Sports Law Blog
All things legal relating
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Thursday, August 31, 2006
 
Jerrell Powe Sacks the NCAA

Jerrell Powe, a prized football recruit for the University of Mississippi, has secured an important court victory in his quest to gain NCAA eligibility. Here's the story: Powe, rated as the country's top defensive tackle prospect and a top 25 overall prospect, is a learning disabled student who has played at Wayne County High School in Mississippi and also Hargrave Military Academy in Virginia (coincidentally, the same school where former NBA player Korleone Young, who I often write about, attended). But Powe received some bad news last week, when the NCAA declared him ineligible due to insufficient academics: he had to obtain a 2.50 GPA in "14 core high school classes" and a 17 on his ACT and while Powe scored an 18 on his ACT and finished with a combined high school GPA of 2.54, the NCAA apparently believes that Powe's GPA reflects too many correspondence classes at Brigham Young University, and also "too many irregularities in his high school course work and transcripts." The NCAA also alleges that Powe has repeatedly refused to "clarify" certain questions that it has about his course work.

In fairness to the NCAA, remember the context of its thinking here: it has been harshly criticized in recent months over "diploma mills" that enable high school football prospects to radically improve their GPAs, including by taking un-timed exams that they grade themselves (see our blog's coverage of Florida's infamous "University High School"). Having said that, there is no apparent evidence that Powe has received that style of "schooling" on his way to a 2.54 GPA. But still, the NCAA is probably uniquely sensitive to the topic of academic standards at this time.

But the NCAA may not have the final word. For one, Ole Miss doesn't want to lose one of its top recruits, so it immediately filed an appeal with the NCAA on behalf of Powe.

But Powe isn't waiting for the appeal to be heard. Instead, he has hired a lawyer: Attorney James Carroll (right) of Carroll, Warren & Parker in Jackson, Mississippi. And the move appears to be a good one, as several hours ago, Carroll secured a temporary restraining order requiring that Ole Miss enroll Powe. Here's the story from Robbie Neiswanger and Rusty Hampton in the Clarion Ledger:
Lafayette County Chancery Court Judge Edwin Roberts Jr. said Ole Miss must allow Powe to enroll in school by Friday — the final day students can enroll for the fall semester. Roberts also said in court papers that because Powe has met the NCAA’s minimum requirements for academic eligibility, Powe should be placed on athletic scholarship and be allowed to practice with the team, in accordance with NCAA rules and the binding scholarship papers Powe and the university signed in February.
So what will Ole Miss do: follow the NCAA or follow Judge Roberts? Although the University has no comment (other than "it's an unprecedented situation"), I think the answser is fairly obvious: follow the judge. Not matter how much the NCAA likes to flex it's muscle, it can't expect Ole Miss to pick it over a judge and face contempt of a court order.

**Please See 9/17/2006 Update: Jerrell Powe Drops Lawsuit Against Ole Miss: Where Will He Now Play Football?

 
An Accommodationist Season Begins


College football begins here in Toledo at 8:00 pm EST tonight when the Toledo Rockets game against the Iowa State University Cyclones arrives via satellite. The other games of the day are the ESPN-featured Mississippi State – South Carolina matchup and Northwestern’s game at Miami of Ohio, which has been dedicated to the memory of late NWU coach Randy Walker.

This season promises to be an interesting one for college football and the once-embattled Bowl Championship Series (BCS). Longtime readers will recall early postings which questioned the legality of the BCS arrangement under federal antitrust laws, such as Greg’s post from November 2003, Rick’s post from October 2005, Mike’s December 2005 post and guest-blogger Chad McEvoy’s December 2005 post.

This season represents the first to be played under a “five-bowl” BCS system. The fifth bowl was agreed to back in 2004 as part of an effort to ward off threatened antitrust action against the BCS and its privileged conferences. Under the new system, the champion of a mid-major conference like the Mid-American Conference (MAC), Western Athletic Conference (WAC), or Conference USA can earn an automatic BCS bid provided that:
a. Such team is ranked in the top 12 of the final BCS Standings, or,
b. Such team is ranked in the top 16 of the final BCS Standings and its ranking in the final BCS Standings is higher than that of a champion of a conference that has an annual automatic berth in one of the BCS bowls.
However, if two or more mid-major champions would qualify under these rules, only the higher BCS-ranked team would earn an automatic berth, while the other would be limited to consideration for an at-large berth (something that, while possible, remains unlikely).

The additional bowl and possibility of an automatic berth for a mid-major conference champion drastically reduce the likelihood of an effective Sherman Act challenge against the BCS, if for no other reason that the odds are there won’t be two such teams in a given year. Since only an undefeated, mid-major conference champion would have standing to challenge the BCS system, the new approach takes away that potential plaintiff. Now, one would likely need two undefeated mid-major champions (or possibly one-loss teams with quality wins over major conference opponents) for there to be one excluded team legally capable of raising a challenge.

For those who still dream of a college-football playoff, I guess all this means cheering for the likes of Utah, TCU, Northern Illinois, Tulsa and Toledo.

Tuesday, August 29, 2006
 
What’s Wrong with Tony Kornheiser

The hiring of Tony Kornheiser for the Monday Night Football announcing team continues an unfortunate trend. Increasingly, commentators don’t talk about the game they are supposedly covering. Instead, they talk about "sports issues," usually sports law issues, while the game goes on in the background. Both baseball and football give us the worst of this, as the many dead spots during the action give ample room for the commentators to pontificate about the state of the game, the commissioner’s doings, player-manager disputes, and the like. Last year’s MNF team, John Madden and Al Michaels, distracted the viewer constantly from game action, especially when the score became even a little one-sided. It’s as if the commentators prepare with talking points instead of game film.

But why employ ex-jocks or former coaches to try their unpracticed hands at this brand of meta-commentary when one can get a pro? Hence the hiring of a full-time, experienced opinion-maker like Mr. Kornheiser.

Maybe it’s just personal preference. I don’t want to watch the Sports Reporters or Bryant Gumbel when I tune in to a football game. It’s the game match-up that draws me, not a chance to hear Kornheiser pontificate or Dennis Miller offer canned one-liners. The constant argument is distracting. I used to go to a church that played music during the recitation of prayers. Who thought this up? Who thinks this is a good idea, to say to the audience we’re going to do one thing, lure them to the activity of that thing, and then, while doing that thing, distract them with something else? Ads for MNF hype the upcoming game and its stars; they don’t say tune in to hear someone give brief, offhand opinions on close issues. I no more want to hear Tony speculating on the legality of mandatory drug testing while a halfback runs off tackle than I want to hear soft rock music kick in while I’m reading from a prayer book. It’s also frustrating. Joe Theismann can explain how a quarterback reads defenses, but he’s obviously not very adept at trading arguments with a professional writer who in high school had his head in Latin conjugations while Joe had his arm around a cheerleader.

No, the fair opponent for Kornheiser’s attempts at quick intellectualisms would be the nemesis who helped make his career, Michael Wilbon. I enjoy PTI. I love MNF. I also have a TIVO. If for some bizarre reason I want to watch the two shows simultaneously I could make it happen. There might be a few folks for whom this sounds appealing, but I suspect not most of us. I like my expert football commentators to be expert in football.

 
Muslim Footballers Sue New Mexico State for Religious Discrimination


My colleague Howard Friedman's Religion Clause reports that three Muslim students dismissed from the New Mexico State football team have sued the school and coach for religious discrimination. The students are represented by the ACLU. As Howard explains,
The suit, filed on behalf of Mu'Ammar Ali, Anthony Thompson and Vincent Thompson by the ACLU of New Mexico, alleges that Mumme made Muslim students feel like outcasts, questioning Ali about his attitudes toward al-Qaida. Coach Mumme had other players recite the Lord's Prayer after practices and before each game, but made Muslim players pray separately. A University investigation of the charges found no evidence of religious discrimination.
While forced recitation of the Lord's Prayer (or any prayer) before a game is objectionable, cases like this face an uphill battle. Part and parcel of the American idea of football coaching is the paradigm of coach-as-tormentor. Comments that might be insulting, or even actionable, in a normal setting, are commonplace and expected in the post-game locker room.

Monday, August 28, 2006
 
Should male college athletes be allowed time off for paternity leave?

That's the question posed by a pending lawsuit filed against the NCAA by Kansas defensive tackle Eric Butler, who was denied an extra year of eligibility by the NCAA after missing the 2001 season following the birth of his daughter, Angelina (Kelly Whiteside, USA Today, 8/24/06, "Suit tests ban on leave for father-athletes"). NCAA regulations give a student-athlete 5 years to complete 4 years of playing season eligibility. However, the NCAA's pregnancy exception states a school "may approve a one-year extension of the five-year period of eligibility for a female student for reasons of pregnancy." Butler brought a federal civil rights claim alleging the NCAA violated Title IX since its pregnancy waiver applies only to females. A U.S. District Court has already denied Butler's request for a temporary restraining order, and Butler has requested emergency relief from the United States Court of Appeals for the Tenth Circuit because Kansas' season opens Sept. 2 against Northwestern State.

