Sports Law Blog
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Monday, November 30, 2009
 
More Amicus Briefs in American Needle v. NFL

Last Tuesday was the deadline for amicus curiae briefs supporting the NFL in American Needle v. NFL. A number of supporting briefs were filed with the Supreme Court, and are now available for download:
  • A brief by the National Hockey League, available here.
  • A brief by the National Basketball Association and NBA Properties, available here.
  • A brief by the NCAA, available here.
  • A brief by the ATP Tour, WTA Tour, Major League Soccer, and NASCAR, available here.
  • A brief by various economists in support of the NFL, available here.
  • A brief by Visa and Mastercard, available here.
  • A brief by Electronics Arts, Inc., available here.
  • A brief by VF Imagewear, Inc., available here.

Unfortunately, a copy of the NFL's brief has still not been made publicly available for downloading, as far as I have been able to discern. However, the brief is now available on LexisNexis, for those with access to its Supreme Court briefs database.


 
Tiger Woods Brings to Light the Privacy Rights of Public Figures

Eric Zorn of the Chicago Tribune wrote an interesting post titled, Up in Tiger's Business: Is it Our Right to Know? Zorn writes that many of us may want to know what precipitated the weird, low-speed crash outside Tiger Woods' home very early Saturday. But he raises the question whether we have the informal right to know. Zorn makes an excellent point:
The implicit bargain of modern celebrity is that it's a battle between the image makers and the image wreckers -- the celebrity is no longer able to draw lines between public and private that the public will respect.

With athletes this is less true than with, say, actors. Tiger Woods' ability to earn millions of dollars in tournament prize money every year is not dependent on what you or anyone else thinks of him. For the most part he has avoided making his private life public and kept the journalistic focus on matters related to golf. His endorsement deals trade on his enormous talent and legendary focus on the links, not on whether or not he's a jolly paterfamilias.
Zorn is articulating in layman's terms the legal test that I propose (in my article Tort Law and Journalism Ethics) for public disclosure of private facts claims involving public figures, which I discussed in my post last week.

Saturday, November 28, 2009
 
The Give Blog

University of Illinois Law Professor Suja Thomas, who teaches sports law, and her husband Scott have created the Give Blog, where up until December 24th they will match donations of up to $100 from new donors to five charities (The Hunger Project, The Grameen Foundation, Safe Passage, Catcholic Charities USA, and Eastern Illinois Foodbank). If you're interested in contributing to any of these five charities during this holiday season, please consider doing so through the Give Blog, as Suja and Scott will match the amount if you are a new donor. For more information, click here.

Tuesday, November 24, 2009
 
2010 AALS Sports and the Law Section Meeting and Panel

For those of you attending the Association of American Law Schools' 2010 annual meeting in New Orleans in January, Villanova Law Professor David Caudill, the Chair of the AALS Section on Sports and the Law, invites you to attend this year's section meeting and panel, which will be held from 1:30 to 3:15 p.m in the Elmwood Room (3rd Floor) of the Hilton New Orleans Riverside.

Below are details on the section's events:

* * *

THE TOPIC: THE NEW NFL/NFLPA COLLECTIVE BARGAINING AGREEMENT: AVOIDING A CATASTROPHE?

OVERVIEW: When the NFL opted out of the current collective bargaining agreement with the NFLPA, the stage was set for contentious negotiations during the 2009 season and potentially beyond. A labor-related stoppage or lockout could result from a failure to come to terms. The topic for this year’s sports law panel will be the present state of labor negotiations within the NFL. The NFL owners will likely predict an economic crisis if the players make unreasonable demands in terms of percentage of revenue, salary cap, bonus provisions, and the rookie wage scale, while the players’ union will likely claim that the owners never had it so good. Perhaps the real Super Bowl for sports lawyers will take place around the bargaining table this year.

PROGRAM: To open the program, Professor Robert H. Topel, the Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics at the University of Chicago’s Booth School of Business, will discuss his controversial study (co-authored with Chicago colleague Professor Kevin Murphy), on behalf of the NFLPA, of the economics of the NFL. What was the NFL’s response to the study? Has the recession altered any of the conclusions of that study?

Next, three law professors will address various aspects of the NFL/NFLPA labor controversy:

Professor Emeritus Bob Berry (Boston College): “Show Me the Money Revisited: The Current NFL Labor Conundrums”.

In the past, dating from the 1960s to the 1990s, NFL labor confrontations often concentrated on player mobility issues. The draft, free agency and free agent compensation were contentious issues, resulting in work stoppages on more than one occasion. This year is different, or seems to be. Pure economic issues appear to be largely the basis of the current negotiations. The question is, however, whether anything has really changed. Has it always been about the money? An even more basic issue is why at this time there is already talk of a lockout and a possible attempt at union decertification. While all these are brewing, we might as well revisit possible antitrust issues under the labor exemption.

Professor Matt Mitten (Marquette): “Drug testing and Sports Medicine Issues in NFL Collective Bargaining: A Proposed Quid Pro Quo.”

Specific issues to be discussed: (1) NFL clubs’ characterization of team physicians as “employees” in effort to bar players’ medical malpractice claims by the worker’s compensation co-employee doctrine; and (2) the 8th Circuit’s recent Williams v NFL decision, which permits the NFL’s collectively bargained drug testing policy to be challenged on the ground it violates Minnesota state law.

