For all the union hand-wringing over owners' "lockout insuranc

[UConn James]

Players' secret lockout insurance could have sparked talks

 

[DeMaurice] Smith disclosed the fund to only a handful of people outside of the executive committee. However with negotiations seemingly at a standstill late Wednesday night, the decision was made to play one of their aces in the hole. So in the relative quiet of the sides' New York City bargaining room the next morning, Baltimore Ravens cornerback Domonique Foxworth informed the owners of the previously secret [$200K per player] lockout fund.

 

This is probably the second or third article I've actually read on the NFL lockout. It just hasn't interested me up to this point, and probably won't whenever they do agree on a deal. I don't really want to listen to the legal bull---- being hashed.

 

But this caught my eye in light of one of the pro-union peoples' arguments against the owners... that last year they purchased an insurance policy to cover there being a lockout in 2011. De Smith did the same damn thing at about the same damn time.

 

So it was 'dirty tricks' when the owners did it with public acknowledgement. But the players get a pass... because "That's different!" Just shows once again how there is no one to root for in this stuff.

Edited July 16, 2011 by UConn James

[BillsVet]

Owners have more money...ergo, they're worse than players.

[Scrappy]

Insurance companies do not like to payout, so this was not in stone by any stretch.

[NoSaint]

Players' secret lockout insurance could have sparked talks

 

 

 

This is probably the second or third article I've actually read on the NFL lockout. It just hasn't interested me up to this point, and probably won't whenever they do agree on a deal. I don't really want to listen to the legal bull---- being hashed.

 

But this caught my eye in light of one of the pro-union peoples' arguments against the owners... that last year they purchased an insurance policy to cover there being a lockout in 2011. De Smith did the same damn thing at about the same damn time.

 

So it was 'dirty tricks' when the owners did it with public acknowledgement. But the players get a pass... because "That's different!" Just shows once again how there is no one to root for in this stuff.

 

I've been pretty pro owner but if you can't see the difference between purchasing insurance, and violating the CBA by not maximizing revenue..... Though obviously both sides had to plan ahead. It'd be dumb not to.

 

 

I still can't believe that they were able to keep a 400-500m insurance policy secret. The premium had to be huge. I also don't think it's the ace the media is calling it as payout would have been after the season would be cancelled which is a ways off for someone relying on that money coming in.

Edited July 16, 2011 by NoSaint

[Mickey]

Players' secret lockout insurance could have sparked talks

 

 

 

This is probably the second or third article I've actually read on the NFL lockout. It just hasn't interested me up to this point, and probably won't whenever they do agree on a deal. I don't really want to listen to the legal bull---- being hashed.

 

But this caught my eye in light of one of the pro-union peoples' arguments against the owners... that last year they purchased an insurance policy to cover there being a lockout in 2011. De Smith did the same damn thing at about the same damn time.

 

So it was 'dirty tricks' when the owners did it with public acknowledgement. But the players get a pass... because "That's different!" Just shows once again how there is no one to root for in this stuff.

 

Not so much a "dirty trick" as illegal. At the time the contract was negotiated with the networks, the CBA was still in effect under which, since player compensation was ultimately a percentage of league revenue primarily derived from the TV contracts, the owners had a duty to get the best deal they could get. They did not honor that duty and instead negotiated a lower deal that preserved their income in the event the league had no product for networks to broadcast. Knowing that the owners would impose a lockout to put financial pressure on players in no position to go without income for long, it would have been foolish for the players not to make what preparations they could. Doty's decision on the network deal certainly helped and the article you cite stated that it was a combination of that money and the insurance fund that would have given the players some staying power. They couldn't know the result of the case on the network contract until Doty made it.

 

In the end, it appears that Smith's foresight in pulling together some rainy day money broke an impasse in negotiations so those who rail at him consistently hereabouts might want to remember that.

 

I was rooting for whatever argument seemed to me to be the most likely to get a deal done without interrupting the season. I was worried that the suit was the only leverage the players would have and that they needed the injunction to avoid any immediate loss of salaries and to save the 2011 season. That wasn't working well in the short term so I had hoped that Doty would start moving on the damages hearing in the network case. Apparently, the players had it all covered and the injunction was just the first option.

 

From a sentimental standpoint, its players that make the game, not the suits. I don't pay to see Ralph Wilson.

 

I just hope they finish it next week.