Butler argues that the NCAA should give college athletes the same opportunities that people in the normal workplace have, citing the federal Family and Medical Leave Act of 1993 which gives men who work at companies with 50 employees or more the right to take up to 12 weeks of paternity leave. Experts for the National Women's Law Center say that if eligibility is extended for child rearing then it should extend equally to men, but if eligibility is extended because of the physical effects of pregnancy then it should not extend equally to men. And the NCAA's position is that the rule explicitly states that it only applies to female students whose physical condition due to pregnancy prevents their participation in intercollegiate athletics.

The legal question in this case for purposes of establishing a Title IX claim is simply whether the NCAA's rule "discriminates on the basis of sex". I don't think it does. The rule doesn't treat women different from men; it treats pregnant women different from men as well as non-pregnant women. Many women (those who are not pregnant) are treated the same as men under the rule, and thus the rule does not treat similarly situated persons differently on the basis of sex.

But even if the rule does treat people differently because of, or on the basis of, their sex, disparate treatment prohibits "unjustified" sex-based distinctions. A rule that discriminates on the basis of sex is justified if the rule is necessary to address the special needs of a particular sex. For example, a rule that prohibits female students from participating in contact sports with male students is justified based upon the physical differences that exist between men and women. Here, the pregnancy exception is necessary because pregnant women can't physically participate in collegiate athletics.

 
New Sports Law Scholarship

New this week:
Aaron J. Hershtal, Note, Does Title IX work after school? California applies the three part test to municipal sports, 12 CARDOZO JOURNAL OF LAW AND GENDER 653 (2006)

Lacie L. Kaiser, Comment, Revisiting the Sports Broadcasting Act of 1961: a call for equitable antitrust immunity from section one of the Sherman Act for all professional sport leagues, 54 DEPAUL LAW REVIEW 1237 (2005)

Toni Wehman, Comment, Not part of the game plan: school district liability for the creation of a hostile athlete environment, 77 UNIVERSITY OF COLORADO LAW REVIEW 767 (2006)

Saturday, August 26, 2006
 
FIFA Election Monitors En Route to Nigeria


Back in May, I posted on FIFA efforts to suspend Cambodia's soccer federation after the ruling government engaged in manipulation of the federation's elections. In an effort at preventative shaming, FIFA has now decided to deploy election monitors to Nigeria to monitor Tuesday's election of a president for the country's soccer association. Given Nigeria's soccer prowess (currently 11th in FIFA's questionable world rankings), the state of soccer in that country is of far more international concern. Five candidates are vying for the soccer association's presidency. Although the candidates have engaged in a televised debate, critics have charged that few hard questions about candidates' ethics were raised. In a country where all major political parties have been charged with election rigging, it's no surprise that a soccer association could fall victim to the same sad state of affairs (as Greg noted in March, Nigerian soccer refs are permitted to accept bribes). Hopefully, international attention will be more lasting and effective than it has been in Nigeria's political arena.

Thursday, August 24, 2006
 
Why Do We Love Hating Maurice Clarett?

Harvard Law professor Jon Hanson and I have an op-ed in today's Providence Journal:

Jon Hanson and Michael McCann: The psychopathology of athlete worship

Providence Journal
Thursday, August 24, 2006

CAMBRIDGE, Mass.

TO SPORTS FANS, it probably wasn't a surprise to learn that former Ohio State University football star Maurice Clarett was arrested again the other week. The evasive running back who had carried the Buckeyes to the 2002 National Championship was unsuccessful in evading the police in a car chase that occurred near the home of a witness in his upcoming robbery trial. As if his location and the arsenal of four loaded guns in his car weren't suspicious enough, Clarett was sporting a Kevlar vest at the time.

Much like Clarett in his glory days, the story has legs, powerful legs. Everyone has now seen the post-arrest photos of Clarett, dressed in a jail-issued jumpsuit and looking beleaguered. Sports writers around America have penned countless condemnations of Clarett and his bad life choices. The following sample of news headlines give a flavor of the indignation:

"After Saying He Had Changed, Clarett Goes Down Familiar Path" (The New York Times).

"Maurice Clarett in Dire Need of a Reality Check" (The Philadelphia Inquirer).

"Clarett's Misplaced Sense of Manhood Meant Nothing but Trouble" (The Akron Beacon Journal).

Editorialists ratcheted up the righteousness. Scott Soshnick, of Bloomberg News, told readers in a column entitled "Maurice Clarett Doesn't Deserve Your Sympathy": "Clarett has no one but himself to blame for his latest incarceration." An editorial said, "all [Clarett] ever has been is a knucklehead." Another, entitled "Don't Cry for Clarett," attributes his failings to "self-absorption," "ego, and arrogance."

Letters to The Columbus Dispatch got even nastier (Ohio State is in Columbus). One: "Big Mo's actions only confirm what my pappy always said: 'Beauty is only skin deep, but stupidity goes clear to the bone.' " Another called for "a citywide ban against Maurice Clarett," saying that "[a]nyone wearing No. 13 this year during Buckeyes games should be encouraged to burn their jersey."

It is obvious that people care about this story; what isn't so clear is why. Why are Americans so interested in an event that, with a different culprit, would have spread no further than the local crime blotter? And why are so many sports writers preoccupied with a man who never played a down in the National Football League and who hasn't played college football in over three years? Most perplexing, why the vitriol? Why do we pile insults on a young man who is already a has-been?

Is it because a young black man was arrested and jailed? Nope. After all, we barely notice that over 15 million Americans are arrested each year and one out of every four black men will go to prison in his lifetime.

Might it be because he was carrying concealed weapons? Uh-uh. Thousands of people are arrested each year for that, and it is not a crime that elicits general outrage. In fact, more and more states are passing laws making it easier to carry a concealed weapon.

To understand why we Americans enjoy villainizing certain sports figures (Ron Artest, Terrell Owens, Rafael Palmeiro, Lawrence Phillips, Mike Tyson), it is helpful to understand why we make super-heroes of others.

Consider the most celebrated athlete in recent memory, Lance Armstrong. He has been the recipient of too many accolades to count, including Sports Illustrated's "Sportsman of the Year," the Associated Press's "Male Athlete of the Year" (four times), and ESPN's ESPY Award for "Best Male Athlete" (again, four times). Is Lance talented and successful? To be sure. And, yes, he won the Tour de France seven times -- more than any rider in history.

But those successes alone are not what make Armstrong our hero. In fact, not long ago Americans cared as much about French cycling races as they do about English cricket tournaments. In Armstrong's case, it wasn't so much the race that made the man; it was the man who made the race. And what we admire in this man is not that he is a winner, but that he is a winner after having nearly lost his life to testicular cancer.

We love loving Lance because his success confirms our faith in the power of perseverance. The message for us all is the American creed: We can overcome our situation, no matter how grim, if only we work hard and choose wisely.

Consider also ESPN's award for the "best sports moment of the year." In the single basketball game that Jason McElwain played in high school, he scored 20 points in just 240 seconds. Sure, that was an outstanding accomplishment, but what made it the "best moment" is that "J-Mac" is autistic and had spent the rest of the season as the team manager.

Oh, we love those stories! Indeed, we pay good money to see movies about fictional sports figures (from Radio to Rudy to Rocky) who overcome their situations.

This brings us back to the more tragic Clarett story. Why do we love hating Maurice? For the same reason -- just from a different angle. Clarett was at the cusp of fame. Had he simply chosen better, as one editorialist wrote, Clarett "would be signing autographs in some National Football League training camp right now. He'd be the face of a franchise. He'd be a millionaire. He'd be wearing Nike shoes and getting paid to do it. He'd be posing for magazine covers and billboards, instead of mug shots."

The message of Clarett's story is just the flip side of the same creed: If we work hard and make good choices we will succeed, but if we are lazy and make bad choices, we will fail.

And why do we love that message? Social science provides several reasons, but among the most important is our subconscious craving to believe that our world is just and that anyone can overcome circumstances. When our heroes are "good guys" who make "good choices" and our villains are "bad guys" who make "bad choices," that craving is satisfied.

If someone succeeds, he deserves it; if someone fails, he has no one but himself to blame. Feels good.

Jon Hanson and Michael McCann -- professors at, respectively, Harvard Law School and the Mississippi College School of Law -- are writing a book on how sports shape beliefs about law and policy.


