NFL Labor Dispute Game-Changer: Federal Judge Rules TV Deal Violates Current CBA

If you are reading this, chances are that you are a fan of the NFL.  The odds are you're a pretty big fan, as you are following the league during the offseason.  

While owners and players have a lot to lose if there is a lockout and games are cancelled, fans contend that we are the ones that are really injured, along with the workers that support the teams and stadiums.

US District Court Judge David Doty gave us a huge gift on Tuesday.  

The NFL's current television contracts contained provisions to allow $4 billion in advances to the league if there was a work stoppage during the 2011 season.  Monies would be recouped once football resumed, but many speculated this provision was the owners' clever ploy to fund operations should they opt to lock players out when the current collective bargaining agreement (CBA—just in case Antonio Cromartie is reading this) expires on Friday.

The NFLPA took umbrage with the agreement.  Their contention was that the NFL had constricted the revenues from which the players are paid for the sole reason of protecting the owners' interests in the event of a work stoppage.

Judge Doty agreed with the NFLPA, ruling the contract is in violation of the terms of the current CBA.  He had been hesitant to offer a ruling on the players suit, claiming that such a position would sway the tone and balance of labor negotiations.  

However, with a potential lockout looming, he chose to act.

The potential fallout from this decision has several facets:

Impact on Owners

It is widely accepted that the NFL and the owners planned to use the TV contract payments to fund operations during the lockout.  While the money would have had to be repaid (with interest), it gave the owners an ace up their sleeve, allowing them to take a hard stance in negotiations.  

Doty's ruling effectively took away that advantage, making both sides equal at the poker table.  Considering they are now gambling with money coming from the fans, and we ultimately have the ability to take our chips and walk, we should anticipate a much different tone when CBA discussions resume today.

As a reminder, the owners have brought a fair amount of contention to the table so far.  Carolina Panther owner Jerry Richardson has been condescending to players during negotiations, taking shots at Peyton Manning in particular.  This kind of a hard-line approach is no longer feasible.  Many teams could enter dire financial conditions in meeting stadium payments and other expenses without an infusion of capital.

The final assessment from Judge Doty is still not determined.  Part of his ruling includes an additional hearing, where he will determine what remedy will be offered to the players.  This could be as simple as preventing owners from collecting the advances, but could also include financial damages to be paid to the NFLPA.

Impact on Future Deliberations

The players are prepared to decertify their union prior to being locked out by the owners.  Should that happen, the National Labor Relations Board loses its hold over the NFLPA.  Judge Doty will maintain jurisdiction over the CBA and future action.  Thus, Judge Doty would be the one to rule on the players' anticipated filing for injunctive relief should the owners attempt to lock them out.

Owners have complained that Judge Doty is biased towards union interests.  Given his player-friendly stance, they tried, unsuccessfully, to get his jurisdiction over the CBA revoked.  

The owners' fears of being subject to his rulings are perceived as a greater threat than the loss of funds from the TV contract.  Indeed, we can expect a different tone in negotiations.

Impact on Continuing Negotiations

Players see this decision as a game-changer.  The owners have lost a huge bargaining chip, and should be motivated to bridge the gap in the areas of contention.

Both sides resumed negotiations with a federal mediator on Tuesday in Washington, D.C.  Jeff Pash, lead labor negotiator for the NFL, told Mark Schwarz of ESPN "I don't think you could have a greater sense of urgency."  Judge Doty's ruling came later in the day, and completely undermined that statement.  

Pash did vow there would be an agreement, stating "I want our fans to know we're trying.  We understand our responsibility and we know if we don't get it done we'll have let them down.  We take that very seriously and so do our owners."

The owners have been asking for an additional $1 billion off the top of the revenues for investment in the league's infrastructure, including funds to build and renovate stadiums.  The league would like to move away from being subject to public financing deals, not to mention be in position to reap the financial gains from stadium revenues.

Players have been pushing to maintain their salary structure and improve retirement benefits (income and health care).  They have also pushed to have more money devoted to improved player safety.

Judge Doty has ensured (pending the outcome of the anticipated appeal on his decision) that both parties will need to maintain realistic expectations at the bargaining table.  Open minds can now embrace discussions on the appropriate number of regular season games and coming to terms on a rookie wage scale.

Both sides can also work together on revenue expansion.  That may come through an 18-game regular season schedule, expanded playoff structure or additional prime-time games.  The latter can be achieved in several ways, including games on Saturday night (particularly after the college regular season is concluded) or simply adding an additional week to the season and giving teams two bye weeks.

A new optimism is being felt relative to negotiations.  Twenty-four hours ago it was a foregone conclusion that we would have a lockout in effect on Friday.  Now, it is not unreasonable to expect both sides to agree to an extension of the current CBA with the expectation that a final agreement would be complete this summer.  

A temporary agreement would allow free agency to begin as planned.  Teams will be able to fill talent needs prior to the draft.  Players will be able to meet with coaches and have protection should they be injured during training.  And fans can leave their money at the table and anticipate the 2011 season with optimism.

Perhaps we need to take a few dollars off the table, though.  Judge Doty certainly deserves a nice fruit basket.