Est. 1964

May NEWSLETTER

Article by Joshua Cline

The NFL lockout has been getting quite a bit of press recently as the players and owners have been unable to negotiate a new collective bargaining agreement.  The real story, however, is how the legal system is being used to gain bargaining leverage in negotiations.  The NFL implemented a lockout to try to force the players to cave into their demands—namely a reduction in the percentage of revenue players are entitled to—as the stream of paychecks stopped flowing.

    The players answered by suing the owners in federal court under antitrust law and asking a court to force the owners to stop locking them out—the players are willing to keep the same percentage of revenue, but of course, the total has increased over time.  The owners responded to the suit by trying  to force them into an administrative proceeding, which would further delay the entire process.

    A loss in the antitrust suit would be a huge blow to the NFL because the law would require it to pay triple the actual damages.  But, the antitrust suit could take years to complete.  By the time the players won, they would lose out on important time on the field with their teammates and splitting the judgment would prove difficult.  Even if the NFL prevailed, it would lose out on seasons of profitability.

    Thus, this litigation seems to move forward on the idea that the initial few rulings from the court system will dictate who has the upper hand at the negotiating table.  This ordeal isn’t necessarily about who wins or loses at the end, but who takes the early lead.  Let’s face it, neither side can afford to have this litigation go on for too long.  Once the first quarter is over, the two sides will likely get an agreement done—whoever is ahead in the legal game will likely win the negotiations.

So what started as a labor negotiation between players and owners on how to split the billions in revenue the league pulls in each year has become a legal “battle royale.”  While many fans are just interested in having their fall Sunday afternoon schedules spent in a stadium or in front of the television, those paying attention to the finer details have had a chance to see how each side is posturing for better negotiation positioning through legal channels.

As a quick update on where things stand at the moment, the lockout is currently in place—meaning the team owners have agreed to ban the players from working.  The players initially asked a federal district court to stop the lockout through an injunction.  The district court agreed and forced the owners to lift the lockout and allow players back inside team facilities to work out (and work toward offseason bonuses).

The league immediately appealed the injunction to the 8th Circuit Court of Appeals.  In a 2-1 decision, a panel of three judges issued a temporary stay.  This means that the 8th Circuit has allowed the lockout to resume, but only until the judges have a chance to hear full arguments on the matter and come to its own conclusion.  The NFL essentially bought itself a small amount of time, hoping to buy itself even more.

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