Very interesting take on NFL v Brady arguments

From St. Louis University Professor Matt Bodie:

That’s why this injunction may not matter that much. Let’s say the court holds that Norris-LaGuardia prohibits the injunction. Well, that only removes the injunction against the lockout; it does not mean that the NFL won’t ultimately be liable for antitrust violations. In fact, Judge Benton seemed to indicate that antitrust damages would continue to accrue even if the lockout could not be enjoined under the NLA. Or, let’s say that the injunction is lifted because the nonstatutory labor exemption still applies. Well, even Clement admitted it can’t apply forever — so how long? Clement seemed to be pushing for at least a year, but Benton seemed comfortable with six months — which would be, according to his calculations, September 11. Would the antitrust violations and the injunction kick back in then?

So the hearing ultimately convinced me that (a) the players took a truly radical move by disclaiming and (b) this problem is not going away, even after the Eighth Circuit rules on the injunction. I had thought that the longer the lockout lasts, the more it favors the owners — players need paychecks after all. But what if the longer it lasts, the more antitrust damages that pile up against the league?

It’s one thing for players to resist a deal in the hopes that the league will cave before they do. That’s a hard one to win, and I think the NBPA showed how disastrous such a strategy can be in the late 1990s. But what if the players resist a deal in the hopes that one day soon, it will be all free agency all the time. No draft, no salary cap, no restrictions whatsoever. Could you hold on for a few more months in the hope that there’s no salary cap — hard, soft, or otherwise? Seems like a lot more to fight for.

So for those of you — like me — who thought that the disclaimer was just a clever, but ultimately discardable, negotiating tactic, think again. When the news went out that (former) NFLPA president De Smith was calling for “war,” I now understand those ramifications. I believe the league brought this upon itself by a series of moves: characterizing the last deal as way too player-friendly, hiring Bob Batterman, opting out of the deal early, and enforcing a lockout. They opened the can of worms. But this could get away from the players, too — do all players really want a world with no collective bargaining agreements?

In his argument, Clement said that the lockout would be “a self-inflicted wound” and “suicide” if it were not intended to ultimately bring about a settlement of the labor dispute. He’s right. And I think the league now, far more than the players, needs to settle that dispute to save itself.

  • Anonymous

    I agree. I think the players just have to hold out a little longer and they win. Simple as that. The thought is that players will cave because they need money more, but I disagree. The owners need an operational league more than the players need money….or at the very least those are equally important…and considering that the owners ‘did this’ then I’d think they would be the ones that have to end it.

  • srp

    I find the antitrust precedents applied against the NFL ludicrous. It’s hard for me to take seriously the argument that a consortium of organizations that MUST collaborate to produce their output–games of football–are somehow an illegal cartel. 

    To take an absurd thought experiment, let’s say the players succeed in forcing the individual teams to “compete” as individual firms rather than a league, and then Jerry Jones announces that the Cowboys will refuse to play any team that pays its players more than x dollars in total. The Giants then say they’ll agree to those terms so that they can play the Cowboys. The chain reaction spreads form there. Would that be collusion even though each team made an individual decision and no single team has monopoly power?

    I’m an economist, not a lawyer, but the mere fact of separate team ownership (rather than a single-entity structure like Major League Soccer) says exactly nothing about the social optimality of letting leagues set their own labor policies collectively (with or without a union). The NFL is more like a firm than an industry. New entrants to the football industry would be new leagues, not new teams. Come to think of it, maybe I’ll start a team and sue the NFL to force them to play me. Wouldn’t want to let them restrain trade.

  • Guest 1

    I think the players and the league may effectively kill the game of pro football if this continues.  No one seems to think this but look at MLB and the NHL.  Strikes did wonders for both of those professional sports leagues.  They may end up fighting over a much smaller pot of cash than the one they have been so fortunate to have in the recent past.  College football once was king and could be again if the NFL continues down this path.   

  • JMV

    Whatever you or I may think of the antitrust claims, the US Supreme Court has ruled (9-0) that the NFL is subject to anti-trust laws (See American Needle). However, in their ruling the court did leave to door open to some “collusive” practices such as scheduling of games and contracting for broadcast rights. But, based on McNeil and Brown it seems pretty certain that restrictions on free agency are barred absent a collective bargaining agreement.

  • JMV

    All of this (other than the lockout) is just a replay of the labor cases from the early 90′s. I think the owners are just hoping that the players cave before this actually goes to court. 

  • srp

    Sure, it’s going to take a sustained campaign of litigation and/orlegislation to reverse this idiocy. In the meantime, perhaps the NFLshould prepare for the contingency that it will be thrown into theantitrust meat grinder by shifting in the direction of my thoughtexperiment. Decertify the league and let each team negotiate its ownregular-season schedule, with the playoffs and Super Bowl controlledby a separate corporate entity, much like the NCAA. Then teams canindividually decide if they want to play against each other based onany criteria they want, and the playoff organization can make anyrules it wants about who is eligible to compete, including limits onsalaries, etc. I bet TV and the players would just love that–it mightconcentrate their minds and force a settlement.

  • JMV

    That would be one option. However, there is a current case against the BCS. Depending on how that goes, your approach might not work.

    Another option would be for the league to form a true single entitity with each current owner merely being a “partner” and regional president or such. Of course the FTC might object to such a fomration.

    The NFL’s problem is that they have asked congress to exempt them from anti-trust and congress would not. Therefore the courts have ruled that congress must intend for antitrust laws to apply to the NFL, regardless of how absurd that may be to some.

  • Anonymous

    Or, they could just come to an agreement. It’s not that complicated at the end of the day.

  • Anonymous

    I think that might be a mistake for the league. Sure, players need money….players aren’t as rich as owners….two true statements. But at the end of the day, owners missing ‘game checks’ hurt them badly as well.  And how hard would it be for the richest players in the game to loan struggling players a couple game checks….wouldn’t be that hard at all. The majority of players aren’t going to be dramatically affected if they miss 3 games.

    Everyone assumes that missing games is worse for the players…..but in a league THIS BIG and powerful, I’d argue that the owners/league would be worse off than the players.

  • Alex

    If the separate ownership is in fact the problem, why not combine the ownership stakes so that each team functions as a ‘division’ of the organization.  Revenues can be collected as a whole and then distributed proportionally.  The current owners would receive a percentage of the new entity’s stock and would ultimately look like a closely held partnership, with strict rules governing the disposition of shares.  The commissioner, functioning as the organization’s CEO, could set budgets for each ‘divisions’ payroll (a functional salary cap).  Since this new organization is a single entity that competes for entertainment dollars, in order to conclude that it is a monopoly one would reasonably have to consider its relative market share/market power over the consumer’s entertainment dollar.  It would be competing against the MLB, NCAA, NHL, NBA, Hollywood, world travel, Broadway, concerts, television programs, etc.  Moreover, the league wouldn’t be employing football players, it would be employing athletes who would sell their services to any of the sports leagues.

    Would such a combination be considered a trust acting in the restraint of trade under the Sherman Act?