[Mickey]

Players' secret lockout insurance could have sparked talks

 

 

 

This is probably the second or third article I've actually read on the NFL lockout. It just hasn't interested me up to this point, and probably won't whenever they do agree on a deal. I don't really want to listen to the legal bull---- being hashed.

 

But this caught my eye in light of one of the pro-union peoples' arguments against the owners... that last year they purchased an insurance policy to cover there being a lockout in 2011. De Smith did the same damn thing at about the same damn time.

 

So it was 'dirty tricks' when the owners did it with public acknowledgement. But the players get a pass... because "That's different!" Just shows once again how there is no one to root for in this stuff.

 

Not so much a "dirty trick" as illegal. At the time the contract was negotiated with the networks, the CBA was still in effect under which, since player compensation was ultimately a percentage of league revenue primarily derived from the TV contracts, the owners had a duty to get the best deal they could get. They did not honor that duty and instead negotiated a lower deal that preserved their income in the event the league had no product for networks to broadcast. Knowing that the owners would impose a lockout to put financial pressure on players in no position to go without income for long, it would have been foolish for the players not to make what preparations they could. Doty's decision on the network deal certainly helped and the article you cite stated that it was a combination of that money and the insurance fund that would have given the players some staying power. They couldn't know the result of the case on the network contract until Doty made it.

 

In the end, it appears that Smith's foresight in pulling together some rainy day money broke an impasse in negotiations so those who rail at him consistently hereabouts might want to remember that.

 

I was rooting for whatever argument seemed to me to be the most likely to get a deal done without interrupting the season. I was worried that the suit was the only leverage the players would have and that they needed the injunction to avoid any immediate loss of salaries and to save the 2011 season. That wasn't working well in the short term so I had hoped that Doty would start moving on the damages hearing in the network case. Apparently, the players had it all covered and the injunction was just the first option.

 

From a sentimental standpoint, its players that make the game, not the suits. I don't pay to see Ralph Wilson.

 

I just hope they finish it next week.

[MattM]

As Mickey noted, what the owners did was not buy an insurance policy, but instead screw the players to whom they had a contractual and legal fiduciary duty to maximize shared revenue. By taking a TV deal that still paid the owners in the event of a lockout they left shared money on the table that the players didn't get and thus violated their duty to the players. Easy open and shut case from a pure legal perspective, which is why the owners lost badly on it. There's a huge difference between that and what the players did, which was simply buy insurance to cover the players in the event of a lockout. Nothing at all wrong about that in any way, shape or form. Remember, too, that the players aren't on strike here. They wanted to play under the old CBA. It was the owners who blew up the CBA and forced the lockout.

 

Finally, for someone who's taken such a lot of criticism (any of it racially tinged, I wonder?), that was an incredibly smart and shrewd move by De Smith.....

[Hplarrm]

As Mickey noted, what the owners did was not buy an insurance policy, but instead screw the players to whom they had a contractual and legal fiduciary duty to maximize shared revenue. By taking a TV deal that still paid the owners in the event of a lockout they left shared money on the table that the players didn't get and thus violated their duty to the players. Easy open and shut case from a pure legal perspective, which is why the owners lost badly on it. There's a huge difference between that and what the players did, which was simply buy insurance to cover the players in the event of a lockout. Nothing at all wrong about that in any way, shape or form. Remember, too, that the players aren't on strike here. They wanted to play under the old CBA. It was the owners who blew up the CBA and forced the lockout.

 

Finally, for someone who's taken such a lot of criticism (any of it racially tinged, I wonder?), that was an incredibly smart and shrewd move by De Smith.....

Right on target! It has been a mixture of both hilarious and pathetic to see a lot of the anti-Smith and anti-NFLPA whining and bleating which has gone on.

 

As a fan, I do not think that the NFLPA deserves much sympathy from fans because it is pretty clear to me that the players do not "deserve" in any value based calculus of how much a man should be compensated for playing a boys game.

 

However, two things:

 

1. This entertainment business is worth based and not value based. The level of compensation received by the players and the owners has tons to do with the market can bear and little to do with any sense of morality or fairness.

 

2. The players are disgusting over paid idiots who are the worst except for the owners who are even more disgusting idiots.

 

If this plays out the way it appears to be going, hats off to Gene Upshaw and the NFLPA for bludgeoning the owners into a deal that they themselves beat each other up to finally sign it and then had to pull a 180 and use the language of the contract to get out of this deal.

