March 03, 2011
With the NFL and NFLPA most likely about to open a veritable Pandora's Box of legal ramifications as we get closer and closer to the end of the current league year and collective bargaining agreement, here's where both sides stand, and hopefully answers questions you may have.
When does the league year end?
The current league year ends at 11:59 p.m. ET, Thursday, March 3. As it stands now, at the stroke of midnight, there would be no collective bargaining agreement in place, and a series of events could roll into place very quickly. The owners and players have one more negotiating session scheduled Thursday. It's entirely possible that before that deadline, the player's union will already have de-certified and sent a request for injunction to court, preventing the owners from locking the players out.
Of course, given the recent ruling by Judge David Doty that the $4 billion due the owners in television money this year will not actually be in their coffers at this point, the league now has a much more pressing incentive to continue talks through whatever lockout or legal activity may take place.
The NFL and NFLPA have been meeting in private mediation sessions for a while now. Is there any hope that those sessions will bear fruit before the end of the league year?
Possibly -- both sides have had a gag order going through the talks, so we don't know how things are going on the specific issues. But the league and the players have been meeting for the last couple weeks under the mediation of George Cohen, who has worked to smooth over many sports-related labor issues in his estimable career, so there's hope there. The two sides will likely still be very far apart on the major issues, like the 18-game season and 18 percent giveback, but Cohen's presence has at least kept goofballs like Carolina Panthers owner Jerry Richardson from turning talks into a kindergarten sandbox, as he did before when he insulted the intelligence of Drew Brees(notes) and Peyton Manning(notes).
Could the owners extend the current league year?
Yes. If the two sides deem talks to be proceeding at a good rate after Thursday's session, the owners could extend the league year for a week, two weeks, a month ... as long as they want. Under those conditions, things would continue as they have been from a league operations perspective, the NFL would not shut down, and talks would continue. If that happens, it could very well mean that both sides estimate a deal getting done. Or, it could be a smokescreen by the owners to get a little bit of breathing room between the Doty decision and the NFLPA's impending threat to decertify, and figure out their next move. Right now, the owners are up against it in a way they haven't been before. And they would need the NFLPA to agree to an extension, so the union would need something in good faith in return.
Why was the Doty ruling so important?
Under the previous ruling by Special Master Stephen Burbank, the owners received the $4 billion in television money due them by, among other things, digital rights from extended contracts with NBC and ESPN. The owners would be able to do many different things with that money, and as we later found out when the paperwork in the Burbank ruling became public, they had planned to use that stash as lockout insurance all along -- and had been planning for a lockout for up to two years before it was set to happen.
What did Doty decide, and what did he reverse?
He reversed a Burbank ruling that was flawed on many levels. Burbank basically ruled that because there was no specific proof that the owners took less revenue, or sold out their assets in exchange for rights fees in the event of a lockout, there were no provisions to stop payment of that money. Burbank confused the "sound business judgment" the NFL used in negotiating lockout insurance with the networks with the requirement that the league negotiate the best possible television deals in good faith for both sides.
In a nutshell, Doty reversed the Burbank ruling with very specific language as to the nature of the NFL's dealings with several networks, including DIRECTV. And he was able to better understand the concept of "good faith." And he very clearly stated that the owners did not act in the best interest of the players when they basically left money on the table, or extended current agreements without the opportunity to gain additional revenue, in exchange for loopholes allowing free money to go to the owners. As Mike Florio of Pro Football Talk expertly wrote, Doty also pushed the "sound business judgment" argument back to the middle where it belonged.
I spoke to people at the players' union after the Burbank ruling, and it was their belief that Burbank basically punted an appeal decision to a higher court because he wasn't comfortable denying any party the use of $4 billion. And if that's the case, Burbank probably should have never heard the case -- he simply allowed the owners to win the battle and the players to win the war with some very shoddy legal reasoning.
Where will that money go?
That's the next thing Doty must decide. Most likely, it will go in an escrow account until a new CBA is negotiated. However, depending on how Doty sees the actions of the NFL in the most recent television negotiations, he could decide that the players are due damages because they were not property represented by an NFL that had a fiduciary duty to them. And given Doty's generally player-friendly mindset, things could get pretty ugly for the owners when that decision comes down.
How else could Doty be of help to the players?
The NFLPA must de-certify before the current league year ends, or it will lose its most effective weapon, because the CBA says that the union cannot de-certify for a period of six months after a lockout. It would also lose Doty as the arbiter of the de-certification case, which would throw its strategy into a series of legal uncertainties. If Doty takes the case now, he retains it no matter how long it goes.
And this is where the de-certification and subsequent antitrust suit becomes so very important -- if there is an antitrust suit, whoever the judge is would most likely rule that the two sides must keep their business going through the litigation process. When the league last de-certified in 1989, football was played all the way through the process, and it took until 1992 for everything to get wrapped up.
But isn't de-certification just a sham strategy?
Well, that's what the owners will argue, but it's unclear how much of a case they have. There is the precedent of the last de-certification, and the owners will most certainly argue that the move is simply a strategy to change the union's status and allow the players to claim anti-competitive practices as a series of individuals, when those same players have been able to benefit from collective bargaining for the last 20 years.
On the other hand, the fact that there is already specific de-certification language in the CBA means that everyone was anticipating it happening again in a worst-case scenario, and it would be difficult for any judge to rule against the NFLPA changing its status unless the NFL could somehow prove that the union was only doing this to somehow hurt the league in an illegal or unethical fashion. If Doty's still in charge of the ruling, I wish the league a lot of luck with that one.
Do the owners have to lock the players out?
No. They could declare an impasse in negotiations, set new and completely onerous terms to agreement, and force the players to strike. It is the opinion of some that this is the league's ultimate strategy, because forcing the players to strike ostensibly swings the public opinion away from the party instigating a work stoppage.
The problem with that strategy is that it's even more transparent than the union's attempt to decertify, and it could backfire on the owners in a major way -- it would then be easy enough for the NFLPA to say, "Look -- they took the terms back to the late 1980s, and we thought we were close to a new deal. Now, we have to strike for our own protection."
If the American public (and more importantly, an antitrust judge) buys that argument, the owners could be up a creek without a paddle.
What is the most likely scenario to come out of the next couple of days?
In my estimation, what will happen Thursday is this: The league, owners, union and players will have one more meeting, at which point it is decided that although some progress has been made, the two sides are still far apart. The owners will ask for an extension to the league year, and the union won't disagree, because as long as the clock hasn't hit midnight on the new CBA, the de-certification strategy under Doty is still possible. If the owners do not ask for an extension, de-certification becomes an immediate reality.
But the owners have already started their league meetings anyway in the middle of all this negotiation, so they can then go back, take a breath, decide where they stand at this point, and discuss whatever they may deem to be an intelligent counter offer to the NFLPA's last offer of splitting everything down the middle. The owners walked out of the room at that offer as a staged act, but with the likelihood of Cohen's continued involvement, such childish ploys will be off the table.
At that point, it's purgatory for everyone -- the players, league employees, lawyers and fans wait for the next move from the owners. It is a frustrating process, but it's extremely important to note that a few specific legal angles could make the negotiations -- and ultimately, labor peace and more football -- far more reasonable and possible.
Ultimately, no matter how it turns out, we're probably closer to the realized dream of real football this year than we were a couple weeks ago.
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