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Articles

The Trial

Sacked! Fourth down and $1,699,999,999 to go for the U.S.F.L.

The $1 league: the rise and fall of the USFL

The price of monopoly.

What it costs to win a $3 lawsuit.

USFL vs. NFL: ratings, courtroom challenge.

USFL heading for showers?

Time, Aug 11, 1986 v128 p12(2)

Sacked! Fourth down and $1,699,999,999 to go for the U.S.F.L. (United States Football League losses money in antitrust case) Ezra Bowen.

Full Text: COPYRIGHT Time Inc. 1986

In a more innocent age, perhaps, sports in the U.S. were played for the sheer thrill of winning. But today, in an era when stadium grass is plastic and the players are depreciable assets, big-time sports are played for money, and lots of it.

Thus the ''moral victory'' claimed last week by the United States Football League in its much publicized antitrust suit against the National Football League left the supposed vctors feeling lower than the SAT scores of their top draft picks. The upstart league did win in a narrow sense: a federal jury found that the old and established N.F.L. was guilty of monopolizing professional football. But the U.S.F.L. lost its $1.7 billion suit where it counts, at the bottom line. After five days of tortured debate, the five-woman, one- man jury awarded the new league $1 in damages. Even tripled, as antitrust damages are by law, the award would not buy the winners a new chin strap.

For the U.S.F.L., which needed to win megabucks just to stay in business, the verdict may spell doom. The outcome was the sudden-death climax of a game that had more fumbles than the sorriest preseason scrimmage. The U.S.F.L.'s suit was watched with immense curiosity by millions of fans who recognize that pro sports are as much about greed as glory and cheered on by local boosters who feel that no city can call itself big league without a pro-football team. More than mere football, the struggle was redolent of the battles among 19th century steel and rail barons, who paid lip service to the virtues of free markets and then fought like mad to corner them.

Owning a pro-football franchise is a dream that seems to possess every high- rolling American businessman who ever scored a touchdown in high school or wishes he had. The rewards are not limited to locker-room privileges and the honor of being addressed as ''Mr.'' by an All-Pro tack- le. Most N.F.L. stadiums are filled at kickoff time, and last year the owners of the 28 franchises divvied up some $1.2 billion in TV contracts. Understandably, the N.F.L. barons have been loath to share the spoils. More teams mean smaller slices of the TV pie. Businessmen who want to start a new pro team are left with only one option: to form their own league.

In 1982 a small group of well-heeled football fanatics, most of them real estate moguls, took the gamble and created the U.S.F.L. The twelve-team league opened in 1983 with a new twist: it played not in the fall but in the spring and summer, thereby testing aficionados' appetite for year- round football. Over the next two years, other fat-cat fans, including New York City's Donald Trump, bought in to swell the league to 18 franchises.

For a while, the new league looked like a fair bet. Franchises were a bargain: $2 million to $5 million a city, vs. $70 million in the N.F.L. True, blue-chip players did not come cheap. Trump, the owner of the New Jersey Generals, paid $5 million for Georgia Running Back Herschel Walker and $8 million for Boston College Quarterback Doug Flutie. Still, much of the money could be written off against profits from the owner's other investments. Besides, a bidding war served to run up the other league's costs while siphoning off talent.

The real aim of the U.S.F.L. owners may have been not to beat their N.F.L. rivals but to join them. At the very least, figured some U.S.F.L. owners, the older league might be persuaded to take in the most prosperous franchises or even agree to a merger that would sweep in the whole U.S.F.L. There was precedent, after all: the N.F.L. in 1950 absorbed the best teams in the fledgling All-America Football Conference and then in 1966 merged outright with the arrivistes of the American Football League.

The key to survival was winning television money. At first the new league had modest success, starting with $18 million from ABC and an additional $8 million from ESPN cable. But U.S.F.L. fans never showed up in force. The average game attendance dropped by 3,000 last season, to 27,000. More ominous, TV ratings fell almost 30%. By the end of its third season, the league had dwindled to eight clubs, with total losses of around $200 million.

In the business equivalent of throwing the bomb on fourth and long, the U.S.F.L. switched seasons to go head to head this fall with the N.F.L. The networks, however, were not buying. ABC did not renew. NBC and CBS, which, like ABC, have a five-year contract to rotate N.F.L. coverage, also would not touch the struggling league.

