Blog Entry

Why owners don't want an antitrust suit

Posted on: March 9, 2011 6:20 pm
Edited on: March 9, 2011 6:48 pm
 
Posted by Will Brinson
NFL Labor

As everyone knows by now, the big sticking point in the NFL and NFLPA negotiations is revenue sharing, and it involves the owners opening up their books.

If the owners open up those books, they will be scrutinized by auditors for the union, which is something the owners don't want happening.

Worse than that, for the owners, is the possibility of the two sides getting involved in a court battle and having all those finances publicly splashed all over legal documents vis-a-vis testimony and/or discovery.

Want proof that will end poorly for the owners? How about recalling the last time it happened, in 1992, when Robert Noll, a Stanford University economics professor, testified that the NFL's $1.3 billion in revenue was "substantially understated."

Per an old-school New York Times article, the NFL reported operating profits at $163 million. However, Noll testified that such a number was "shielded from costs such as the $600,000 per team contributed to the World League of American Football and two antitrust lawsuits that are 'the costs of defending and maintaining a monopoly.'"

This was big news in 1992, obviously, but it wasn't the sort of news that got splashed all over Twitter or replayed 24/7 on every single sports-related television channel. That's because those things didn't exist as such back then. They do now, and such testimony, were it to become public, would be ugly news for the owners.

Oh yes, and there was the financial document showing that Norman Braman, Eagles owner at the time, paid himself a $7.5 million salary. Which wasn't counted as profit.  

Add in 20 years worth of inflation, and whatever gets reported should play just wonderfully with the press, especially with in this economic climate.

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Comments

Since: Dec 2, 2011
Posted on: January 9, 2012 5:17 pm
 

Why owners don't want an antitrust suit



hgtrerte
Since: Dec 2, 2011
Posted on: December 7, 2011 6:57 pm
This comment has been removed.

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Since: Dec 2, 2011
Posted on: December 5, 2011 7:31 pm
 

Why owners don't want an antitrust suit

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Since: Oct 7, 2011
Posted on: October 18, 2011 2:27 pm
 

Why owners don't want an antitrust suit

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Since: Dec 1, 2009
Posted on: March 9, 2011 9:01 pm
 

Why owners don't want an antitrust suit

The owners (see my last post) would be welcome to use the upper floors of the skyscrapers in the Manhattan financial districts as launching pads. Perhaps Goldman Sachs could even sponsor a telecast of one grand event, thereby generating SOME monies for the widows and orphans. Their sponsorship would have a certain ironic twist to it, would it not. It's where their big shots should have been thrown overboard by U.S. Marines following Obama's taking of the oath of office.



Since: Dec 1, 2009
Posted on: March 9, 2011 8:54 pm
 

Why owners don't want an antitrust suit

For me, the funniest scenario possible is as follows:
(1) In a move that may prove astoundingly stupid, the NFL colluded with the networks by trading the latter's promise to front the TV rights for the first year for SOME consideration, which a court could only fairly conclude, WITHOUT the need for a trial, was a decrease in the rights fees (pro-rated over the length of the contract.) 
(2) The judge could rule that the $4 billion  be fronted, pro rata, to players and teams. Existing percentages of upfront money could then arguably go to individual players, where appropriate (pro rata, as they are guaranteed) and the interest on the remainder could then be distributed to all players under contract (by vote.) 
(3) Meanwhile, the NFLPA could file suit to recover the value of the players' share of the foregone rights fees. I would suggest that they argue that the league's anti-trust exemption should be pierced (on a one-time basis) as a matter of public policy. (As punishment for the collusion.) Treble damages. Plus, I believe that the court is entitled to also award the actual non-professional costs of the lawsuit as an added amount in anti-trust cases.
(4) To gild the lily, any players who are subsequently let go should front a  complaint against the NFL for both anti-trust collusion and RICO violations. The union and current players would be bystanders for that circus.



Since: Dec 5, 2006
Posted on: March 9, 2011 7:35 pm
 

Why owners don't want an antitrust suit

The NBA does open its books to the Union. However the numbers are surely much smaller for an NBA club than an NFL club would show. Transparency is not the only object. As an accountant, I can appreciate how easily accounting theory can be mis-applied in closely help businesses. Your example of Norman Braman is just on of the more obvious ones. How about the treatment of signing bonuses. Are they expensed in the year paid or are they amortized over the expected life of the contract? The opening of financial information to public scrutiny may not make much difference in anything but the bar talk. It seems that we, as a nation, are well addicted to our football fix and especially the NFL. 

What really becomes problematical is that the NFL is a monopoly and colludes to force younger players to stay in school and learn their trade at no cost to the NFL. It also fixes all sorts of limits on coaches, clubs and players that are not tied to maximizing the income of those people and entities. without the union shield (US Labor Laws) the league is indeed exposed with its primary defense apparently resting on the obvious decertification action in the face of a lockout. The exposure is large to the players as well in such a lawsuit. Should they lose on the above point their only action is to continue to try to tear the house down by exposing embarassing private information. This hurts them too as fans focus on players who are making too much money depriving them of their game. For the guy and gal in the street the whole conflict is disgusting, that 32 clubs and 1,440 players cannot agree on dividing up $9,000,000,000! (50% to the clubs provides $140,625,000 each; 50% to the players averages $3,125,000 each every year). The anti-trust is with the fans folks. Who can trust players and owners who cannot divide up such a huge pie?


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