Wednesday, August 23, 2006
 
Hollywood Talent Firm Consolidates Sports Agent Biz

SFX, Octagon and IMG, collectively, once dominated the player representation business. Consolidation in the sports agency industry involving these companies, which began in 1995, dramatically changed the sports agent market and transformed the industry from a "mom and pop" environment into the world of big business in which few independent sports agents remain prominent today. [However, one independent agent, Scott Boras, continues to flourish in the baseball industry and is arguably the most dominant agent in any single sport. In 2005, Boras virtually controlled the free-agent market in baseball by signing six premium free agents to more than $400 million worth of deals.]

This year, the agent business was consolidated even further with Creative Artists Agency’s decision to buy and merge the practices of former IMG football agents Tom Condon and Ken Kremer and former SFX football agents Ben Dogra and Jim Steiner. In an instant, the merger created the largest NFL player representation firm in the country, with about 140 players, including stars such as Shaun Alexander, Peyton and Eli Manning, and Carnell “Cadillac” Williams. CAA, a Hollywood talent firm, also purchased IMG's baseball practice lead by Casey Close.

When a company purchases a sports agent business, what is it really buying? The primary assets consist of the player-agent representation agreements. But the players association regulations governing agents in all four sports permit the players to terminate these agreements at will upon just a few days notice. And players frequently switch agents, so there is a risk that some of the agency's clients will not even be the agency's clients at some point or another after the sale. So in essence, the buyer is really just purchasing the future commissions owed by the player to the agents under these agreements. [The regulations only permit commissions to be paid to the agent as and when the player is paid his salary during the term of his player contract.]

The other primary asset purchased consists of the individual agents themselves via an employment agreement with the agent. But here too, it is very common for disputes to arise between individual agents and the agency that employs them, and the agent ends up leaving and takes clients with him resulting in a lawsuit. In the July 31 edition of the Sports Business Journal, Liz Mullen notes that many agents are speculating how long the marriage will last at CAA:
No sooner was the deal announced than other agents started saying it would never work. They reasoned that egos would clash, that players might shy away from being represented by what one agent called “a monstrosity,” and that Condon, long recognized as the most powerful NFL agent, and Dogra, an up-and-comer, would struggle over issues such as who would recruit which players. Arn Tellem, the prominent basketball and baseball agent who was formerly CEO of SFX Sports and is now CEO of athlete management for Wasserman Media Group, said that the most successful agents are extremely competitive and have a hard time working with their former competitors. “It is not in most agents’ nature to make it work,” Tellem said.
Another legal issue that arises from consolidation in the industry is the increased potential for conflicts of interest. Such a conflict can arise when an agency represents two or more similarly situated players at the same time who are competing for a finite number of available positions in the league, or, even if not competing for the same position, competing for a pool of available dollars that teams are willing to spend on players at that particular time. Representing over 140 NFL clients means that CAA is representing an average of 5 players per team. At some point, CAA will be negotiating contracts at the same time for multiple free agents competing for a job. An agent owes a fiduciary duty (duty of loyalty) to serve the best interest of each individual client, and it will be difficult for CAA to do so in this scenario. The NFLPA will be closely monitoring this situation.

Tuesday, August 22, 2006
 
Comparing Baseball Salaries to Income Inequality in the United States

Kevin Drum of Washington Monthly (probably my favorite non-sports blog) has a very interesting post on growing income inequalities in the United States, as he uses the growth of baseball salaries to explain his position (which, in sum, is that while aggregate wealth keeps increasing in the U.S., the rich and powerful have the greatest access to it, so they take most of it):
[I]t's not just the top 20% who have gained relative to the bottom 80%, it's also the top 1% who have gained relative to the 10% just below them. Do we really believe that the top 1% have an enormous educational advantage compared to the top 10%? And that this gap has increased over the past 50 years?

Consider professional baseball. Today's top players routinely sign contracts that pay them $5 million a year. A-Rod signed one that paid more than $10 million. But 50 years ago, the highest paid player earned about $300,000 (in inflation-adjusted terms). Why the 30x increase?

It's certainly not because A-Rod is relatively more valuable to the Yankees' pennant chances today than, say, Mickey Mantle or Roger Maris were in their day. Rather, what's happened is that there's fantastically more money sloshing around in professional baseball than in the past thanks to skyrocketing TV, radio, and merchandise sales. More money means higher salaries.

But that's not automatic, of course. There's another piece to the baseball puzzle: in 1966 the baseball players union hired Marvin Miller, a former negotiator for the U.S. steel workers, to head their organization. In 1972 they went on strike, and ten years later the reserve clause was history, free agency was in full swing, and player salaries were going through the roof. This is not a coincidence.

Similarly, the broader economy has grown enormously in the past few decades, but without a Marvin Miller on their side almost none of this growing pile of money has gone to middle class workers. And this, I believe, is the root cause of skyrocketing income inequality: economic growth combined with stagnating median wages has produced a colossal amount of extra money sloshing around in the system, and it has to go somewhere. And since the rich and powerful run the system, where else is it going to go but to the rich and powerful? They aren't going to dole it out to the less fortunate out of the goodness of their hearts, after all.

Alright, I'll admit it: I inserted the A-Rod picture above, which depicts his infamous and feeble attempt to knock the ball out of Bronson Arroyo's glove in Game 6 of the 2004 American League Championship Series (sorry, the Yankees' five game sweep of the Sox this past weekend still has me aggravated). But going back to Drum's post, he mentions Marvin Miller. Miller as you know, was a labor economist who served as executive director of the MLBPA from 1966 to 1982. During that time, and as Drum notes, he radically improved the rights and earning capacities of the baseball labor force.

So is Drum right: Does our country's middle class lack a "Marvin Miller type figure," and does that in part explain why so many in the "middle class" seem worse off than the "middle class" of years ago? I suppose some might describe Ralph Nader as the Marvin Miller of the middle class, although Nader, while influential, has not been in charge. What do you think?

 
Floyd Landis and Justin Gatlin Doping Scandals: Should Congress Get Involved?

Chris Graham of the Augusta Free Press has an excellent article on whether Congress should conduct new hearings on performance-enhancing drugs in the wake of the Floyd Landis and Justin Gatlin doping scandals ("The Politics of Steroids," Aug. 20, 2006). As you know, Landis is an American cyclist who won the 2006 Tour de France and who was recently fired from the Phonak team after a positive doping was confirmed, while Gatlin is an American sprinter who holds the world record in the 100 meter sprint and who also recently tested positive for doping. Graham wonders if Congress might consider holding hearings on doping in sports, much like it did in 2005 in the wake of the baseball steroids scandal.


Graham interviews several people for the story, including me:

"I would be surprised if Congress acted again on this issue in the near future," said Michael McCann, a professor at the Mississippi College School of Law and a regular contributor to The Sports Law Blog. "This certainly has garnered the attention of the sports world. But with elections coming up, with the war in Iraq, with Israel, it doesn't seem as if there is a window of time to address this," McCann told The Augusta Free Press.

Bob Thompson, the director of the Center for the Study of Popular Television at Syracuse University, points to another issue that could be serving to hold back congressional action. "I don't feel yet like we've really reached that point of total public outrage all united together in one sort of voice," Thompson said . . .

Arthur Caplan, the director of the Center for Bioethics at the University of Pennsylvania, thinks it is wise of Congress to steer clear of getting involved in the issue any more than it has. "The issue here is that there really isn't any right or wrong about what to ban or prohibit in sports once you get past risk," Caplan said . . .

Paul Haagen, the co-director of Center for Sports Law and Policy at Duke University, offers two other reasons for Congress to keep its nose out of the regulatory end of things. "With the international sports, I think there is a really strong case that this ought to be left to the World Anti-Doping Agency - and the reason for that is when you're dealing with international competitions, there's a lot of suspicion from country to country that individual countries are protecting their athletes, that they're not interested in rooting this out . . ."
Check out the story for more. Do you think Congress should get involved at this time, or ever?

 
World Series of Poker Champion to Face Lawsuit? SPOILER WARNING


For those still awaiting ESPN's September 26 broadcast of the August 10 World Series of Poker Main Event final table to find out who won it all, please STOP READING NOW.

The Las Vegas Review Journal gossip column reports that WSOP main event champion Jamie Gold may soon face a lawsuit from financial backers who will seek to claim some share of his WSOP $12 million payday.
There are rumblings of an "explosive" development in a story rife with more twists than an episode of "The Sopranos."

An insider says look for court challenges over whether Gold agreed to divvy up a share (or shares) of the $12 million prize he won at the World Series of Poker's main event Aug. 12 at the Rio.

* * *

Yes, Gold was sponsored by the gaming site, bodog.com, Horn said. But, "He will be an ambassador. No money was involved."

An Internet report claimed Gold's sponsor would get 50 percent.
According to the same article and to the Defamer blog, Gold is also coming under fire for alleged exaggerations and misrepresentations of his background and career as a Hollywood agent.