 

Likewise now hats off to Smith for apparently pulling a rabbit out of his hat he had quietly set-up to unleash at crunch time in the negotiations. If the NFLPA merely were able to retain this as a good deal rather than the great deal they had under Upshaw (and not end up with what they would have judged to be a bad deal) when the owners had a lot of leverage he looks like he pulled off a nice trick.

 

It does not add up to the truly ballsy move I was hoping for that the players would opt for a set-up with essentially replacement owners but it looks like it was well played.

[NoSaint]

As Mickey noted, what the owners did was not buy an insurance policy, but instead screw the players to whom they had a contractual and legal fiduciary duty to maximize shared revenue. By taking a TV deal that still paid the owners in the event of a lockout they left shared money on the table that the players didn't get and thus violated their duty to the players. Easy open and shut case from a pure legal perspective, which is why the owners lost badly on it. There's a huge difference between that and what the players did, which was simply buy insurance to cover the players in the event of a lockout. Nothing at all wrong about that in any way, shape or form. Remember, too, that the players aren't on strike here. They wanted to play under the old CBA. It was the owners who blew up the CBA and forced the lockout.

 

Finally, for someone who's taken such a lot of criticism (any of it racially tinged, I wonder?), that was an incredibly smart and shrewd move by De Smith.....

 

Players wouldn't have seen a penny til 2012 either way. For the many guys hurting right now, it doesn't help much. He spent millions (likely tens of millions) and got what exactly in return?

[Hplarrm]

Players wouldn't have seen a penny til 2012 either way. For the many guys hurting right now, it doesn't help much. He spent millions (likely tens of millions) and got what exactly in return?

It appears that the NFLPA got the breathing room to maneuver when the owners had tried to simply bulldoze them by getting leverage over the stupid part of the NFLPA membership which did not take the warnings of the NFLPA from over a year ago to prepare themselves financially for several months of protracted bargaining with no paychecks coming in.

 

The clock was ticking in that if the lockout continues the NFL and their partners (whether the owners admit it or not or nor or the owners refuse to treat then like partners and honor their contract)the owners and the players were going to start leaving money on the table when pre-season was canceled.

 

What Smith and the NFLPA bought themselves for the multi-millions strike insurance cost them was time as the $200K a player undercut the owners plan to force a settlement. $200K paid out in 2012 was not going to make a difference right now for the players who were stupid and did not prepare themselves fiscally for a pro-tracted lockout. However, it did provide an avenue for these stupid players to come to the NFLPA and borrow money right now if they needed (actually wanted it) for bling or the revolving credit line at Tiffany's.

 

Without this breathing room, these idiot players might have provided fertile ground for the team owners to try organize a rejectionist front of players.

 

The $200K bought the NFLPA solidarity. They provided a reasonable showing that they might be able to get the weakest players to hold out longer than the weakest owners. All signs point now to this jujitsu having turned the owners power play against them.

 

Sweet move if this plays out the way its looking right now.

[NoSaint]

It appears that the NFLPA got the breathing room to maneuver when the owners had tried to simply bulldoze them by getting leverage over the stupid part of the NFLPA membership which did not take the warnings of the NFLPA from over a year ago to prepare themselves financially for several months of protracted bargaining with no paychecks coming in.

 

The clock was ticking in that if the lockout continues the NFL and their partners (whether the owners admit it or not or nor or the owners refuse to treat then like partners and honor their contract)the owners and the players were going to start leaving money on the table when pre-season was canceled.

 

What Smith and the NFLPA bought themselves for the multi-millions strike insurance cost them was time as the $200K a player undercut the owners plan to force a settlement. $200K paid out in 2012 was not going to make a difference right now for the players who were stupid and did not prepare themselves fiscally for a pro-tracted lockout. However, it did provide an avenue for these stupid players to come to the NFLPA and borrow money right now if they needed (actually wanted it) for bling or the revolving credit line at Tiffany's.

 

Without this breathing room, these idiot players might have provided fertile ground for the team owners to try organize a rejectionist front of players.

 

The $200K bought the NFLPA solidarity. They provided a reasonable showing that they might be able to get the weakest players to hold out longer than the weakest owners. All signs point now to this jujitsu having turned the owners power play against them.

 

Sweet move if this plays out the way its looking right now.

 

Between friday morning when 5-10 guys knew it existed, and Friday afternoon after the card was played though, what ground did they gain in negotiations? The big dollar percentages were already negotiated. Say they paid 30m to be able to play that card, did they really gain anything worth that in how they used it?

