On This Date in Sports July 29, 1986: The $1 Judgement
In collaboration with the Sportsecyclopedia.com
A New York Jury finds that the NFL violated antitrust laws in its dealings with the USFL. However, the award just $1 in damages, unable to distinguish the amount of losses caused by the upstart league’s poor management versus the NFL’s Monopoly. The USFL had sought $1.69 Billion in damages, and due to the legal costs of the trial and the lack of a television deal, it would announce four days later it was suspending play for the upcoming season.
The United States Football League was born in 1982 as a Spring Football League. Playing its first games in 1983, the league made an immediate splash as they aggressively pursued star players from the NFL and NCAA. No team made more noise than the New Jersey Generals, who signed Heisman winner Herschel Walker to a contract worth $4.2 million, more than any other rookie was making.
Playing from March through July, the USFL found a nice niche of loyal followers in its first season with 12 teams. Some cities warmed to the idea of spring football right away, as they had no existing pro-football team or no baseball. However, in markets where baseball ruled, the USFL struggled to draw fans. Teams like the Los Angeles Express and Chicago Blitz routinely played in front of empty stadiums. Despite these struggles, the USFL added four new teams in 1984. At the same time, Donald Trump, Owner of the New Jersey Generals, began pushing for the league to take a more direct challenge to the established NFL. Two teams would fold after the second season, but Trump’s fall plan eventually gained momentum, and the league decided to begin playing in the fall in 1986. With several teams sharing NFL stadiums in the spring, more teams were forced to cease operations after the 1985 season, leaving the USFL with just eight teams heading into the 1986 season.
While playing their games in the spring, the USFL was looked at as a minor nuisance to the established NFL. Some teams were forced to increase their salaries at the fear of losing star players to the league. When the USFL announced that they would move to the fall, the NFL began taking a more aggressive stance. The NFL told television networks that they would cancel any contract if they showed USFL games. This led ABC, which had aired the USFL in the spring, to cancel their contract with the USFL over fears it would lose the rights to Monday Night Football. As it prepared for its first fall season, the USFL only had a contract with ESPN, which at the time began negotiating with the NFL to add cable television to its increasing television coverage.
The NFL’s aggressive stance toward the USFL over television left the league in a bind. Knowing it would not survive without television revenue, the USFL filed an antitrust lawsuit claiming the NFL had established a Monopoly. With ABC showing Monday Night Football, NBC showing AFC games, and CBS showing NFC games, the USFL had no way of finding a network home. The Fox Network was starting up and could not bid for sports as it was still trying to line up affiliates when it debuted its first primetime schedule in 1987. The trial was heard in the New York district of the Federal Court before Judge Peter K. Leisure. Lasting 42 days with six jurors consisting of five women and a man found in the USFL’s favor on July 29th. However, there was confusion when it came to the penalty phase. Unable to find an agreement over damages, the jury agreed to award just $1, assuming the judge would adjust the damages.
Under antitrust laws, the award would triple to $3, but the damage was done as the USFL needed the lawsuit to cover its debts totaling $160 million. Four days after the $1 verdict, the USFL announced it would suspend play, canceling the 1986 season and eventually folded. The USFL would appeal the decision but was rejected by the U.S. Court of appeals. In 1990, the USFL received a check for $3.76 from the NFL with interest added to the award.