Donald Trump and the United States Football League

Long before his foray into presidential politics, Donald J. Trump was was best known as one of the most prominent businessmen in the world. From his gold penthouse in Manhattan to his prestigious golf courses all over the world, Mr. Trump has throughout his life attempted to brand himself as a “winner.” In many respects Mr. Trump is not incorrect in that assessment.

However, there is one area in which he would be hard pressed to admit that he was a “winner.”In the mid-1980s Mr. Trump bought the New Jersey Generals, a franchise in the United States Football League, commonly known as the USFL. If you do not know much about the USFL you are not alone. The league was founded in 1982 and subsequently went out of business by 1986. Many legal and business experts have placed the lion’s share of the blame at the feet of Mr. Trump. The demise of the USFL culminated in 1986 after the league and its owners brought an antitrust lawsuit against the National Football League. The jury in that case ultimately awarded the USFL with a $3.00 verdict, finding the NFL liable on only one of nine counts alleged in the lawsuit. Despite this legal ‘victory,’ the nominal damages awarded to the USFL would ultimately end up crippling the League.

Mr. Trump acquired the New Jersey Generals in 1983 and like most Trump business ventures, attempted to make them the best and boldest team in the league. He was able to acquire former Heisman Trophy winner Doug Flutie at quarterback and former New York Jets head coach Walt Michaels. Herschel Walker, another former Heisman Trophy winner, was already under contract with the Generals. Things seemed promising for a time. The team after a rough first season rebounded with a 14-4 season in 1984. The USFL was founded in the 1980s in the hopes that it could compete with the NFL. Part of the overall strategy of the USFL was to have their games played in the spring, while the NFL was in the midst of its offseason. For Mr. Trump, this strategy would not do. Trump once famously said, “If God wanted football in the spring, he wouldn’t have created baseball.”

By 1984 the USFL had incurred debts in excess of $100 million. The league however had recently signed a lucrative television deal which would increase its revenue. In an attempt to further expand the league, the owners of the USFL tried competing with the NFL for players and, most importantly, television revenues. In the summer of 1984, despite numerous warnings from ABC and the USFL’s consulting firm, the league and its owners voted to move their games to be played in the fall starting in 1986. This decision would ultimately become the beginning of the end for the league.

This shift towards competing with the NFL was viewed by some as an attempt to ultimately merge the two leagues together. In Boris Kogan’s law review article for the University of Berkeley he said, “Certainly Trump, and possibly other owners, were anticipating a future merger between the USFL and NFL. The likely answer is that USFL in support of the new fall schedule felt that it would be a successful strategy—whether by creating a merger candidate or a viable league—and less focused (or even aware) of future legal trouble with the NFL.”

The USFL ultimately brought an antitrust lawsuit against the NFL in the Southern District of New York seeking over $550 million in treble damages. A treble damages award would triple the damages claimed in the lawsuit, so in reality the USFL was hoping to secure a verdict worth over $1.5 billion. The USFL claimed that the NFL violated certain provisions of the Sherman anti-trust Act (15 U.S.C. §§ 1, 2). Essentially the League claimed that the NFL had established a monopoly over the market, detrimentally affecting the USFL’s television contracts with the networks.

After a lengthy discovery process fraught with pre-trial motions and five days of jury deliberations, the USFL was awarded $1 in nominal damages. Under the law of treble damages, that award was tripled to a whopping $3. The jury did find that the NFL had essentially a monopoly over professional football played in the United States. Despite this finding, however, the jury’s minimal award of nominal damages “suggested that the USFl’s failure to secure further revenue from television contracts or otherwise came at the fault of its own league owners and officials, rather than from the alleged anti-competitive actions of the NFL.”

This decision (also affirmed on appeal to the Second Circuit) would ultimately end up crippling the USFL. According to Mr. Kogan’s article, the USFL lost an estimated $163 million during its three years in business. As we know today, the NFL has grown into a multi-billion dollar business and is seen by many as the most popular sport in the United States.

In a 2009 interview for ESPN’s 30 for 30 documentary on the collapse of the USFL, Mr. Trump looked back on the lawsuit saying, “I think honestly the NFL did a very good job in that they did lose a big antitrust case, but they convinced everybody that Trump is very rich, he doesn’t need money so the jury sort of said hey we’re going to give the victory to Trump, but he doesn’t need the money and they were very smart on that.” Ultimately, most people intimately involved with the USFL looked back on Mr. Trump’s greed to compete with the NFL (and his own aspirations to become an owner of an NFL team) as one of the key factors in sinking the USFL. If he were to become elected President, one may ask, will he destroy the country the way he destroyed the USFL?

 

Additional Reading:

http://www.nytimes.com/1984/01/01/sports/trump-building-the-generals-in-his-own-style.html?

THE BATTLE: FROM THE PLAYING FIELD TO THE COURTROOM—UNITED STATES FOOTBALL LEAGUE v. NATIONAL FOOTBALL LEAGUE, 18 U. Tol. L. Rev. 871 (Summer 1987)
http://www.espn.com/espn/story/_/id/13255737/five-things-know-donald-trump-usfl-experience

http://mmqb.si.com/mmqb/2016/07/11/donald-trump-usfl-new-jersey-generals-owner

https://en.wikipedia.org/wiki/United_States_Football_League#USFL_v._NFL_lawsuit

http://articles.latimes.com/1986-07-30/sports/sp-18643_1_jury-finds-nfl-guilty

https://en.wikipedia.org/wiki/New_Jersey_Generals

http://www.espn.com/30for30/film?page=small-potatoes-who-killed-the-usfl&fb_comment_id=146152532196410_727303770747947#ffe5d201

https://www.law.berkeley.edu/sugarman/Sports_Stories_USFL_v_NFL__-_Boris_Kogan.pdf

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