NFL Labor Fight

For you sports fans, there is a fight starting between the NFL and the NFL PA (NFL Players Association). This is a win for the NFLPA.

The NFL and NFLPA have an agreement that when the NFL negotiates TV contracts it has to try to get the best deal it can. This is relevant to the NFLPA because they share some of the revenue. But the NFL knew there was a new Collective Bargaining Agreement (CBA) that was going to be negotiated between the NFL and NFLPA. They wanted to do what the NBA did, which was get a TV contract that guaranteed them revenue even if there was a lockout (the owners don’t allow the players to play) or a strike (the players decide not to play). To get this they had to sacrifice funds that the NFLPA was apparently entitled to. At least that is what the judge ruled. To quote from the article:

In his 28-page ruling, Doty criticized special master Stephen Burbank for legal errors and erroneously concluding earlier this month that the NFL can act like a self-interested conglomerate when in fact it is bound by legal agreements to make deals that benefit both league and player.

Doty instead declared that the NFL violated its agreement with the union, which had asked that the TV money be placed in escrow until the end of any lockout. A hearing, yet to be scheduled, will be held to determine potential damages for the players as well as an injunction involving the TV contracts.

I have not had enough time to read up on the issue but my initial thoughts are that the NBA was able to do this, so why not the NFL. They both share very similar legal standings in that they both have limited Anti-Trust exemptions. Very curious.

Paying for What You Watch?

Imagine you go to the store to buy an apple. When you get to the checkout line you are told in order to buy that apple you also have to buy three other products. You refuse and walk out the store. The next store tells you the same thing and it quickly occurs to you that in order to buy an apple you have to buy a bundle of other products. You have no choice to buy simple that apple (what is called ‘a la carte’).

This is exactly what cable is doing. They are telling us that if we want to watch the lifestyle network we also have to buy ESPN (and vice versa for people like me). What if we could buy only the channels we actually want to watch? How much would it cost us? This article gives you an idea. Congress has refused to require a la carte pricing for cable channels (probably because the cable industry is making a lot of money off of charging us money for things we do not want to watch). (this should be against anti-trust laws)

EA Sports as a Monopoly

Anti-trust laws are designed to prevent monopolization. The technical terms are restraint of trade. By cutting back quantity a monopolist has an opportunity to increase prices (and therefore profits). If you saw "The Informant" that is what the justice department was investigating.

One of the most obvious cases of restraint of trade comes from the NFL's video game practices. They allow only one company (EA sports) to make a game with the NFL's likeness (and therefore the only game to have real NFL players in the games). EA must pay the NFL a lot of money for this right, and EA must make a lot of money making their version of the game (which is Madden). Now it is being challenged in court.

I am interested to see how the NFL will fight this one. Will they rely on their limited Anti-trust exemption (which they have... and this is what allows them to sign exclusive deals with DirecTV for broadcast rights). This is probably their best legal case, but I give this lawsuit a chance to change everything. With more competition comes choices and decreased prices.

(HT: Deadspin of all places)