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While we were waiting in our Courtside Seat the other day, we picked a magazine up off the coffee table to pass the time. It was one of those advice-for-the-lovelorn publications. You know the kind. One of the features caught our eye, titled: Can This Marriage Be Saved? (Don't know why that comes to mind right now.) Anyway, today we start with
From 1993 until March 11, 2011, the players and the owners in the NFL enjoyed the most lucrative partnership in the history of sports. It produced huge profits for owners and pushed the average value of each team beyond the $1 billion milestone; for the players, it produced enormous increases in salaries, bonuses and benefits.
The foundation for this unprecedented bonanza was a court-ordered document that is known throughout the NFL as the "Stipulation and Settlement Agreement (SSA)." The SSA was the direct result of a unanimous conclusion in September 1992 by a jury in Minneapolis after 10 weeks of trial that the owners were guilty of illegal conduct in their treatment of players. The jury of six women ruled that the league's so-called "Plan B" system that allowed each franchise to keep 37 players from moving from one team to another was an unreasonable set of restraints and violated antitrust law. The NFL, the jury said, was using its monopoly power to eliminate player freedoms. It was the beginning of free agency.
|One of the focal points of the labor dispute is the NFL's contracts with its broadcast partners.|
Within weeks of that verdict, the two sides initiated settlement talks that eventually produced the SSA on April 20, 1993.
The key to the success of the SSA partnership and the long-term relationship that followed was a commitment from the owners that in their dealings with TV networks, they would negotiate on behalf of both themselves and the players.
It was, the players said in a recently filed court document, a partnership that "required trust from players and honor by [owners]." The players' "trust" was that the owners would use their business skills to obtain the most profitable TV contracts possible. And the owners' "honor" described their obligation to the players to do just that.
The SSA worked well until the owners announced two years ago that they were not happy with its terms and wanted to replace it with a new agreement when it expired on March 11.
Instead of the "trust" and the "honor" that produced skyrocketing profits, the owners changed course and renegotiated contracts with the five networks that broadcast NFL games. According to a preliminary opinion from U.S. District Judge David Doty concerning the litigation the players filed attacking those renegotiations, the owners "undertook the contract renegotiations to advance their own interests and harm the interests of the players."
The "harm," according to the players, came when the owners in their renegotiations gave away income from the 2009 and 2010 seasons in return for payments from the networks for games not played during the 2011 lockout.
In the increasingly hostile language of the litigation, the players say the owners showed nothing less than "calculated reckless dishonest and/or disingenuous disregard of their SSA obligation coupled with specific intent to injure."
How's that for being dissed? The players were treated with "dishonest, disingenuous disregard."
Despite the owners' "special duty," the players say, the owners "did nothing to curb their impulse to advance self-interest."
|The calm before the lockout storm: The Super Bowl in February, the last game the league played.|
The owners acknowledge that any failure to live up to the terms of the "SSA" would be "morally reprehensible," but they assert that they "did not ignore deliberately or otherwise their obligations under the SSA."
All of this language comes in a legal firefight that will be resolved in a hearing before Judge Doty scheduled to begin next Thursday, May 12. As we discussed in an earlier Courtside Seat, Doty will decide whether the players are entitled to as much as $600 million in television income from the 2009 and 2010 seasons and whether to issue an injunction that would prevent the owners from enjoying payments from the networks during the lockout.
Doty has already indicated that he is not happy with the owners' conduct. If he rules for the players, the case may be remembered as the biggest occurrence of sports team owner chicanery since the collusion conspiracy in Major League Baseball in which owners were caught trying to manipulate the market for free agents.
Like in the collusion cases, the players have struggled to learn what the owners actually did as they renegotiated the TV contracts. The networks, according to the players, "fiercely resisted" the players' attempts to obtain the contracts and to interview the executives who negotiated the agreements. Only when the players' attorney threatened them with potentially expensive sanctions did the networks produce the contracts and access to the executives.
In addition to the reluctance of the networks to reveal their new deals, the players say league officials lied to them about the renegotiated contracts. In a letter to the players, the top NFL attorney, Jeffrey Pash, said "the terms of the amended contracts are no different than those in place in prior agreements for decades."
At an earlier hearing before special master Stephen Burbank, however, Steven Bornstein, the executive vice president of media for the NFL, admitted there were "material differences from prior contracts."
