[FREE ISSUE] NFL gets hit with a $14 billion judgement, Packers choose their new leader, NBA Draft, and more... (1)

Happy Sunday…

We miss you at the Sunday 7 and hope you’ll rejoin us! As we pause this week for the holiday, enjoy last week’s issue for free! If you’d like to jump back on board, you can do so for 2.99 a month HERE!

Busy week in the business of sports with my old team, and the only publicly-owned team in the NFL, choosing its next leader. I’ll give my thoughts on that and the NFL being hit with a $14 billion judgment (although plaintiffs shouldn’t hold their breath waiting for payment). Also, more billionaire owners bluffing toward stadium subsidies, the unique business of the NBA Draft, and answering your questions. A busy Sunday 7 newsletter for you before a break next week for the July 4^th holiday.

Settle in, learn, and enjoy…

1. What I’m thinking of Ed Policy being named the Packers’ president and CEO…

 In NFL owners meetings, there are often sessions that are labeled “one per club,” meaning everyone except the principal owner is kicked out of the room. In those sessions, there are 31 individual owners and the Packers’ president and CEO, representing the only publicly-owned franchise in the league. In my time with the Packers, that person was Bob Harlan, it is now Mark Murphy, and next year — starting July 2025 — it will be Policy.

I don’t know Policy well as he came to the Packers after I had left, but he is respected around the league and known by many NFL owners and executives since he was a teenager, as his father Carmen served as president of both the 49ers (1991-1997) and Browns (1998-2004). More importantly, those inside the building think highly of Policy, especially Murphy and the Executive Committee, whose vote counted most. I heard there was never a truly competitive search process; Policy was the leader in the clubhouse from the start.

 Policy is general counsel at the Packers, a title I held in my time there. However, my role was more “football general counsel,” which is now being done there by Russ Ball. I negotiated player contracts, managed the salary cap, dealt with player disputes, etc. Policy is more of a corporate counsel, dealing with stadium issues, real estate transactions, local politics, sponsorships, licensing contracts, etc. I point this out to say the president and CEO will continue to be more business and administrative-focused and deferential to football operations. The Packers general manager — whether Ron Wolf, Ted Thompson, or now Brian Gutekunst — will continue to have the most autonomy of any general manager in the NFL, if not in all major professional sports.

And, to those who have asked: No, I did not put my name in the hat for the role. I have very fond memories of my time with the Packers and living in Green Bay for almost 10 years, but for me, that was a chapter of my life and career, not a life or career.

2. What I’m thinking about the NFL losing a jury verdict in the Sunday Ticket litigation…

 A class action lawsuit that began in 2015 reached a conclusion — sort of — on Thursday when a jury ruled that the NFL violated antitrust law in requiring purchasers of its Sunday Ticket package pay for all games, rather than a customizable package of games with customizable pricing. The jury awarded plaintiffs over $4.7 billion, which, per antitrust law, will be trebled (tripled) to over $14 billion.

 For some background, the NFL does have a broadcast antitrust exemption, as Congress in 1961 allowed the league to package all its games and sell them collectively to ESPN, FOX, CBS, NBC, etc. The NFL argued the exemption should apply to the Sunday Ticket games as well, and while the judge seemed receptive, the jury disagreed. They were perhaps swayed by a couple of smoking gun memos introduced into evidence that suggest the NFL could have (1) charged less, a lot less, for the package, but were influenced by FOX and CBS not to, and (2) were approached by ESPN to offer team-by-team packages, again for a lot less than the collective offering, but declined.

 Practically speaking, if there were no antitrust exemption for broadcast, teams like the Cowboys and Packers could sell their rights for dramatically more than teams like the Panthers and Jaguars (more on them below). If this verdict were to hold, that would be true for the out-of-market packages, albeit with much less impact than the overall package.

 Some of the primary questions I am receiving about this are: (1) Will this affect how out-of-market games are priced and packaged? (2) How would one access the damages to them as a plaintiff? (3) Will this big damage amount affect the NFL at all, specifically the salary cap?

The NFL owners, who would split the damages bill in 32 ways, will be fine. Their teams are worth an average of $4 billion; league revenues are over $20 billion and any payout will be over many years. As for accessing the award, there are instructions and as with any class action award, it would be parceled out per a formula after the lawyers take their significant cuts. As for the salary cap, it is based on league revenues, not league expenses, so it will not be affected.