The courts were the league's last hope. In 1984 U.S.F.L. Commissioner Harry Usher and his owners had filed an antitrust suit. Though major-league baseball has been exempt from antitrust laws ever since a 1922 Supreme Court decision, other pro sports are not. Alleging that the N.F.L. had ''willfully acquired and maintained a monopoly,'' the U.S.F.L. charged the older league with trying to drive it out of business, principally by leaning on the networks to withhold television contracts.

The trial, which finally began last May and lasted 2 months, brought a parade of more than 40 witnesses, whose testimony amounted to a morass of contradictions. Supercaster Howard Cosell, for example, testified that ABC Executive Roone Arledge had confided to him that N.F.L. Commissioner Pete Rozelle was ''all over me'' to drop U.S.F.L. coverage. But Arledge countered under oath that he had said no such thing. Trump testified that Rozelle had promised him a franchise if he agreed not to sue. But Rozelle testified that Trump had begged him for a franchise, promising to ''find some stiff'' to buy the Generals.

When the testimony ended, Judge Peter Leisure sent the jury out with 155 pages of instructions, containing 61 questions of fact for them to resolve. Juror Margaret Li lienfeld, a retired foundation aide, admitted that at first ''there was some confusion.'' In fact, Juror Miriam Sanchez was so confused by the instructions that she reportedly told news people after the verdict that she had wanted an award of $300 million but had agreed to $1 because she believed Judge Leisure could amend it upward to a proper sum. She was mistaken: though judges often lower damages if they are not warranted by the evidence, they cannot increase them.

In the jury room, Sanchez, along with Juror Bernez Stephans, took the U.S.F.L. side so passionately that they generated some shouting matches in the 31 hours of debate. En route home after one session, Foreman Patricia McCabe became exhausted to such a degree that, she says, ''I couldn't breathe; my face was numb.'' She was taken to the hospital, where the diagnosis was stress. Sanchez and Stephans regarded the case as a David-vs.-Goliath struggle, but Lilienfeld refused to accept the U.S.F.L. owners as the ''little guys.'' Said she: ''Anyone who can buy a football team is not a little fellow.'' Lilienfeld and two other jurors argued that the U.S.F.L. had been done in not by the N.F.L.'s monopoly but by its own blunders, such as forking over huge salaries and risking TV contracts by switching from a spring to a fall schedule. ''The U.S.F.L. owners seemed to be spending themselves into oblivion,'' said Lilienfeld. Finally the jurors agreed to compromise with a $1 verdict. Lilienfeld argued that there was no confusion in the end. ''Six people took a vote,'' she said, ''and it was unanimous.''

After the jury had delivered its verdict, U.S.F.L. Commissioner Usher muttered, ''I just find the whole thing completely un- understandable, if that is a word.'' Lawyer Harvey Myerson, flabbergasted and furious, found some words. ''It defies logic and common sense,'' he fumed. ''What we have on our hands is $1. That is absolutely bizarre.''

Rozelle and the N.F.L. owners exulted. ''The U.S.F.L. shot itself in the foot,'' said the commissioner. ''Nowwe can go back to playing football.'' Few legal experts were surprised by the verdict. ''The U.S.F.L.'s filing of the suit,'' said Stephen Ross of the University of Illinois College of Law, ''showed that they were interested in merging, not competing as a league.'' He added, ''They will probably die.''

Other outside experts agreed. ''It's clear to me that this is the death knell of the league,'' said West Coast Player Agent Leigh Steinberg. Still, U.S.F.L. Attorney Myerson bravely vowed to press a motion for a new trial on the question of higher damages. But the judge is unlikely to dis- turb the jury's verdict. This week U.S.F.L. owners are huddling in New York with Myerson to see if the league will indeed be in business when the scheduled season opens Sept. 13. Memphis Showboats Coach Pepper Rodgers, among others, is trying to believe it will. ''Until they tell me to shut it down, I'm going to keep working,'' he says. ''I've got 70-plus players and my staff to worry about.''

Not everyone around the league was worried. The Dallas Cowboys of the N.F.L., who have first dibs on Herschel Walker, reportedly have sent him a Cowboys playing jersey with his favorite number, 34. Walker loyally declared, ''I am going to stay with the U.S.F.L. until the last second has ticked off.'' He added that he would, of course, ''be honored to play for Dallas,'' but then suggested, ''I may choose to give up football.'' Walker can afford to. ''Mr. Trump,'' he explained, ''has offered me a very good position in real estate.''