[Orton's Arm]

Not so much a "dirty trick" as illegal. At the time the contract was negotiated with the networks, the CBA was still in effect under which, since player compensation was ultimately a percentage of league revenue primarily derived from the TV contracts, the owners had a duty to get the best deal they could get. They did not honor that duty and instead negotiated a lower deal that preserved their income in the event the league had no product for networks to broadcast. Knowing that the owners would impose a lockout to put financial pressure on players in no position to go without income for long, it would have been foolish for the players not to make what preparations they could. Doty's decision on the network deal certainly helped and the article you cite stated that it was a combination of that money and the insurance fund that would have given the players some staying power. They couldn't know the result of the case on the network contract until Doty made it.

 

In the end, it appears that Smith's foresight in pulling together some rainy day money broke an impasse in negotiations so those who rail at him consistently hereabouts might want to remember that.

 

I was rooting for whatever argument seemed to me to be the most likely to get a deal done without interrupting the season. I was worried that the suit was the only leverage the players would have and that they needed the injunction to avoid any immediate loss of salaries and to save the 2011 season. That wasn't working well in the short term so I had hoped that Doty would start moving on the damages hearing in the network case. Apparently, the players had it all covered and the injunction was just the first option.

 

From a sentimental standpoint, its players that make the game, not the suits. I don't pay to see Ralph Wilson.

 

I just hope they finish it next week.

The above is an extremely pro-player/pro union perspective on the matter. Are you prepared to apply the above logic to all business transactions?

 

Suppose that a guy--let's call him Steve--decides he wants to sell ice cream on the Fourth of July. His friend Tim owns an ice cream cart. "Let me use your cart on the Fourth," Steve says, "and after my costs are subtracted away, I'll split the remaining money with you 50/50." Tim agrees.

 

Does Steve now have a moral or legal duty to do everything he can to maximize profits? What if he spends an extra $10 on something which might or might not increase revenue? Does Tim have the right to say, "You just stole $5 from me?" Some would feel that it's enough for Steve to make a good faith effort to have a nice, profitable ice cream stand. They'd feel that if Tim went crying to the press over every last dime Steve spent on something not strictly necessary, that Tim would be a very unpleasant person with whom to work! It could be argued that Tim should be happy to get what he's getting for the use of his ice cream cart, because his next best alternative would have been to let it collect dust in his garage. Similarly, if professional football wasn't available for the players, their next best alternative would be . . . what, exactly? What marketable non-football skills do most of these guys have? If you were a business owner, would you give them a six or seven figure salary for something which was both a) non-football related, and b) not intended to take advantage of their fame/name recognition?

 

Demaurice Smith argues that the networks would have given the owners an even bigger, more generous television deal if the insurance component hadn't been included. That may or may not be true. Suppose, for example, that during negotiating sessions, the NFL and network execs had already agreed on a number. Then the NFL might have said, "Oh, by the way, we also require lockout insurance." The network executives might, conceivably, have seen that provision as somewhat similar to a nuclear weapon. Nuclear weapons have a very significant impact on the balance of power even though they aren't used. The idea behind the lockout insurance would be the same: merely the threat of the insurance would force the greedy and short-sighted NFLPA back to the negotiating table, thereby eliminating the need to actually trigger the insurance provision. If the television networks thought about the lockout insurance in those terms, they probably wouldn't have charged a very high premium for it. Certainly, the magnitude of the television revenue suggests that the NFL probably couldn't have gotten much more money out of the networks even if they'd elected to forego lockout insurance.

 

In the absence of any sort of quantitative analysis, there's no particular reason to believe the NFL lost any more revenue from its lockout insurance than it's lost from the Green Bay Packers' decision to donate half of their concessions revenue to charity, and to charge reasonably fair prices for their concessions in the first place. The NFLPA would do as well to squawk about lost revenue from that as opposed to lost revenue from lockout insurance. (This assumes, of course, that the NFLPA isn't already trying to "fix" the Green Bay concessions situation.)

 

The bottom line is that the owners are the business owners, not the NFLPA. The NFLPA does not have the rights or privileges of owners, and certainly doesn't have the right to tell the owners what insurance policies they are or aren't allowed to buy.

[MattM]

The above is an extremely pro-player/pro union perspective on the matter. Are you prepared to apply the above logic to all business transactions?

