NFL fans have been anxious about the potential for a lockout in 2011. Should they be even more worried today, now that the players' union is taking legal action against the NFL's renegotiated TV contracts?
At the heart of the complaint is that the NFL's TV deal guarantees $4 billion in payments from the networks to the league, even if there's no football in 2011. The union argues that under its current collective bargaining agreement, the league can't shirk its obligations to the players in an attempt to bolster its own bargaining power. The union thinks the TV safety net is exactly that -- an attempt by the owners to gain leverage as the league and the union try to hammer out a new CBA.
According to David Elfin at nflplayers.com, the union says the lockout provision "is a clear violation of the [existing] contract because the league didn't use its best efforts in good faith to maximize total revenues" from broadcast partners CBS (NYSE: CBS), General Electric's (NYSE: GE) NBC Universal, NewsCorp's (Nasdaq: NWS) Fox, and satellite provider DirecTV (Nasdaq: DTV), which has exclusive rights to the NFL Sunday Ticket package in the USA. A contract negotiation with Disney's (NYSE: DIS) ESPN will include similar lockout provisions, Elfin says.
If the players get their way, they could turn the tables on the league and end up with a significant bargaining chip of their own. As ESPN writer and legal analyst Lester Munson explains:
The players want the TV networks to pay the money to the league as the 2011 contracts require, but they want a court order that requires the league to deposit the money in an escrow until a lockout ends with a new collective bargaining agreement. If the owners see their money sitting in an escrow and watch their loan interest piling up, they are likely to be considerably more interested in striking a bargain with the players that will allow the games to begin.
Strange as it sounds, then, this legal action could reduce the chances of a lockout next year, rather than driving the two sides farther apart.
The NFL has the most lucrative TV deal of any North American sport. If there's a lockout, it could be getting money for nothing. How does that sit with investors in any of the NFL's broadcast partners? If you're one of them -- or if you're just a football fan fretting about the potential for no football in 2011 -- sound off in the comment box below.
Fool online editor Adrian Rush doesn't own shares of any of the companies mentioned here, but he does own a share of the Green Bay Packers. Disney is a recommendation of Motley Fool Stock Advisor and Motley Fool Inside Value. The Fool's disclosure policy prefers rugby to football.
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