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  • Both Colin Kaepernick and the NFL had incentives to settle the collusion grievance. After losing on summary judgment, the NFL offered a settlement, instead of risking the p.r. disaster. Kaepernick accepted the settlement instead of risking potential scorn from his critics. Also, why this settlement brings new light to the report that Kaepernick requested $20 million to play in the AAF.
By Michael McCann
February 15, 2019

Colin Kaepernick’s multi-year quest to prove that NFL teams conspired to exclude him from the league has ended without a finding.

On Friday, Kaepernick’s attorney, Mark Geragos, tweeted that Kaepernick—who last threw an NFL pass 25 months ago—and Eric Reid have resolved their pending grievances with the NFL. Shortly thereafter the NFL released an identical statement. Terms of the settlement are unknown. The parties have agreed to a confidentiality agreement, meaning any terms or findings from the grievance process are forbidden from disclosure.

As discussed below, either side can spin this settlement as a win. No doubt, it will be spun by Kaepernick’s supporters and his critics alike. In reality, the settlement is more like a draw that underscores the relative strengths and weaknesses for each side. Also, the absence of public knowledge of the terms of the settlement makes classifying it as a “win” or “loss” highly speculative.

A brief timeline of relevant facts that preceded Kaepernick filing his collusion grievance

In August 2016, Kaepernick, who then played for the San Francisco 49ers, began to kneel during the pre-game playing of the national anthem. Kaepernick described his kneeling as a non-violent form of expression designed to raise awareness of social and racial injustices. Kaepernick became both a recipient of praise and a target of hate. His advocates, who included Reid and other players who soon joined him in kneeling, lauded Kaepernick for calling attention to social causes. His critics denounced the kneeling as disrespectful to the country and as damaging to the NFL’s business model.

In 2016 Kaepernick played in 12 games for the 49ers, starting the team’s final 11 games of the season. San Francisco struggled during that stretch, but Kaepernick played reasonably well, throwing 16 touchdown passes against four interceptions, rushing for 468 yards and amassing a QB rating of 90.7. His QB rating was ranked 17th in the NFL and superior to the QB ratings of Philip Rivers, Eli Manning, Carson Palmer and several other starting quarterbacks. While Kaepernick was not at the level of a Tom Brady or an Aaron Rodgers, he was, at least statistically, a “middle of the pack” starting NFL quarterback.

While Kaepernick’s kneeling was a cultural phenomenon during the 2016 season, it didn’t take legal significance until ’17, when on March 3 Kaepernick opted out of his contract with the 49ers and relinquishing a contractual right to $14.5 million in salary. However, it’s unlikely Kaepernick would have received that salary: the 49ers general manager John Lynch planned to cut Kaepernick. By opting out, Kaepernick preempted the 49ers releasing him and gave himself, along with his agents Sean Kiernan and Jeff Nalley of Select Sports Group, more time to find a new team.

Now 714 days later, no new team has surfaced. Kaepernick received no offers in 2017, despite having a stronger ’16 season than the year before and despite several teams clearly needing a quarterback. The closest Kaepernick came to an offer was in the fall of 2017, when the Baltimore Ravens considered extending him one, but according to published reports, ultimately declined.

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Explanations for Kaepernick’s failed free agency have included that teams are supposedly unwilling to embrace his mobile style of play, even though several teams use mobile quarterbacks (Marcus Mariota, Deshaun Watson, Lamar Jackson and Josh Allen are among them, and one might argue likely 2018 NFL MVP Patrick Mahomes fits that depiction as well). Other commentators speculate that Kaepernick would only agree to sign with a team as a starter and that such supposed insistence has diminished teams’ interest. The defect with this purported explanation is that it hasn’t been tested: Kaepernick hasn’t turned down an offer to become a backup quarterback because he hasn’t been offered such a chance.

Instead, many have surmised that teams don’t want him because of his kneeling. Either teams philosophically disagree with his behavior or fear that signing him would lead to a sideshow distraction for the team.

Kaepernick’s theory of collusion

On Oct. 15, 2017 Kaepernick, with the assistance of his attorneys Mark Geragos and Ben Meiselas, filed his collusion grievance against the NFL. To prove collusion, Kaepernick needed to establish more than teams deciding to exclude him because they disagreed with his kneeling or his political views. In fact, a team owner or general manager could have openly admitted to not offering Kaepernick a contract because of the anthem without such an admission proving collusion. Collusion, instead, requires cooperation or agreement between at least two teams, or between at least one team and the league, to deprive Kaepernick of the chance to play. A team cannot collude with itself.

