Players sought $2 billion from NFL

The $765 million proposed settlement between the NFL and players who sued the league for allegedly concealing a link between football and brain damage ended up in court-ordered mediation only after the judge told players' attorneys that the bulk of their case was in "real danger of being dismissed," a source familiar with the negotiations told "Outside the Lines."

And while NFL attorneys confidently indicated that they would take the case to court, U.S. District Judge Anita Brody in the same discussion in her Philadelphia court chambers in July told league attorneys that at least part of the case was likely to survive, a possibility that would expose the league to potentially embarrassing disclosures and a continuing public relations nightmare.

Thus began a seven-week odyssey that culminated with Thursday's settlement announcement. The settlement, which still must be approved by Brody, would put $675 million of the $765 million aside to compensate former players and families of deceased players who have suffered cognitive injury. Other money will be used for baseline medical exams, and research and education at a cost of $10 million. Once it covers attorneys' fees of players, the league will pay out close to $1 billion.

Shortly after the July meeting with Brody, Christopher A. Seeger, a litigation attorney who represented the players, and Brad S. Karp, a partner with one of the NFL's outside law firms, met to discuss a potential settlement. The two men had held preliminary discussions as early as the previous August, but negotiations did not become serious until after the July meeting. Those negotiations, which involved former U.S. District Judge Layn Phillips, the court-appointed mediator, included dozens of sometimes-heated meetings and phone conversations and continued as late as 2 a.m. the day the settlement was announced.

Once in mediation, the players demanded slightly more than $2 billion to settle the case, the source said. The NFL indicated that it was unwilling to offer more than a token settlement and said it was prepared to try the case.

One attorney who represents dozens of players but was not directly involved in the negotiations said he was told that the NFL had initially offered "peanuts" and that the proposed compensation was commensurate with a "dog-bite" case. NFL spokesman Greg Aiello declined to comment Saturday.

Brody had signaled that she was going to side with at least part of the league's argument that some players covered by the collective bargaining agreement should not able to sue the league. That would have gutted the lawsuit in two ways. First, it would have removed many of the nearly 6,000 former players and/or their families suing, including, lawyers for the players believed, players who appeared in the league from 1994-2010, the controversial period at the heart of the lawsuit. Second, those who remained would have faced a major hurdle proving fraud allegations, given that the NFL's controversial concussion committee wasn't formed until 1994.

Even so, as meetings continued with Phillips and Brody, it became clear that the NFL was potentially facing years of litigation, even if many of the plaintiffs were to be tossed out of the case.

The negotiations became more urgent during the past two weeks, the source said. For the players, part of the urgency was forced by a Sept. 3 deadline that had been set by Brody for the two sides to report back to her. Lawyers for the players had become convinced that Brody would not extend the deadline and was prepared to make a decision that might weaken the lawsuit significantly. For the NFL, the pressures were clear. The league was eager to avoid having the matter hanging over the 2013 season.

To encourage a settlement, Brody repeatedly reminded the NFL about the continuing public relations damage. "She put a lot of heat on both sides and didn't let us get comfortable," the source said.

The meetings usually took place in New York at the offices Seeger Weiss LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP. The meetings included up to a dozen people, including one lawyer from the NFL, along with Phillips. Only a handful of the many attorneys hired by players took part in the settlement negotiations.

Lawyers for the players consulted with economists and actuaries to try to calculate how much money would be needed to cover the neurocognitive needs of retired players now and in the future. The calculations are difficult, in part because of the continuing debate over the science and the lack of knowledge about the prevalence of neurodegenerative disease in former players.

Part of the NFL's strategy to bring the players' monetary demands down included pointing out that years of litigation would have the effect of denying the players -- many of who needed medical and financial assistance -- the help they needed.

Some players and their families have criticized the $765 million settlement as too small to matter for an industry that generates nearly $10 billion annually. Including legal fees, which have not been determined, the financial burden to the NFL is likely to approach $1 billion. If a significant number of players were to exercise their right to opt out of the settlement agreement, Brody has the option of not accepting the settlement overall or issuing a ruling on the league's motion to dismiss the lawsuit.

According to the source, Brody, in the July meeting and in several follow-up discussions involving either her or the federal mediator, indicated to players' attorneys that they faced significant legal challenges. "Don't you think this case can be settled -- a lot of guys are going to be out of court," Brody told lawyers for the players, the source said. The source added: "The comments were always very consistent, it wasn't just posturing. It was, 'You guys have real legal hurdles here.' "

Lawyers for the players feared that among those disqualified would be players who appeared in the league from 1994 through the mid-2000s. During that era, a research arm assembled by former commissioner Paul Tagliabue repeatedly denied that concussions led to long-term brain damage in NFL players and attacked independent scientists who asserted otherwise.

That likely would have left older, retired players who were most in need of attention but had a more difficult case that the NFL concealed the connection between the sport, concussions and chronic neurodegenerative disease.