UPDATE (8/25/06): Yesterday, news broke that a lawsuit had been filed against Gold by another Hollywood promoter (rather than bodog.com). A judge has issued a TRO preventing the Rio from paying out half of the $12 million prize.

Monday, August 21, 2006
 
New Sports Law Scholarship

New this week:
Kevin J. Cimino, Note, The rebirth of the NBA - well, almost: an analysis of the Maurice Clarett decision and its impact on the National Basketball Association, 108 WEST VIRGINIA LAW REVIEW 831 (2006)

Jonathan Deem, Note, Freedom of the press box: classifying high school athletes under the Gertz public figure doctrine, 108 WEST VIRGINIA LAW REVIEW 799 (2006)

Leslie Ann Dougiello, Casenote, Inequitable procedures win gold in Olympic arbitration, discussing Jacobs v. United States Track & Field, 374 F.3d 85, 2d Cir. 2004, 24 QUINNIPIAC LAW REVIEW 887 (2006)

Saturday, August 19, 2006
 
Are golf courses good for economic growth?

At the Conglomerate Blog, Maryland Law Professor Lisa Fairfax asks whether building golf courses can spur economic growth in developing countries. She's done some research on the subject, and found studies that indicate golf courses promote growth. While there are some obvious endogeneity issues here, I wonder whether the same can be said for American states. Is building golf courses a route to economic development?

Friday, August 18, 2006
 
Golfer's Suit Against Agent Heating Up

Discovery battles have surfaced in pro golfer David Toms' suit against his agent, Links Management Group, LP. In a slip opinion available at 2006 WL 2355865, a federal magistrate judge denied Toms' motion to compel a deposition of Chad Campbell, another golfer and client of the same agent. Toms' lawsuit claims, as reported by a Baton Rouge TV station, "breach of contract, breach of fiduciary duty -- not looking out for Toms' best interest -- and seeks the termination of the contract and compensatory damages with interest." The federal magistrate elaborates:
Plaintiff's lawsuit generally alleges that he and Defendant are parties to a written contract; that Defendant breached the contract by not diligently developing, negotiating or managing prospective merchandising endorsements or sponsorships for Plaintiff; that Defendant alienated existing clients and other business associates of Plaintiff; that Defendant has not treated Plaintiff fairly, preferring instead to promote other golfers at the expense of Plaintiff; that Defendant has recouped fees to which it is not entitled under the contract; that Defendant held large endorsement checks for long periods of time, thereby depriving Plaintiff of interest on the money . . . . The petition asserts claims for breach of contract, breach of fiduciary duty, rescission of the contract, and unjust enrichment. Plaintiff also seeks a declaratory judgment regarding termination of the contract.
The relationship between professional athletes and agents -- and the fiduciary law issues posed by breakdowns in the relationship -- is one of the most interesting and challenging areas of sports law. This case will be one to watch for a later substantive opinion.

Thursday, August 17, 2006
 
NHL "Stealing" Russia's Star Hockey Players?

There's an interesting story released this week on NHL.com as well as in USA Today about hockey star Evgeni Malkin, who bolted from his Russian professional hockey league team, the Metallurg Magnitogorsk, last Saturday after it arrived for training camp in Helsinki, Finland. Malkin is widely considered the best in the world not currently playing in the NHL. Malkin's agents in the U.S. will not confirm where he is at the moment, though they believe he is "out of harm's way". This is good news for the Pittsburgh Penguins because, although Malkin is currently under contract with Metallurg, they own the rights to Malkin here in the States as he was their No. 2 overall pick in the 2004 draft. Now that he is out of Russia, Malkin is expected to sign with the Penguins, if he hasn't already done so, and report to their rookie camp. However, Metallurg general director Gennady Velichkin is threatening legal action against the Penguins: "We all are really shocked by his departure and we will take legal actions against the NHL club Penguins from Pittsburgh. Americans like to speak about democracy and teach the whole world how to live but engage in sport terrorism and simply steal people."

In the U.S., it is well established that if a player under an existing contract "jumps ship" and signs a contract with another team in a different league, the team that loses the player would generally have two claims. First, the team could sue the player for breach of contract and seek a court order by way of a "negative injunction" to prevent the player from playing for the new team. Second, the team could sue the new team on a tort claim for intentional interference with contractual relations if the new team signs (or attempts to sign) the player to a contract that overlaps with the player's term under his existing contract. However, the new team is not prohibited from negotiating a contract with the player for a term to commence after the expiration of the term under the player's existing contract because, from a policy standpoint, courts are sympathetic to the defendant's right to compete with the plaintiff for the personal services of others.

So this situation presents an interesting international sports law issue because the two teams are located in different countries, and each country has its own set of laws governing the issue. One major distinction between the two countries' laws is that Russian law apparently permits any employee under contract, even a professional athlete, to leave his or her job upon giving two weeks' written notice. Thus, unlike in the States, it appears that it might be difficult for Mettalurg to establish a claim against Malkin for breach of contract.

But what about a tortious interference claim against the Penguins? This is a complicated question. Mettalurg would most likely sue the Penguins in a Pennsylvania court and, assuming the court determines that jurisdiction is appropriate, the court would most likely apply Pennsylvania law. It then becomes a factual issue regarding the extent of interference committed by the Penguins. Mettalurg could argue that the Penguins were aware that Malkin was already under contract when they made Malkin their first round draft pick. However, that act alone probably wouldn't rise to the level of tortious interference on the part of the Penguins unless the Penguins also negotiated a contract with Malkin (or his agents) for a term to commence prior to the end of the Mettalurg contract term.

If the Penguins ultimately sign Malkin to a contract that overlaps with the Mettalurg contract term, it would make Mettalurg's case much stronger. On the other hand, even if the Penguins do sign Malkin, the Penguins could argue that the interference is not substantial (i.e that the Penguins didn't really do something that either prevents performance of the Mettalurg contract or makes performance substantially less likely) if Malkin could in fact terminate the Mettalurg contract by simply giving two weeks' notice. Mettalurg might have a good argument that the two week notice termination right simply allows the player to essentially opt out of the contract and not play, but such right does not permit a player to nullify an existing contract and sign with another team because that would make all multi-year terms in Russian professional sports contracts superfluous.

As the USA Today article indicates, Malkin isn't the only Russian player invoking the letter of resignation as a way to leave a team and play in the NHL. Draft picks Alexei Mikhnov (Edmonton Oilers) and Andrei Taratukhin (Calgary Flames) also sent such letters to their Russian teams this summer in order to join the NHL. It will be interesting to see if Mettalurg ultimately acts on its threat....

 
Sixth Circuit Rules Michigan High School Sports Seasons Discriminatory

In the latest opinion in a long-running dispute, the U.S. Court of Appeals for the Sixth Circuit yesterday upheld a district court opinion finding that the Michigan High School Athletic Association (MHSAA) violated federal and state law in the scheduling of girls' sports season. A news article on the case can be found here, and the court's opinion can be downloaded here. While this case may head back to the Supreme Court (which remanded the issue on a technical point in 2005), the 6th Circuit's decision also makes it likely that major changes in the state's sports scheduling will take place in the 2007-2008 school year.

Wednesday, August 16, 2006
 
Shoud Physicals Come Before Trades?


The recent failed Lee Suggs trade raises a curious aspect of the NFL regime for player trades. Two teams negotiate for the terms of a player’s reassignment, and once terms are “final,” the traded player reports to his new team. Only at that point does the new team conduct a medical examination of the traded player. The team gaining the player then faces a dichotomous choice: either declare the player has “failed” the physical, invalidating the trade, or declare that he has “passed,” such that the terms of the trade become finalized. Notably, the team conducting the physical does not have the option to renegotiate terms of the trade based on troubling, but not necessarily fatal medical discoveries. In addition, the team giving up the player has limited or no right to challenge the medical determination made by the acquiring team.

This is an odd way of trading, certainly foreign to most transactions in goods and services, and it may not represent the economically efficient arrangement. Consider the NFL trading regime as applied to, say, the sale of a used car. Let’s say I am selling a used car in which you are interested. As with a potential traded player in the NFL context, you have limited information about the vehicle in question; certainly, I, the seller of the vehicle, have more information. The NFL’s approach, applied to the auto context, would mean that you could look at film of other people driving the car (equivalent to watching film of an NFL player), but that you could neither test drive the car, nor take it to your friendly neighborhood mechanic, until after we had agreed to terms of the sale. Once we had inked the terms of the sale – and only then – you could take it and have someone more knowledgeable look under the vehicle’s hood, to see what it’s packing. At that point, the mechanic (presumably according to your instructions or specifications) could declare that the car either “passed” or “failed” its examination. If the car failed, you would be able to return it to me, along with a torn-up copy of our trade agreement. You would not be able to renegotiate a different price; nor would I have any power to challenge your assessment (or rather, your mechanic’s assessment) that the car was a lemon.