Over the first 10 months of the grievance procedure, Kaepernick’s legal team engaged in “discovery.” This refers to neutral arbitrator Stephen Burbank permitting Kaepernick’s legal team to access relevant NFL records and depose owners and executives under oath. NFL commissioner Roger Goodell, Dallas Cowboys owner Jerry Jones, the late Houston Texans owner Bob McNair, New England Patriots owner Robert Kraft and Denver Broncos general manager John Elway were all required to give testimony.

In April 2018, The New York Times reported on leaked recordings from an Oct. 2017 meeting between NFL players, NFL owners and league officials. The meeting made clear that several owners openly worried about President Donald Trump sharply criticizing both players who kneeled and the owners who employed them. Trump—who at different points in the past contemplated buying the New England Patriots and the Buffalo Bills, and who once sued the NFL as part of his involvement in the USFL—has repeatedly complained that NFL owners receive undeserved tax breaks in the construction of new stadiums. In tweets, the President has linked that view with his frustration over the NFL’s response, or lack-there-of, to kneeling players, including one tweet where he warned that the government ought to “change tax law!

Central to Kaepernick’s theory of collusion is the contention that NFL owners and team officials have conspired to exclude Kaepernick because they are fearful of Trump. Along those lines, there is belief among persons close to Kaepernick that Trump has personally relayed concerns. It has been noticed that Trump began to criticize Kaepernick and owners on March 20, 2017, which is one day after he flew on Air Force One with Kraft (working against that suspicion is the fact that Kraft openly criticized the President over his comments about kneeling players).

ORR: Le’Veon Bell Is Ready to Return, But Where?

Significance of Kaepernick defeating the NFL on summary judgment

Kaepernick’s collusion grievance received significant skepticism and Twitter ridicule. Many scoffed at the idea that teams would plot against a quarterback who led his team to a 2–14 record. Instead, his critics surmised, Kaepernick was simply upset about the lack of offers and, to deflect blame, invented a storyline that blamed others.

That skepticism changed dramatically last August when Burbank denied the NFL’s request for summary judgment. This was a major development, meaning that Kaepernick had persuaded Burbank that he possessed enough evidence sufficient to raise a genuine issue of material fact. In other words, Kaepernick had some evidence, even if the nature of this evidence remains unknown to the public. Also, due to the settlement’s non-disclosure agreement, the nature of this evidence will remain out of public light. In fact, both sides could be sued for breach of contract lawsuit if they divulge the contents. Meanwhile, attorneys in the grievance who breach confidentiality could risk sanction by state bars. That doesn’t mean we can’t speculate about the evidence. Such evidence could be in the form of an admission made during witness testimony (attorneys Geragos and Meiselas have deposed a number of owners, team officials and NFL officials) or perhaps a damning email, text or other correspondence sent by one owner to another.

For the NFL, the summary judgment ruling made the possibility of losing to Kaepernick a legitimate worry. The NFL knew that Kaepernick and his legal team had persuaded Burbank that evidence of collusion was present.

To be sure, Kaepernick still faced an upward climb in proving collusion. Under Article 17 of the CBA, Kaepernick had to prove collusion by (1) a “clear preponderance of the evidence” that collusion occurred and (2) that such collusion caused him economic harm—and this would have been a high standard to meet. Still, the NFL losing on summary judgment informed league officials that Kaepernick’s case was not frivolous and was instead an actual threat.

Why the NFL agreed to settle with Kaepernick (and Reid)

The NFL likely settled for a multitude of reasons.

First, the league may have realized after losing to Kaepernick on summary judgment that it could have lost the entire grievance. Burbank clearly saw “something” adverse to the NFL or else he would have granted summary judgment and tossed out Kaepernick’s grievance. The fact that he didn’t was clearly a worry to the league.

