Thursday, August 29, 2013
A favorable payment plan for NFL
By Kevin Seifert
There is plenty of fine print in the public version of the NFL's landmark concussion settlement, and I think at least one portion merits further discussion.
The NFL actually has 20 years to pay out the $765 million agreement; the league is also required to pay the players' legal fees on top of the $765 million. According to a court summary distributed to the media, the payment plan requires "approximately 50 percent of the settlement amount" to be paid over the next three years. The balance would be paid over the final 17 years.
Before legal fees, that works out to about $127.5 million in each of the next three years and then $22.5 million per year thereafter. That plan would work because the case won't pay out equally to each plaintiff. Instead, according to the document, "the precise amount of compensation will be based upon the specific diagnosis, as well as other factors including age, number of seasons played in the NFL and other relevant medical conditions."
I won't pretend to be a financial genius. But when an industry with $9 billion in annual revenues can pay out a landmark legal settlement over 20 years, I think we can politely call it manageable. A case that once threatened the league's existence has turned into a relative financial blip.
That realization spread quickly after Thursday's announcement, and I thought former NFL player LeCharles Bentley offered passionate but fair commentary on the topic via Twitter. Among his tweets:
To be clear, the NFL doesn't funnel fine money into its general fund. Instead, the league has said the funds go to "charitable purposes." But Bentley's point is well-taken. While $765 million sounds like a lot of money and is a lot of money, the payment schedule offers quite a soft landing.