United States Football League VS. National Football League
The trial: USFL v.
The $3.76 antitrust lawsuit
By Greg Garber
Inevitably, with the USFL hemorrhaging money and attendance and television ratings dwindling, the league played its Trump card: A $1.5 billion antitrust suit against the NFL. It all played out in the spring and summer of 1986 in Manhattan's U.S. District Court.
Harvey Myerson, the USFL's flamboyant attorney, claimed to have three "smoking guns" that proved the NFL had conspired to monopolize pro football:
1) A March 2, 1973 memorandum to NFL broadcasting director Robert Cochran from NFL counsel Jay Moyer suggesting that an "open network" might be an "invitation to formation of a new league."
2) An Aug. 4, 1983 memo from Jack Donlan, the NFL Management Council executive director, to his staff insisting that NFL teams should push USFL teams to "increase the salaries of existing players or run the risk of losing them."
3) A plan to "conquer" the USFL presented in February, 1984 to NFL management by Harvard Business School professor Michael Porter.
The NFL argued that the USFL was its own worst enemy and had only itself to blame for its financial woes.
Even the testimony of Howard Cosell and Al Davis -- the Raiders owner was excluded from the lawsuit in exchange for his testimony -- failed to save the USFL. On July 29, a jury of six found the NFL guilty of acting as a monopoly, but agreed with the NFL's argument that the USFL had done itself more damage. The jury awarded the USFL a symbolic $1 award, which was trebled according to antitrust law to $3. The total, including interest, came to $3.76. Later, the USFL collected more that $6 million in court costs. By then, it was too late.
By Joe SteinThe war actually began last August when the Chicago Blitz under George Allen signed tight end Tim Wrightman, a third-round pick of the Chicago Bears who had not agreed to a contract with the NFL team. After the Blitz signed linebacker Jim Fahnhorst, a fourth-round pick of the Minnesota Vikings, there was a calm as the USFL began signing hundreds of NFL rejects. But it proved to be just a calm before the storm
The clouds erupted in January, after the new league had held its first draft, as top picks began signing with the USFL. First, it was Tim Spencer of the Blitz on January 7and proceeded through February 26 when the Michigan Panthers signed Anthony Carter. Before that was the signing of underclassman Herschel Walker by the New Jersey Generals, a move that prompted as much debate as a presidential election. It was clear the new league was playing hardball, a game perhaps the NFL had not expected.
Said New York Jets personnel director Mike Hickey (before the signing of Walker). “Let them eat cake.” Responded Jim Gould, president of the USFL’s Washington Federals. “There are two types of war: One where you go out and beat the NFL and another type, a psychological war, where you get them to start beating themselves. I’m not at war with the Redskins. I’m at war with the mentality that we’re so big and almighty nobody can compete with us. That’s the “Let them eat cake” routine. That’s the arrogance we’re at war with.”
What bothered many personnel directors, especially the Redskins’ Bobby Beathard, was that the USFL was able to corral many of the top players without a whimper from the NFL. The established league was still 109 days away from its draft when Spencer signed in early January. Said Beathard, “What I hate is not having a shot. It’s that helpless feeling. It’s very frustrating.”
But it wasn’t very frustrating to the players who signed. They walked away with huge contracts and also set the stage for those who decided to wait for the NFL draft. The absence of numerous top players will catapult other players higher in the draft, meaning more money. And players who turned down big USFL offers will still have bargaining leverage with the NFL team that drafts them, even though the USFL will be nearing its third month when the April 26-27 draft is held.
Said player agent Leigh Steinberg. “Who cares if a player misses eight games if he can play for you 10-15 years?” Steinberg predicted that after the NFL draft, what will develop would be “the wild, wild west of contract negotiations.”
Perry Deering, the agent who negotiated a reported $2 million, four-year contract for Kelvin Bryant with the Philadelphia Stars, agrees “I except salaries to increase 25 percent this year for the incoming class,” he said pointing out that the normal increase is about 10-15 percent. Said agent Tony Agnone, “The rookie this year will be the highest paid group as a whole, in history.”