Second, a loss to Kaepernick on the merits would have been a public relations disaster for the NFL. Kaepernick would have shown that at least two teams, or the league and at least one team, had conspired against him. This type of finding would have been construed by media as proving that NFL owners are racially-insensitive or even racist. Kaepernick, for his part, would have been celebrated as a hero while Goodell would have been vilified (I realize many already view him as a villain, but that narrative would have taken on greater momentum). By settling instead, the NFL avoids admitting it did anything wrong. Don’t underestimate the value to the NFL in avoiding saying “we were wrong.” That value was apparent in the concussion litigation settlement and could be true here as well.

Third, a finding that the NFL colluded would have been badly damaging to labor relations between owners and players. The NFLPA would know for a fact that teams had colluded against at least one of its members and perhaps two if Reid was also victimized by collusion. Ask baseball players and the MLBPA how it was impacted upon a finding that MLB owners had colluded against baseball players in the 1980s: the finding caused lasting distrust. Moreover, considering the NFL and the NFLPA still haven’t solved the apparent riddle of how to craft a sensible national anthem policy, the NFL losing to Kaepernick would have emboldened the NFLPA to continue the fight over the anthem.

Fourth, the negative impact that would have been associated with the NFL losing to Kaepernick would have been exacerbated by the fact that Burbank was completely neutral. His decision would have been authoritative and credible. Likewise, the odds that the NFL could have successfully challenged Burbank’s award in federal court were exceedingly slim. Federal law is highly deferential to arbitration awards. It is extremely unlikely that Burbank would have made the kind of fundamental error necessary to undermine his award before a federal judge.

Fifth, the NFL and its teams could have owed Kaepernick a sizable amount of money. To be sure, the league could afford to write a large check. It reportedly generated about $15 billion in revenue last season. Still, at least in theory, Kaepernick could have been entitled to an amount of money higher than that paid to highest paid quarterback in the league (Aaron Rodgers, $33.5 million). Specifically, Kaepernick would have been awarded both compensatory damages and non-compensatory damages (the latter of which would have reflected punitive or punishment damages). Burbank would have calculated compensatory as the salary Kaepernick would have earned but for collusion, while non-compensatory would have equaled twice the amount of compensatory damages. Hypothetically, if Kaepernick had proven that but for collusion he would have signed an $20 million contract—a contract for a middle-of-the-pack starting QB—Burbank would have awarded him $60 million in damages: $20 million compensatory + $40 million non-compensatory. Taking this hypothetical to the next step, if collusion had caused Kaepernick to miss two seasons (2017 and 2018) and if he would have been paid $20 million in each of those seasons, then Burbank’s award would have been $120 million.

Sixth, there was an admittedly slim and farfetched possibility that Burbank ruling in favor of Kaepernick would have led to termination of the entire CBA. Under Article 17, (1) if Kaepernick had shown “clear and convincing evidence” that 14 or more teams had colluded against him; (2) if Burbank had found that these teams engaged in “willful collusion with the intent to restrain competition among teams”; and (3) if the NFLPA was the party the brought the proceeding that led to a finding of 14 or more teams colluding against Kaepernick—note the many “ifs” in that sequence—the NFLPA could have elected to terminate the CBA, which is set to expire in 2020. Obviously, it’s unknown if Kaepernick could have proven such a wide-ranging conspiracy, though it is perhaps notable that Burbank did not dismiss any teams from the grievance.

Regardless, in the unlikely scenario the NFLPA would have been given an option to terminate the CBA, it probably would have declined. A termination could have led to a work stoppage and it’s unclear if the NFLPA would have been prepared to negotiate a new CBA with the league.

Lastly, the NFL was likely worried about potential disclosures from the grievance process. Geragos and Meiselas have already deposed a number of owners, team officials and league officials. Had no settlement been reached, Burbank would have ruled on the grievance. In doing so, he likely would have authored a detailed decision. The decision would have referenced transcripts of testimony. Any unflattering and insensitive statements by NFL witnesses while under oath might have been revealed. Keep in mind, those witnesses had to truthfully answer probing questions asked by two very skilled litigators in Geragos and Meiselas. Even if testimony hadn’t proven collusion, it might have depicted owners and officials as insensitive or biased. Further, it’s possible that Kaepernick’s attorneys have uncovered damming texts, emails and other messages that might embarrass the league and its teams. Such evidence would also have been subject to reference in a written decision. While Burbank’s decision might not have been become public immediately, it likely would have surfaced eventually. Plus, the loser of Burbank’s award could have challenged it in federal court, thereby creating public records with detailed information about the grievance. The NFL has long tried to avoid the discovery process and disclosure of any discovery. It is one of the reasons why the NFL reached a global settlement on concussion litigation: to avoid the public learning how the league really does business.