Professor Jeff Standen (Willamette): “American Needle and the Threat of Union Decertification”

This paper argues that the American Needle case currently pending before the U.S. Supreme Court will impact heavily on the upcoming labor negotiations. If the NFL prevails in its argument that the league constitutes a "single entity" for all or certain legal purposes, then a chief NFLPA bargaining tactic, the threat of union decertification, would be unavailable. Decertifying the players union arguably strips the NFL's bargaining agent of its non-statutory labor exemption and exposes the league to antitrust liability. If the NFL, however, is characterized by the Supreme Court as a single entity, then the league would be effectively immune from antitrust claims. The paper suggests that the Court should adopt a nuanced perspective on the single entity theory in order to preserve the ability of the union to resort to judicial redress.

* * *

It should be a great event and I look forward to attending.

Monday, November 23, 2009
 
The Free Agents and Important December Deadlines

Last week, 171 players filed for free agency by the November 19 deadline. Of that group, there are 23 Type A free agents and 49 Type B free agents. John Grabow, a Type A free agent, and the Chicago Cubs have already agreed to a new 2-year, $7,500,000 deal. Now the December 1 and December 7 deadlines are quickly approaching. The teams have until December 1 to offer arbitration to protect their right to receive compensation if the player accepts a deal with another team. The December 7 deadline is the last date that a player can agree to accept an offer of arbitration from his former team. If the arbitration agreement is offered and accepted, the team and player will either work out an agreement on salary or proceed into the arbitration process that can involve the exchange of figures and a hearing.

Two players, Darren Oliver and David Weathers, agreed to accept arbitration offers last year. Oliver is a Type A free agent this off-season. Weathers moved from the Reds to the Brewers during the season, and he is a Type B free agent this year.

Two more important December events are the Winter Meetings in Indianapolis from December 7-10, and the tender deadline of Saturday, December 12. As I mentioned in an earlier post, there is some thought that many arbitration-eligible players will not be tendered, thus, increasing the number of free agents on the market. Recently, Scott Boras questioned the financial situation in baseball and wondered about teams that maintain really low budgets in the face of the current revenue stream from the centrally shared resources. It could be a really interesting off-season.

Here is the list of Type A and Type B free agents:

Type A

Jason Bay (Boston - OF), Rafael Betancourt (Colorado - RP), Orlando Cabrera (Minnesota - SS), Johnny Damon (New York Yankees - OF), Octavio Dotel (Chicago White Sox - RP), Jermaine Dye (Chicago White Sox - OF), Chone Figgins (Los Angeles Angels of Anaheim - 3B), Mike Gonzalez (Atlanta - RP), John Grabow (Chicago Cubs - RP), Kevin Gregg (Chicago Cubs - RP), LaTroy Hawkins (Houston - RP), Matt Holliday (St. Louis - OF), Orlando Hudson (Los Angeles Dodgers - 2B), John Lackey (Los Angeles Angels of Anaheim - SP), Bengie Molina (San Francisco - C), Darren Oliver (Los Angeles Angels of Anaheim - RP), Placido Polanco (Detroit - 2B), Marco Scutaro (Toronto - 2B/SS), Rafael Soriano (Atlanta - RP), Miguel Tejada (Houston - SS), Jose Valverde (Houston - RP), Billy Wagner (Boston - RP), and Randy Wolf (Los Angeles Dodgers - SP).

Type B

Garret Anderson (Atlanta - OF), Rod Barajas (Toronto - C), Erik Bedard (Seattle - SP), Joe Beimel (Colorado - RP), Ron Belliard (Los Angeles Dodgers - 2B), Adrian Beltre (Seattle - 3B), Chad Bradford (Tampa Bay - RP), Doug Brocail (Houston - RP), Marlon Byrd (Texas - OF), Kiko Calero (Florida - RP), Michael Cameron (Milwaukee - OF), Doug Davis (Arizona - SP), Mark De Rosa (St. Louis - 3B), Carlos Delgado (New York Mets - 1B), Justin Duchscherer (Oakland - SP), Scott Eyre (Philadelphia - RP), Jon Garland (Los Angeles Dodgers - SP), Brian Giles (San Diego - OF), Troy Glaus (St. Louis - 3B), Vladimir Guerrero (Los Angeles Angels of Anaheim - OF/DH), Rich Harden (Chicago Cubs - SP), Bob Howry (San Francisco - RP), Nick Johnson (Florida - 1B), Randy Johnson (San Francisco - SP), Jason Kendall (Milwaukee - C), Adam LaRoche (Atlanta - 1B), Braden Looper (Milwaukee - RP), Felipe Lopez (Milwaukee - 2B/3B/SS/OF), Brandon Lyon (Detroit - RP), Jason Marquis (Colorado - SP), Melvin Mora (Baltimore - 3B), Guillermo Mota (Los Angeles Dodgers - RP), Xavier Nady (New York Yankees - OF), Will Ohman (Los Angeles Dodgers - RP), Miguel Olivo (Kansas City - C), Vicente Padilla (Los Angeles Dodgers - SP), Chan Ho Park (Philadelphia - SP), Carl Pavano (Minnesota - SP), Andy Pettitte (New York Yankees - SP), Joel Pineiro (St. Louis - SP), Fernando Rodney (Detroit - RP), Ivan Rodriguez (Texas - C), Brian Shouse (Tampa Bay - RP), Russ Springer (Tampa Bay - RP), Fernando Tatis (New York Mets - 1B/3B/OF), Yorvit Torrealba (Colorado - C), David Weathers (Milwaukee - RP), Randy Winn (San Francisco - OF), and Gregg Zaun (Tampa Bay - C).

Saturday, November 21, 2009
 
Journalism Ethics Run Amuck, Once Again

The Associated Press published a story yesterday on a very tragic, sensitive and private matter involving the death of a famous professional athlete's mother. The report not only discusses details surrounding the death, but also personal information about the player's relationship with his mother.