Can anyone imagine buying a used car this way? Yet that’s exactly how NFL trades seem to work. Wouldn’t more efficient trades be possible if the potential acquiring team could conduct a physical of the player before signing the terms of the deal? That way, the team would not face the “all-or-nothing” choice it does under the current regime. If the player were hobbled by some surprising injuries, the potential acquirer could negotiate for reductions in price (or, since trades aren’t for “cash” in American sports, other types of compensation).

To be sure, a proposal to allow pre-trade physicals might upset some players. After all, being physically examined would tip off the player that a trade was coming – something that a player under the current scheme might not find out until the deal is announced to the public. But at the same time, certainly players like Suggs would appreciate not being declared “physically unfit” to play the game – a moniker that can’t be good for a player’s next contract bottom line.

At a minimum, it seems that the NFL should clarify the standards under which teams are permitted to declare a player has “failed” his medical exam. That would reduce the likelihood of the kind of bad feeling expressed by the Cleveland Browns this week, according to the San Jose Mercury News:
The Browns released a statement that disputes the Jets' medical decision, with GM Phil Savage saying that Suggs will return to practice immediately.

"Medical opinions can vary from team to team, and obviously this is one team's opinion," Savage said.

Said Browns coach Romeo Crennel: "They've got a new regime down there, so maybe they're doing things a little differently. All I can say is the kid was practicing for us."

Tuesday, August 15, 2006
 
New Federal Lawsuit on Whether Fantasy Sports Are Forms of Gambling

Tresa Baldas of the National Law Journal has a feature story on a complaint recently filed in the U.S. District Court for New Jersey asserting that ESPN.com, CBS.sportsline.com, and Sportingnews.com are engaging in illegal gambling by hosting pay-to-play fantasy leagues with lucrative prizes (also available on Law.com, 8/14/2006). The claim is being brought by Charles E. Humphrey, Jr., a Colorado attorney whose practice focuses on gambling law. He filed his suit in New Jersey because of that state's gambling loss recovery statute, which, interestingly enough, was originally passed in 1710 to protect English aristocrats from gambling away their inheritance and allows for a "private attorney general," or qui tam plaintiff, to recover half of gambling losses, with the other half going to the state. As Baldas notes, six other states, and the District of Columbia, have similar laws allowing a third party to recover gambling losses-Georgia, Kentucky, Illinois, Massachusetts, Ohio and South Carolina.

Humphrey contends that fantasy players can often lose because of circumstances beyond their control, like plain bad luck. Specifically, he said that if a baseball pitcher throws out his arm, or a football player twists an ankle, or a coach pulls out a star player to give him a break, those are all circumstances beyond the player's and bettor's control and thus consistent with a game of chance.

Humphrey's lawsuit is apparently causing great consternation among fantasy sports operators, and has elicited response from their lawyers that fantasy sports are about skill:
The lawsuit has raised some commotion in the fantasy sports industry, which has invited a team of attorneys to discuss the potential impact of the suit at the 14th Fantasy Sports Trade Conference in Las Vegas on Aug. 30.

"People of course are nervous about [the lawsuit] but the general feeling in the industry is that fantasy sports are not gambling," said Glenn Colton of the New York office of Palo Alto, Calif.'s Wilson Sonsini Goodrich & Rosati, who will speak at the conference. Colton, who also represents the Fantasy Sports Trade Association, doesn't believe Humphrey's suit will succeed.

"I think that the premise that [a fantasy sport] is more chance than skill is simply wrong," Colton said. "There are very large number of ways in which someone can skillfully and intellectually predict how a player is going to perform." For example, Colton said, a fantasy football player can study offensive coordinators' techniques, evaluate who gets the ball more often-wide receivers or running backs-or study a quarterback's performance.
Baldas also interviews Attorney Rudolph Telscher and me:
Michael McCann, who teaches sports law at Mississippi College School of Law, does not think Humphrey's suit will prevail.

"Fantasy sports just don't strike people as immoral. Even if his argument is technically correct, it lacks the moral weight that is so crucial in many other litigations," McCann said. He added that the name of the game itself-fantasy-"attempts to suggest that it's not real, that there's an innocence to it."

Attorney Rudy Telscher of Harness, Dickey & Pierce in St. Louis recently won a case on behalf of a baseball fantasy league operator suing over the rights to use player statistics.

Major League Baseball argued that fantasy leagues needed a license to use the information. But on Aug. 8, a federal judge ruled that fantasy baseball operators do not need licenses to operate such leagues. C.B.C. Distribution and Marketing v. Major League Baseball Advanced Media, No. 4:05-CV-00252 (E.D. Mo.).

Telscher said that the ruling was a big win for fantasy operators, which would have had to shut down had the judge ruled otherwise, and for fantasy players, who may have had to start paying fees for player statistics. "I think a loss would have definitely crippled [the fantasy industry]," he said.
We'll keep you posted on Humphrey v. Viacom Inc., No. 2:33-av-00001 (D.N.J.). For other coverage of fantasy sports on this blog, please click here.

Monday, August 14, 2006
 
Marquette Conference on Individual Performer Sports

Marquette's National Sports Law Institute will be hosting an interesting conference (CLE credit available) on October 8 entitled Individual Performer Sports: Current Legal and Business Issues.

Panels include:
Internal Regulation Issues in Individual Performer Sports and Public Law Limits on Authority

Transsexualism and Athletic Competition

Legal and Business Issues in Tennis, Golf & Track & Field

Legal and Business Issues in Emerging Individual Performer Sports
For more information, or to register, go to this site.

 
New Sports Law Scholarship

New this week:
Melissa Steedle Bogad, Note, Maybe Jerry Maguire should have stuck with law school: how the Sports Agent Responsibility and Trust Act implements lawyer-like rules for sports agents, 27 CARDOZO LAW REVIEW 1889 (2006)

Kenneth B. Franklin, Note, A brave attempt: can the National Collegiate Athletic Association sanction colleges and universities with Native American mascots?, 13 JOURNAL OF INTELLECTUAL PROPERTY LAW 435 (2006)

Jacob Jacoby, Sense and nonsense in measuring sponsorship confusion, 24 CARDOZO ARTS & ENTERTAINMENT LAW JOURNAL 63 (2006)

 
New NFL Commish Has His Work Cut Out for Him

Vito Sellino has an interesting piece in Sunday's edition of the Florida Times-Union, in which he addresses a common misperception in the sports world that new NFL commissioner Roger Goodell took over from Paul Tagliabue a "well-oiled machine" ("Goodell's hands full with heavy contract issues"). Sellino interviewed Jacksonville Jaguars owner Wayne Weaver, who said the consensus of owners right now is that they need a new business model. Despite the fact that the owners passed a new collective bargaining agreement last March by a 30-2 margin, that agreement has yet to be finalized in written form and, according to Sellino, many owners appear to have buyers' remorse. Weaver said he voted in favor of the new labor deal because "labor peace was more important than having a labor strike or Armageddon."

At the final hour, the owners and the union agreed in principle on a very complex and detailed revenue sharing plan that still hasn't been reduced to writing. Indeed, the very next day following the announcement there appeared to be confusion among the owners about how the revenue sharing would work, and some owners were even questioning what it was they agreed to regarding revenue sharing. Now, five months later, 32 owners and the union are still trying to come to agreement and accurately reflect in writing what they agreed upon last March. It even appears as though there is some disagreement among the "have's and have not's" regarding the basics of the revenue sharing plan. Sellino wrote:
"The way it's set up, the small-market teams must pick up the costs that help the big-market teams make more money. Weaver has called that agreement "unsustainable" in the long term. Small-market owners will closely watch to see how Goodell handles this issue because they're concerned that big-market teams will insert qualifiers in the deal and limit the money the lower-revenue teams receive."

Here we go again! It remains to be seen how much longer the so-called "labor peace" in the NFL will actually last. Even if and when the owners and the union finally agree upon the precise terms and language, Sellino points out that, in just 27 months, the vote of only nine owners would enable them to opt out of the deal, which would then expire after the 2009 season and the onus would then be on Goodell to convince Gene Upshaw that the union should give back some of the perks it won last March. Good luck with that Mr. Goodell....

Friday, August 11, 2006
 
Redskins Trademark Challenged as Offensive (Again)


In the latest salvo in a long-running war with the Washington Redskins, a group of Native American activists has filed a complaint with the Patent Trademark Office (PTO) seeking cancellation of the registered mark on the grounds that it is offensive. The petitioners argue that the term "Redskin" "was and is a pejorative, derogatory, denigrating, offensive, scandalous, contemptuous, disreputable, disparaging, and racist designation for a Native American person." A similar complaint was ultimately rejected by a federal court in Pro Football, Inc. v. Harjo, 284 F.Supp.2d 96 (D.D.C. 2003).