Added Deering, “I’m happy to see it come. The NFL has been able to take advantage of its monopolistic position for too ling. It’s healthy. The owners aren’t going to like it. It’s going to cut their profit margin down. But it’s the best thing that’s ever happened to a players.”
Ironically, the NFL may play itself right into the players’ hand. At least this year, most players were forced to make an early choice without benefit or knowing exactly where they stood with the NFL. But, as Beathard pointed out, there is sentiment to move the NFL draft to early February next year in an effort to combat the exodus. That could be self-defeating.
Assuming the USFL is successful this season, they’ll go into 1984 with a full head of steam. Teams that didn’t do well because they failed to sign some top players will go harder after their draft picks next year. Additionally, there will be four new teams with four new owners seeking to game some quick publicity in their city. If the NFL holds an early draft, and still a top player with the USFL, not only will the player be lost but the high draft pick as well. Commented New York Giants GM George Young on this year’s situation, “At least you’re not losing the choice.”
Additionally, later round picks will now know where they stand with the NFL and might seek out the USFL. There are some owners who oppose an early draft because of the bidding wars that might develop. They’ll likely wait until after this year’s draft to see the effect of the USFL on negotiations before making a decision.
One coach opposed to an early draft is New Orleans’ Bum Phillips. And his is a selfish reason. Phillips, along with his coaches, does extensive film scouting of eligible players after the season, leading up to the draft. With an early draft, Phillips says, “Out system wouldn’t be as effective because I want the coaches coaching during the season. They wouldn’t have time to look at the film.”
Said Colts Coach Frank Kush, “It just wouldn’t be an adequate amount of time and I feel it would be detrimental to have an early draft. We have enough chaos as it is.”
What many people forget is the draft used to be held in late January. However, when the 1977 collective bargaining agreement was signed, mandating draft-choice compensation for veteran free agents, the draft was moved to late April or early May. The reasoning was that because free-agent offer sheets had to be presented by April 15, teams losing free agents wanted the picks in that year’s draft. Of course, in the ensuing time only one player (Norm Thompson, from St. Louis to Baltimore) ever moved as a free agent for compensation.
Still, the late draft enabled teams with inferior scouting departments to catch up on the rest of the field. That, as much as the balanced schedule, has contributed to the NFL’s parity in the last few years.
But enough of next year,
there remains the matter of the 1983 draft and the things to watch for on draft
day. Remember that NFL teams hold its player’s rights once they draft them,
meaning players like Spencer, Trumaine Johnson, etc., will still be drafted
by NFL clubs, but later in the selection process, hoping they’ll be available
in a few years down the road when their contracts expire. And what will happen
then? You guessed it, more bidding and even more money. If there’s
USFL denied request for NFL retrial
(c) USA TODAY - FINAL EDITION - SPORTS
- FRIDAY THROUGH SUNDAY
By Gordon Forbes MARCH 11, 1988
The United States Football League lost its hope for a new trial Thursday when a federal appeals court upheld the $3 damage award it got in an antitrust suit against the National Football League.
The USFL, which lost $163 million from 1983-85, included four requests - all denied - in its appeal: an overturned verdict, a new damages trial, a new trial in the case, or a new finding on damages.
The ruling by the Second Circuit Court of Appeals in New York is unlikely to affect the NFL's expansion plans. Commissioner Pete Rozelle had tied expansion to a new TV pact, the USFL suit and a new labor agreement. ``But then the commissioner updated it,'' said NFL spokesman Joe Browne. ``He said, barring unforeseen developments, he hoped there would be two expansion teams two years after a new CBA (collective bargaining agreement) was signed.''
Judge Ralph K. Winter wrote in the 91-page
opinion on the USFL's appeal: ``There was ample evidence that the USFL failed
because it did not make the painstaking investment and patient efforts that
bring credibility, stability and public recognition to a sports league.''
