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Patrick Hruby

Just the Cost of Doing Business

Breaking down the proposed NFL concussion lawsuit settlement

Sports on Earth

Editor’s note: On Thursday, the National Football League announced a tentative $765 million settlement resolving concussion lawsuits brought by thousands of former players. Patrick Hruby examines the news:

Was the proposed settlement as unexpected as it seemed?

Not really.

Why not?

Barring an outright dismissal, which was increasingly unlikely, the case always was going to end up with a settlement, largely because the NFL would never risk: (a) a damaging discovery process, with smoking-gun document searches and depositions of curious characters like former league concussion committee chairman and ongoing medical advisor Elliot Pellman, a process that potentially could make the league look as callous and conniving as big tobacco; (b) a jury trial; (c) a “damaged goods” defense arguing for limited NFL liability because players suffered previous, indeterminate brain damage participating in pee wee, high school and college football — not the best public argument for a league looking to shore up its feeder system by reassuring nervous parents.

On the plaintiffs’ side, by contrast, former players with brain damage — particularly those with degenerative diseases — and their families were primed to accept probable smaller payments sooner rather than possibly larger sums later. As such, the only real question was the timing.

So why now?

The NFL probably did a cost-benefit analysis and concluded that any savings resulting from a strategy of slow-walking the plaintiffs — dragging out litigation while waiting for as many of them as possible to die — and rolling the dice on a court victory weren’t worth the increasingly high PR cost. Those costs figured to rise considerably over the next two months, with the October premier of the unflattering PBS documentary “League of Denial” and accompanying book of the same name.

Any other reason?

Bad news always comes out before holiday weekends; that’s Public Relations 101. Moreover, the NFL season kicks off next week, and by then, fans will have only one question about concussions: Does this affect my fantasy lineup?

Who won?

The NFL, lawyers, publicists, ESPN and the league’s other broadcast and business partners, the NFL and also the NFL. Did we mention the NFL?

How so?

For ESPN, any lingering embarrassment from its much-criticized “League of Denial” split with PBS — reportedly at the behest of the NFL — soon will be forgotten. For everyone else, a re-focus on the comfortable, profitable practice of celebrating and promoting professional football will come as a relief. Whew! That was awkward. Meanwhile, lawyers and publicists win because the settlement is essentially a legal and PR solution to a legal and PR problem.

Also: billable hours.

As for the NFL, the league just made a major headache (no pun intended) mostly go away — and for cheap. Like, really cheap. As others have noted, the $765 million settlement – not all of which actually goes to diagnose, treat and compensate injured former players — represents less than 10 percent of the NFL’s roughly $9 billion annual revenue. It’s less than half of what ESPN alone pays the league annually, and it’s far less than previous settlement estimates ranging from $2 billion to $10 billion.

Hold up. How can $765 million be considered cheap?

Over at Pro Football Talk, Mike Florio breaks it down:

The documents released on Thursday indicate that, once the settlement receives final approval, half of the $765 million settlement will be paid over three years, with the rest paid over the next 17 years.
That’s a total payment of $23.9 million per team — over 20 years. For the first three years, each team will pay $3.984 million per year. For the next 17 years after that, each team will pay $703,125 per year.

Even in the first three years, that’s basically the cost of a single free agent per year, and not even a star player. As Florio also notes, the easiest way for owners to cover the cost is simply to pay current players less. Win-win!

So as far as punishments go, is this basically like Johnny Manziel sitting out a half-game?

Actually, it’s more like Goldman Sachs paying a record $550 million Securities and Exchange Commission fine — a whopping four percent of the firm’s $13.4 billion profit in 2009 – to walk away otherwise unscathed from its central role in the subprime mortgage meltdown and subsequent tanking of the world economy.

It’s just the cost of doing business, in other words.

Would this be an appropriate anthem for league owners?

Yes.

But at least the NFL admitted wrongdoing, right?

