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Blog Entry

Lockout ruling to speed up talks or a Doty hammer

Posted on: July 8, 2011 11:38 am
Edited on: July 8, 2011 12:01 pm
Posted by Will Brinson

When we recently asked seven important lockout questions, one of them dealt with the rulings that were "hanging out there" from U.S. District Judge Doty and the Eighth Circuit Court of Appeals.

The latter, as we know by now, has been handed down, making the lockout legal, and it's quite possible that Doty's ruling could come soon as well.

But that probably hinges on whether the owners attempt to use the circuit court's ruling as a true source of leverage in the talks that are ongoing Friday and could (should?) continue through the weekend.

See, the owners have a choice, what with the lockout ruling coming down in their favor in the middle of negotiations: They can sit on it or they can use it when they walk into the room with the players.
NFL Labor

If the former happens, it's a good thing; the negotiations will get a kick in the rear vis-a-vis the players' concern that the lockout could extend into perpetuity. And nothing will have actually changed, because everyone expected this ruling in the owners' favor.

Though -- it's worth noting -- the fact that the Eighth Circuit was wise enough to leave open the NFL's legal risk should they lose a full season is tremendous, because it doesn't give anyone incentive to miss a large chunk of football.

If the latter happens, we should fear for the future of football, and we should also expect to see Doty drop a hammer in the form of the television contract rulings. If the owners attempt to maximize the negotiating power a legal lockout gives them, the only way for the players to truly swing the momentum pendulum back to the middle is Doty giving them a big ruling on the television contracts.

Hopefully, it won't come to that, and both sides will see how important it is to get a deal done as soon as possible.

But if they don't play nice in the face of the latest legal ruling, there's a very good shot at Doty dropping a hammer that could truly create labor chaos.

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Since: Dec 2, 2011
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Since: Dec 5, 2006
Posted on: July 9, 2011 12:10 am

Lockout ruling to speed up talks or a Doty hammer

Rod you raise some good points. The Doty ruling is not a hammer but a velvet mallet. Part of the reason for this is, as you say, the 8th Circuit's likely overturn. Another reason is that the payment of any amount under such a negative ruling is simple delayed until after all appeals are completed. A condition of signing the next CBA will surely be a quit-claim against any liability of the NFL to the union (and the reverse.)

The league has nearly completed negotiations from all the news lately. I doubt seriously that the recent ruling or the Doty case will have any additional effect. Many believe without the $4B the league was to receive from the broadcast partners the league would be cash short. Not true. The league has a credit facility for its members which is available for any club which is short. The amount is yet unknown but the NBA credit facility is a reported $1B, leading to the expectation that the NFL can raise several times that amount.

All signs are looking positive now and both the NFL and the NFLPA (or what used to be called that) know that a significant setback after these signals will cause a terrific backlash against both from the fans and media. It has raised the PR stakes and the probability of time for training camps.

Since: May 14, 2007
Posted on: July 8, 2011 4:29 pm

Lockout ruling to speed up talks or a Doty hammer

I hadn't heard the 46% number. I had heard a 48/52 early on, but that had changed to 50/50. If your 46% number is right - then this could have legs. I mean if the owners are immediately going from 47% to 54% (and considering the old deal where they got 1B and then 40%, meaning any increase in revenue had them getting less than 47%) that's a big win for the owners. Also tells you how badly the players do not want to get to the point of missing checks if they're agreeing to this deal. Owners could try to use leverage on other topics, but would be hard to get much better than 54% of the revenue.

I know they lost the "lock-out" insurance revenue, but any ruling that might give any of that to the players would be appealed and therefore pretty moot. I just think a short work stoppage (3-4 games) harms the players way more than the owners - obviously i dont have the owners books and expenses in front of me though.

Only other stumbling block (besides topics, outside the revenue split, that are still being negotiated) would be the retired players wanting a seat at the table. Going to be interesting to see how that plays out.

Since: Sep 5, 2006
Posted on: July 8, 2011 4:20 pm

Lockout ruling to speed up talks or a Doty hammer

I have not been hearing a 50/50 split. I've been reading that the players will come in between 46% and 48% when all is said and done, but the owners are losing their billion dollar expense credit that used to come off the top. I thought that the revenue split was all but decided and the focus now was free agency (the "right of first refusal" nonsense is a deal-breaker, in my opinion). In my mind, focusing on the rules for signing players is a negotiation runway light pointing to the end of the lockout. Of course, that was before the 8th ruled. It was expected to go the way it did, but I still think some owners might want to bleed the players a little with this ruling in their pocket.

Since: May 14, 2007
Posted on: July 8, 2011 4:05 pm

Lockout ruling to speed up talks or a Doty hammer

All along the owners have had the upper hand in negotiations - they still do. I don't see how a deal gets done right now. I mean, why would the players take anything short of the current approx. 53% of revenue they have under the expired CBA (60% of the 8B leftover after the 1B comes off the top)? Why would owners only ask for 50/50, as is being reported, when they have all the leverage? I see it as the owners should be using this leverage because right around week 3 or week 4 (after that many missed checks) is the only time they'll get a real feel for whether the players will cave. My gut is the players will cave - careers are too short and missed checks are no good - they don't have the future players in mind, they have themselves in mind. Now, if they can hold out until late 2012 or 2013 when the anti-trust suits finally get to court, they're in for a major win, because everything the NFL does will fail anti-trust scrunity without a CBA. I just don't see them missing a good 1.5-2 yrs in checks to get their win.

Maybe I'm wrong. Maybe both sides are willing to not get the deal they want - to take an even 50/50. It's just hard for me to fathom that they went through all of this just so the owners could get a 50/50 split (currently a 3% improvement on the expired deal and slightly better as revenues climb) and the players could accept giving up 3% now, and more as revenues climb.

Since: Apr 14, 2007
Posted on: July 8, 2011 2:42 pm

Lockout ruling to speed up talks or a Doty hammer

The owners have, and have had the law on their side the whole time. A series of illegal rulings ignoring federal labor law were handed down, but these could never hold up under the scrutiny of a competent court.
Doh-doh Doty's "hammer" would be just as illegal.

Since: Sep 5, 2006
Posted on: July 8, 2011 1:41 pm

Lockout ruling to speed up talks or a Doty hammer

Doty's ruling won't matter. The owners will appeal with the same 8th Circuit that has been ruling in their favor all along. The 8th always rules in this manner, so any Union victory awarded by Doty will be appealed the next day. Unless the players then want to appeal to the US Supreme Court, they're sunk. And good luck getting this in front of the Supreme Court anytime soon. I doubt that the 8th would reduce the players' award from $9 billion to zero, but I know that the 2011 season will be toast if it gets that far. So too might the 2012 season. This has to be settled now. Right the **** now, before Doty's judgement throws the union and league back into a pissing match.

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