White v. National Football League

972 F. Supp. 1230, 1997 U.S. Dist. LEXIS 11148, 1997 WL 431013
CourtDistrict Court, D. Minnesota
DecidedJuly 30, 1997
DocketCivil 4-92-906
StatusPublished
Cited by1 cases

This text of 972 F. Supp. 1230 (White v. National Football League) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
White v. National Football League, 972 F. Supp. 1230, 1997 U.S. Dist. LEXIS 11148, 1997 WL 431013 (mnd 1997).

Opinion

DOTY, District Judge.

This matter is before the court on plaintiffs’ appeal from the decision of the Special Master dated May 30, 1997. Based upon a review of the file, record and proceedings herein, and for the reasons stated below, the court reverses the decision of the Special Master.

BACKGROUND

Class Counsel and the National Football League Players’ Association (“NFLPA”) appeal from two related contract disputes involving the “circumvention” provisions of Article XV(2) of the Stipulation and Settlement Agreement (“SSA”) and Article XXV, § 2 of the National Football League (“NFL” or “League”) Collective Bargaining Agreement (“CBA”).

The first dispute concerns the renegotiation of Billy Joe Hobert’s Player Contract with the Buffalo Bills. Hobert has been a quarterback in the NFL since 1993. Prior to the commencement of the 1996 League Year, he ■ signed a four-year Player Contract with the Oakland Raiders which obligated him to play for the Raiders through the 1999 League Year. Hobert was paid a $700,000 Signing Bonus by the Raiders. After com *1232 pleting the first year of his contract, the Raiders traded Hobert to the Bills and Hobert became obligated to play for the Bills for the 1997-1999 League Years. The Bills and Hobert agreed to renegotiate his Player Contract for the 1997-1999 League Years as follows:

Year Current Compensation Renegotiated Compensation
1997 Paragraph 5: $ 760,000 Paragraph 5: $ 235,000
Signing Bonus: $0 Signing Bonus: $ 525,000
1998 Paragraph 5: $1,250,000 Paragraph 5: $1,250,000
1999 Paragraph 5: $1,500,000 Paragraph 5: $1,490,000

Paragraph 5 compensation, or base salary, is the compensation set forth in paragraph 5 of a NFL Player Contract. Paragraph 5 compensation is not guaranteed, and is paid in weekly installments over the playing season. CBA Art. I, § 3(ao). Thus, under the terms of the original contract with the Raiders, it is possible that Hobert’s 1997 earnings could be substantially less than $760,000. In contrast, under the renegotiated contract, Hobert would be paid a $525,000 Signing-Bonus immediately. The remaining $235,000 of the $760,000 would be paid as Paragraph 5 compensation and disbursed to Hobert throughout the 1997 season. Hobert would also receive $10,000 less during the 1999 League Year under the restructured contract.

Generally, Signing Bonuses are prorated over the full term of a Player Contract. SSA Art. X(G)(2)(a); CBA Art. XXIV, § 7(b)(1). 1 However, Paragraph 5 compensation is included in Team Salary by the NFL Clubs “in the year earned.” SSA Art. X(G)(l)(a); CBA Art. XXIV, § 7(a)(1). The following summary illustrates the effect the proposed restructuring of Hobert’s contract would have on the Bill’s Salary Cap:

Amount Hobert’s Current Contract Would Add to the Bills’ Salary Cap Amount Hobert’s Renegotiated Contract Would Add to the Bills’ Salary Cap
Year Current Cap Dollars Renegotiated Cap Dollars
1997 $760,000 $5B410,000
1998 $1,250,000 $1,425,000
1999 $1,500,000 $1,650,000

Under Hobert’s original contract, the entire $760,000 to be paid for his 1997 services would be counted against the Bills’ 1997 Salary Cap. Under the proposed renegotiated contract, and in accordance with the SSA proration rules, only $410,000 ($235,000 of Paragraph 5 compensation plus $175,000 of Signing Bonus) would be counted against the Bills’ 1997 Salary Cap. The remaining $350,-000 of the proposed $525,000 Signing Bonus would be prorated over the 1998 and 1999 League Years.

For Hobert, the proposed renegotiation provides him with at least two benefits. First, he would be guaranteed $525,000 for his services during the 1997 League Year. Second, the Signing Bonus would function as an incentive for the Bills to keep him on their team roster for the full term of his contract. If Hobert were released early, the Bills’ Salary Cap recognition of the $525,000 Signing Bonus would be accelerated to the then-current League Year. SSA Art. X(G)(2)(b); CBA *1233 Art. XXIV, § 7(b)(ii). If Hobert remains with the Bills through the 1999 League Year, however, the $525,000 Signing Bonus would count against the Bills’ Salary Cap pro rata through the 1999 League Year. The renegotiation would also provide the Bills with an additional $350,000 of Salary Cap Room which could be used to sign other football players in 1997. By shifting the recognition of compensation to be earned by Hobert in 1997 to later years for Salary Cap purposes, however, the Bills would have $175,000 less to spend on other players during the 1998 and 1999 League Years because $350,000 of Hobert’s Signing Bonus would be prorated over those League Years.

The National Football League Management Council (“NFLMC”) informed the Bills’ management that they could not agree to the proposed renegotiation of Hobert’s contract unless Hobert agreed to extend his Player Contract for an additional year. The NFLMC asserted that the proposed renegotiation violated the “circumvention” provisions of the SSA and CBA.

The second dispute involves Elvis Grbac, another quarterback who recently signed a five year Player Contract with the Kansas City Chiefs. Under the terms of his Player Contract, Grbac would receive a $3,500,000 Signing Bonus which the Chiefs would prorate over the full term of the contract. The fifth year of the contract, the 2001 League Year, is voidable at Grbac’s option upon the occurrence of the following events:

1. If the Player is on the Active/Inactive 53-man roster, the PUP, NFI, IR or any other employment or league list (except Reserve/DNR, Reserve/left squad) for the last game of the 2000 NFL season.
AND
2. Any of the following contingencies are met during 1997, 1998, 1999 or 2000 NFL regular seasons.
A. Player participates in at least 20% of the team’s offensive plays, exclusive of special team plays in any single season.
B. Player passes for at least 800 yards in any single season.
c. Player completes as least 9 or more touchdown passes in any single season.
D. Player’s QB rating is at least 73 in any single season.
D. Club qualifies for post-season play in any single season.
THEN
Player has the express right to terminate (void) his contract for the year 2001 within 30 days subsequent to the last game of the 2000 regular season. Player must notify the club of his right to terminate the 2001 contract by fax, personal delivery, or certified mail to club’s president or general manager.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

White v. National Football League
149 F. Supp. 2d 858 (D. Minnesota, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
972 F. Supp. 1230, 1997 U.S. Dist. LEXIS 11148, 1997 WL 431013, Counsel Stack Legal Research, https://law.counselstack.com/opinion/white-v-national-football-league-mnd-1997.