A Pair of Major Settlements

Well, two major settlements in the news today. On Friday, the NFL Players Association announced a settlement in Parrish Adderley et al v. NFL Players Inc. If you don’t remember, that’s the retired players law suit against the union for breaching licensing agreements over the use of their images. Incidentally, the suit lives on in a recent law suit from former Arizona State and Nebraska QB Sam keller against EA Sports and the NCAA over the use of player images.

Simultaneously, Midway Games’s shareholder Mark Thomas and the Midway Games creditors committee (these are the unsecured creditors), have secured a settlement that appears quite favorable to the creditors. If you haven’t been tracking the whole complicated mess, basically Thomas purchased Sumner Redstone’s super-majority stake in Midway for $100,000 – the deal of the century some said. He also purchased $70 million of Midway debt owed to Redstone’s company National Amusements. The debt, apparently, was structured $40 million unsecured and $30 million secured.  Originally, Thomas’s $30 million secured debt claim would have put him in the front of the line vis a vis the creditors in Midway’s bankruptcy reorganization.

That appears scuttled in the settlement, however. Thomas apparently has agreed to allow the $40 million in unsecured debt to be wiped out, and to accept a $5 million payment instead of the $30 million secured debt claim. This leaves him with a tidy chunk of change (though far far less than he could have received) and the creditors actually in a position to recover some of their money.

Somehow, I don’t think this is the last chapter in this shady saga. But we’ll see.

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NFL Retirees Win Suit Against Players Union

In a surprising turn of events, the NFL Retirees have been awarded $28 million by a jury verdict in their suit against the NFL Players Union. The decision in Maddengate came on Monday, when a jury found that the NFL Players Union had failed in their duty to promote the interests of ALL players, past and present. This opened the floodgate to punitive damages in the amount of $21 million, which, added to the $7 million in compensation awarded by the jury, adds up to over 10% of the union’s net worth. Union is expected to appeal.

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Madden-Based Lawsuit Powers Through

NFL Hall of Fame player Herb Adderly is suing the NFL Players Association.  His suit is similar to one filed by retired player Jim Brown against EA.  Both claim that the retired players never gave permission for their numbers and likenesses to be used in EA’s Madden game series.

Neither of the suits is protesting the use of their likeness per se, but rather both contend that the retired players have been cheated out of profits and proceeds from the games.  Adderly’s suit, a class action encompassing at least 2,000 players, even goes so far as to claim that EA’s failure to acquire Take Two Interactive was detrimental to the retired NFL players because such a deal would have been worth more money.  

It is important to note that Adderly is not suing EA, but rather the NFL Players Association, with whom retired players have long had a contentious relationship.  It remains to be seen whether gaming companies will be brought into the suit or implicated for any wrongdoing in the matter.

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