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Wednesday, May 30, 2012
 
Why did Vilma not sue the NFL?

Mike's SI piece on the Vilma lawsuit got mentioned on Slate's Hang Up and Listen podcast this week. I disagree with a couple of points that Mike makes (and that the HU&L guys largely repeat): I do not believe there is any chance the claim is frivolous, although the issue of whether the whole thing is preempted by the NLRA and the CBA is an interesting one (the answer to which I have no idea). It seems to me that while the CBA gave Goodell a great deal of investigatory and sanction power over the players, it did not give him license to defame players and that possible defamation did not become the subject of bargaining. As to forum, I wrote previously that there is a nice issue of whether Goodell is subject to personal jurisdiction in Louisiana, although the more I think about it, the more convinced I am that the case can be heard there.

But I now want to pose a different question: Why did Vilma sue only Goodell and not the NFL on a respondeat superior theory? The answer depends on two questions that I hope people can answer.

One possibility is that the NFL is a party to the CBA (Goodell is not), so suing the other contracting party makes the possible labor preemption more obvious. Is that possible?

A second possibility is that Vilma wants to be in federal court and was worried that the NFL might somehow destroy complete diversity and thus federal jurisdiction. That explanation depends on my second question: What is the precise organizational status of the National Football League? Is that an independent entity and, if so, what is its form and make-up? Or is it owned by some other entity and, if so, what is the form and make-up of that entity? While the league has its offices in New York, that only matters if it is a corporation; if it is a partnership or a limited liability company, its citizenship is based on the citizenship of all of its partners or members. And if some of those are from Florida (Vilma's home state), this case cannot be in federal court. So who, exactly, does Goodell work for and what is its nature and structure?

Update: Tom's comment gets us part way there, but only part way. A partnership's citizenship is determined by the citizenship of every partner. So we need to know about all the general and limited partner of Miami Dolphins Ltd. The general partner is "South Florida Football Associates LLC," which is headquartered in New York. Its managing member is Stephen Ross. Is Ross a Florida citizen? According to Wikipedia, he resides in New York. Of course, there also are the famous limited partners that Ross brought on, such as Gloria and Emilio Estefan, Marc Anthony, and the Williams sisters. Gloria for sure is a Florida citizen. Not sure if she and the others are partners in the partnership or members of the LLC. But either way, they make Miami Dolphins Ltd. a Florida citizen which makes the NFL a Florida citizen. So suing the NFL probably would have destroyed diversity and Vilma wanted to be in federal court. Of course, that is surprising, given the "local bias" rationales underlying diversity jurisdiction. I would have expected Vilma to want to be in state court in Louisiana.


 
The Discovery Process, Internal Investigations and Jonathan Vilma's lawsuit

I've written an article titled Power Game in the May 28 issue of Sports Illustrated. The article appears on page 19 and can also be found at this link. Here's an excerpt:

The NFL likely worries that if a judge orders pretrial discovery, the league would have to reveal its informants, which could undermine the NFL's investigation and provoke other suspended players and coaches to challenge the commissioner. Keep in mind, informants talking to league investigators are not under oath, and can lie—including to protect themselves—without legal repercussion.

To read the rest, click here.

Tuesday, May 29, 2012
 
Today in Sports Law History

Today marks the 90th anniversary of the United States Supreme Court's seminal opinion in Federal Baseball Club of Baltimore v. National League. In a unanimous decision authored by Justice Oliver Wendell Holmes Jr. (pictured), the Court held that the "business of base ball" was neither interstate in nature, nor commerce, and thus was not subject to the Sherman Act. The case was brought by the Baltimore Terrapins of the Federal League of Professional Baseball Clubs, after the team was dissatisfied with a peace settlement between the rival circuit and the American and National Leagues in December 1915. After being presented with unfavorable testimony during an abbreviated trial in Philadelphia, the Baltimore franchise voluntarily withdrew its case in 1917, only to refile it a few months later in Washington, D.C. This latter suit proceeded to trial in 1919, with a jury awarding Baltimore an $80,000 verdict(subsequently trebled to $240,000). Organized baseball prevailed on appeal, however, and the Supreme Court affirmed on May 29, 1922. Although the relatively narrow view of interstate commerce relied on in Federal Baseball soon became outdated, the Court has nevertheless affirmed the decision on two separate occasions, giving rise to baseball's infamous antitrust exemption.

