Report: Owners saved for lockout
NFL owners have enough money saved to carry them through a lost 2011 season -- even without the so called "lockout insurance" television rights revenues that might not be available after being successfully challenged in court by the locked-out players, The Wall Street Journal reported Monday.
Unnamed NFL officials with direct knowledge of the league's budget plans told the newspaper that the owners would only need the contested $4 billion in TV rights money if the lockout stretches into the 2012 season.
"There was a clear and premeditated plan to lock out the players," George Atallah, the deputy executive director of the NFLPA, told the newspaper, pointing to the owners' stockpiling of cash.
Earlier this month, U.S. District Judge David Doty backed the players in their fight over the so-called "war chest" of broadcast revenue that the union contends is leverage the NFL is wielding against it in the labor fight.
The union accused the NFL of failing to secure the maximum revenue possible when it restructured broadcast contracts in 2009 and 2010, and claimed the deal to be paid by the TV networks even if there was no football in 2011 was designed to guarantee owners enough money to survive a lockout. The union argued this violated an agreement between the sides that says the NFL must make good-faith efforts to maximize revenue for players.
A hearing, yet to be scheduled, will determine potential damages for the players as well as an injunction involving the TV contracts.
Unable to decide how to divvy up $9 billion a year, NFL owners and players put the country's most popular sport in limbo this weekend by breaking off labor negotiations hours before the collective bargaining agreement expired. At midnight, as Friday became Saturday, the owners locked out the players -- creating the NFL's first work stoppage since 1987 and putting the 2011 season in jeopardy.
Pittsburgh Steelers owner Art Rooney II told the Pittsburgh Post-Gazette that the players never even considered the owners' final proposal Friday.
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"What we offered them, there's no reason why they wouldn't take it and look at it," he told the newspaper. "They could have said 'That's not enough, we need more.' That wouldn't have been surprising. But, to not even take it, I'm not sure what purpose that served.
"That was probably another indication they weren't that interested [in negotiating]. It made us think this was their plan all along."
A lockout is a right management has to shut down a business when a CBA expires. It means there can be no communication between the teams and current NFL players; no players -- including those drafted in April -- can be signed; teams won't pay for health insurance for players.
On Friday, the union decertified, meaning it declared itself out of the business of representing players. In exchange for giving up their rights under labor law, the players are able to take their chances in court under antitrust law.
That paved the way for 10 players, including MVP quarterbacks Tom Brady and Peyton Manning, to sue the owners in federal court in Minneapolis in a class-action claim. The players also sought an injunction to block a lockout -- even before one had been imposed.
The antitrust suit -- forever to be known as Brady et al vs. National Football League et al -- attacked the league's policies on the draft, salary cap and free-agent restrictions such as franchise-player tags.
A preliminary hearing in the case has been set for April 6.
If that injunction is granted, the NFL is likely to play the 2011 season with no salary cap, using the same restrictions on player movement the league had in 2010, The Washington Post reported. Sources told the newspaper that the league would use that system since the players agreed to it in the last CBA and therefore might withstand an antitrust challenge.
In 2010, only players with six years of service were eligible for unrestricted free agency and all other players were considered restricted free agents. In a normal capped year, players needed only four years to gain unrestricted status.
This offseason, NFL teams protected themselves by giving restricted tenders to numerous players, who likely would be unrestricted free agents if a CBA had been agreed upon.
Along with no salary cap, there wouldn't be a salary floor under an uncapped year. Also, the "final eight" rules would again be in effect, placing restrictions on signing free agents for the eight teams that played in the divisional round.
It could take a month for there to be a ruling on the union's injunction request, and antitrust judgments should take longer.
However, even if the lockout is lifted by injuction, the NFL could appeal the ruling and ultimately shut down the sport again.
Bob Batterman, the NFL's lead outside counsel, predicted that the lockout, even if lifted temporarily, would return until there's a deal.
"There may be some sloppiness this week in terms of injunctions and stays," Batterman told the Wall Street Journal. "When it all plays out, the lockout will remain in place and the union will be back at the bargaining table."
Information from The Associated Press was used in this report.
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