The lead attorney for the U.S. Football League produced in federal court today a 1984 in-house memo from the head of the National Football League owners' Management Council to his staff, serving notice of an upcoming "closet meeting" for NFL owners to "scare" them about the USFL.
Attorney Harvey Myerson, pressing the USFL's antitrust suit, used an overhead projector to show the six jurors the memo written by Jack Donlan, executive director of the NFL Management Council, which serves as the owners' negotiating arm. Donlan's three-paragraph memo read, in part, "My function is to scare all of them [NFL owners] about the USFL, e.g. economics, draft, undergraduates."
NFL Commissioner Pete Rozelle, on the witness stand for the second consecutive day, disavowed knowledge of the letter. Joe Browne, an NFL spokesman, later indicated no such "closet meeting" ever took place.
The memo was part of Myerson's continued attempt to prove the NFL had "anticompetitive" intent and behavior toward the USFL. Myerson is expected to conclude his questioning of Rozelle on Monday when the USFL's $1.32 billion suit against the NFL resumes. NFL attorneys then will cross-examine Rozelle.
The USFL suit alleges that the NFL illegally "tied up" all three major television networks, violating the Sherman Antitrust Act. Since moving from a spring schedule to the fall of 1986, the USFL has been unable to secure a network contract.
Besides damages, the USFL seeks injunctive relief to force the NFL off at least one network so that the USFL might negotiate a deal with that network. Judge Peter K. Leisure presides over a trial that is expected to last until mid-July.
Myerson spent a good portion of the day trying to prove anticompetitive intent and actions by the decades-old NFL toward the fledgling USFL.
He prodded Rozelle about whether he tried to use "pressure or coercion or threats" to force CBS into signing a deal with the NFL in 1982. Rozelle admitted using "pressure" on CBS by telling its officials that rival networks NBC and ABC "had an interest" in acquiring the CBS package of games featuring National Football Conference teams. At the time, Rozelle testified, CBS had a right of first refusal to match the offer of other networks.
Rozelle said, "Sometimes you use pressure in negotiations. Other times the networks use big pressure on us." He also said, "Mr. Myerson, one does not try to pressure or coerce the biggest communication company in the world."
The five-year contract with CBS was worth $736 million to the NFL, according to Myerson. The USFL attorney said that Neal Pilson, former president of CBS Sports, termed Rozelle's negotiating tactics "a system of pay or else."
Rozelle did not indicate whether the CBS contract figure was correct and said he had never heard Pilson use such words.
At one point, Myerson zeroed in on the nature of the NFL's relationship with the networks, by questioning Rozelle about "his good friend" Roone Arledge, head of ABC News and Sports. Rozelle testified that he met with Arledge on several social occasions, but said, "I wouldn't say [he's] a personal friend, but I certainly respect what he's done in the field of television."
Myerson brought into evidence a December 1981 memo written by Carl Lindemann, a CBS executive, to Pilson. In the memo, Lindemann noted that CBS should not accept an invitation to attend a USFL meeting because when CBS had attended a similar meeting of the short-lived World Football League in 1974, its attendance was "considered an unfriendly act by Pete [Rozelle]."
Myerson asked Rozelle if the NFL followed the recommendation of a 1984 Harvard Business School presentation on "How to Conquer the USFL" and pressured networks away from the USFL by threatening them with a schedule featuring poor NFL teams.
First, Rozelle testified he had no knowledge that the USFL-related presentation was on the agenda at Harvard until after its presentation. Rozelle said, "When I read that presentation, I almost got physically ill."
Rozelle then denied that the NFL offered ABC or the other two networks a poor schedule to pressure them away from the USFL. He testified, "If we wanted to kill ourselves that would be a beautiful way to do it.
"To have the ratings fall would be a depressing event to the networks and to us."
Near day's end, Myerson questioned Rozelle about his statement that the USFL was "heading in a bad direction" in part because of so many franchise sales and relocations. Myerson countered by saying that the NFL had endured 15 franchise sales since 1961 and presented the jury with a lengthy team-by-team list.
Rozelle responded to Myerson that because the 28-team NFL has had 15 ownership changes through sales over 26 years, "I don't think that makes us unique."