The issue here is not whether the facts of this publication are untrue. The disclosure of private facts tort claim subjects the press to liability for the publication of truthful private matters that would be highly offensive to a reasonable person and that are not of legitimate public concern. In many respects, we as a society have become brainwashed into thinking that the press has a constitutional privilege to publish whatever truthful matters it wants, especially when the matter involves a public figure. But surprisingly, the Supreme Court has given very limited attention to the constitutional privilege of the press to publish truthful private facts and has addressed the issue in only one case involving a public disclosure of private facts tort claim (see Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975)), and its holding in that case was deliberately and explicitly narrow. Such little guidance by the Supreme Court naturally leaves state and federal courts wide discretion to determine what constitutes a "legitimate public concern" (a/k/a newsworthiness) and to balance the conflicting interests of individual privacy and press freedom.

As I discuss at length in my law review article Tort Law and Journalism Ethics, state and federal courts have proffered varying definitions of newsworthiness. The California Supreme Court in Shulman v. Group W Productions, Inc., 955 P.2d 469 (Cal. 1998) recognized that a broad "public domain" view of the First Amendment privilege, i.e. any information readily available to the public, would swallow the public disclosure of private facts claim. Regarding matters involving public figures, the court set forth what I believe is the proper standard for newsworthiness: "[T]he evaluation of newsworthiness depends on the degree of intrusion and the extent to which the plaintiff played an important role in public events, and thus on a comparison between the information revealed and the nature of the activity or event that brought the plaintiff to public attention. Some reasonable proportion is . . . to be maintained between the events or activity that makes the individual a public figure and the private facts to which publicity is given."

In other words, there must be a nexus or connection between the private information published and the public activity that makes the person a public figure. Here is an excerpt from my law review article:
"The relevance/nexus factor is a critical component in balancing the First Amendment and journalism ethics standards because such an inquiry takes into account the purpose, or reason, for the publication of the matter. If there is a remote nexus or connection between the truthful matter and the event or activity that brought the plaintiff to public attention or that made him or her a public figure, then the societal First Amendment interest in the information is much less compelling because the purpose for publication becomes primarily one of sensational prying into private affairs for its own sake or one of pandering to lurid curiosity."
There is a very tenuous connection between the details surrounding the death of a player's mother and what makes the player a public figure, that being his status as a professional athlete. This publication, having no social value and intruding into an extremely tragic, private and sensitive personal matter, turns journalism ethics standards on its head.

Friday, November 20, 2009
 
Professor Alfred Yen on Efforts by Colleges to Discourage Disappointing High School Recruits from Enrolling

Over on Madisonian.net, Boston College Law School Professor Alfred Yen has a thought-provoking piece on Duke basketball recruit and high school senior Clair Watkins, who, as a junior, Duke University offered a full scholarship to play (and enroll) at Duke. Watkins, an honors student, has apparently not progressed as a player and Duke recently told her that while it will honor its scholarship offer, Watkins likely wouldn't play at Duke if she enrolled. Watkins is now contemplating other college options, though she could still choose to accept Duke's full scholarship, as she has until the spring to decide.

Here's an excerpt from Professor Yen's post:

* * *

I find this story interesting and complicated. At first blush, it’s all about nasty Duke finding better players for its team and then dumping someone they had aggressively courted. That having been said, Duke apparently is willing to stick by its commitment to a 4 year scholarship if Ms. Watkins still wants to attend. Many schools would simply have withdrawn their scholarship offer, as verbal early commitments are explicitly non-binding.

So, on one hand, I find myself giving Duke respect for keeping its promise of a 4 year scholarship. Indeed, Ms. Watkins might have found herself on the bench anyway. If the Duke coach changed her mind about Ms. Watson because better players had committed to the program, or if other players outplayed Ms. Watson once she got to Duke, she’d have the same experience the Duke coach has now warned about.

On the other hand, I also think that Duke has revealed just how much it values winning basketball games over real decency. The truly decent thing to do would be for Duke to tell Ms. Watson that she needed to elevate her game in order to play, and that the coach was calling to express her commitment to helping Ms. Watson improve. To put this in perspective, should a college call an admitted student to say “We’ve reconsidered. You’ll probably be at the bottom of your class, so maybe you’d like to go elsewhere?” Or, should a college say “We know you will find our curriculum challenging. Here are all of the academic support services that will help you thrive.”? By calling with the cold shoulder, the Duke coach was hoping to get Ms. Watson to give up her scholarship despite Duke’s willingness to honor it. Apparently they didn’t really want her to come to the school unless she would be a star basketball player.

* * *

To read the rest, click here.

Thursday, November 19, 2009
 
Reebok files its Brief in American Needle v. NFL

This past Tuesday was the deadline for the respondents in American Needle v. NFL to file their briefs with the United States Supreme Court. Although the NFL's brief is not yet publicly available, the brief submitted by Reebok, the NFL's co-defendant in the case, is now available to be downloaded. Meanwhile, for those interested in getting a preview of the NFL's argument, both ESPN.com's Lester Munson and the SportsBusiness Journal's Liz Mullen have posted articles discussing the brief.

The earlier-filed briefs by the petitioner, American Needle, and its supporting amici are available here and here.

Tuesday, November 17, 2009
 
Commissioner as Justice or Executive? Thoughts on Zelinsky

Mike already mentioned Aaron Zelinsky's new essay (forthcoming in Yale Law Journal Online) arguing that the better baseball analogy is between Supreme Court justices and the baseball commissioner. Aaron sent me a draft of the paper and I made a few comments; he gave me permission to reprint them (in much expanded form) here.

For starters, the analogy does work in some respects. The commissioner (working, in part, with the owners) makes prospective rules of general applicability, umpires apply them in particular game settings, and the commissioner corrects their understanding of those rules when it believes the umps got it wrong.

