NFL Seen Saving Money After $765 Million Concussion Settlement

Photographer: Chris Graythen/Getty Images

National Football League players stand on the field for the opening coin toss. A progressive brain disease known as chronic traumatic encephalopathy, or CTE, has been found in the autopsies of three former NFL players who committed suicide. Close

National Football League players stand on the field for the opening coin toss. A... Read More

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Photographer: Chris Graythen/Getty Images

National Football League players stand on the field for the opening coin toss. A progressive brain disease known as chronic traumatic encephalopathy, or CTE, has been found in the autopsies of three former NFL players who committed suicide.

The National Football League may have saved itself from a potentially higher payout -- and a stain on its reputation -- by reaching a $765 million settlement with former players over concussions, according to sports business executives.

The settlement will compensate more than 5,000 ex-players for ailments stemming from head injuries, provide medical monitoring and pay for research on concussions, U.S. District Judge Anita Brody in Philadelphia said yesterday in court papers. The accord, which requires court approval, resulted from talks between the league and players.

The agreement ends thousands of lawsuits that threatened the reputation of a league with $9.7 billion in annual revenue, the richest in North America, according to David Carter, executive director of the Sports Business Institute at the University of Southern California.

“Achieving cost certainty and closure is very important for the league and those that conduct business with it,” Carter said yesterday in an e-mail. “Had this suit continued, there would have been other possibilities to emerge, ranging from a larger potential monetary settlement, to ongoing public relations issues and the possibility of additional disclosures or developments that could possibly harm the NFL brand.”

Maximum awards include $5 million for patients with Alzheimer’s disease and $3 million for dementia, Christopher Seeger, a plaintiffs’ lawyer, said in a statement on the NFL website. The overall settlement works out to about $153,000 for each plaintiff.

5,000 Suits

More than 5,000 former NFL players had sued the league seeking damages for head injuries. The complaints, which were consolidated before Brody in Philadelphia, accused the league of negligence and failing to inform players of the link between repeated traumatic head impacts and long-term brain injuries, including early onset Alzheimer’s and dementia.

The players claimed the NFL knew as early as the 1970s about the increased risk of repetitive head injuries and took no meaningful steps to address the issue until 1994. The league later sought to suppress medical literature showing a link between head injuries and post-career brain damage, the players argued.

“This agreement will get help quickly to the men who suffered neurological injuries,” Seeger said in an e-mailed statement. “It will do so faster and at far less cost, both financially and emotionally, than could have ever been accomplished by continuing to litigate.”

Avoids Disclosure

Kevin Mawae, a retired NFL center for the New York Jets and former president of the players’ union, said the accord allows the NFL to avoid disclosing evidence about what it knew about brain injuries and when. Mawae, who is not part of the lawsuit, said yesterday on his Twitter account that players need to be willing to “go all the way and not settle.”

“To be very clear … $$$ is not everything … knowing what you don’t know but could’ve is far more valuable,” Mawae said on his Twitter account. “Information=knowledge=security.”

The NFL Players Association said in a statement that it looks forward to learning more about the pact.

In the past three years the NFL has negotiated long-term television extensions with CBS Corp. (CBS), News Corp.’s Fox unit, Comcast Corp.’s NBC and Walt Disney Co. (DIS)’s ESPN. The eight-year extension with ESPN, which broadcasts “Monday Night Football,” is valued at $1.9 billion, about 73 percent more than the network had been paying, according to the New York Times.

Deep Pockets

The league’s financial resources meant it was better suited for a lengthy legal battle, giving it an advantage in negotiations, according to Andrew Brandt, a sports business analyst for ESPN and former executive with the Green Bay Packers.

“Owners have leverage of time,” Brandt said on his Twitter account. “Past/current/future players need money; don’t want to wait years of litigation”

Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon said the settlement is a good deal for the growing NFL, “especially if you look at the value of that money today versus potential future revenue streams.”

“I also think it’s a win-win in that it provides immediate relief to those who have suffered and played in an era where it appeared they were much more susceptible to this type of injury,” Swangard said in a phone interview. “It puts money where it needs to go.”

Settlement Breakdown

Among the payments will be $675 million to compensate injured players and their families, $75 million for medical exams and $10 million for research and education, according to the Plaintiffs Committee for Retired Players. The NFL will pay players’ attorneys’ legal fees separate from the accord, according to court filings.

The compensation program may last 65 years to provide payments to players who develop neurological ailments from concussions, Seeger said in an interview. The NFL can spread out payments to the players’ fund over 20 years. Still, the deal’s terms require the league to pay out more than $380 million of the total accord by 2016.

The settlement requires players to have completed five NFL seasons to receive full recoveries, a person familiar with the accord said. Players with fewer years can claim discounted recoveries, the person said, requesting anonymity because the information wasn’t public.

A progressive brain disease known as chronic traumatic encephalopathy, or CTE, has been found in the autopsies of three former NFL players who committed suicide. The families of those players -- All-Pro linebacker Junior Seau, and defensive backs Dave Duerson and Andre Waters -- can recover $4.5 million each under the agreement, according to the person familiar with the settlement.

Riddell Claims

While yesterday’s accord, if approved, ends the former players’ quest to find out what the NFL knew and when, that information could still be revealed through other litigation.

Lawsuits by Duerson’s family, for example, include Riddell Sports Inc., the league’s official helmet provider, for refusing to properly acknowledge or address the concussion threat. Those portions were not included in yesterday’s settlement.

Barry Sanders, a 10-time Pro Bowl running back and member of the Pro Football Hall of Fame, said yesterday that players know the dangers associated with playing football at its top level. Sanders, whose son plays on the Stanford University football team, retired after the 1998 season at the age of 30.

“It’s physical. There are no guarantees,” Sanders said on ESPN. “No one is forced to play, and all you can do is explain what the dangers are and like any other sports, you let kids and young men make their own decisions.”

The case is In re National Football Players’ Concussion Injury Litigation, 12-md-02323, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

To contact the reporters on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net; Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net; Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Michael Sillup at msillup@bloomberg.net

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