The key point to note here is this litigation will likely enter its second decade. The NFL will appeal first to the trial judge, who telegraphed a favorable attitude toward the league throughout the trial, on July 31. He could throw out the jury verdict and rule for the NFL or reduce the award. If not successful there, the NFL will appeal to the Ninth Circuit Court of Appeals, and if not successful there, the NFL will appeal to the U.S. Supreme Court. Bottom line: No plaintiffs are getting any money any time soon.

The NFL still believes it has “good facts” despite the smoking gun memos. Years ago, they settled the lawsuit with St. Louis knowing they had “bad facts.” Here, I am told that league executives and attorneys are telling team owners that “they got this.”

 We will see.

3. What I’m thinking of Charlotte and Jacksonville approving large stadium subsidies for their NFL teams…

On Monday the Charlotte City Council approved, by a 7-3 vote, $650 million to help Panthers owner David Tepper renovate Bank of America Stadium. A day later, the Jacksonville City Council approved, by a 14-1 vote with two abstentions, $775 million to help Jaguars and owner Shad Kahn renovate Everbank Stadium.

Tepper, known for his recent drink-throwing and penchant for firing coaches, has a net worth of $21 billion. Khan, who has shown a penchant for taking his team to London as often as he is allowed, has a net worth of $12 billion. Of course, they could privately finance stadium renovations. But they used the leverage of the infinitesimal chance they might move their team to accomplish their goal, even though they weren’t going anywhere.

 You know my feeling here. Los Angeles and Las Vegas are off the board, and where are they going to move? St. Louis? San Diego? Toronto? Please. You and I both know that was not going to happen, but the bluff worked in both cases.

 Once again, the diabolical business strategy from NFL (and other league) owners:
Socialize cost, privatize profit.

4. What I’m thinking about the NBA Draft…

 The NBA Draft truly intrigues me due to (1) where many of the top players are coming from and (2) their earnings at the start of their careers.

 As I remarked last year, it is astounding to me how many top picks come from places beyond college basketball. Last year, two of the top eight picks came from France. This year topped that: Three of the top six picks are from France, including the top two picks, and six of the top 12 picks are not from college basketball. Can you imagine top NFL draft picks coming from some other country or some other league? No, you can’t.

 Then there is the money. Like NFL draft picks, NBA draft picks will sign four-year contracts with little, if any, room for negotiation. But the NBA Draft numbers at the top zoom past those of the NFL Draft. In fact, the top four NBA draft picks have four-year contract values over $40 million, all greater than the NFL’s top pick, Caleb Williams, who will make $39 million.

 On the veteran side, with free agency next week and contracts already being signed such as the Knicks’ re-signing OG Anunoby for $212 million, it is time for NFL players to avert their eyes.

5. Answering this week’s reader question…

Kelly Ford asks: “NFL rosters have a large number of players as everyone knows that are never going to make NFL-level salaries. How do these players pay the bills while chasing the dream during the time from signing until they are let go? Do they get some sort of money from teams during this time, especially those that are not draft picks?”

Good question Kelly and yes, these players — many of whom will not make the team — are paid per diems for offseason workouts.

The NFL Collective Bargaining Agreement (CBA) requires that players receive $315 per day for offseason workouts or classroom instruction in the voluntary part of the offseason workout program (separate from any mandatory minicamp). That shows the inflation of the business; I remember administering payments with the Packers 15 years ago when the amount was $120 per day.

 There is a caveat, however, that players have to complete three out of four scheduled workouts per week in order to be paid unless there are fewer than four scheduled workouts that week.

Come training camp and preseason, first-year players make $1,850 per week; veteran players make $3,200 per week.

Send your questions to [email protected] and I will try to answer one every week.

6. What I’m tweeting…

7. Life thought from me:

Hard work is important, both mentally and physically, but so is time away from that work. Test your mind and body, but also rest your mind and body.
Stress, then rest, then repeat. A recipe for growth.

My Column:

I broke down the Trevor Lawrence contract on a year-by-year cash basis, showing how different (and worse) it is compared to initial reports. I did the same with the recent wide receiver deals:

My Podcast…

Back with old friend and colleague Ross Tucker on a football offseason simulcast:

Thanks for your continuing support and I hope you’re enjoying the new format; your feedback is always welcome, send to [email protected].

Have a great two weeks, enjoy the 4^th, see you back here on July 14^th!

Andrew