The problem with this is that the Supreme Court makes prospective rules within the confines of review of lower court judgments through case-based decision-making. Not only does the Court establish a rule going forward, but it also dictates something about the outcome of a specific legal dispute. By contrast, the commissioner virtually never reverses a judgment (a particular ball/strike/safe out call) issued by an umpire; and he certainly virtually never reverses the sum-total of all umpire judgments, the result of a single game. The Pine Tar Game in 1984, which Aaron discusses in his paper, is one of the rare examples of this. Of course, that reversal was possible only because the umps' decision came on the very last play of the game; if it had happened in the 5th inning, the league might have had a harder time outright reversing the outcome.

Rather, it seems to me that the commissioner is better thought of as a legislator. Or better still, as the executive working together with the various teams/owners/GMs acting as the legislature. In most of the examples Aaron presents (the calling of balks, changing the strike zone, etc.), the commissioner has seen how umpires have been interpreting and applying the rules, not liked that approach, and changed the rules (or ordered a different interpretation) going forward. This very much how Congress (or Congress and the President) interact with the courts on matters of subconstitutional law--courts apply the rules in cases and, when Congress does not like the way the rules are being interpreted, understood, or applied, it changes the rules prospectively, to be applied by courts in future cases. In fact, the one thing Congress cannot do is dictate case-specific outcomes to courts; it can only set the rules

Put somewhat differently, the Supreme Court and the trial courts (who Aaron says are better comparable to umpires) are engaged in a version of the same enterprise--deciding discrete cases. The commissioner and the umpires are doing something very different from one another, just as the legislature and the courts are doing something very different from one another.

Of course, much depends on whether we see the strike zone (or the rules of the game more generally) as analogous to statutes or to the Constitution. If the strike zone is statutory, then commissioner-as-Congress makes sense, in terms of degree of control. If the strike zone is constitutional, then this does not work.

Moreover, Aaron's analogy potentially breaks down along a couple of points.

First is the difference between how the Commissioner makes legal rules to guide umpires on the ground and how the Supreme Court does. There is a difference between case-based, litigation-bound rulemaking that courts do and the more free-standing prospective rulemaking that the Commissioner engages in. Even if the Supreme Court is more concerned with rulemaking than error correction, it still makes its prospective rules rules only in the context of litigation and in the context of reviewing decisions by lower courts. While it can reach out to do a lot when it chooses, it does not have the type of free-standing rulemaking authority the commissioner has.

Second, the resulting rules are different. The "judicial minimalism" trend (espoused by C.J. Roberts and Justice O'Connor and scholars such as Cass Sunstein) affects the analogy. The Commissioner is not and arguably should not be "minimalist"--he goes around and makes the generally applicable prospective rules he believes necessary. A Justice committed to minimalism--and bound by case-based decisionmaking--will produce less far-reaching rules. And those minimalist rules arguably will be harder to apply in future cases because their contours are less clear and more in need of fleshing out by lower courts.

Third, the Commissioner is able to act unilaterally in the best interests of the game. Aaron's essay focuses heavily on the way commissioners (notably Bart Giamatti, but including others) have wielded individual power. An individual justice can do only what four other colleagues are willing to go along with; the resulting legal rules are affected by that deliberative group-based process (as a host of recent poli sci literature has demonstrated), usually by being narrower and less far-reaching. Now maybe this means that proper analogy is not Commissioner/Justice but Commissioner/Court. But we still have to account for the differences in how an individual act as opposed to how a collective acts.

Fourth, the commissioner's realm is such that he can, if he chooses, wade into a larger swath of potential areas and issues that affect how umpires call the games. The Supreme Court, even if it wanted to hear more than the ridiculous 75 cases it hears now, could not reasonably take on any substantial percentage of the cases or issues brought to the courts in a given year. At its peak, the Court in the 1970s would hear 150-200 cases per term, a tiny fraction of the cases brought in federal and state courts.

But that points up one last break in the analogy. Aaron's argument is systemic--trying to place everyone in comparable places within the system of baseball or the judiciary. But there is no rulemaking buffer between the commissioner and the umpires; the commissioner makes the rules and the policies, the umpires follow. But the Supreme Court is not even the primary rulemaker guiding the lower courts; that role is played by the courts of appeals, especially given the Supreme Court's small caseload. And if the commissioner is the Supreme Court and the umps are the trial courts, we need to find someone in MLB who is somehow analogous to these intermediate appellate courts that do make binding prospective rules, but in a far broader array of cases.

Monday, November 16, 2009
 
The dangers of consequentialism

Everyone is talking about Bill Belichek's decision to go for it on 4th-and-2 from the Pats' own 28 with around two minutes left (sorry Mike). And most people (including the NBC commentators speaking three-and-a-half minutes after the game) have concluded it was a bad decision. But the only reason they offered as to why the call was bad is that it did not work. Had it worked, it would have been called gutsy and a brilliant decision.

This is the problem--in both sports and law--of pure consequentialism, in which the a priori wisdom of a decision is evaluated solely by the outcome. But the decision to go for it cannot be right or wrong based solely on the result. The result is good or bad; but the decision must be evaluated independent of the outcome. Evaluating a decision as right or wrong must be based on the quality of the reasoning that went into it. Since 2001, the Pats have converted 63.5 % of attempts on 4th-and-2-or-less, a higher percentage when Brady is the quarterback. And on a day in which the offense racked up more than 400 yards and generally had moved at will, those sound like pretty good odds. Plus, in the situation, the Colds defense would be particularly worried about jumping offside, so their aggression may be ever-so-slightly-restrained. All-in-all, it strikes me as a highly unconventional, but hardly unreasonable or reckless decision. And, in fact, the play worked, except Fault did not catch the ball cleanly, thus losing forward progress as to the spot.