Why Kaepernick (and Reid) agreed to settle

Like the NFL, Kaepernick had plenty of reasons to settle before waiting for Burbank’s decision.

First, Kaepernick and his legal team were disadvantaged by the applicable burden for proving collusion under Article 17. Burbank would have only ruled for Kaepernick if he identified a “clear preponderance of the evidence” that collusion took place and caused Kaepernick economic harm. This burden is higher than the “preponderance of the evidence” burden used in civil cases, a burden that colloquially means “more probable than not.” The insertion of “clear” before “preponderance” means Burbank had to be convinced. If he only leaned in favor of Kaepernick’s arguments, that would not have been enough. Kaepernick had to have made a compelling showing to win. Although it’s impossible to assess the odds of the NFL or Kaepernick winning given that the evidence remains hidden, the applicable burden alone clearly favored the NFL.

Second, Kaepernick losing the grievance would have brought him scorn from his many critics. The fact that Kaepernick defeated the NFL on summary judgment would have been ignored, and the focus would have been on Kaepernick losing at the end, and the symbolism that loss would have carried.

To that point, Kaepernick is likely more marketable by settling than losing. Nike has made him the primary face of its 30th anniversary “Just Do It” campaign and pays him several million dollars a year. While Kaepernick losing his grievance would not have caused Nike to cut him, a loss would have at least dented his marketability. Perhaps stated too bluntly, nobody likes a loser and apparel companies are aware of that when assessing an athlete and celebrity’s endorsement value.

VRENTAS: Nike and the NFL: How Two Companies Saw Colin Kaepernick in Very Different Ways

That’s not to say Kaepernick “cutting a deal” with the NFL won’t be used against him. By settling, some might question whether he was really a warrior of social justice. They could say if he’s willing to deal with the NFL, presumably for a financial payment (which as Robert Raiola notes would probably be taxable), then he put money above justice. To rebut that point Kaepernick could highlight how he has pledged many millions of dollars to charity in order to advance social causes. He could further maintain that the NFL would only agree to settle with him if they feared losing. That could be inferred as a sign that Kaepernick had made the NFL worry.

Along those lines, when does the NFL ever settle with individual players over their grievances? The league took Tom Brady, Adrian Peterson and Ezekiel Elliott to federal court, and it battled against Ray Rice and Greg Hardy until there were arbitration awards. Sure, it looks like (for now) the league and Kareem Hunt might not end up battling each other in arbitration or court, but let’s see how that plays out. The larger point is by settling with Kaepernick and Reid, the NFL could be viewed as less confident. That, in turn, could be construed by Kaepernick as a sign he really won.

Third, Kaepernick might now be better positioned to sign with an NFL team. He is no longer associated with a collusion grievance. A team doesn’t have to worry about whether communicating with him could become admissible evidence before the arbitrator. Kaepernick just saw Reid sign a three-year, $22 million contract with the Carolina Panthers. Maybe Kaepernick believes that he is set to sign with a team.

Why Kaepernick’s discussions with the AAF did not impact his grievance

Friday’s settlement between Kaepernick and the NFL brings new context to a report on by Barry Wilner of the Associated Press. Citing an unnamed source with knowledge of discussions between Kaepernick and the Alliance of American Football, Wilner reported that Kaepernick and the AAF had engaged in talks and that Kaepernick demanded at least $20 million to play in the AAF. On Friday, the Action Network’s Darren Rovell confirmed that Kaepernick negotiated with the AAF. Rovell reported Kaepernick’s demand exceeded $20 million.

• Making sense of Kaepernick demanding $20 million from the AAF

A $20 million a salary would hardly resemble a salary paid to any other AAF player. AAF players are paid, on average, about $83,000 a season.

A $20 million demand is much more in line with the salary of a middle-of-the-pack starting quarterback in the NFL. Data from Spotrac shows that a $20 million salary for an NFL quarterback would place his salary 16th among NFL quarterback salaries. Specifically, a QB paid $20 million would rank behind the 15th highest paid QB (Cam Newton, whose salary is $20.8 million) and ahead of the QB who would become the 17th highest-paid QB (Ryan Tannehill, whose salary is $19.3 million).

