Football fans will remember the very real prospect of a canceled 2011 NFL season due to a lockout by NFL owners who were looking to achieve more favorable economic terms from the NFL Players Association and its Executive Director DeMaurice Smith. Now that a full season has passed, the firm can reveal its role in the proceedings.
The Problem
The NFLPA wanted more player safety and health benefits, a more equitable share of revenues, and more transparency with financial information, among other issues. The parties were unable to find common ground given their very different perspectives and priorities, and a lockout dragged on for 18 weeks.
The Solution
In the end, the owners underestimated Smith's ability to negotiate and utilize a previously unheard-of ace in his back pocket: Lockout insurance for the players. John Cadarette, Managing Director with The Claro Group, worked behind the scenes to develop the prime-time lockout coverage with the NFLPA and its outside counsel, Latham & Watkins, to secure the lockout insurance and devise an overall negotiating strategy. They recognized that success hinged on the NFLPA having not only a litigation strategy, but also a game-changing bargaining tool in order to maximize the players' negotiating position. The major challenge facing Claro and the NFLPA was that a union-side lockout policy had never been written and simply did not exist. The combination of Claro and Latham's strategic thinking and diligence in pursuing such a policy in U.K. and U.S. insurance markets resulted in securing a high-limits $400 million insurance policy from 17 insurers that would replace lost player income in the event of a lockout. The difficult task of convincing multiple insurers to back this deal required complete secrecy so the NFL owners did not get wind of the deal.