Gregg Easterbrook writes the Tuesday Morning Quarterback feature for espn.com and he is constantly arguing that coaches should go for it on 4th-and-short, particularly around midfield and deep in opposing territory. I am looking forward to what he has to say about this one.

Update:

The folks at Advanced NFL Stats, who know stuff about mathematical analysis that I don't, say that Belichek made the right decision. (H/T: Deadspin) The success rate on 4th-and-2 is 60% and teams score a touchdown from the opponent's 28 with 2:00 remaining approximately 53% of the time. This puts the Pats in a statistically better position than punting would have.

Further Update:

Easterbrook weighs in: Belichek was absolutely right to go for it (although he questions some of the other calls and moves, particularly the call on 3d-and-2). Easterbrook also takes on one of the sillier memes about this--Tedy Bruschi saying Belichek showed a lack of faith in his defense--by pointing out that what Belichek did was to show faith in his offense to get two yards on a day in which it averaged more than 6 yards a play.

The "lack of faith" meme rests on the assumption (which Easterbrook has been fighting) that going for it on 4th down is so far out of the norm that it is justified only in special circumstances. The assumption is that an offense really only has three downs to get a first down ordinarily and to use an additional down shows desperation of some sort--here, lack of faith in the defense. But if the mindset is that four downs means four downs and the percentages favored New England, there was nothing insulting to the defense here, just a faith in the offense within the normal rules of the game (four downs to try to get a first).

Sunday, November 15, 2009
 
Aaron Zelinsky on Benching the Judge-Umpire Analogy

Aaron Zelinsky of Yale Law School has just posted on SSRN a draft of his forthcoming piece in Yale Law Journal Online titled "The Justice as Commissioner: Benching the Judge-Umpire Analogy". It's an excellent read. Zelinsky traces the judicial history of the judge-umpire analogy since 1886, concluding that it was intended for trial court judges, and meant as a model to be rejected because of an umpire's passivity. In its place, Zelinsky proposes that Supreme Court Justices are properly analogous to Commissioners of Baseball, since both provide interpretive guidance to subordinates, undertake extended deliberation, take countermajoritarian action, and wield substantial rulemaking power.

Check out Aaron's draft here. We have also discussed this analogy on our blog -- see commentary by Howard, Geoff, and me.

Thursday, November 12, 2009
 
Boise State Athletic Department Selling Stock

USA Today is reporting today that Boise State has officially formed a non-profit corporation and will begin selling shares to the public at $100 per share in hopes of raising $20 million (Boise State Athletic Department Hopes Stock Offering Raises $20 Million). AD Gene Bleymaier said, "If we are to continue the success we are enjoying now we must generate new revenues to pay for coaches' salaries, scholarships and facilities." The shares will not pay dividends, but shareholders can vote on members of a 12-person board at an annual meeting and the board will determine how money raised through the offering would be spent. Bleymaier also said this fundraising program mirrors the offering made by the Green Bay Packers when they raised $24 million in the sale of more than 105,000 shares back in 1997.

If this is true, needless to say, it's a very interesting development. One would certainly think this has to violate some provision, somewhere, in that 437-page NCAA Bylaw manual. It also raises all kinds of interesting corporate law questions in the context of fiduciary duties, state and federal securities regulations and non-profit corporation laws, just to name a few. The more I think about it, this has to be a joke, right? But perhaps this is no different than what is already taking place in big-time intercollegiate athletics, the only difference is that we call them boosters instead of shareholders.

This new development also relates to the topic of my article I posted on two days ago to the extent the proceeds generated from this stock sale fund coaches' salaries. Boise State along with Cincinnati and TCU are prime candidates to have their successful football coaches solicited by competitor schools, making them soon-to-be victims of both tortious interference and breach of contract. The presidents of these three schools have a choice. They can pay their coaches more money or let them go and then proclaim that they are "powerless" to do anything about rising salaries. Or, they can exercise their legal rights and stand up for all the current and prospective student-athletes who committed to their school in reliance on the fact that their coach was obligated to be there for a period of years....the same student-athletes who, unlike their coach, are prohibited from transferring to another school.

Tuesday, November 10, 2009
 
University Presidents are Not "Powerless" to Control Coaches' Salaries

USA Today's latest study released today on college coaches' compensation reveals that at least 25 college head football coaches are making $2 million or more this season, which is slightly more than double the number two years ago, and the average pay for a head coach in the 120-school Football Bowl Subdivision is up 28% in that time and up 46% in three years, to $1.36 million. Two weeks ago, the Knight Commission released its survey of bowl-subdivision university presidents in which 85% of the respondents said they felt football and basketball coaches' compensation "was excessive" as well as "a key contributor to the (fiscal) 'arms race' in intercollegiate athletics" and "the greatest impediment to sustainability."

With the end of the football season approaching and, hence, the beginning of the coach solicitation season, the timing is ripe to announce my new law review article on this subject titled, The Coaching Carousel in Big-Time Intercollegiate Athletics: Economic Implications and Legal Considerations. The paper will be published in the coming weeks in the Fordham Intellectual Property, Media and Entertainment Law Journal and can be downloaded off SSRN here. I take an extensive look at the economics surrounding college coaches' contracts and the reasons for rising coaches' salaries, and then use the economics to tackle the legal question that everyone avoids like the plague, which is what can schools do about it?

From a legal standpoint, it is astonishing that schools routinely solicit and steal coaches who are under contract with another school and that these solicited coaches are free to breach their contracts with limited or no repercussion. This is not representative of free market competition, but rather unfair competition. It would be like the Cowboys soliciting Tom Brady to breach his contract with the Patriots, and even worse, the Patriots then allowing Brady to breach his contract with them. The professional leagues have "no tampering" rules that prohibit this tortious interference and the Patriots would have no qualms whatsoever about using judicial means to prevent Brady (via a negative injunction) from playing for the Cowboys. Indeed, the NFL even has a no tampering policy with respect to its coaches.

