Tagliabue: NFL Trust survival ‘a done deal’
Tagliabue: NFL Trust survival ‘a done deal’Published March 29, 2004
NFL owners have largely agreed to keep intact the league's shared sponsorship and licensing system after nearly a year of debate, said Commissioner Paul Tagliabue and several team owners.
While there will be some important structural changes to the new model, which is set to be approved at the owners' annual meeting in Florida this week, there will be no dramatic, wholesale shifts as advocated by some teams. The 40-year-old NFL Trust, which last year evenly distributed $128 million to the clubs, expires Wednesday.
"It's a done deal," Tagliabue predicted, regarding passage of a new business model. The new plan, he added, retains the initiatives of the last several years that granted teams more rights to sell sponsorships and market themselves while at the same time reserving the league's central marketing and licensing role.
However, several clubs could still resist going along with this new "master agreement," as the NFL dubs the plan, potentially creating a bitter legal battle.
"Our general counsel has advised the league that on April 1 the right to our marks and logos reverts to us," said Oakland Raiders President Amy Trask, meaning the club does not consider itself a party to the league's incoming marketing system. "The league made a commitment to the clubs when the [collective-bargaining agreement] was adopted in the early part of the 1990s that there would be a fair and equitable revenue sharing system implemented, and it hasn't been. The entire revenue sharing system needs to be re-evaluated. ... [The master agreement] is just one part of a more comprehensive issue." (See "‘Our work just started’ on revenue sharing, group says".) Tagliabue conceded that the score this week was unlikely to be unanimous, but he did not elaborate on how the league
One team source said the league has structured the master agreement to minimize the legal threats from owners such as Jones, who through a spokesman declined to comment, and the Raiders' Al Davis.
Under the expiring trust, the league controls the teams' 32 marks, or logos. When clubs have wanted control of the marks for a specific type of sponsorship, such as beer and soda, it had to be approved by the league.
That enraged owners like Jones, who argued he shouldn't be told by league headquarters how his Cowboys are marketed.
Under the master agreement, however, the teams legally will own their own marks, potentially undercutting a key legal argument for the Cowboys. Still, the new plan contains restrictions that mimic the economic framework of the old trust.
So, for example, while teams own their logos, the master agreement will create categories of sponsorship and licensing rights reserved for the league, such as sideline deals and apparel licensing.
"I don't see anything in the proposed resolutions where there is any significant changes from the way we have been doing business for the last four or five years," said Denver Broncos owner Pat Bowlen.
While teams like the Raiders argue that they are free to do as they please, the league will counter that the vote of only 75 percent of clubs is sufficient to pass a league rule that affects all franchises.
"We vote on everything by three quarters," said Pittsburgh Steelers owner Dan Rooney.
Wellington Mara, the New York Giants' co-owner, noted that league attorneys were confident the new structure would inoculate the NFL against litigation from recalcitrant clubs that want to go off on their own.
One area that looks to change slightly under the master agreement is how a team's market territory is defined. Teams now cannot market outside a 75-mile radius from their own city, a burden resented by clubs in some Western states with large swaths of real estate separating them from the nearest NFL competitor.
Marketing territory under the master agreement would not be defined in a cookie-cutter fashion. Some teams would retain the 75-mile radius while others with different geographic situations could be allowed to expand their territories, Tagliabue said.
One thorny subject that very well could receive vigorous debate this week is the duration of the new master agreement, which, in the NFL proposal, is 15 years.
Some league and team executives have been arguing for a short-term extension, perhaps as tight as one year. With negotiations over the league's collective-bargaining agreement and
New York Jets owner Woody Johnson said issues like the length of the renewal were sure to be debated this week. But, echoing Tagliabue, Johnson concluded of a master agreement, "Essentially, it is a done deal."
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