NFLPA Could Deal Directly With Sponsors in Event of Lockout
The expiration of the current agreement would mean the expiration of the rights of corporate sponsors such as Gatorade, Verizon and Pepsi to use players in national ad campaigns under their contracts with the league. As a result, the players' union is talking to some of those sponsors about contingency deals in which the players would sell those rights directly to sponsors. It would provide players a potential source of revenue during a lockout, but the head of the NFLPA's for-profit wing contends that the contingency deals would be in the sponsors' best interests as well.
"If the NFL locks out the players, the sponsors get locked out of player rights," said Keith Gordon, the president of NFL Players Inc. "We've been communicating with sponsors since the summer, and our primary objective is to shield them from being put in the middle between the NFL and the players. At this point, our primary objective is to avoid disruption to their business."
Gordon said the union approached the NFL more than a year ago about extending the sponsorship agreements independent of the CBA but was rebuffed. NFL spokesman Brian McCarthy said the two sides agreed before the Super Bowl to resume discussions after the Super Bowl, but that resumption has not yet occurred. So the union's more recent efforts have been focused on dealing directly with sponsors that would be affected. The union has proposed contingency agreements that would allow those sponsors to continue to use players in their ads the way they already do.
"If they take advantage of a contingency agreement, their rights would be protected without interruption," Gordon said.
So far, the NFLPA has yet to reach such an agreement with any of the sponsors in question. But Gordon said discussions have turned more serious in recent weeks as the expiration date of the CBA has drawn closer and the sponsors have become more educated about the impact that expiration would have on their agreements.
"We've had to do a fair amount of educating the sponsors with regard to the mechanics of how it all works as far as player rights and their having access to it," Gordon said. "Not all of them know the mechanics there, so they were surprised to find out that even though, for example, they may have an agreement that runs through 2014, their player rights actually expire in 2011. Some of the sponsors felt like, 'We already paid for that,' and we told them they had to take that up with the league."
The expiration of the current agreement would deprive companies that have sponsorship deals with the NFL from using more than five players in the aggregate in any national ad campaign. For example, if Verizon uses Drew Brees and Mark Sanchez in a national ad but then uses other NFL players in smaller, local newspaper ads, the total number of players used by Verizon can't exceed five without the NFLPA's approval. The contingency agreements, the union says, would allow those companies to continue to use the players as they currently do. The only difference is that those deals would be negotiated directly between the sponsors and the players.
The union also says that sponsors who don't do contingency deals with them running the risk of losing their exclusive rights to the players. So again, for example: Pepsi is the official soft drink of the NFL, and the only soft drink for which NFL players do ads. But if the agreement expires, so do the exclusivity rights and the non-compete agreement, which means nothing would stop an individual player or the NFL as a whole from negotiating a new deal with, say, Coke. Players are concerned about losing income in the event of a lockout, and such deals would certainly help.
"We're forced, because the league isn't interested in doing a deal, to re-teach some of these lessons," Gordon said. "As of March 4, any sponsor category that hasn't locked up a deal with us is open for business."
Some of those sponsors may do just that, though they may first want to contact the NFL to ask if they can get a credit for any player rights that expire at the end of the current deal. Regardless, the sponsorship agreements loom as potential victims of the fallout from an NFL labor dispute that has no end in sight.