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NFL Players Seek Cash for Owners’ TV Deal During Lockout

National Football League players asked a U.S. judge to award them damages for team owners’ decision to trade their top price for television broadcast rights for $4 billion in payments during a labor lockout.

“The NFL illegally obtained a $4 billion war chest to fund the lockout,” Jeffrey Kessler, a lawyer for the players, told U.S. District Judge David Doty today at a hearing in Minneapolis. “They did so without good faith.”

Attorneys for the players asked Doty for an order barring the owners from accessing those funds. They’re also seeking as much as $700 million in damages, Kessler’s co-counsel, Thomas J. Heiden, told reporters outside the court.

The hearing comes while the U.S. Court of Appeals in St. Louis, in a separate case, weighs whether to uphold an order by a federal judge in St. Paul, Minnesota, for the NFL to end the lockout it imposed March 12.

In their labor fight, team owners and players are arguing over the distribution of about $9 billion in league revenue, the most in U.S. sports. The two sides also disagree about extending the regular season by two games, capping rookie pay and paying for players’ health care.

Doty ruled March 1 that the 32-team league violated the terms of a settlement agreement, first created in 1993, that obligated the owners to make their best effort to maximize total revenue for the league and its players in 2009 and 2010.

Lockout Provisions

The NFL extended broadcast contracts and altered lockout provisions with DirecTV, CBS Corp. (CBS), News Corp. (NWSA)’s Fox, Comcast Corp. (CMCSA)’s NBC and Walt Disney Co. (DIS)’s ESPN Inc.

“The NFL renegotiated the broadcast contracts to benefit its exclusive interest at the expense of, and contrary to, the joint interests of the NFL and the players,” Doty said in that ruling. “Broadcast contracts are an enormous source of shared revenue for the players and the NFL.”

Gregg H. Levy, a lawyer for the league, told Doty today that “nobody knew the likelihood of a lockout in 2009,” when the TV deals were being renegotiated.

“There is nothing, zero, in this record that there was a plan or a commitment to have a lockout,” Levy said. “Was there a contingency plan? Yes. Was there a commitment? Certainly no.”

‘Enormous Source’

Doty, who has overseen the NFL labor contract since 1993, ordered today’s hearing to consider the award of money damages and other relief for the players based on his March ruling. He said today that he thought the labor dispute might have been resolved by now, making the hearing unnecessary.

“I thought possibly by now that this matter would have been decided,” Doty said.

“It seems to me you’re asking me to put my thumb on the scale and push something along,” he said later.

The case before Doty was filed in 1992 in the name of then- Philadelphia Eagles defensive lineman Reggie White. White, now a member of the Pro Football Hall of Fame in Canton, Ohio, died in 2004. Another named plaintiff in the suit, former Chicago Bears player Dave Duerson, died this year.

The players seek to prevent the NFL from using the $4 billion from the disputed TV payments to fund operations. The players want the money placed in escrow during the lockout.

The NFL has said the money is a loan that will have to be repaid if no games are played.

Special Master

In March, Doty upheld Special Master Stephen Burbank’s decision to award the players $6.9 million in damages for the league giving the NBC television network broadcast rights to an additional 2010 regular-season game in exchange for an amended work-stoppage provision.

Doty overruled Burbank’s findings that the league hadn’t violated the 1993 accord in negotiations with CBS, NBC, Fox, ESPN and satellite broadcaster DirecTV. (DTV)

The players on March 31 asked Doty to order the DirecTV revenue be placed in escrow until the labor lockout is over.

League owners responded in an April 22 court filing in which they said the National Football League Players Association, which is pursuing the White litigation, is no longer representing the players as a union.

The association on March 11 announced it would no longer act as the players’ representative after talks on a new collective bargaining agreement collapsed. New England Patriots quarterback Tom Brady and nine other athletes filed the antitrust lawsuit in St. Paul against the NFL that day.

League owners declared the lockout at midnight that night.

Doty told the parties he would rule on the players’ requests “in due season.”

The TV rights case is White v. National Football League, 92-cv-00906, U.S. District Court, District of Minnesota (Minneapolis). The antitrust case is Brady v. NFL, 11-cv-00639, U.S. District Court, District of Minnesota (St. Paul) and 11- 1898, U.S. Court of Appeals for the Eighth Circuit (St. Louis).

To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net; Jay Weiner in Minneapolis at jay.weiner@comcast.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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