The Bottom Line: It is the football dead zone when the biggest NFL news happens in the courtroom rather than the playing field. When it comes to Courts, the NFL is good. Real good.
Three court cases reached a dramatic conclusion in the past week. Each could have a wide impact on the league’s revenue. Commissioner Roger Goodell is one of the sharpest lawyers in the country. There is no doubt the league will emerge the ultimate victor. That is why Goodell is so well paid. The fun will be watching how Goodell works things out. The NFL is unbeaten in courtroom games between the seasons.
American Broadcasting Cos., Inc. v. Aereo, Inc.
The NFL “won” this U.S. Supreme Court case although it were not a direct party to it. Aereo, that tiny, too-good-to-be-true device, allowed viewers to watch “for free” broadcast TV streamed to their smart phone. ABC begged to differ. They argued that Aereo stole their broadcast signal instead of properly paying retransmission fees for copyright content
Nothing draws an audience like football. The king of broadcast beasts is the NFL. Thirty-four of the 35 most watched fall TV shows are NFL games. It’s why broadcasters pay a king’s ransom that will pump $200 million to each team annually through the end of the decade. Broadcasters would have a hard time recapturing those fees if their audience leaked to a freeloader like Aereo. Advertisers would follow the audience.
What is good for broadcasters is lucrative for the NFL. The league has its own plans for a bigger footprint on fans’ smart devices. They will offer the apps NFL Now and NFL Now Plus for personalized video service to any mobile device. The apps will be available in summer 2014. Aereo’s loss means the league can work with broadcast partners to stream content at their own pace and price.
U.S. Court of Appeals reinstates NFL PA’s collusion lawsuit.
The headline reads as if it is a major setback for the owners. Far from it. The league was far ahead on this when, to be very polite, the players’ union was asleep.
Hop the WABAC machine to 2012 when the NFL Management Committee, John Mara, chairman, assessed $46 million in salary cap sanctions against beloved team owners Jerry Jones and Daniel Snyder
NFL PA director Gene Upshaw foresaw the owners’ lockout as early as 2008. He counted on the no cap year to dissuade owners from doing it. And then Upshaw died. His union floundered without him.
The owners locked players out in 2011. They sanctioned the Cowboys and Redskins in 2012 for not conspiring with them to treat the 2010 no cap year as if no salary cap were in place. The league then snared legal cover from the union by way of neophyte executive director DeMaurice Smith’s agreement. Just like that, the sanctions became new terms in the CBA making legal an illegal collusion.
Why would Smith do such a thing? Because under the new CBA, the 2012 salary cap was set to drop to $114 million per team according the Sean Gilbert who is campaigning for Smith’s job. Players were unaware of that. They thought they “won” the lockout war because the owners opened 2011 training camps on time. The owners agreed to maintain the cap at 2011’s level ($120 million) in return for Smith’s support for the sanctions.
Then the league got really clever. Rather than simply cancelling the $46 million sanction, they spread it among the other 28 teams as a one-time salary cap bonus. In theory, the players’ share of league revenue remained unchanged at the small price of removing the Cowboys and Redskins from the 2012 and 2013 labor market. They were the very teams Upshaw counted on to blow the lid off the no cap year. Upshaw would not have played along.
Like the famous line from an old movie, the players’ union was shocked, SHOCKED, to learn later that collusion was going on. The union’s challenge will be to show actual damages even if they prove the owners colluded. There is still that inconvenient CBA language that says all disputes arising from the old CBA is to be considered settled.
Put your money on Roger for this one.
Trademark Board cancels Washington Redskins trademark registration.
This one got the most attention. It is also the one with the least impact to the league or to the Redskins – in the Court of Law anyway.
The administrative Trademark Trial and Appeal Board cancelled the Redskins’ trademark registration of “The Redskins®,” which means the team and the NFL may not use federal agencies to go after anyone infringing on the trademark. The team and league may pursue those miscreants in federal and state courts. It is more costly to enforce that very much alive trademark in the Courts, but it is hardly impossible. The convenience of using federal agencies for enforcement is the only (potential) loss here. Washington’s won-loss record since 1992 is a far bigger threat to its brand value.
The U.S. District Court reversed the Trademark Board’s 1999 ruling that was based on essentially the same evidence. The Court’s reversal was on a technicality, but it was critical of the Trademark Board’s findings saying that its evidence did not met the legal test of disparagement.
The Redskins will file their appeal in the U.S. District Court of Eastern Virginia instead of the District of Columbia. Trials may go either way, but a federal judge in Virginia will read the 2003 precedent written by the federal judge in D.C. I sense that Eastern Virginia is more conservative than D.C. It is hard to foresee a different outcome.
Win or lose, this case will be tied up for the rest of the decade. Daniel Snyder will not capitulate before his day in court.
The court of public opinion is another matter. Snyder has always been clueless there.