For analysis of the Supreme Court's decision in Federal Baseball, check out Kevin McDonald's 1998 article from the Journal of Supreme Court History, "Antitrust and Baseball: Stealing Holmes," as well as Justice Alito's 2008 commentary considering the case (also published in the Journal of Supreme Court History), along with the thoughts of Sports Law Blog's Ed Edmonds. Meanwhile, for more on the Federal League generally, be sure to read Daniel Levitt's excellent, recently-released history, The Battle that Forged Modern Baseball: The Federal League Challenge and Its Legacy.

Monday, May 28, 2012
 
Bioethics Panel: A Legal, Medical and Theological Perspective

Bioethics will likely play a significant role in how sports and athletes are regulated in the future. For instance:
  • Should parents be able to"select" certain genes for their children so their kids have the greatest chance of becoming pro athletes?
  • Should athletes be able to undergo gene therapy for rehabilitation of injury or enhancement of natural ability (was Bartolo Colon's stem cell treatment a sign of things to come)?
  • Should bioethics matters be regulated by collective bargaining agreements, or should federal or state governments not allow players' associations and owners to agree to certain possibilities?
Our colleague Alan Milstein - one of the nation's leading bioethics attorneys, including in the intersection of bioethics and sports, such as when Alan represented Eddy Curry when the Chicago Bulls demanded Curry take a DNA test -- has organized what looks to be a terrific panel to be held on Monday July 23, from 12:30 to 3:45 pm, in Philadelphia.

I'll be in attendance and am looking forward to hearing from some of best bioethicists around. Here is more information - hope you too consider attending:

Bioethics: A Legal, Medical and Theological Perspective

Hear from a wide range of experts

Our panelists will include doctors, clergy, academics and lawyers. Explore with them as they reflect, analyze and dialogue about:

  • Bioethics – its meaning and sources
  • Key documents that underlie bioethical decision-making
  • Doctor/patient relationships and quality of care
  • Public health issues and the role of physicians in state actions
  • Reproductive rights and issues
  • Organ transplants
  • Death and dying
  • Human subject research
  • Eugenics, cloning and embryonic stem cell research

Come to investigate the current ethical issues

If you’re coming for answers, then this may not be the seminar for you. But if you’re coming to investigate current ethical issues and probe into the questions and dilemmas they pose for you, your clients, families, hospitals, governments and civilizations, then you’ll enjoy this program.

Leave with an understanding of why even well-informed people reasonably disagree about how to apply bioethics


Course Planner: Alan C. Milstein, Esq.


Faculty:
Alan C. Milstein, Esq., Sherman Silverstein, Moorestown, NJ
Elizabeth A. Babin, M.D., Obstetrics & Gynecology, Kennedy Health System, Turnersville, NJ
Aaron D. Bannett, MD, MBA, Founder, Organ Transplant Program & former Chairman of Surgery, Albert Einstein Medical Center, Philadelphia
Peter J. Colosi, Ph.D., Assistant Professor of Moral Theology, St. Charles Borromeo Seminary, Wynnewood
Frank M. McClellan, JD, LLM, Professor of Law Emeritus, Temple University James E. Beasley School of Law, Philadelphia
Reverend Robert J McFadden, Resurrection Baptist Church, Philadelphia
Timothy B. McKinney, M.D., Obstetrics & Gynecology, Blackwood, NJ
LocationStart TimeEnd Time
  • The CLE Conference Center
    Wanamaker Bldg., 10th Floor, Ste. 1010, Philadelphia, PA
Mon, 12:30P
Jul 23, 2012
Mon, 3:45P
Jul 23, 2012

For more information on attending, click here. Hope to see you there!

