NFLPA Files Complaint Over NFL’s TV Contracts

The NFL Player’s Association has filed a complaint with the NFL’s Special Master regarding the NFL’s television deals.

The NFL has negotiated their TV deals so that in the event there’s no football in 2011, they would still be paid that money. It’s not exactly “free” as the NFL’s side would argue that they have to pay that money back in future years when football returns.

The guaranteed money that the NFL will receive regardless of whether there’s football in 2011 has been called by Union sources as a “lockout fund”.

Further, the NFLPA alleges the league did not maximize their revenue in the recent TV deals.

The NFLPA argues in the complaint that, under their 17-year-old agreement with the NFL, the NFL cannot breach its fiduciary duties to the players in order to strengthen its bargaining position. Furthermore, the NFLPA says that the NFL’s inclusion of the lockout provisions is a clear violation of the contract because the league didn’t use its best efforts in good faith to maximize total revenues from DirecTV, Fox, CBS and NBC. Reports on the recent re-negotiations of the ESPN contract indicate that it will likely incorporate similar lockout payment provisions.

This essentially alleges that the league left money on the table in order to secure a deal that would allow them to be paid in the event there was no football. The NFLPA is arguing that this is an example of the NFL not bargaining in good faith in order to maximize revenues.

The NFLPA alleges that the DirecTV deal is the most “glaring” example of the NFL’s financial protection in the event of a work stoppage.

The league opted not to allocate any of the increased revenue from the deal with the satellite service during the 2009 and 2010 seasons, moving all of that money into 2011 and beyond, after its current contract with the players expires. So DirecTV was given immediate new broadcast benefits for two seasons with no price increase for those two seasons. These immediate benefits include access to a new REDZONE channel and the right to sell access to broadband and mobile phone transmission of games.

What that quote means is that the NFL gave it’s TV partners “broadcast benefits” -- such as the REDZONE channel -- in 2009 and 2010 but aren’t having their TV partners pay for it until 2011, the year their agreement with the players expires.

The league has yet to issue a statement on the situation but it’s fair to assume that a major part of their argument will be that the money they collect in 2011 -- if there is no football -- will have to be repaid in the future, as the NFL’s General Counsel Jeffrey Pash recently said.

“The networks aren’t going to hand over larger amounts of money to us, and if they don’t get a product [in return] tell us to go ahead and keep that money,” Pash told NBCSports.com. “We will have to give it back to them and take reductions about what we get from them in future years. … It is not a payment, it is a financing mechanism. It is no different than borrowing on a home equity line. You still have to pay it back.”

Rather than the NFL owners split the TV money, the NFLPA wants the money to sit in escrow instead.