The NCAA should consider adopting a "no tampering" policy (i.e. an anti-solicitation rule) similar to the NFL's no tampering policy which essentially prohibits teams from soliciting coaches under contract. In my paper I also explain why schools are entitled to equitable relief in the form of a negative injunction to prevent their coaches from jumping ship, and there is even precedent for it specifically in the context of enforcing college coaches' contracts.

Monday, November 09, 2009
 
Follow-up on Buster Olney - Hardy, Hermida, Teahan

After posting last week about Buster Olney’s article and comments about arbitration-eligible players and free agents, the Twins traded Carlos Gomez to the Brewers for J.J. Hardy; the Red Sox traded Jose Alvarez and Hunter Jones to the Marlins for Jeremy Hermida; and the White Sox acquired Mark Teahen for Chris Getz and Josh Fields. Olney posted a column on his ESPN.com site (“Hermida’s Move Sure to be Replicated - 11-6-2009) supporting his earlier comments while noting that the Royals are looking to slash $10-$13 million from their payroll and peddling Teahen is a start. Teahen settled with the Royals last year at $3,575,000 after an exchange of figures ($3,050,000 - $3,850,000). Teahen was in a select group of five of the 46 players who exchanged numbers to negotiate a figure above the midpoint. As a Super Two in 2008, Teahen was able to negotiate a $2,337,500 deal that year. Apparently the Royals will contribute $1,000,000 towards Teahen’s 2010 salary. Fields and Getz have quite awhile before they become arbitration-eligible.

Hardy finished four years with the Brewers with a disappointing season. In 2008, Hardy exchanged numbers with Milwaukee ($2,400,000 - $3,050,00) before agreeing to a $2,650,000 deal. In 2009, he made $4,650,000. Hardy’s .229 average and drop in power numbers prompted to Brewers to make a move instead of going back into arbitration. With his demotion to AAA last year, the Brewers forced him to lose his ability to move to free agency after the upcoming season. How the Twins will handle negotiations will be interesting.

Olney’s main post involved Jeremy Hermida, who moved into the salary arbitration-eligible group before the 2009 season with the Marlins. He signed in January 2009 for $2,250,000. The Red Sox will accept his arbitration-eligible status without much complaint.

Hardy, Hermida, and Teahen are now set. Their new teams will advance through the negotiation and arbitration process, if necessary, to sign their new acquisitions.

Friday, November 06, 2009
 
Tulane Law School Baseball Arbitration Competition



I am proud to announce that the Tulane Law School Sports Law Society will be hosting its third annual National Baseball Arbitration Competition from January 22-24, 2010. This is a really great and unique event that allows students to argue a baseball arbitration case involving real players and real statistics. We already have a number of great guest arbitrators lined up to judge the competition and will have students from schools across the country competing in the event. The official announcement from the Tulane Sports Law Society is attached below. Click here for the competition's website and more information. I look forward to seeing many of you down in New Orleans for the competition...


About the Competition
The Tulane Law School Sports Law Society is pleased to invite your school to compete in the 2010 Tulane Law School National Baseball Arbitration Competition. The Baseball Arbitration Competition is a simulated salary arbitration competition modeled closely on the salary arbitration procedures used by Major League Baseball. Like most law school moot court competitions, the Competition’s main goal is to provide participants with the opportunity to sharpen their oral and written advocacy skills, which are essential for a successful career as an attorney. The Competition, however, is unique in that it allows law students across the country with an interest in the growing body of sports law to sharpen these skills within the specialized context of Major League Baseball’s salary arbitration proceedings. This will be an exciting and educational legal exercise for all participants, as it will provide participants an opportunity to learn more about one of the legal processes used in the sports industry. In its two-year history the Competition has grown significantly, and we fully expect an increase in participation once again.

Schedule & Registration Materials
The Baseball Arbitration Competition is open to any ABA accredited law school. This year, the Competition will begin the evening of Friday, January 22nd, with a reception for competitors and participants. Competition rounds will begin the morning of Saturday, January 23rd, and continue through the afternoon of Sunday, January 24th.

 
The Changing Landscape of Salary Arbitration-Eligible Players and Free Agents in Baseball

With the Yankees winning the World Series last night, the off-season officially began this morning. The clock starts ticking on the free agent filing period of 15 days after the end of the World Series. Buster Olney appeared on Mike and Mike on ESPN this morning. He started his segment with the same point that he made in an article on ESPN Insider on Sunday titled “Baseball's Next Great Economic Disparity.”

Let me quote from his posting:

“Baseball's financial structure appears to have reached a tipping point that can be defined simply. ‘The arbitration process is now outdated,’ said a highly ranked executive, ‘because the players can get more money in arbitration than they would through free agency.’ So now teams are about to adjust to this reality, and this is why multiple general managers expect that dozens of young players with three, four and five years of major league experience will be cut loose rather than offered arbitration in the next 41 days. Not a handful, but dozens.

During the past 48 hours, I went through the rosters with some executives and counted 93 solid non-tender candidates -- players whose current teams simply won't offer them contracts for 2010. If the final numbers come close to that figure, close to 300 veteran players will be looking for jobs in the winter, a staggering number that will inevitably depress the asking prices for free agents.”

Examples that Olney offered in his posted article were J.J. Hardy of the Milwaukee Brewers, Jeremy Hermida of the Florida Marlins, and Bobby Jenks of the Chicago White Sox. In both the article and this morning on Mike and Mike, Olney offered that the big market teams will be able to sign their top choices of both traditional free agents (six years of service) and non-tendered arbitration-eligible players. Small market teams might benefit from a depressed market overall for free agents.