However, this time around, as WSJ Law Blogger Peter Lattman explains, the plaintiffs have an interesting strategy. The court in the previous case found that
laches (essentially, a statute of limitations) barred the Native Americans’ claim because the Redskins had registered their trademark way back in 1967. The Native Americans then appealed to the D.C. Circuit, which issued an opinion last year declining to rule on disparagement but asking the trial court to reconsider the laches issue.

So how do the new petitioners get around the laches issue? They’re young, ranging in age from 18 to 24, so their claim isn’t stale.

 
How Not to Teach A Softball Team to Slide

A New York appellate court has upheld a trial court's decision allowing some portions of an injured softball player's suit against her school to go forward. See Ross v. New York Quarterly Meeting of the Religious Society of Friends, 2006 WL 2291108 (N.Y. App. 2006). The plaintiff had twisted and fractured her right lower leg while performing an exercise to practice sliding. According to the court,
The drill was conducted in the school gymnasium, under the supervision of the softball team's coach and her assistant, both of whom were defendant's employees. The students took turns running across the hardwood floor toward an area where the floor was covered by parachute material, where they were directed to slide on the material. . . . [P]laintiff testified that the coach and her assistant did not smooth out and reset the material after each student's slide . . . .
The appellate court upheld the trial court's decision to let the plaintiff proceed with her case over the defendant's primary assumption of risk argument. The court reasoned that the plaintiff had raised a triable issue of fact as to whether the softball team coaches had increased the risks ordinarily associated with softball practice participation:
To begin, plaintiffs' expert opined that the coach unreasonably increased the risks of the exercise by directing the students to slide while wearing sneakers, which, according to the expert, would create traction on the gymnasium floor from which injury could result. In addition, the expert opined that, if (as the . . . plaintiff testified) the parachute material were not smoothed out and reset before each successive slide, such an omission was a breach of sound coaching practice that could have been the cause of the accident. In this regard, it is significant that . . . the accident occurred when her leg "got caught" in material that was "bunched up" from the previous slide. Finally, the expert opined that the coach should not have directed the . . . plaintiff to begin sliding before she reached the parachute material. Given that the uncovered hardwood floor would have generated greater friction than the material, beginning to slide while still on the uncovered floor (if this is what the infant plaintiff did) could have been a cause of the accident.
However, the court rejected plaintiff's claim that the failure to use a "spotter" increased the risks associated with the sport which plaintiff assumed by way of her voluntary participation. The court opined, "If plaintiffs were permitted to go to trial on this theory, predicated solely on defendant's alleged failure to realize a conceivably attainable additional increment of safety, little would remain of the well-established doctrine of primary assumption of risk."

Tuesday, August 08, 2006
 
Judge Rules in Favor of Fantasy Baseball League

Today U.S. District Court Judge Mary Ann Medler ruled in a 49-page summary judgment that baseball and its players have no right of publicity to their names and playing records associated with statistics generated for fantasy baseball leagues. MLB, which paid the MLBPA $50 million for an exclusive right to license the stats for this purpose, claimed that CBC Distribution and Marketing Inc. (which runs CDM Fantasy Sports) violated the players' right of publicity by using their names in connection with the use of stats. Essentially, MLB is stepping into the shoes of the MLBPA via the license and asserting the claim that could otherwise be brought by the players.

According to Judge Medler, even if the players could claim the right of publicity to protect their names and information from commercial ventures by others, the First Amendment takes precedent because CBC is disseminating the same statistical information found in newspapers every day. Judge Medler also wrote: "The names and playing records of Major League baseball players as used in CBC's fantasy games are not copyrightable. Therefore, federal copyright law does not pre-empt the players' claimed right of publicity."

I disagree with Judge Medler's comment about the applicability of the First Amendment here because I think it's a stretch to say that fantasy sports leagues are serving any sort of newsworthy purpose. Fantasy sports leagues are basically games -- a form of entertainment. Some would even say it's akin to gambling. The issue from a right of publicity claim standpoint is simply, to what extent can third parties use the names and likenesses of athletes and entertainers, without consent, for their own commercial advantage?

So where do we draw the line on what constitutes "commercial advantage"? Obviously, newspapers are free to use the names. But if Nike were to use Tiger Woods without his consent, I presume nobody would question that Tiger would have a valid claim against Nike. What about baseball trading cards? Judge Medler's decision appears to be at odds with existing case precedent holding that Topps is not allowed to print and sell cards without the players' consent. How is the use of players' names and stats on trading cards any different from their use in fantasy leagues? Both companies are using the information for their own commercial advantage in a non-newsworthy context.

 
From Intern to Commish


The N.F.L. has made its choice for its next Commissioner from five finalists, and that choice is insider Roger Goodell.

Monday, August 07, 2006
 
Chicago Panel on Title IX

The Federalist Society is sponsoring a lunchtime event tomorrow, August 8, in Chicago, entitled "Title IX and Athletics: The Debate over Surveys, Quotas, and the Three-Part Test." The panel includes former Iowa Athletics Director Christine Grant and University of Chicago Law Professor Richard Epstein, who has recently turned his libertarianism / law and economics analysis to Title IX.

 
10th Circuit Partially Reverses Jury Verdict in Broncos Ownership Dispute Case

On August 1, the U.S. Court of Appeals for the 10th Circuit partially reversed a jury verdict that had gone in favor of former Denver Broncos owner Ed Kaiser (who had sold the team in 1984). See Kaiser v. Bohlen, 2006 WL 2130439 (10th Cir. 2006). Greg blogged about the underlying dispute and jury verdict back in February 2004 in this post. As Greg's post notes, the jury gave Kaiser a partial victory; the district court subsequently ordered specific performance allowing Kaiser to buy back an ownership stake in the company that owns the Broncos.

The 10th Circuit's holding is based on a narrow reading of the Right-of-First-Refusal provision of the contract, and essentially involves a different interpretation of the contract than the district court's. A more interesting aspect of the decision may be the court's opening paragraph:
If sport be a metaphor for life, then surely the sale of a National Football League franchise must be like the game itself. Sophisticated businessmen, armed at the elbow with teams of experts, including transactional lawyers, advance their offensive and defensive strategies towards the goal of obtaining a contract, shaking hands, and sealing the deal. When the ink is dry, the game is over. If a dispute arises, our role, like that of a referee, is to ensure that the parties live up to their agreements, follow the law, and play by the rules.
Kaiser has vowed to continue his fight in state court.

Sunday, August 06, 2006
 
Welfare for Billionaire Team Owners? Paul Allen, the Portland Trail Blazers, and Chapter 11 Bankruptcy

Helen Jung of the Portland Oregonian has an excellent article on Portland Trail Blazers' owner Paul Allen and what he plans to do with his franchise (Will He Hold the Ball, Dish, or Drive?, Aug. 5, 2006). Until last week, Allen, who co-founded Microsoft with Bill Gates and who Forbes Magazine ranks as the world's 6th wealthiest person with a net worth of $22 billion, had planned to sell the team, in part because of frustrations over the revenue he obtains from his deal with the Portland Arena Management group, which hosts the Trail Blazers' home games in the Rose Garden, and in part because of poor management decisions concerning player talent and player contracts (e.g., Zach Randolph's $86 million deal). In fact, the Blazers, which had the NBA's worst record last season, are expected to lose over $100 million in the next few years. But Allen could not find a buyer that met his price, even though the Arena Management group claims that he turned down several lucrative offers.

Blazers' fans are now wondering what Allen--who, if the Seattle Supersonics relocate to Oklahoma City, may seek to relocate the Blazers to Seattle, where he already owns the Seahawks and lives nearby--will do.

As Jung details, one option would be to do nothing. When you are worth $22 billion and you get to own an NBA team, what's a $100 million in losses, really? And actually, because of federal income tax write-offs, he might be able to write-off the losses, thus taking some of the sting out of them.

A second option would be to buy back the Rose Garden, which he owned from 1995 to 2004. That is said to be Commissioner David Stern's preferred option, although bad blood between Allen and the Arena Management group apparently makes that unlikely.

A third and perhaps more controversial option would be to try to put the Blazers into Chapter 11 bankruptcy protection, which would enable the Blazers to stay in business while a bankruptcy court managed its reorganization and franchise-related decisions. Part of the reorganization could entail the Blazers being relieved of the obligation to pay some or all of the player contracts. However, those contracts are guaranteed by the NBA, meaning the NBA would likely pick up the tab for Paul Allen, at least until the reorganization was complete. So that means the other 29 NBA ownership groups would be paying off the contracts of Allen, the NBA's wealthiest owner.

Jung interviews me for the story on this point:
Another significant obstacle would be getting the NBA and other team owners to go along with a bankruptcy-filing-and-relocation attempt, said Michael McCann, a law professor at the Mississippi College School of Law and sports-law expert.