 

Suppose that a guy--let's call him Steve--decides he wants to sell ice cream on the Fourth of July. His friend Tim owns an ice cream cart. "Let me use your cart on the Fourth," Steve says, "and after my costs are subtracted away, I'll split the remaining money with you 50/50." Tim agrees.

 

Does Steve now have a moral or legal duty to do everything he can to maximize profits? What if he spends an extra $10 on something which might or might not increase revenue? Does Tim have the right to say, "You just stole $5 from me?" Some would feel that it's enough for Steve to make a good faith effort to have a nice, profitable ice cream stand. They'd feel that if Tim went crying to the press over every last dime Steve spent on something not strictly necessary, that Tim would be a very unpleasant person with whom to work! It could be argued that Tim should be happy to get what he's getting for the use of his ice cream cart, because his next best alternative would have been to let it collect dust in his garage. Similarly, if professional football wasn't available for the players, their next best alternative would be . . . what, exactly? What marketable non-football skills do most of these guys have? If you were a business owner, would you give them a six or seven figure salary for something which was both a) non-football related, and b) not intended to take advantage of their fame/name recognition?

 

Demaurice Smith argues that the networks would have given the owners an even bigger, more generous television deal if the insurance component hadn't been included. That may or may not be true. Suppose, for example, that during negotiating sessions, the NFL and network execs had already agreed on a number. Then the NFL might have said, "Oh, by the way, we also require lockout insurance." The network executives might, conceivably, have seen that provision as somewhat similar to a nuclear weapon. Nuclear weapons have a very significant impact on the balance of power even though they aren't used. The idea behind the lockout insurance would be the same: merely the threat of the insurance would force the greedy and short-sighted NFLPA back to the negotiating table, thereby eliminating the need to actually trigger the insurance provision. If the television networks thought about the lockout insurance in those terms, they probably wouldn't have charged a very high premium for it. Certainly, the magnitude of the television revenue suggests that the NFL probably couldn't have gotten much more money out of the networks even if they'd elected to forego lockout insurance.

 

In the absence of any sort of quantitative analysis, there's no particular reason to believe the NFL lost any more revenue from its lockout insurance than it's lost from the Green Bay Packers' decision to donate half of their concessions revenue to charity, and to charge reasonably fair prices for their concessions in the first place. The NFLPA would do as well to squawk about lost revenue from that as opposed to lost revenue from lockout insurance. (This assumes, of course, that the NFLPA isn't already trying to "fix" the Green Bay concessions situation.)

 

The bottom line is that the owners are the business owners, not the NFLPA. The NFLPA does not have the rights or privileges of owners, and certainly doesn't have the right to tell the owners what insurance policies they are or aren't allowed to buy.

 

And yours is an extremely pro owners view.

 

I'll try to be briefer than you were--

 

1. First, you haven't seen the relevant provisions of the old CBA, but presumably there is something in there that contractually requires the owners to act to maximize revenue to be shared with the players via the TV deals. In the unlikely event there's not, the law may very well fill that term in as part of a party's good faith obligation to its counterparty. Personally, considering the lawyers involved in deals like this, I'd be shocked if there was no such contractual provision. Again, that's why that was probably one of the easiest decisions in Judge Doty's history on the bench; and

 

2. Secondly, as someone who helps folks negotiate large deals for a living, I can without hesitation tell you that there is indeed a dollars and cents value to the owners' "lockout insurance". You don't get something of that magnitude without giving up some real dinero. Think about it for a second--it was an obligation of the networks to pay $400m in the event that they HAD NO GAMES TO BROADCAST. Let that sink in for a second. No games to make revenue off of, yet they had to fork over $400m. Worse yet, the ability to collect on this insurance through making sure there were no games by (a) canceling the CBA and then (b) forcing a lockout was also in the hands of the folks who stood to be paid the $400m. Holy conflict of interest, Batman! I can guarantee you that the price of this was steep in terms of lost player revenue.

 

The owners have shown multiple times throughout this process that they were not to be trusted. This was one of the most egregious examples. Yet throughout, perhaps because of his "funny name", De Smith was the one who was repeatedly attacked and mocked. Only in post-2008 America.....

Edited July 16, 2011 by MattM

[Orton's Arm]

And yours is an extremely pro owners view.

