The End of the NFL as We Know It

 

Greetings from the Thomas F. Eagleton Courthouse.  I was fortunate enough to attend the oral arguments for Brady v. National Football League this morning at the Eighth Circuit.  As you can tell from this notice, the Eighth Circuit was expecting quite a crowd; congrats to Clerk of the Court Michael Gans and his staff for their excellent handling of the event.  Since this is a football case, I feel free to use sports metaphors, so this morning's argument was like an all-star game -- nay, a heavyweight bout -- between two of the country's top attorneys. Paul Clement represented the League, and Theodore Olson represented the players.  It was a terrific show.  But more importantly, I was really struck by how huge this case is to the future of the NFL, and perhaps the future of all U.S. sports leagues.  Whether or not the league wins the battle over the injunction, there is a lot left to come.  And we could end up with a completely new landscape.

The case is a great example of how the law makes strange bedfellows.  The NFL is relying primarily on the Norris-LaGuardia Act to strike down the injunction against its lockout of the players.  Yes, that Norris-LaGuardia Act -- the one that was passed to prevent state federal courts from enjoining unions from forming.  Clement acknowledged as such in his argument, which I think was a savvy move, because the thrust of his argument was that this is all really a labor dispute and it should be treated as such.  Although he did not, until the very end, insinuate that the NFLPA's disclaimer was not legitimate, he essentially said that the union should not be allowed to jump back and forth between labor coverage and antitrust coverage as it suits their needs.  Collusive activity is perfectly legal and even encouraged in the nonstatutory labor exemption context, but suddenly it's illegal once the union has disclaimed.  Clement analogized this to turning a light switch off and on, and he made this back and forth seem unfair to the NFL.  After all, he argued, a lockout is one of the "classic tools" of labor law that employers can use in an attempt to resolve a dispute. 

Olson, representing the players, emphasized that the players had voted to get rid of the union, and it was gone.  "That union does not exist," he said, at least a few times, with emphasis.  The players were therefore entitled to antitrust protection.  Olson maintained that players could elect whether to have a union and enjoy collective bargaining rights under labor law, or disclaim the union and get the protection of the antitrust laws.  If not, players would be stuck in a "no man's land" where neither labor law nor antitrust protections applied.  Characterizing the NFL as antitrust "recidivists," Olson convincingly contended that the players needed some form of protection, and he made it clear that the decision to disclaim should mean that the antitrust protections apply.

The oral argument was fascinating to me, because it illuminated the jury-rigging that is necessary for modern sports leagues to exist in their current forms.  They are clearly collusive, and they clearly dominate their respective industries.  So antitrust liability seems to naturally follow.  The leagues have escaped this quandry (when it comes to the players) by falling under the nonstatutory labor exemption.  But what if the players don't want to play ball, as it were?  Brady v. NFL is the result.

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.