I think that Buster Olney is right on top of this issue. The first two important dates to remember are December 1 and December 7. December 1 is the last day for teams to offer arbitration to their former players who became free agents. Monday, December 7, is the last day for a former free agent to accept arbitration. The non-tender date is December 12. After free agents file, teams have the right the offer arbitration. Often they will do this for projected Type A and Type B free agents to gain a draft choice if the player turns down the offer. Players turn down the offer to talk to all teams about a deal for the upcoming year. If they accept arbitration, they have basically agreed to a contractual relationship with their existing team. They can negotiate a deal or allow the arbitration panel to decide the appropriate amount. This year might be strategically different, however, because of the changing landscape. There will be a lot more free agents this year based on Olney’s prediction. If you offer arbitration to a Type A or Type B free agent, that player and his agent might just accept arbitration when they would have turned it down previously with different market conditions because an arbitration panel might award a figure that is higher than the deal that the player and agent could get on an open free agent market.

I will be monitoring all of this activity in the off-season, and I will post occasional musings.

 
Legal Fallout from Phoenix Coyotes - NHL Saga

Over on the American Lawyer Daily, Zach Lowe has a good piece on the legal fallout of the Phoenix Coyotes likely sale to the NHL. He interviews me for his story, and I tie-in the American Needle case. Here's an excerpt:
The [NHL] apparently doesn't want the Coyotes for long, and they are already in talks to sell the team to an investment group represented by Cadwalader, Wickersham & Taft . . .

Monday's hearing at the federal bankruptcy court in Phoenix . . . was the first major gathering of the main legal players since the federal judge handling the case took the unusual step last month of tossing out both bids for the team--the NHL's $140 million bid and a much larger offer from Canadian business mogul Jim Balsillie, who wanted to move the team to Ontario. As we've written before, Judge Redfield T. Baum tossed the bids for very different reasons . . .

. . . But what really happened, according to four lawyers on the case, is that the NHL simply clarified the final bid it submitted more than a month ago. At the outset of the hearing, lawyers for the NHL and the creditors committee (represented by Paul Sala of Allen, Sala & Bayne) pointed out to Judge Baum that the NHL was not actually proposing to pay some unsecured creditors ahead of others. Rather, the lawyers told Baum, the league was offering to purchase the claims of those allegedly favored creditors--about $11.6 million, mostly owed to local vendors. The rest of the NHL's bid price--$128.4 million---would go to the bankrupt estate to be distributed to secured and unsecured creditors in the proper manner . . . .

Judge Baum is expected to approve the deal as soon as Monday. The next step would be for the NHL to sell the team . . .

One interesting note from McCann: Baum's earlier ruling allowing the NHL in as a bidder reinforces the notion that sports leagues have some momentum in getting around antitrust laws. Earlier this year, the U.S. Court of Appeals for the Seventh Circuit ruled that the National Football League could act as a so-called single entity--exempt from antitrust laws--in signing apparel licensing agreements. (The U.S. Supreme Court had previously reserved single entity status for parents and their wholly owned subsidiaries, McCann says.) One apparel maker (American Needle Co.) has objected, claiming that the 32 NFL teams are separate businesses, and that apparel makers should be able to negotiate separately with all of them. The appeals court rejected that argument, holding that the NFL could be considered a single entity for the purpose of licensing agreements even though the teams are very clearly separate businesses, McCann says. The case is now headed to the U.S. Supreme Court.

The NHL cited the Seventh Circuit's ruling in the Coyotes case, in effect saying the league could bid for and own an individual team. That suggests how much importance leagues are placing on the outcome of the American Needle case, McCann says.


 
Referees Injured by Tortious or Criminal Behavior of Players

Victoria E. Freile and Claudia Vargas of the Rochester Democrat and Chronicle have an interesting piece on a sports law topic that we often don't discuss: referees injured by the tortious or criminal behavior of players. They focus on a recent incident in an adult amateur football game played in Rochester which generated a felony charge for a player. Here's an excerpt:
On the day a football player was in court facing felony charges in connection with an attack on a referee, football officials said the adult amateur league will have a tough time finding referees to officiate games next season.

Leon R. Woods, 23, of Rochester was charged with first-degree assault, a felony, in connection with the attack on Pete McCabe, 54, of Lakeville, Livingston County. Woods, a running back for the Western New York Cougars, a team from Rochester, is accused of intentionally swinging his helmet and striking McCabe in the face after a game at Edgerton Park on Saturday.

McCabe, who was one of several referees officiating the end-of-season playoff game between Rochester and Utica, suffered severe lacerations, a broken jaw and nose and internal injuries. . . .

Referee Robert Lockhart, 54, told police that he saw a player running down the sideline, holding his helmet. "He then ran up to (McCabe) and swung his helmet like a weapon," Lockhart said. "It was like a roundhouse punch. He hit (McCabe) right in his face." McCabe immediately went limp and fell to the ground, he said. Blood was gushing from his face, he said.
To read the rest, click here.

Thursday, November 05, 2009
 
Peter Carfagna's New Sports Law Books

There are a number of terrific sports law case books available, and there is a new one that joins them: Peter Carfagna's "Sports and the Law: Examining the Legal Evolution of American's Three 'Major Leagues" (West, 2009).

Peter's book is devoted to the sports law of Major League Baseball, the National Football League, and the National Basketball Association. I just finished reading a copy of it, and it's excellent. I particularly like its clarity and brevity (167 pages, not including appendixes; appendixes include the MLB Uniform Player Contract, the NFL Standard Player Contract, and the NBA Uniform Player Contract) -- it addresses all of the key decisions and also provides useful practical materials, such as an actual naming rights agreement between the Red Sox and Anheuser-Busch (pages 125 to 135).

