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NFLPA Wins Objection To TV Network Case

“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 players want to play football. That is the only goal we are focused on.”

– Official Statement From the NFL Players Association

CONCLUSION

It is hereby ordered that:

1. The court adopts the special master’s “Recommendations for relief” paragraphs 1 and 2, see Op. 47, as there is no objection to these findings and recommendations before the court;

2. The court overrules the special master’s findings as to the NFL’s breach of the SSA relating to its contracts with DirecTV, CBS, FOX, NBC and ESPN, and holds that the NFL breached the SSA as to those contracts; and

3. The court orders that a hearing be held concerning relief to be granted to the Players arising from the NFL’s breach of the SSA. The hearing shall consider the award of both money damages and equitable relief, including injunction. District of Minnesota Local Rule 7.1(b)

Dated: March 1, 2011

David S. Doty

United States District Court

DIRECT EXCERPTS FROM THE RULING

***  The special master should have considered the intent of the parties and the context from which this language arose. The NFL and Players formed the SSA to avoid the consequences of the jury verdict finding the NFL in violation of antitrust law. The level of discretion allowed by the SSA is constrained by the context and hard bargaining which establish the intent of the parties and the meaning of that language. (16)

***  Under the SSA, the Players rely on the NFL to negotiate these contracts on behalf of both the NFL’s own interest and the interests of the Players. In May 2008, the NFL opted out of the final two years of the CBA, and recognized that a lockout in 2011 would help achieve a more favorable CBA. Thereafter the NFL sought to renegotiate broadcast contracts to ensure revenue for itself in the event of a lockout. The record shows that the NFL undertook contract renegotiations to advance its own interest and harm the interests of the players. (19)

***  The NFL next argues that any injury to the Players’ interests will occur after the termination of the SSA. The court disagrees. (20)

*** The NFL rankles under the restriction to its enormous market power imposed by the White settlement after the jury inMcNeil found that the NFL had abused its power in unlawful restraint of trade.  The facts underlying this proceeding illustrate another abuse of that market power wherein various broadcasters of NFL games were “convinced” to grant lucrative work-stoppage payments to the NFL if the NFL decides to institute a lockout.  Typical work-stoppage provisions anticipate a strike by players, not a work stoppage created by the NFL itself.  Whether the contract provisions insuring these payments might ultimately be deemed unenforceable because of their potentially collusive nature is not an issue before this court, but the court does consider the abuse of the NFL’s market power when finding that it did not act in good faith to benefit both itself and the Players, as required by the SSA. (21)

*** The special master failed to analyze the total capabilities and the market power of the NFL because he found it “difficult to believe that” the parties intended best efforts to “require the NFL to seek additional consideration for rights already under contract.” This is another example of importing corporate law to a sui generis agreement that was forged at the anvil of litigation, threatened repercussions and hard bargaining. (23)

***  The NFL used best efforts to advance its CBA negotiating position at the expense of using best efforts to maximize total revenues for the joint benefit of the NFL and the Players for each SSA playing season. … The evidence clearly shows that maximizing total revenues for SSA seasons was, at best, a minor consideration in contract renegotiations. (26)

Download the complete decision:

http://www.nflplayers.com/Articles/CBA-News/NFLPA-WINS-OBJECTION-TO-RULING-IN-TV-CONTRACTS-CASE/#

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