Retired NFL Players Win Verdict Against Union For Failing to Include Them in Licensing Deals

A verdict was reached yesterday in an interesting case filed by retired NFL players against the players union for failing to include them in lucrative licensing deals involving video games and other sports products.

NFL Gridiron Gab reported on the verdict as follows:

NFL Players Association was ordered by a jury on Monday to pay $28.1 million in damages to retired players after finding that the union failed to properly market their images. The dollar amount includes $21 million in punitive damages, just short of the requested $21.9 million award that the players’ lawyer had submitted to the jury which reflected about 10% of the net worth of the union at the start of this year.

Interestingly enough, the NFL Players Association Official Website calls the verdict on the front page of its website a "complete miscarriage of justice" and further states:

[I]t is significant that the jury did not buy the retired players’ claim that they were entitled to an equal share of the active players’ group licensing money, which was the principal claim in the case. If the retired players had prevailed on that claim, their claimed damages would have been close to $90 million as opposed to the $7.1 million awarded.

A New York Times article from February, 2007 reported on the background to the case as follows:

Parrish and Adderley said they were suing in part to compel Players Inc. to provide full details of all agreements with and payments to the players. . . . According to a news release from Players Inc. last month, the organization, formed in 1994, handles $750 million in retail licensing business on behalf of all 1,800 current players as well as 3,500 retired players, generating more than $100 million in annual revenue. While no specifics were offered, it is common industry knowledge that the vast majority of the revenue derives from the use of the names and likenesses of active players.

I have not had the opportunity to review the court filings in this case, but this verdict caught my attention because the suit is over the failure to include certain individuals in a licensing deal, rather than a breach of the licensing deal itself.

Of course, the thought that comes to mind as an attorney is how in the world did retired players get themselves into the situation, where they are represented by an apparently unaccountable organization?

A quick search of the NFLPA in Wikipedia provided some additional history on the organization. While I am no expert on labor union law, the fact that the union was reconsituted in 1993 suggests to me that at very least the retired players had the opportunity to express their views on the arrangement.

I can understand the need for single representative doing the negotiating on behalf of a group of people, but shouldn't there be some accountability in that representation? When you have to go to court to force the hands of the representative, then it seems to me that you have a problem with the representation itself. As a transactional attorney, I wonder if it isn't time to go back to the drawing board on the relationship with the union.

All in all, I think a good argument could be made that this case is really an internal matter between the retired NFL players and the union that is supposed to be representing them. While it is an interesting issue, I can't help but wonder if we should be using limited court resources to hear a case like this. Presumably, the parties will be continuing their relationship even now that the verdict has been rendered. Should the courts be getting involved in an ongoing relationship like this?

Regardless, I think this case is a good example of why you should be careful of allowing a third party to do your negotiating for you. While such third party representations can be advantageous, they can also be very problematic at times, and you ideally need to be in a position to be able to discern what the situation is before you end up locked into a bad deal.

Of course, for the retired players in this case, they ultimately came out reasonably well with a $28.1 million verdict in their favor. However, since this is apparently only a fraction of what they had hoped for, it still seems that they would have been better off if the dispute had been avoided altogether.

See related blogpostings:
Consortia Licensing: Is this an ideal way to license intellectual property?
Supreme Court to Consider Fantasy Baseball Case: Do Players’ Names and Statistics Constitute Major League Baseball Intellectual Property?