Tuesday, April 26, 2011

The NFL's Worst Case Scenario

In my earlier post, I discussed several possible outcomes in the antitrust suit between the NFL and the players ("Tom Brady et al.") Earlier today, ESPN's Adam Schefter talked to NFL Commissioner Roger Goodell about some of the issues facing the League in view of the judge's latest ruling. As I noted in my last post, there are lots of moving parts here, and potentially, this dispute could be far from over.

On the other hand, there is a way that this could go downhill, very quickly, for the league.

On Monday evening, Judge Susan Nelson granted the players' motion for a preliminary injunction. She also held that the "'lockout' is enjoined". Shortly thereafter, the players sent a letter to the court asking for "clarification of the quoted language". The owners have until 5 pm today to respond. So what is the NFL's worst-case scenario?

The initial order said that the lockout was "enjoined". Judge Nelson could clarify that this means that the lockout must end -- immediately. If she issues this ruling Thursday night, there could be very serious consequences for tomorrow's NFL Draft. Remember, while the case was under consideration by the judge, conventional wisdom was that the draft would happen as usual, except that trades involving players would not be allowed (pick-for-pick trades would still be allowed).

If Judge Nelson holds that the lockout must end immediately -- but does not specify that the NFL's operations resume under the now-expired collective bargaining agreement -- then we would have a free-for-all on the eve of the draft. The league would be forced to reopen for business, but with no CBA in place, there would be literally no rules to govern player movement. You could see the Carolina Panthers trading their #1 pick to Indianapolis in exchange for Peyton Manning to play on an eight-game, $100 million contract. As an Eagles fan, I wonder what would happen to Kevin Kolb -- would he get snatched up by a team desperate for a new QB? (And what would the Eagles get in return?)

The league believes, as it wrote in its motion for a stay, that it is impossible to unscramble these eggs if and when the Eighth Circuit reverses the district court. But Judge Nelson has one more arrow in her quiver. She could emphasize that the lockout must end immediately, on pain of contempt. Generally, a party that does not comply with a court order would be in contempt of court. (In this case, that probably means a substantial monetary fine for each day the league does not lift the lockout.) As a practical matter, it is hard to get one's adversary fined immediately: If he does not comply with the order, you will have to go to court, ask for an order of contempt, he will have some time to respond to your request, etc. But if Judge Nelson says in her order that noncompliance will be punished by a specific penalty (say, a fine of $100,000 per day that the lockout is not lifted) , then the league will be on notice that a penalty will attach if the lockout was not lifted immediately.

So that's the NFL's worst case scenario: an order tomorrow evening clarifying that the lockout must be lifted immediately, with an explicit proviso that failure to do so will result in a finding of contempt.

By the way, this worst case scenario might be the NFL's saving grace. Imagine that the lockout was lifted (with "no rules") Thursday night. The crazy shenanigans that might occur (Tom Brady to the Bills for $1 billion!) are precisely why the league says, in their application for a stay, that the owners would suffer irreparable harm without a stay -- imagine trying to, in their words, "unscramble the eggs" if the Eighth Circuit were to reverse. But between Judge Nelson's clarification order and a ruling from the appeals court, which could easily take weeks, Judge Nelson's order will be the law. And the potential fallout for the owners is grave indeed.

Later today, I'll write about what the worst-case scenario for the players might be. Spoiler alert: it's that they lose on appeal.

EDIT: Corrected the day of the draft -- it's tomorrow, not Friday.

7 comments:

  1. Great analysis - From a fellow eagles fan.

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  2. Goutam, great post. Question: why couldn't it be reasonable to assume that the teams and players will exercise restraint even in the absence of a CBA? After all, they are (supposedly) professionals.

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  3. Doesn't the draft start tomorrow night?

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  4. Good catch. Posted edited accordingly.

    As to 10:28, yes, I think that's a reasonable argument. The NFLPA's general counsel, in his declaration opposing the stay, notes that even in years without a salary cap (most notably 2010), all hell did not break loose. So yes, this isn't a given. But on the other hand, there are teams out there with real needs, and this could give them an opening. People talk about the players potentially breaking ranks, but the owners might, too.

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  5. As an interesting aside, it is my understanding that judges hesitate to issue affirmative injunctive relief (ie, do this or be sanctioned v. don't do this, or be sanctioned). I wonder if Judge Nelson would be reluctant to issue an order requiring business to go on as usual. Such a mandate seems in my mind inappropriate and difficult to enforce in light of the NFL's size.

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