

March 2, 2011

A federal judge has sided with the the National Football League Players’ Association (NFLPA) in ruling that the league improperly negotiated to receive US$4bn in income from television networks even if a lockout occurs, cancelling games in the 2011 season over failing discussions to agree a new collective bargaining agreement (CBA).

U.S. District Judge David Doty upheld a complaint from the players’ union yesterday, March 1, overruling an earlier decision on the matter by a special master, or arbitrator.

Doty, who has overseen the NFL labor contract since 1993, ordered a hearing to consider the award of money damages and equitable relief to the players.

The judge agreed with the union that, in extending the contracts into the 2011 season, the NHL had failed to get the best terms available to maximize revenue in 2009 and 2010.

Spokesman for the NFLPA, George Atallah stated: “This ruling means there is irrefutable evidence that owners had a premeditated plan to lock out players and fans for more than two years.”

The union is now seeking to have the money placed in escrow during any potential lockout, rather than allowing the NFL to use it to fund operations. The league responded by saying that the money is a loan that will have to be repaid if no games are played.

In his decision, the judge stated: “The NFL negotiated access to over $4bn in rights fees in 2011 if it locks out the players. Of that sum, it has no obligation to repay $421m to the broadcasters.”

The NFL extended contracts and altered lock out provisions with DirecTV, CBS Corp., News Corp.’s Fox, Comcast Corp.’s NBC and Walt Disney Co.’s ESPN Inc.

NFL spokesman Greg Aiello released a statement playing down the issue, reading: “Our clubs are prepared for any contingency, this decision included. The ruling will have no effect on our efforts to negotiate a new, balanced labor agreement.”