Q&A on Special Master case regarding television contracts

Earlier this week, the NFL and NFLPA met with the Special Master to discuss scheduling in the proceeding regarding the NFL’s TV contracts.  Following is a Q&A on the issue:

Q: What was the NFL’s reaction to the union’s filing of the Special Master case challenging the league’s television contracts?

A: The television contracts that the union attacked were agreed to during the worst economy in our lifetimes.  Far from failing to maximize revenue, the contracts grew league revenue to fund higher player salaries and benefits.  No wonder DeMaurice Smith said publicly this year, ‘My hat’s off to Roger Goodell. Television is locked up until 2014 to the tune of about $5 billion a year.’ The union’s meritless charges, including many inaccuracies, will be addressed in the proper forum, but they are simply a distraction and do nothing to get us any closer to a new CBA.

Q: The NFLPA says the NFL will receive $4 billion in television revenue in 2011 even if no games are played. The union is calling it “lockout insurance.” Is this accurate?

A:  No. For decades, NFL network TV contracts have protected the league against the possibility that games might be lost for any of a variety of reasons, including work stoppages, natural disasters, and similar events.  Any sums paid by the broadcast and cable television networks to the NFL during a work stoppage would have to be repaid with interest. 

Q: The NFLPA claims that in the recent extensions of its broadcast contracts, the NFL left money on the table for 2009 and 2010 in exchange for rights payments during a potential work stoppage in 2011. What are the facts?

A: The NFLPA’s allegations are not true. Each of the extensions resulted directly in additional revenues, or provided additional revenue opportunities, for the NFL and the clubs during the term of the CBA. 

Q: Hasn’t the NFLPA seen the television contracts?

A: The NFLPA filed this proceeding without even reviewing the contracts that they are challenging.  The NFL repeatedly offered those contracts to the NFLPA’s lawyers for their review, but the NFLPA refused to agree to standard confidentiality guarantees for those proprietary documents.  As a result, many of their allegations are speculative and inaccurate.

Q: What do network television executives say?

A: The networks say they aren’t going to hand over large amounts of money to the NFL and tell the league to keep the money if games are not played. We would have to give it back and take reductions from future years. 

“It’s not as if we are running a charity,” said FOX’s Ed Goren to the Sports Business Journal (3/29/10). “That money comes back…with interest.”

NBC’s Dick Ebersol said in the same SBJ story, “I have been around longer than anybody else, and I don’t remember a deal, certainly all the way back to the early 1980s, that this wasn’t in. This is not a new development.”


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