 

I'll try to be briefer than you were--

 

1. First, you haven't seen the relevant provisions of the old CBA, but presumably there is something in there that contractually requires the owners to act to maximize revenue to be shared with the players via the TV deals. In the unlikely event there's not, the law may very well fill that term in as part of a party's good faith obligation to its counterparty. Personally, considering the lawyers involved in deals like this, I'd be shocked if there was no such contractual provision. Again, that's why that was probably one of the easiest decisions in Judge Doty's history on the bench; and

 

2. Secondly, as someone who helps folks negotiate large deals for a living, I can without hesitation tell you that there is indeed a dollars and cents value to the owners' "lockout insurance". You don't get something of that magnitude without giving up some real dinero. Think about it for a second--it was an obligation of the networks to pay $400m in the event that they HAD NO GAMES TO BROADCAST. Let that sink in for a second. No games to make revenue off of, yet they had to fork over $400m. Worse yet, the ability to collect on this insurance through making sure there were no games by (a) canceling the CBA and then (b) forcing a lockout was also in the hands of the folks who stood to be paid the $400m. Holy conflict of interest, Batman! I can guarantee you that the price of this was steep in terms of lost player revenue.

 

The owners have shown multiple times throughout this process that they were not to be trusted. This was one of the most egregious examples. Yet throughout, perhaps because of his "funny name", De Smith was the one who was repeatedly attacked and mocked. Only in post-2008 America.....

I see no reason to make the bolded presumption about a deal neither you nor I have seen. I have not seen any article assert that the NFL violated the contractual obligation you've described. The accusation I have seen is that the NFL had an implied obligation to maximize revenue.

 

"I can guarantee you that the price of this was steep in terms of lost player revenue." That all depends. Suppose the network owners felt there was a 5% chance of a lost season. In that case, the expected cost of providing the lockout insurance would be $400 million x 5% = 20 million. Diving that by 32 teams, it would imply a cost of $625,000 per team. That cost is spread over the course of two years, making it $312,500 per team per year. Divide that by 53 players, and you're looking at a cost of $5,896 per player per year. The salary cap is 60% of revenues. When you multiply $5,896 by 60%, you're left with $3,538 per player per year. That might almost be enough to pay some of the players' bar tabs or dinner bills I've heard about.

 

"Again, that's why that was probably one of the easiest decisions in Judge Doty's history on the bench." Judge Doty has been consistently and very strongly in the players' corner. What was probably a very easy decision for him might have required serious thought and consideration had the case been heard by a neutral judge.

 

"Yet throughout, perhaps because of his 'funny name,' De Smith was the one who was repeatedly attacked and mocked." Possibly there were those who mocked him for his so-called "funny name." It's also possible that his consistent distortion and misrepresentation of facts, his evident lack of interest in finding win-wins with the NFL, and his blinkered focus on increasing the salary cap to the exclusion of anything else which might help the players, could also explain some of the mocking. For example: player head injuries are a very serious issue. A good union leader in Demaurice Smith's position would push the NFL for changes in equipment, NFL practices, and possibly the rules set in a larger effort to reduce the incidence of brain trauma. But when Demaurice Smith brings up the subject of brain trauma, it's usually because he's advocating still more increases to the salary cap. Reducing brain trauma is something which could significantly help the players without materially harming the owners. But because Demaurice Smith's actions have been consistently and entirely adversarial, he has neglected such possibilities, and has focused solely on zero-sum issues such as salary caps. Removing this man from the process would benefit players and owners both.

[MattM]

I see no reason to make the bolded presumption about a deal neither you nor I have seen. I have not seen any article assert that the NFL violated the contractual obligation you've described. The accusation I have seen is that the NFL had an implied obligation to maximize revenue.

 

"I can guarantee you that the price of this was steep in terms of lost player revenue." That all depends. Suppose the network owners felt there was a 5% chance of a lost season. In that case, the expected cost of providing the lockout insurance would be $400 million x 5% = 20 million. Diving that by 32 teams, it would imply a cost of $625,000 per team. That cost is spread over the course of two years, making it $312,500 per team per year. Divide that by 53 players, and you're looking at a cost of $5,896 per player per year. The salary cap is 60% of revenues. When you multiply $5,896 by 60%, you're left with $3,538 per player per year. That might almost be enough to pay some of the players' bar tabs or dinner bills I've heard about.

 

"Again, that's why that was probably one of the easiest decisions in Judge Doty's history on the bench." Judge Doty has been consistently and very strongly in the players' corner. What was probably a very easy decision for him might have required serious thought and consideration had the case been heard by a neutral judge.