Doty will consider 12,000 pages of testimony and more than 400 exhibits submitted in the hearing in front of Burbank. At the request of the owners, almost all of the material has been impounded. The players now want it made public.
If Doty agrees with the players that the material should be made public, it would provide a rare look into the profits of the teams and the networks. Even without a decision from Doty, it is likely that many of the financial details of the NFL deals with the networks will become public as the lawyers argue during the hearing next week.
|Stephen Burbank presided over the first hearing involving the renegotiated TV contracts.|
The stakes are high. Although the specific terms of the network contracts have been removed from court papers at the request of the owners, there are some indications of the size of the players' claim. The owners, for example, gave NBC a free Sunday night game in return for lockout payments. The single game would have produced $39 million for the NFL, according to the league's court brief. Under the distribution formula (57.5 percent goes to the players), that would have been as much as $22.4 million more in player salaries in 2010. (Most teams spend their TV money on salaries.) And that's just one game.
The DirecTV deal is worth $994 million. NBC's contract is for $775 million And the total package of lockout-based, network contracts appears to be worth $4.078 billion. (All of the numbers -- both the original numbers and the new numbers -- involving ESPN's contracts with the NFL are redacted in the court documents. Too, those figures are complicated by a formula for cable subscriber rebates.)
So what had been a source of mutual benefit for the players has now become the source of rapidly escalating enmity. When the players are accusing the owners of a "conspiratorial, bad-faith betrayal" and a "specific intent to harm" them, it is hard to imagine the two sides sitting together in a small room and agreeing on a new version of the SSA. But, as both sides must realize at some level, they need each other and they need another one of those blockbuster partnerships.
At 10 o'clock on Friday morning, June 3, in a federal courthouse on 10th Street in St. Louis, two of America's most famous lawyers -- Theodore Olson and David Boies -- will appear before three judges of the U.S. Court of Appeals for the 8th Circuit to argue a big case.
Representing NFL owners, Boies will tell the judges why his clients are entitled to a lockout that they have planned for nearly three years. Representing NFL players, Olson will tell the judges why his clients are the victims of an illegal lockout and must be allowed to work out and to play football.
|David Boies (right) and Theodore Olson (left) worked together to overturn Proposition 8 in California. But they're back as adversaries in the NFL case.|
If those names sound familiar, it's because this isn't the first time these two lawyers have faced each other in a big case. In Bush vs. Gore, the U.S. Supreme Court case that decided the 2000 presidential election, Olson represented George W. Bush, and Boies represented Al Gore.
Olson is a recent and interesting addition to the players' legal team. In addition to his formidable skills as an advocate, he brings something not often seen. As President, Olson's former client, George W. Bush, appointed two of the three judges who will decide the fate of the NFL lockout. Bush appointed Judge Steven Colloton in 2003, and he appointed William Benton in 2004. President Clinton appointed the third judge on the panel, Kermit Edward Bye, in 2000.
Without Olson's triumph for Bush in the nation's highest court more than 10 years ago, Colloton likely would be practicing law in Iowa and Benton likely would be hearing cases as a justice of the Supreme Court of Missouri.
What, if anything, does all of this mean for the lockout and the prospects for a 2011 season? Olson and the judges would tell us it is all meaningless. But one of the oldest of courthouse adages is this: Good lawyers know the law, and great lawyers know the judge.
President Barack Obama has certainly been busy. In the past week or so, he has lent in-person support to tornado-ravaged sections of the South; authorized the successful mission against Osama bin Laden; scored a triumph with a comic turn at the White House correspondents dinner; applauded the choice of fellow Chicagoan Derrick Rose as the NBA's Most Valuable Player; and appeared at a Ground Zero ceremony in New York to honor the men and women who died at the World Trade Center site on Sept. 11, 2001. Oh, and his administration also initiated an attack on the Bowl Championship Series. Not bad for a week's work.
The BCS initiative, which came in the form of a letter of inquiry from the U.S. Department of Justice to the NCAA, should be no surprise. Obama discussed his idea of a college football playoff repeatedly during the 2008 campaign, both on ESPN and on "60 Minutes." From our Courtside Seat in early 2010, remember, we reminded the president of his commitment to a playoff.
Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.
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