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NFL Lockout Would Result In More TV Revenue From DirecTV Than Season With Football

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On Tuesday, Judge David Doty threw out a previous decision allowing the NFL to earn television revenue during a lockout should the owners choose to lock out the players. The ruling cuts off the supply to the owners pockets, making a work stoppage harder to absorb as teams would be struggling to find income. But that wasn't even the most interesting thing to come out of the ruling. Instead, Doty found, looking through the NFL TV contracts, that a lockout would actually be more beneficial to the owners than a season with football.

Here's the relevant section from the ruling, pertaining to the NFL's contract with DirecTV.

The extended contract provides that DirecTV will pay a substantial fee if the 2011 season is not cancelled and up to 9% more, at the NFL's discretion, if the 2011 season is cancelled. Of the total amount payable in the event of a cancelled season, 42% of that fee is nonrefundable and the remainder would be credited to the following season. Op. 27, 71-72; Goodell Direct Test. 11. As a result, the NFL could receive substantially more from DirecTV in 2011 if it locks out the Players then if it does not.

Wait, what? Essentially, in layman's terms, the NFL was ready for a lockout and negotiated its contract with DirecTV, in 2008, knowing a work stoppage was likely to happen. The language in the contract gave the NFL an insurance policy, of sorts, leaving the league with a continued stream of revenue and a buffer allowing the owners to keep a lockout going for as long as it takes.

Fans should be irate at both the NFL, for a premeditated work stoppage, and DirecTV, for facilitating the NFL's scheme. DirecTV wanted the NFL, its RedZone Channel and Sunday Ticket, bending to the will of the league in the 2008 negotiations. The league leveraged that, creating a situation where a lockout would be beneficial to the owners.

Seem fair? Of course it doesn't. Looking at it from a common-sense perspective: Why in the world would an organization ever get more money for choosing to shut down operations than not? The fact that the NFL negotiated its TV contracts knowing full well it was in control of a work stoppage -- and securing streams of revenue that would continue, and increase during a lockout -- is the clearest picture we've seen about how the NFL planned for the CBA negotiations. And it isn't pretty.

With the ruling, and the release of Doty's opinion, comes a public relations nightmare for the NFL. The ramifications in the court of public opinion and at the bargaining table, where the NFLPA suddenly has a level playing field, are severe for the league. Then again, if it pushes both sides to actually work towards a deal, perhaps this is all a positive in the end.