By Gordon Forbes (c) USA TODAY, March 16, 2000
The smallest check ever written by the National Football League has been fondled, copied and photographed - but never cashed.
The check was sent to the disbanded United States Football League 10 years ago to settle a make - or - break $1.69 billion antitrust case. It's cash value is $3.76, representing a $1 damage award, trebled to $3, plus 76 cents in interest.
The token award was based on the NFL's monopoly power. But the USFL failed to prove the heart of it's case: that its losses were caused by the NFL's monopolistic practices.
Wednesday was the 10th anniversary of the historic check, and former USFL executive Steve Ehrhart can't quite shake the sad memory of his old employer. At his office in the Memphis suburbs, Ehrhart still daydreams about the young heroes of his old league. About Herschel Walker, Reggie White, Steve Young, Doug Flutie and Jim Kelly, the boys of spring football.
span style="font-size: 9.0pt">Sliding open the top drawer of his desk creates the nostalgic mood into which Ehrhart often lapses. The drawer contains the uncashed check dated March 15, 1990, for "the sum of $3 and 76cents."
"They didn't even spell out our league name," says Ehrhart, who masterminded the signing of Walker, an underclassman at the University of Georgia. "They even double - signed it."
The check is co - signed by Thelma Elkjer, an executive aid to the late commissioner Pete Rozelle, and Thomas O. Sullivan, the controller. Elkjer died last month.
"It represents to me, I guess, a lot of blood, sweat and tears," Ehrhart says. "We had some great executives, Carl Peterson and Bill Polian. So many great coaches. Jim Mora, Steve Spurrier, Red Miller, Mouse Davis and George Allen. And the quarterbacks, Kelly, Young, Flutie, Doug Williams."
A 1985 team photo of the Memphis Showboats, the franchise that Ehrhart joined after leaving the USFL office, hangs near his desk. Reggie White, the greatest player to wear a USFL uniform, was a Showboat.
Ehrhart has thought about turning over the historic check to the NFL's Hall of Fame. Hall of Fame vice president Joe Horrigan says the check, colored red, white and blue, the NFL colors, has enormous value. "It's right up there with the impeachment papers," he says.
Yet, on the 10th anniversary of the check, nostalgia has triumphed over history. Ehrhart seems reluctant to part with the document, regarding it like a crushed prom rose.
"It represents a lot of achievements by a lot of great people," Ehrhart says." At the right time, turning it over will be the right thing to do."
In reflecting on the brief three - year history of the USFL, Ehrhart spins stories of intrigue, power and failure. None is more intriguing than the signing of Walker, the Heisman Trophy winner.
Vince Dooley, Walker's coach at Georgia, and the NFL hierarchy screamed in protest. Ehrhart claims Dooley was already aware of Walker's contract yet Feigned innocence at a news conference.
Later, while driving in downtown Athens, Ga., Ehrhart confronted Dooley. "You knew Herschel called us," Ehrhart said. "But that's the opposite of what you said to the press. You said we were going to destroy college football." According to Ehrhart, Dooley abruptly slammed on the breaks. "He told me to get out of the car, so I did," Ehrhart says. "Then I started walking."
Ehrhart blames Harvey Myerson, the USFL's fun - loving lead attorney, for losing the case. For one thing, Ehrhart says, the $1.69 billion figure was too high. For another, Myerson should have focused on the USFL loses. "In retrospect," Ehrhart says, "had there been simply a presentation of declining franchise values, it would have been easier for the jury to make a connection, rather than evaluating a projection."
And if the USFL had won? "There would have been some kind of amalgamation (with the NFL)," Ehrhart says.
The USFL launched March 5,1983, barely a month after organized workouts.
It lasted three spring seasons, losing an estimated $163 million.
Ehrhart, now executive director of the Liberty Bowl and unofficial USFL custodian, still thinks about the USFL heroes of springs past.