The NFL Players Association (NFLPA) has gone to court to challenge the league’s television deals because they insure that the NFL would get paid billions, even if no games are played due to a strike or lockout. The union charges that the NFL reworked its TV contracts to buy lockout insurance for the 2011 season at the expense of the players.
The complaint filed with the Special Master overseeing legal dealings between the NFL and its players union (under a 1993 class action settlement) charges that the NFL breached its fiduciary duty to its players because it didn’t use its best efforts to maximize revenues from Fox, CBS, NBC and DirecTV. Those revenues are split between the league owners and the players. NFLPA counsel Jeffrey Kessler charges that the NFL “knowingly left money on the table…at the expense of players.”
The benefit to the league, according to the complaint, is that the NFL will get nearly $4 billion from the TV contracts, even if no games are played in the 2011 season. That’s about half of total league revenues. At the same time, the NFL teams would be saved about $4.4 billion in player salaries and benefits during a lockout, so the union charged that the team owners would still turn a profit. The union addressed only the possibility of a lockout by the owners, with no mention of a strike by the players.
The NFL has denied that the TV payments would produce a profit, saying that they would be counted as “loans” which would have to be paid back in subsequent seasons.
“They went out and obtained financing to take a whole year off,” charged Seattle Seahawks receiver Sean Morey, a member of the NFLPA’s executive committee on the union’s website.
RBR-TVBR observation: Broadcasters certainly remember the 1987 NFL season, when replacement players took over for striking pros for three weeks and arguably altered the team records that decided who went to the playoffs and ultimately the Super Bowl. No one really wants to see a repetition of anything like that – let alone a fall with no games at all.