Nope. Not even an empty, tossed-off mistakes were made. Not only did the league not admit that it has done anything untoward — despite ample, ample, ample public evidence to the contrary — the settlement doesn’t even concede that getting hit in the head via football caused any of the brain damage in question. From the settlement press release:

No Admissions of Liability or Weakness of Claims — The settlement does not represent, and cannot be considered, an admission by the NFL of liability, or an admission that plaintiffs’ injuries were caused by football. Nor is it an acknowledgement by the plaintiffs of any deficiency in their case. Instead, it represents a decision by both sides to compromise their claims and defenses, and to devote their resources to benefit retired players and their families, rather than litigate these cases.

Hold up. You sound cynical. According to a statement from NFL executive Jeff Pash, league commissioner Roger Goodell and “every owner gave the legal team the same direction: do the right thing for the game and for the men who played it,” because the NFL “thought it was critical to get more help to players and families who deserve it rather than spend many years and millions of dollars on litigation.”

Of course. Those players and families were so deserving that it only took a huge lawsuit and a massive, slow-motion PR disaster unfolding over a half-decade for the NFL to spend a single penny helping them!

But they’re going to get help now, right?

Hopefully. According to the general terms of the settlement, former players will be able to dip into a $75 million fund for baseline medical exams and a $675 million injury fund, with the largest potential awards going to victims of Alzheimer’s (up to $5 million), chronic traumatic encephalopathy (up to $4 million, only diagnosable post-mortem) and dementia (up to $3 million).

Why “hopefully?”

Two reasons. First, $675 million may or may not cover the full cost of caring for thousands of former players with chronic brain injuries, particularly conditions that emerge and worsen over time. Keep in mind: this money is earmarked not only for former players who sued, but for all of the 15,000-plus current living players who may develop illnesses in the future. What happens if the fund runs out? Grantland’s Bill Barnwell explains:

If a player’s condition gets worse, he can then apply to the league for reevaluation and possibly receive additional compensation, so it’s easy to imagine a situation in which the league uses the money from the compensation pool to pay out players based on these baseline tests and then runs out of money when symptoms get worse. If this happens, the league will have to fund a one-time contribution of up to $37.5 million, another insignificant sum, given the possible circumstances.
Furthermore, players aren’t getting this money today. Fifty percent of the pool — $337.5 million — will be paid out over the first three years following the settlement. The other half will be disbursed over the ensuing 17 years. There aren’t any details on whether these figures will be adjusted for inflation over that 20-year period, which would further decrease the value of each player’s compensation from the lawsuit. In the end, it’s impossible to tell what each player might possibly receive from the lawsuit, but the relatively small sum of money earmarked for compensation and the large pool of players set to split it suggests that most players won’t get very much at all.

Second, consider previous league-funded efforts to care for injured former players. As this must-read Washington Post report makes clear, they aren’t encouraging. Ailments like degenerative arthritis and bad knees are relatively easy to diagnose and treat. What happens when players have to navigate a morass of Veterans’ Affairs-shaming paperwork and delays to seek treatment for poorly-understood cognitive problems?

Former Tampa Bay lineman and plaintiff Chidi Ahanotu shared his concerns with Sports Illustrated’s Don Banks:

“It’s decent money, but the key part of this will be the people who determine who qualifies and who’s eligible,” said Ahanotu, who played for five teams between 1993-2004, spending nine seasons in Tampa Bay. “If it’s like the NFL’s disability benefit program, this isn’t a win for the players. That panel denies most requests. We have access to the benefits, but that doesn’t mean you get them.
“That’s why the jury is still out on this. I want to say we won, but you can’t do that until you see how this money can be accessed and by whom. The fact that this money is here is great, but [how the money is distributed] is the most important part of the process. That’s everything.”

Will former players universally go along with the settlement?