Peter has also just published Representing the Professional Athlete (West, 2009), another excellent work. This one is about hands-on training for acting as a player agent.

Peter teaches sports law at Harvard Law School and has a long and storied career in the industry, including serving as chief legal officer/general counsel of IMG. It's neat to see sports law continue to grow in scholarship and esteem, and I'm looking forward to more sports law books on the way.

Wednesday, November 04, 2009
 
More on Star Caps

As a follow up to Nathaniel’s post on the Star Caps hearing, the written testimony of all of the witnesses and the video of the hearing can be found here (note that the testimony from the witnesses does not begin until about the 1:26:48 mark).

Here is the full witness list: Roger Goodell, Commissioner, National Football League; DeMaurice Smith, Executive Director, National Football League Players Association; Rob Manfred, Executive Vice President, Labor and Human Resources, Office of the Commissioner of Baseball, Major League Baseball; Michael S. Weiner, General Counsel, Major League Baseball Players Association; Travis Tygart, Chief Executive Officer, United States Anti-Doping Agency; Jeffrey Standen, Professor of Law, Willamette University College of Law; Gabriel Feldman, Associate Professor of Law and Director, Sports Law Program, Tulane University Law School.

Also, although I may be a bit biased, the Minnesota Post did a good job of recapping the hearing.

Here’s an excerpt:
During additional testimony before the committee, Gabriel A. Feldman, associate professor of law at Tulane University and the director for the Tulane sports law program, laid out a more detailed argument against congressional action.

“It is important to emphasize that the Eighth Circuit did not hold that the NFL [Performance Enhancing Drug] Policy violates Minnesota law,” he said in prepared testimony. “Instead, the court only held that the Williamses may challenge their suspensions in Minnesota state court under state law.”

Thus, Feldman concluded that it was only a “potential” problem. And even if the court did ultimately rule in favor of the Williamses, it was still a “narrow” problem because only three states, including Minnesota, currently have drug-testing laws that might conflict with the NFL policy.

“This narrow potential problem warrants a very narrow solution, and many steps should be taken before Congress intervenes,” said Feldman. “The most appropriate — and simple — solution is for the NFL to litigate the case in state court and convince the court that the Minnesota Laws were not intended to apply to the NFL [Performance Enhancing Drug] Policy and that suspensions do not violate the Minnesota Laws. If that suit is unsuccessful, the NFL should seek an exemption from the state Legislature that makes it clear that the Minnesota Laws do not apply … If that fails, the NFL and the players association should try to bargain around the Minnesota Laws. If that fails, then, only as a last resort, Congress should consider passing a narrow federal law that will protect” the NFL policy.

Goodell retorted that if a national law was not enacted, then other states could ultimately change their laws to conflict with NFL policy. Feldman, however, stated that there was little chance of that happening.

In the end, subcommittee chairman Bobby Rush of Illinois seemed to side with Feldman.

Rush said that he would be keeping a “wary eye” on the Williamses’ case, but warned that “you can’t tell what members of Congress might ultimately do once you open up Pandora’s Box.”

“I would just ask that you all try to work this thing out,” Rush told the gathered panel.


Finally, Mark Maske of the Washington Post wrote a piece discussing the study of state employee drug testing laws that I conducted for the hearing. The study concluded that only 3 states (Minnesota, Maryland, and North Carolina) currently have workplace drug testing laws that might conflict with the NFL’s performance enhancing drug testing policy. Many thanks to Andrew Miragliotta, a sports law student here at Tulane Law School, for helping with the study.

Tuesday, November 03, 2009
 
Congress Considers the StarCaps Case

A Congressional hearing was held today regarding whether to amend the Labor Management Relations Act in order to protect professional sports leagues' performance enhancing drug policies from being attacked under state law. The hearing was held in response to the 8th Circuit's recent decision in Williams v. NFL (i.e., the "StarCaps" case), and featured testimony from NFL commissioner Roger Goodell, NFLPA executive director DeMaurice Smith, Rob Manfred, Major League Baseball's executive vice president of labor relations, and Michael Weiner, the MLBPA's general counsel. Sports Law Blog's Gabe Feldman is quoted in the New York Times' report on the hearing. Meanwhile, Paul Secunda, a professor at the Marquette University Law School, has posted some thoughts regarding the hearing and the Williams case over at PrawfsBlawg.

For more on the Williams case, see Gabe's prior posts on the litigation, as well as the thoughts of Willamette law professor Jeffrey Standen at the Sports Law Professor Blog.

Monday, November 02, 2009
 
U.S. Supreme Court to hear American Needle v. NFL on January 13, 2010

The U.S. Supreme Court released its January calendar today, and announced that American Needle v. NFL will be heard on Wednesday, January 13, 2010 (h/t Ryan Rodenberg of Legal Aspects of Sports Blog). For past Sports Law Blog coverage on the case, click here. For links to various amicus briefs and other court materials, click here.

For related scholarship on this case, see:
  • Gabriel Feldman, The Puzzling Persistence of the Single Entity Argument for Sports Leagues: American Needle and the Supreme Court's Opportunity to Reject a Flawed Defense, 2009 Wisconsin Law Review __ (forthcoming, 2009)
  • Nathaniel Grow, There’s No ‘I’ in ‘League’: Professional Sports Leagues and the Single Entity Defense, 105 Michigan Law Review 183 (2006)
  • Michael McCann, American Needle v. NFL: An Opportunity to Reshape Sports Law, 119 Yale Law Journal __ (forthcoming, 2009)