The league -- and other team owners -- might have to take on the responsibility of paying player contracts in a bankruptcy situation, McCann said. Plus, there's the league's image.

"There comes a point where fans say enough is enough," he said.

So how realistic would Chapter 11 be for Allen? I don't think it's very realistic. Depending upon how a court grants relief (and if it grants relief), using Chapter 11 protection to "protect" the Blazers could potentially set-off a disastrous precedent for the NBA and pro sports leagues in general: if teams can get out of bad player contracts by simply declaring bankruptcy, other franchises would seemingly be penalized, since they would be paying off the contracts of the bankrupted franchise (sort of like an unintended form of revenue-sharing). Granted, other NBA owners could agree to not use that mechanism in the future, and could try to condition future purchases of NBA franchises upon the waiving of the right to declare bankruptcy, and thus make this a one-time problem--a Coase Theorem style solution, if you will.

But even as a one-time event, an NBA franchise going into bankruptcy would seem very embarrassing for the NBA--especially considering Allen's profound personal wealth--and possibly damage the league's reputation and hurt the value of other NBA franchises. It would also call into question whom exactly bankruptcy law is supposed to protect; I don't think billionaires like Paul Allen are the intended beneficiaries.

For much more on this story, be sure to check out Henry Abbott's excellent post on True Hoop and Dwight Jaynes' excellent on-line column. There's some other great stuff on Helen Jung's blog, Playbooks and Profits.

Saturday, August 05, 2006
 
USA Equestrian Escapes Antitrust Case


On August 2, USA Equestrian Federation (USEF), Inc., the National Governing Body for "equestrian sports" (such as "jumping," "dressage" and "hunter"), won an antitrust case in the United States Court of Appeals for the 11th Circuit. See Jes Properties, Inc. v. USA Equestrian, Inc., 2006 WL 2136260 (11th Cir. 2006). At issue was the USEF's "Mileage Rule," which
requires that any A-rated recognized competitions held on the same date must be held at least 250 miles away from each other. This is true for all but some Northeastern states, which are subject to a 125-mile radius distance for A-rated competitions. The required distance diminishes as the rating decreases. Unrated or local competitions on the same date can be held within fifty miles of each other. Under the Mileage Rule, an A-rated competition that was held on a certain date in the previous year receives priority.

Florida promoters of for-profit equestrian shows who had lost out on receiving an "A-rating" hoped that the court would declare the Mileage Rule a violation of the antitrust laws. Seems like a pretty clear "territorial allocation," a per se violation of the Sherman Act, right? Not so, says the 11th Circuit. USA Equestrian has "implied immunity" from antitrust laws under the Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. § 220501 (commonly known as the "Amateur Sports Act," or ASA). That immunity allows a National Governing Body to exercise "monolithic control" over a sport. The court explained:
Therefore, the question for this Court is whether the application of the antitrust laws to the facts of this case would "unduly interfere" with the "operation" of the ASA. . . . Congress has specifically required NGB's to minimize conflicts in the scheduling of competitions and to "develop interest and participation throughout the United States" in their particular sport. The Mileage Rule functions to minimize conflicts and encourages interest in equestrian sports. It forbids competitions of the same rating from being held on the same days within 250 miles of each other. The USEF and the Promoter Defendants adduced evidence that the rule enables the best athletes to compete against each other. If two competitions of the same rating were in close proximity, top athletes may avoid competition against each other and go to different competitions. The USEF and the Promoter Defendants also produced evidence that the rule protects horses from being overworked. If two competitions were very close by on the same dates, horses may be taken from one competition to the next without sufficient rest. Additionally, the rule encourages the spread of equestrian sports throughout the country. If a competition cannot be held in one locality, a promoter may decide to hold a competition in a region in which competition has never been held. Therefore, the Mileage Rule is an exercise of the "monolithic control" Congress conferred on the USEF.
One interesting thing going on here is that evidence that a rule is part of the exercise of monolithic control sounds a lot like evidence that an antitrust violation promotes "on field competition." That kind of evidence has been rejected repeatedly by courts adjudicating sports law antitrust decisions. This decision also makes me wonder how how far "monolithic control" might go. Could USA Basketball, for example, decide to implement a rule that affected NBA competitions, on the grounds that it might increase the popularity of the sport of basketball?

Friday, August 04, 2006
 
Deer, Racetracks, and Torts

There is a very unfortunate story out of Road America, a racetrack located in Elkhart Wisconsin:
There are many ways that driver can get injured in an open-wheel racing car. A 100-mph collision with a deer isn't one that usually comes to mind.

But that's the fate that befell Cristiano da Matta on Thursday during a routine test day at Road America. According to witnesses, the 32-year old Brazilian's RuSPORT Racing Lola struck the animal after it darted onto the track from the driver's right on the uphill run to the blind, left-hand Turn 6. The impact knocked da Matta unconscious [and he suffered a ruptured blood vessel on the surface of the brain and remains in critical condition] . . .

Road America media director Julie Sebranek said she had never heard of a similar incident at the track. "The race track has been here for 50 years. It's highly, highly unusual," Sebranek said Friday.

An 8-foot chain link fence topped with barbed wire circles the 628-acre property, which is surrounded by wooded terrain and farm fields.

When asked how the deer got onto the property, Sebranek said: "They have been known to jump the 8-foot fences. It's just a freak thing and we just maintain the property as we do on a daily basis."

Attorney John Powers has some interesting torts questions based on these facts:

1) Does a racetrack owe a duty to its drivers to keep the track in safe condition?
2) Is a deer running onto the track foreseeable?
3) How high are the fences?
4) How high can deer jump?
5) Do racetracks make drivers sign waivers?

 
Federal Court Continues to Bar Suspicionless Stadium Patdowns

On July 28, a federal district court refused to lift an injunction barring the Tampa Sports Authority (TSA), which owns the stadium in which the NFL Tampa Bay Buccaneers play. Greg discussed the issues raised by the case, filed by a schoolteacher, here; Mike followed up here. In his latest opinion in Johnston v. Tampa Sports Authority, 2006 WL 2136154 (D. Fla. 2006), Judge Whittemore explained:
The TSA has not established that its concern for public safety is based on a substantial and real risk which would justify a "special needs" exception to the well-established rule that suspicionless searches of one's person are per se unreasonable. Moreover, the TSA has not demonstrated that this case presents one of the very limited instances where the Plaintiff's privacy interest is minimal and the TSA's public safety interest would be jeopardized by prohibiting mass suspicionless pat-downs at the Stadium.
* * *
Defendants contend the "special needs" exception justifies mass suspicionless pat-downs of NFL patrons because of the need to protect patrons against potential terrorist attacks. One cannot seriously dispute the magnitude of the threat of terrorism to this country or the Government's interest in eradicating it. In this regard, the TSA's "special need" to prevent terrorist attacks is "substantial" . . . . Likewise, any reasonable person appreciates the potential harm that would result from a terrorist attack at the Stadium. However, the gravity of the threat cannot alone justify the intrusiveness of a suspicionless search of Plaintiff's person.
The Court concludes:
Particularly after September 11, 2001, Americans are justifiably more sensitive to the need to protect against acts of terrorism. Many Americans have become more tolerant of protective measures such as magnetometers, container searches and pat-downs, rationalizing that the inconvenience is worth the added protection. In fact, pat-downs may not bother the average Buccaneers fan. However, the constitutionality of mass suspicionless searches does not turn on popular opinion. A generalized fear of terrorism should not diminish the fundamental Fourth Amendment protections envisioned by our Founding Fathers. Our Constitution requires more.
It's worth noting that the TSA, as a municipal entity engaging in "state action," is subject to the constitutional prohibition on search and seizure; an entirely privately owned stadium would likely be able to pat down fans without such concern.

 
National Sports Law Institute Conference

Here's something that will be of interest to many in the sports law industry (and those who are trying to break into the industry): On Friday October 6, 2006, the National Sports Law Institute will host a conference on "Individual Performer Sports: Current Legal and Business Issues" on the campus of Marquette University in Milwaukee, Wisconsin. There will be five panels, and they will address legal and business issues related to tennis, golf, track and field, poker, swimming and other individual performer sports.