 

"Yet throughout, perhaps because of his 'funny name,' De Smith was the one who was repeatedly attacked and mocked." Possibly there were those who mocked him for his so-called "funny name." It's also possible that his consistent distortion and misrepresentation of facts, his evident lack of interest in finding win-wins with the NFL, and his blinkered focus on increasing the salary cap to the exclusion of anything else which might help the players, could also explain some of the mocking. For example: player head injuries are a very serious issue. A good union leader in Demaurice Smith's position would push the NFL for changes in equipment, NFL practices, and possibly the rules set in a larger effort to reduce the incidence of brain trauma. But when Demaurice Smith brings up the subject of brain trauma, it's usually because he's advocating still more increases to the salary cap. Reducing brain trauma is something which could significantly help the players without materially harming the owners. But because Demaurice Smith's actions have been consistently and entirely adversarial, he has neglected such possibilities, and has focused solely on zero-sum issues such as salary caps. Removing this man from the process would benefit players and owners both.

 

 

As noted above, I do this for a living--I'm a corporate/investment attorney working in NYC who helps people with this kind of stuff and have been doing so for a number of years (too large a number than I'd care to admit). While I have not seen the agreement, I can pretty much guarantee you that (a) it was chock full of covenants preventing the owners from doing the kinds of things they did here on this issue and (b) even on the incredibly odd chance that it wasn't, most courts would imply some kind of good faith obligation on the owners to maximize shared revenue in this kind of deal. My money is clearly on (a) considering that the NFL uses folks like Covington & Burling and the NFLPA uses similarly top notch counsel (may have been Proskauer, but I'm not 100% sure on that). That's why it was a no-brainer for Doty, who, BTW, was a Reagan appointee mind you, so it's not like he was some ultra-lefty as you make it sound. Personally, I suspect that he decided repeatedly for the players because he found that the owners could not be trusted and quickly formed an opinion about their "truthiness" as our former President may have said, said initial opinion following them in his dealings with them.

 

I must admit that I find it hysterical that you attack Smith, yet stick up for the owners who have been found by a court to have done scuzzy things. They were also the folks who negotiated the original CBA and then torched it less than 4 years later (real geniuses, eh?), all the while pleading poverty, but refusing to show folks who had a contractual economic interest in this matter (let's not even talk about the incredibly phony "employee" analogy that some folks keep bringing up, ok? You're smarter than that) their books to prove it. Some real winners there, no?

 

As for your damages argument, the networks, too, are a lot smarter than you give them credit for. 5% is an incredibly low chance of losing games, as we have seen having been pushed to the brink here. No way is it good business sense to potentially give away nearly half a billion dollars to someone in the form of "insurance" when they're the ones controlling the likelihood of payout. I'd personally value it at over $100 million minimum myself. Breaking that down on a per player basis reduces the sound of the number, but $100m is not chump change in any situation outside of govt debt or spending.....

[UConn James]

As noted above, I do this for a living--I'm a corporate/investment attorney working in NYC who helps people with this kind of stuff and have been doing so for a number of years (too large a number than I'd care to admit). While I have not seen the agreement, I can pretty much guarantee you that (a) it was chock full of covenants preventing the owners from doing the kinds of things they did here on this issue and (b) even on the incredibly odd chance that it wasn't, most courts would imply some kind of good faith obligation on the owners to maximize shared revenue in this kind of deal. My money is clearly on (a) considering that the NFL uses folks like Covington & Burling and the NFLPA uses similarly top notch counsel (may have been Proskauer, but I'm not 100% sure on that). That's why it was a no-brainer for Doty, who, BTW, was a Reagan appointee mind you, so it's not like he was some ultra-lefty as you make it sound. Personally, I suspect that he decided repeatedly for the players because he found that the owners could not be trusted and quickly formed an opinion about their "truthiness" as our former President may have said, said initial opinion following them in his dealings with them.

 

I must admit that I find it hysterical that you attack Smith, yet stick up for the owners who have been found by a court to have done scuzzy things. They were also the folks who negotiated the original CBA and then torched it less than 4 years later (real geniuses, eh?), all the while pleading poverty, but refusing to show folks who had a contractual economic interest in this matter (let's not even talk about the incredibly phony "employee" analogy that some folks keep bringing up, ok? You're smarter than that) their books to prove it. Some real winners there, no?

