The United States Football League was a short-lived professional American football league that played three seasons between 1983 and 1985. . . .
. . . [T]he USFL filed an antitrust lawsuit against the older league, claiming it had established a monopoly with respect to television broadcasting rights, and in some cases, to access of stadium venues.
The USFL claimed that the NFL had bullied ABC, CBS and NBC into not televising USFL games in the fall. It also claimed that the NFL had a specific plan to eliminate the USFL . . . . The USFL sought damages of $567 million, which would have been tripled to $1.7 billion under antitrust law. . . .
The case went to trial in the spring of 1986 and lasted 42 days. On July 29, a six-person jury handed down a verdict that, while technically a victory for the USFL, in fact devastated the league. The jury declared the NFL a “duly adjudicated illegal monopoly,” and found that the NFL had willfully acquired and maintained monopoly status through predatory tactics.
However, it rejected the USFL’s other claims. . . . In essence, the jury felt that while the USFL was harmed by the NFL’s de facto monopolization of pro football in the United States, most of its problems were due to its own mismanagement. It awarded the USFL only one dollar in nominal damages, which was tripled under antitrust law to three dollars. . . .
The verdict was a classic Pyrrhic victory. The USFL had essentially staked its future on the outcome of the suit, and considered the television-related claims to be the heart of its case. Almost immediately upon announcement of the verdict, it announced it was suspending operations for the 1986 season, with the intent of returning in 1987. . . .
The USFL appealed the award, but it was rejected by the United States Court of Appeals for the Second Circuit in 1988. This decision ended any chance of the USFL returning to the field, and the league formally dissolved shortly afterward. . . .
The USFL finally received a check for $3.76 in damages in 1990, the additional 76¢ representing interest earned while litigation had continued. Notably, that check has never been cashed.
What does this have to do with anything, you might ask?
Substitute “AMD” for “USFL” and “Intel” for “NFL,” that’s what this is about. Not saying AMD is doomed to face the same results, but legal actions are risky business, especially when you need to win.
As AMD becomes increasingly incapable of standing toe-to-toe against Intel due to fiscal feebleness, it will become increasingly obvious that the company will not be able to turn things around shortly on its own. There is no light at the end of the tunnel.
There’s no doubt AMD is pursuing any and every possibility to get new money. However, there is growing skepticism on Wall St. that AMD will become truly profitable anytime in the foreseeable future.
We have a chicken-and-egg situation. AMD has no chance to get back into the ballgame (or even stay in the stadium) unless it gets more money, but it can’t get more money because no one thinks they have a chance to make real money.
If you take a look here, you’ll see that the average stock analyst not only thinks AMD will be a financial loser for all of 2008, but 2009 as well.
So what can AMD do if they can’t sell themselves? Why, you sell the lawsuits.
To some degree, this has been going on already for a while, as evidenced by this AMD site.
Of course, what AMD really wants is to be able to “break free” from Intel competition. In AMDese, “open competition” means selling all the processors we make and get Intel-like prices for them. If that ever happened, AMD’s future would indeed be secure.
As losses continue and other reasons to back AMD wither away, AMD’s alleged victimization will be proclaimed (privately, behind closed doors, of course) as AMD’s biggest “real” asset, more than mere fabs or IP.
It’s almost pointless to try to figure out what will happen at AMD; they’ll take whatever they can get to keep them alive a little longer, alive long enough to see what their legal beagles can do.
However, no matter what happens, it’s clear why whoever does the what is doing it. They’re buying into the lawsuit and complaints.
A big gamble? Sure, but if the effective result of AMD’s legal actions is a bound-and-chained Intel, there will be a big payoff for those who backed AMD during the tough times.
It might not even take a big win for AMD to take care of itself. If AMD could swap its legal actions for a renegotiated patent agreement with Intel to allow it to be sold to somebody with deep pockets, that could be enough to keep AMD around for a long, long time.
However, if the legal results end up looking more like the USFL case with some extra zeroes after the “$3” (let’s say eight or less), game over.