As detailed above, one could credibly argue that the 31-year-old Kaepernick is (or was) a middle-of-the-pack starting NFL quarterback and thus ought to be paid like one. If Kaepernick demanded $20 million from the AAF, one might surmise that he wasn’t genuinely interested in playing in the AAF. That could prove both factually true and an understandable perspective for someone in Kaepernick’s position to adopt. The AAF consists largely of players who have played sparingly in the NFL or simply failed in the NFL. The AAF’s salary structure is in line with such a player profile. Kaepernick knows that he has achieved a vastly superior profile.

To that point, and whatever one thinks about Kaepernick’s kneeling or his politics in general, Kaepernick’s statistical profile is more in line with an ordinary starting NFL quarterback. During his six seasons in the NFL, Kaepernick threw for 70 touchdowns and rushed for 13 more while throwing 30 interceptions. His career QB rating of 89 is superior to those of Joe Flacco (84), Eli Manning (84), Alex Smith (87) and Ryan Tannehill (87). Given this data, Kaepernick might conclude that he would be paid about $20 million if he played in the NFL. He could also surmise that he shouldn’t accept less than that amount from any league.

Kaepernick also has the financial leverage to decline to play with inferior players in an inferior league where he would face a risk of concussions and other serious injuries. As mentioned earlier, Kaepernick has an endorsement deal with Nike that reportedly pays him several millions of dollars a year. Kaepernick also earned more than $43 million in his six NFL seasons. Chances are, he doesn’t ever need to work again.

• Kaepernick’s demands to the AAF, a third party, is outside the scope of his NFL grievance

Whether or not Kaepernick demanded many millions of dollars from the AAF and whether or not such a demand ought to be regarded as reasonable or unreasonable for someone in Kaepernick’s position, Kaepernick’s discussions with the AAF did not impact his collusion grievance against the NFL.

Here’s why. Kaepernick insisting on $20 million—or $200 million, $2 million or even $2—from the AAF is outside the scope of his grievance under Article 17 of the CBA. A collusion grievance under Article 17 concerns labor and contract issues in the NFL, not those in other leagues.

As explained above, NFL collusion refers to at least two NFL teams, or the league and at least one team, conspiring to deprive a player of a collectively bargained right. Kaepernick has insisted that his right to sign with an NFL team was denied by a conspiracy of at least a couple of teams. If Kaepernick had proven that a team didn’t sign him because of his kneeling, Kaepernick would have proven a newsworthy political point that would have been sure to catch fire on social media. However, he would have not proven collusion. To prove that, Kaepernick needed to show a plot involving more than one team to keep him out of the NFL.

It’s important to note that Burbank’s analysis was limited to the boundaries of the Article 17 and the grievance’s record. Article 17 only concerns parties governed by the collective bargaining agreement—meaning NFL players, NFL teams, NFL owners and the league. Kaepernick’s negotiations with the AAF, or his discussions with Nike and other commercial entities, were outside the scope of the grievance.

Similarly, even if Kaepernick had proved that an NFL owner and President Trump had conspired in their opposition to Kaepernick, that fact wouldn’t have proven collusion. The President, like AAF and Nike officials, is only a third party in relationship to the CBA between the relevant bargaining units (the NFL Management Council and the NFLPA). Burbank, a seasoned attorney and a highly-regarded law professor at the University of Pennsylvania, was extremely unlikely to have exceeded the permissible scope of his authority as the arbitrator. To do so could have made an arbitration award (whether it was for the NFL or for Kaepernick) vulnerable to being vacated by a federal judge.

Kaepernick’s collusion was also governed by a relevant timeline. Under Article 17, a grievance must be filed within 90 days of the time when the player knows, or reasonably should have known, that he was victimized by collusion. Kaepernick filed his grievance in October 2017, meaning the alleged collusion (or at least the first act of alleged collusion) most likely began in the summer or fall of 2017. Kaepernick’s negotiations with the AAF over the last several months had no relevance to a claim against multiple NFL teams two years ago.

Kaepernick’s negotiations with the AAF confirm that he remains interested in playing pro football. But he’ll only do so at a salary that he believes justifies his talents and that helps to validate why he engaged in a historic, multi-year legal fight against the NFL.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.

Question or comment? Email us at talkback@themmqb.com.

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