Not necessarily. Any player could attempt to move forward with individual litigation. However, the cost of going it alone would be steep, and the likelihood of success far from certain. Mediator and former federal judge Layn Phillips explains:

For a variety of reasons, the underlying theory of this lawsuit about what took place in the past would be difficult to replicate in the future. Everyone now has a much deeper and more substantial understanding about concussions, and how to prevent and manage them, than they did 20 or even 10 years ago, and the information conveyed to players reflects that greater understanding. In addition, the labor law defenses asserted by the NFL would represent a very substantial barrier to asserting these kinds of claims going forward. The combination of advances in medical research, improved equipment, rules changes, greater understanding of concussion management, and enhanced benefits should, and hopefully will, prevent similar lawsuits in the future.

Translation? Good luck, settlement dissidents. You’ll need it.

Does the NFL settlement put pressure on the NCAA to settle its own concussion lawsuit, currently seeking class-action status?

Yes. While NCAA and its member institutions are doing a fine job putting pressure on themselves, the NFL settlement does provide a roadmap for a similar financial and legal arrangement.

So what happens to Elliot Pellman and his ilk — the people who actually know what the NFL knew about brain trauma, and when the league knew it?

The answer probably involves lucrative, ironclad non-disclosure agreements.

Will we ever know the full story?

Not if the NFL can help it. However, “League of Denial” figures to contain new revelations, and the truth has a way of coming out over time — a half-century ago, did anyone expect to find out that the Shot Heard ‘Round the World involved catcher sign-stealing?

The settlement also earmarks $10 million toward “medical, safety, and injury-prevention research,” with some of that going to support “joint efforts by the NFL and retired NFL players to promote education and safety initiatives in youth football.” That’s good, right?

It would be better if the NFL spent the same amount of money — or better yet, 10 times that amount — on making sure that as many high school and youth football games and practices as possible were staffed by certified athletic trainers. But hey: safe tackling!

In addition, any money given by the NFL toward brain trauma research should be viewed with the same skepticism that would accompany a Coca-Cola grant toward childhood diabetes research. Remember, the league leaned on ESPN for partnering on a PBS documentary that paints its product in a negative light, and ESPN is paying them billions.

Looking back, mismanaged concussions almost certainly played a major role in many players’ chronic brain injuries. Doctors and researchers directly and indirectly affiliated with the league produced bogus, denialist science. Players themselves were financially incentivized to hide and play through head trauma. In almost every way, NFL medicine is defined by business concerns and blatant conflicts of interest, from doctors who pay teams for the marketing privilege of treating players to an entire league whose continuing popularity and prosperity depends largely on minimizing and externalizing the inherent risks and ugly outcomes of its primary product. Has anything really changed?

No. The primary problem with the American financial system heading into the Great Recession was banks being too big to fail. Those same banks are now bigger than ever. There are NFL parallels if you care to look for them.

Does the settlement make football-induced brain trauma a moot issue? Personally, are you going to reverse course and start watching football again?

No. And no. On a personal level, I still can’t stomach watching young men destroy themselves for my amusement. Football is still football. It remains a brain trauma delivery mechanism. Knowing that players may have access to a health care kitty doesn’t particularly reassure me, and besides, if the history of the NFL (and, to be totally fair, corporate America) is any guide, league lawyers and administrators will work relentlessly to duck those obligations.

Looking at the bigger picture, football’s brain trauma crisis never has been primarily about the professional game. Generally speaking, we allow adults to choose dangerous jobs, provided they can give informed consent and their employers take workplace safety seriously. Children are a different story. The vast majority of football players in America are college, high school and elementary school students – kids. We protect them. We nurture them. We especially protect and nurture their still-developing brains. Are we comfortable subjecting them to potential cognitive harm for the sake of sport? With providing the most vulnerable players with the least protection? Is that an appropriate risk-reward tradeoff for our education system to be making? Is football boxing, or is it something else?

Those questions are complex. They have yet to be answered, and they figure to dominate the debate moving forward. Is that also a win for the NFL? Perhaps not.

Now that the lawsuits have been settled and he doesn’t have to worry about being deposed, will Roger Goodell finally, publicly admit that — duh — getting hit in the head while playing football is connected to brain damage?

Your guess is as good as mine.

Read the original article at Sports on Earth