 

As for your damages argument, the networks, too, are a lot smarter than you give them credit for. 5% is an incredibly low chance of losing games, as we have seen having been pushed to the brink here. No way is it good business sense to potentially give away nearly half a billion dollars to someone in the form of "insurance" when they're the ones controlling the likelihood of payout. I'd personally value it at over $100 million minimum myself. Breaking that down on a per player basis reduces the sound of the number, but $100m is not chump change in any situation outside of govt debt or spending.....

 

http://www.youtube.com/watch?v=XfTrLcXE5sw

[Buffalo Barbarian]

who cares just play ball.

[ICanSleepWhenI'mDead]

As noted above, I do this for a living--I'm a corporate/investment attorney working in NYC who helps people with this kind of stuff and have been doing so for a number of years (too large a number than I'd care to admit). While I have not seen the agreement ...

I'm an anonymous voice on the Inter-web making no claim to any particular education or experience, but I've seen the 2006 CBA. Here's a copy:

 

http://images.nflplayers.com/mediaResources/files/PDFs/General/NFL%20COLLECTIVE%20BARGAINING%20AGREEMENT%202006%20-%202012.pdf

 

Judge Doty actually decided the "network TV case" based on language in a settlement agreement made between the players and the NFL that was entered a long time ago (and has been amended several times since then) in a case called White v. NFL, over which the court retained jurisdiction. In a March 1, 2011 opinion, Judge Doty referred to that settlement agreement by the acronym "SSA."

 

Here's Judge Doty's opinion:

 

http://docs.justia.com/cases/federal/district-courts/minnesota/mndce/4:1992cv00906/57169/675/

 

You can read the entire opinion to see the reasoning for his decision in favor of the players, but here's the contractual SSA language at issue in the dispute (that Judge Doty concluded was breached by the owners):

 

Article X, § 1(a)(i) of the SSA provides that:

 

The NFL and each NFL team shall in good faith act and use

their best efforts, consistent with sound business

judgment, so as to maximize Total Revenues for each

playing season during the term of this Agreement....

 

SSA Art. X, § 1(a)(i). The SSA defines total revenues as:

 

“Total Revenues” (“TR”) means the aggregate revenues

received or to be received on an accrual basis, for or

with respect to a League Year during the term of this

Agreement, by the NFL and all NFL Teams (and their

designees), from all sources, whether known or unknown,

derived from, relating to or arising out of the

performance of players in NFL football games ....

 

Judge Doty reached exactly the opposite conclusion from the Special Master who first heard this particular dispute. My brother Darryl thinks that means the issue wasn't entirely clear cut for either side.

Edited July 17, 2011 by ICanSleepWhenI'mDead

[1B4IDie]

It's entirely clear cut.

If the NFL owners extort money from a television network to pay only NFL owners even if that television network cannot broadcast the NFL's product, and the money received by the NFL is contractually shared with the players, then there are a few problems with that situation.

If you can't see that then you have lost your moral compus as well as not understanding the situation. The hot dog cart example is laughable.

 

Then comparing this with players socking money away (which anyone involved in the NFL from a janitor to a President would have been silly not to do) is even more clueless then not understanding why manipulating a contract and not sharing the revenue is legally wrong.

 

What is also hilarious is the "owners" are pro Union and the "players" are pro Business. Silly people see the word "owner" and start making assumptions and taking sides without understanding the actual situation.

 

This isn't the Ford auto workers vs Ford. It's not the same.

Edited July 17, 2011 by Why So Serious?

[JohnC]

Players wouldn't have seen a penny til 2012 either way. For the many guys hurting right now, it doesn't help much. He spent millions (likely tens of millions) and got what exactly in return?

 

He got an insurance policy just in case there was an extended lockout. People pay for all types of insurance: auto, life, home, legal, crop, disability etc. In reality, you hope that you never have to collect. But the prudent thing to do is to buy some form of protection just in case something unexpected happens. The owners, shortly after the prior CBA was signed, strongly expressed that they were willing to shut the league down in order to get a deal that suited. Under that already known owner/labor conflict and prior notice of a re-opening of the CBA buying an insurance policy to potentially keep your membership in a more financially viable situation was a very wise and reasonable decision.

 

My niece's naive and imprudent husband didn't buy life insurance at his job where it was offered. He saved a few dollars a paycheck. He got killed in an accident. My widowed niece (in her 20s) couldn't even afford the funeral costs. That's why you buy insurance!

Edited July 17, 2011 by JohnC