Panelists include:

John Collins--partner, Collins & Collins, Chicago, IL

Adam Epstein--associate professor of finance and law, College of Business Administration, Central Michigan University, Mt. Pleasant, MI

Elizabeth A. (Libba) Galloway, executive vice president and chief legal officer, Ladies Professional Golf Association, Daytona Beach, FL

Jeff Gewirtz, general counsel & managing director of legal affairs, U.S. Olympic Committee, Colorado Springs, CO

Martin Greenberg, partner, Greenberg & Hoeschen, LLC, Milwaukee, WI

Gordon Kirke, Q.C., sports lawyer who also teaches sports law, Toronto, Canada

Richard McLaren, faculty of law, University of Western Ontario, and Chairman, Association of Tennis Professionals (ATP) Anti-Doping Tribunal, London, Ontario, Canada

Jim McKeown, partner, chair Antitrust Practice Group, and member Sports Industry Team, Foley & Lardner LLP, Milwaukee, WI

Barbara Osborne, associate professor in exercise and sport ccience, and adjunct professor in law, University of North Carolina at Chapel Hill

Jill Pilgrim, general counsel & director of business affairs, USA Track & Field, Inc., Indianapolis, IN

Ryan Rodenberg, associate general counsel, Octagon, McLean, VA [and Sports Law Blog guest contributor]

James Sullivan, executive vice president, Poker Royalty, LLC, and founder and president, MVP Sports Group, Las Vegas, NV

For more information, check out this link. It should be a great conference.

 
Royals Sign No. 1 Draft Pick to Major League Contract

The No. 1 overall draft pick this year, Luke Hochevar, agreed with the Royals on a four-year major league contract with a guaranteed $5.2 million over the length of the contract and incentives that could push the deal to about $7 million. Major league contracts are not usually given to draft picks. As stated in the linked press release, Hochevar will become the fourth No. 1 selection of the draft to sign a major league deal in the last 20 years. The others were Alex Rodriguez in 1993, Pat Burrell in 1998 and Delmon Young in 2003.

Signing a major league contract can be beneficial to the club because it allows the club to defer payment of the signing bonus by spreading it out over the term of the contract (typically backloaded). Whereas, signing a minor league contract requires the club to pay the entire bonus before the end of the calendar year of the year following the draft (i.e. within 18 months). Major league contracts are beneficial to the player because the player must be placed on the 40 man roster right away and the 3-year option clock starts ticking. In other words, the club has three years in which to get the player on the 25 man roster or risk losing the player to another team through waivers. Although signing a major league contract does not affect the player's eligibility for arbitration or free agency, it can potentially create roster problems for the club if the player is not ready for the big leagues after three years due to the option rule.

Hochevar is represented by Scott Boras. He was drafted out of the University of Tennessee by the Dodgers as the 40th overall pick in 2005, but did not sign. John Manuel and Kevin Goldstein of Baseball America wrote a really interesting article last year (9/5/05) outlining in detail the fiasco that lead to the failure of the Dodgers and Hochevar to reach agreement ("Hochevar Negotiations Get Weird"). In a nutshell, Hochevar (with Boras as his "advisor") was holding out with the Dodgers (imagine Boras doing that!) and they were unable to reach a deal after the 2005 draft. Another agent approached the Dodgers and negotiated a $3M signing bonus. Hochevar then terminated Boras on Sept. 2 before signing the contract, but that evening Boras convinced Hochevar that he was worth much more and convinced Hochevar not to sign and to stay with him. Hochevar decided not to play his senior year at Tennessee and played in an independent league so that he could continue negotiating with the Dodgers up until the 2006 June draft. Since they still did not reach agreement, Hochevar re-entered the draft and was selected by the Royals with the first pick.

From a purely economic standpoint, Boras definitely called this one right. All along Boras had been saying that Hochevar is comparable to 2005 draftee (and Boras client) Craig Hansen, who received a $1.3 million bonus and a guaranteed $4 million major league contract, and to Philip Humber, the Mets’ 2004 first-round pick who signed for a $4.2 million major league deal with a $3 million bonus. On the other hand, Hochevar's holdout prevented him from gaining valuable experience for two seasons playing for an organization in a much more competitive atmosphere than the independent league, which I believe has tremendous value that obviously can't be measured from an economic standpoint.

Thursday, August 03, 2006
 
California Court to Give Injured Golfer a Trial


A California Court has reversed a lower court's decision granting summary judgment to a defendant who was sued after injuring another golfer. While the defendant may, of course, win at trial, the decision appears to put California at odds with the Hawai`i Supreme Court's decision, which I discussed in this post. (The attorney representing the golfer injured by Jamal Mashburn should get his hands on this California decision).

The case is Shin v. Ahn, 2006 WL 2042891 (Cal. App. 2006), which can be downloaded (free registration required) from Findlaw here, and is covered a news story here. The facts underlying the dispute, according to the appellate court's opinion:
On August 10, 2003, [Ahn], Shin, Jeffrey Frost and a fourth unidentified man were grouped together to play a round of golf at Rancho Park Golf Course. . . .[Shin] stopped on the cart path before the tee box and then got a water bottle out of his bag and checked his phone for messages. In the vicinity of the thirteenth hole, before anyone had begun to tee off, Shin made eye contact with [Ahn] as he stood to the front and left of [Ahn].

[Ahn]'s practice on the tee was to back away from the ball and take one practice swing. When he took his practice swing on the thirteenth hole, he did not know where Shin was. He did not see anyone on the fairway at that time. After his practice swing, he stepped forward and focused on the ball for approximately 15 to 20 seconds until he struck it. [Ahn] did not know where Shin was when he teed off. After he hit the ball, he looked up to see Shin on the ground approximately 25 to 35 feet away; he was to the left of appellant at about a 40 to 45-degree angle from him toward the upper tee box. [Ahn]'s ball had hit Shin in the head.
Applying the doctrine of primary assumption of risk, the trial court granted defendant's motion for summary judgment. On appeal, the appellate court rejected the application of this doctrine to the facts:
the undisputed evidence submitted on summary judgment showed that [Ahn], who was in the same threesome as Shin, failed to establish Shin's whereabouts at the time he teed off. He conceded that there was "[n]o particular reason" why he did not wait to tee off until he knew where Shin was standing. . . . as a matter of law, [Ahn] owed Shin a duty of care . . . This duty included the duty to ascertain Shin's whereabouts before hitting the ball. . . . [I]mposing a duty on a golfer to determine the whereabouts of the individuals in his group before teeing off does nothing to alter or destroy the nature of the activity.

The court's holding is that failing to check for the location of the golfers in one's own group increases the risks inherent in golf, and is thus outside of the primary assumption of risk doctrine.

Is the distinction between Shin and the Hawai`i case regarding whether the injured and injurer are within the same foursome an adequate basis to justify different legal outcomes?

Wednesday, August 02, 2006
 
New Sports Law Scholarship

Newly published this week:
Kristen Boike, Note, Rethinking gender opportunities: non-traditional sports seasons and local preferences, 39 U. MICH. J.L. REFORM 597 (2006)
Also worth a look (via free download at this link):
N. Jeremi Duru, Fielding a Team for the Fans: The Societal Consequences and Title VII Implications of Race-Considered Roster Construction in Professional Sport, 84 WASHINGTON UNIVERSITY LAW REVIEW (forthcoming 2006)

 
UM Coach Carr Responds to "Blind Ref" Lawsuit


Today's Detroit Free Press has a response from Michigan football coach Lloyd Carr to being mentioned in a lawsuit filed by terminated Big 10 official James Filson in an Illinois federal court. Filson was a Big 10 official from 1992 until 2005. In 2000, he had suffered an eye injury leading to blindness in one eye; however, he wasn't terminated until Carr, who learned about the injury from another official, called the conference commissioner. Predictably, Filson claims his termination violated the Americans with Disabilities Act (ADA).

Upon terminating Filson, Big 10 Commish Delany stated that he had to go because he "failed to fulfill the 'minimum physical requirements' of the job and because he did not have a 'full field of vision.'" I'm not a doctor, but it certainly is easy to imagine how a person blinded in one eye might have diminished perception. One might worry that the official would miss a crucial call, or perhaps be injured because he failed to spot an mass of college athlete coming his way.

The big problem for the Big 10? Filson's "rating" as an official actually improved after his injury. That would seem to undercut the conference's ability to claim that Filson could not be reasonably accomodated. (How, exactly, Filson managed to improve his rating after his injury is an interesting question. Perhaps, sensitive to his potential limitations, he concentrated extra hard on making the right calls after his injury. But if extra concentration could improve his rating, what does that say about his pre-injury level of effort?).

Sports Illustrated's Justin Doom is cheering for Filson to get his job back. Doom suggests that a critical issue will be whether Filson told his bosses of his injury. I'm not sure that's legally correct. Unless Filson had a specific contractual obligation to disclose "material" changes in his health, I wouldn't think he has any obligation to tell his employer of an injury or disability that occurred off the job, particularly if he is not seeking an accomodation of any kind at work.

In any event, Coach Carr rejects the characterization that he tried to get Filson fired. According to the Freep:
"I made it clear to [Big 10 Commissioner] Jim [Delany] that I had no opinion and that I was not calling with any motivation other than to provide him with that information," Carr said. "What he chose to do with it was his decision. ... Given the same circumstances, I would make the same call -- in spite of the fact that it has been portrayed I cost him his job or that I was trying to get him fired. There is nothing further from the truth."