March 14 (Bloomberg) -- Tom Brady, Peyton Manning and Drew Brees have led National Football League teams to a combined five Super Bowl titles. In coming weeks, they’ll lead 1,900 players into a court fight with their employers in U.S.’s richest and most popular sport.
The three quarterbacks are among the 10 named plaintiffs in a group, or class-action, lawsuit that seeks to block a lockout imposed by owners this weekend. The case was filed March 11 after the NFL Players Association abandoned its role in collective bargaining and walked away from federal mediation on how to divide the NFL’s $9 billion in annual revenue, the most of any sports league.
The lawsuit, which comes about five weeks after the Super Bowl telecast attracted the largest U.S. television audience in history, moves the NFL labor dispute from the Federal Mediation and Conciliation Service’s offices in Washington to a federal courthouse in Minnesota. Players may have more bargaining power in court, according to Gary Roberts, dean of the Indiana University School of Law in Indianapolis.
“They basically claim that all of the operating rules that they agreed to in the now-expired collective bargaining agreement are antitrust violations,” he said. “The players are going into antitrust court because that will increase their bargaining leverage. And that’s what it’s all about.”
Meanwhile, players won’t be paid. Teams can’t sign or trade them and won’t pay for their health insurance. About 500 free agents can’t get new jobs. Practices are canceled. The league’s draft of college players, set to begin April 28, is now the last scheduled football event of the year. And those drafted players will be represented in the lawsuit’s class by Texas A&M linebacker Von Miller.
The work stoppage ends 24 years of labor peace. It also threatens to empty stadiums financed with a combined $7 billion in taxpayer money, interrupt the schedules of the largest U.S. broadcasters and leave fans without a sport that, during the 2010 regular season, was watched by a record 207.7 million people, according to Nielsen Co. data.
Andrew Brandt, who negotiated player contracts for the Green Bay Packers between 1999 and 2008, said owners and players can still fight for months without affecting games in the 2011 season.
“If and when this is finally settled, the parties can work out anything they want in terms of timing: a truncated free-agency period, shortened training camp, playing into February, etc.,” said Brandt, an ESPN analyst who lectures at the University of Pennsylvania’s Wharton School and runs nationalfootballpost.com. “They would make every effort to fit everything in if at all possible.”
NFL executives including Jeff Pash, chief negotiator in talks with the union, and Eric Grubman, executive vice president for business operations, said before the Super Bowl that the league would lose $120 million in ticket sales, sponsorship and revenue if a deal weren’t reached by March and $1 billion if an agreement takes until September. Each week of lost games would cost the league about $400 million in revenue.
Players have access to about $60,000 each from a reserve fund established by the union.
The New York Jets said in February that they would begin furloughing employees if there were a lockout. Employees in business operations will have to take one-week unpaid leave every month until a new deal is reached. If no games are lost, the Jets said they will reimburse the workers.
Owners voted in 2008 to opt out of the collective bargaining agreement starting March 3, saying it didn’t account for costs such as those of building stadiums. The union said owners wanted to double to about $2 billion the amount of revenue set aside for costs before calculating player payrolls.
On March 12, union officials left the mediation and said the organization stopped representing players as a union. Mediator George H. Cohen said that “no useful purpose would be served” by continuing more than two weeks of talks.
The league said in a March 12 statement that it was “taking the difficult but necessary step of exercising its right under federal labor law to impose a lockout of the union.”
According to the players’ complaint, the NFL is engaged in a “patently unlawful group boycott” of their professional services and wage-fixing.
“The NFL has a long history of violating federal antitrust law in an effort to minimize its labor costs,” the players said in the complaint. “The owners’ collective purpose in imposing the ‘lockout’ is to force the non-unionized NFL players to agree to the massive wage reductions and anticompetitive restrictions, which the NFL defendants are seeking from the players.”
The NFL said this weekend it had hired lawyers including David Boies, who helped win the U.S. government’s antitrust litigation against Microsoft Corp., and Paul Clement, the U.S. Solicitor General from 2005 to 2008.
The plaintiffs include the NFL’s most popular and successful players. Brady, a three-time Super Bowl winner and last season’s most-valuable player, was also the world’s best-dressed man in 2007, according to Esquire. He and Manning, a four-time most-valuable player, often lead the rankings for football players on Marketing Evaluation Inc.’s Q Scores, which measure U.S. consumer awareness of celebrities and their marketability.
Brees, who led the New Orleans Saints to the team’s first Super Bowl championship about five years after Hurricane Katrina, was Sports Illustrated’s 2010 sportsman of the year.
Roberts said the suit makes a “heads we win, tails you lose” argument. After the union dissolves itself and ceases representing the players in collective bargaining, anything the league does to operate, including not operating, counts as a restraint of trade.
“By definition all the teams have to act in a uniform manner,” Roberts said. “So the players’ position is that even if the league does nothing it’s a violation.
The NFL has already said that the union hasn’t really surrendered its role in bargaining, calling the move “a sham” in a complaint filed with the National Labor Relations Board. Roberts said the league may make the same argument in court.
The union used the same legal tactic two years after a 1987 strike broken by replacement players. The move triggered about 20 lawsuits, including one that helped establish free agency in 1993.
Roberts said this case may result in a negotiated settlement, with sides now competing for leverage in court instead of at mediation.
“This is classic labor bargaining,” he said. “And at the end of the day, come August or September, the two parties will have figured out what their risks are and they’ll sit down and they’ll do a deal.”
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