"(Y)ou know you've reached the absolute limits of your power as a major network ... (when) the commissioner of the National Football League calls you ... and says ... (w)e're done, pay this or move on .... (the NFL has) market power like no one else, and at a certain point in time, they'll tell you to pack it up or pay the piper," the executive said.
Doty said at least three networks expressed "some degree of resistance to the lockout payments"; that the NFL "characterized network opposition to lockout provisions to be a deal breaker"; and that DirecTV "would have considered paying more in 2009-2010 'to have (the work-stoppage provision) go away.'"
The decision revealed that DirecTV, in fact, would pay up to 9 percent more to the NFL if no games are played in 2011. And of the total amount payable if there is a canceled season, 42 percent of DirecTV's fee is nonrefundable.
Under the CBS and Fox contracts set to expire at the end of the 2011 season, the NFL would have been required to repay CBS and Fox that same year if there were a work stoppage. Under the contracts extended to the 2013 season, the NFL will repay the funds, plus money-market interest, over the term of the contract, Doty wrote. And if the season is canceled, the contracts would be extended another season.
NBC's contract through the 2011 season contained the same work-stoppage provisions as the CBS and Fox contracts, according to Doty.
He wrote that during extension negotiations, NBC felt the NFL was "hosing" the network by its demands. To "bridge the gap," the league agreed to award NBC an additional regular-season game for the 2010-2013 seasons. The NFL did not seek additional rights fees for the 2009, 2010 and 2011 seasons, and NBC agreed to pay increased rights fees for 2012 and 2013.
Although ESPN's contract was not set to expire until 2013, the work-stoppage provision was amended. In the negotiations, ESPN requested that the rights fee not be payable if there is a work stoppage, but the NFL rejected the request. Doty wrote: "The NFL stated that the digital deal and the work-stoppage provisions were 'linked,' ... To secure ESPN's agreement to the work-stoppage provision, the NFL granted the right to a Monday Night Football simulator via the wireless partner."
NFL lawyers argued that the league used sound business judgment to maximize revenue for both sides to share, but Doty wrote in his ruling that the NFL enhanced "long-term interests at the expense of its present obligations."
Indianapolis Colts center Jeff Saturday, a member of the NFLPA's executive committee, said the ruling was a "really good reversal."
"I'm not sure what all that means, as of yet," Saturday told The Associated Press as he left Tuesday's mediation session in Washington. "We haven't been debriefed. We just got the news when we were in the meeting, so I'm sure we'll hear more tonight. But it sounds very favorable."
AP Sports Writer Howard Fendrich in Washington contributed to this report.
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