Saturday, May 26, 2012
 
Preliminary Thoughts on the NFL Collusion Lawsuit

As many of you know, on Wednesday May 23, the NFL Players Association filed suit against the 32 NFL teams in the case White v. National Football League, arguing that the NFL teams "engaged in a secret, recently-revealed collusive ... agreement" to suppress player salaries and impose a $123 million salary cap for the uncapped 2010 season.

Michael McCann has already shared his thoughts on the lawsuit in his recent column for Sports Illustrated. However, having written two law review articles on Major League Baseball's history of collusion (see here and here), I wanted to add a few points of importance:

1. The Recent Football Case is a Labor Case, Not an Antitrust Case: Generally when we think about collusion in professional sports, we think about violations of Section 1 of the Sherman Act, which states that "[e]very contract, combination ... or conspiracy, in the restraint of trade or commerce ... is declared to be illegal." However, the recent lawsuit filed by the NFL Players Association is not based on Section 1 of the Sherman Act. Rather, it is filed under labor law, and argues that the NFL teams violated three distinct provisions of their last collective bargaining agreement that relate specifically to disallowing collusion. These provisions include:
  • Article XIII(a) (Anti-Collusion): "No Club, its employees, or agents, shall enter into any agreement express or implied, with the NFL or any other Club .... to restrict or limit individual Club decision-making [with regards to] whether or not to negotiate with a player."
  • Article XV, Sect. 2: "Neither the parties hereto, nor any Club or player shall enter into an agreement .... to serve the purpose of defeating or circumventing the intention of the parties reflected by [aspects of the agreement related to] Total Revenues, Salary Cap, Entering Player Pool, and Minimum Team Salary ..."
  • Article XIX, Sect. 6: "Defendants ... each pledge their best efforts and cooperation ... to implement the provisions of the [collective bargaining agreement] in a manner consistent with good faith and fair dealing."
2. The Labor Law Setup of this Case Makes it Like the Baseball Collusion Claims in the 1980s: The legal claims in the recent NFL collusion suit are shaping up a lot like those in three baseball collusion grievances, filed based on conduct that occurred during the 1985, 1986 and 1987 baseball off-seasons. In those cases, labor arbitrators Thomas Roberts and George Nicolau found the Major League Baseball teams liable for reaching an agreement not to sign other teams’ free agents, and later for creating an information bank to prevent teams from offering more than one another for free agents. Each of these three grievances was ultimately decided in favor of the Baseball players. After the third ruling, the Major League teams settled by agreeing to pay the players $280 million in damages (plus interest).

3. Nevertheless, the NFLPA Claims are Not Identical to Baseball Collusion in the 1980s: Yet, there are at least three important differences between the Football Collusion claims filed this week and the Baseball claims from the 1980s. First, the baseball cases alleged salary suppression on the individual level, whereas the NFL Players Association alleges salary suppression on the team-wide level. In addition, in the baseball cases of the 1980s all teams to some extent participated in the conspiracy (the only team in doubt was the New York Yankees that made a contract offer to White Sox catcher Carlton Fisk); whereas the National Football Players Association alleges in its claim that "the Redskins, Cowboys, Raiders and Saints .... refused, at least to some extent to abide by their collusive conspiracy." Finally, whereas the Major League Baseball collusion cases were decided upon by an arbitrator, the National Football League Players Association has filed its claim in federal court.

4. For the NFL Players, Proving a Conspiracy will be the Biggest Challenge: Most likely, the most difficult part of this case for the NFLPA will be proving that there really was a conspiracy among the NFL teams to enforce a secret salary cap. Presuming a court adopts antitrust law's standard of proving an agreement (even though this is technically not an antitrust case), the NFL Players would have to show sufficient facts to exclude the possibility that defendants were acting independently or in a consciously parallel manner. To prove such an agreement, the NFL Players would not necessarily need a "smoking gun" memo, such as the one that Major League Baseball's Director of the Player Relations Leland S. MacPhail distributed during baseball's 1985 off-season that encouraged teams to “exercise more self-discipline in making their operating decisions and to resist the temptation to give in to the unreasonable demands of ... players." But the NFL Players would still need evidence -- either through documents, testimony or evidence of radical departure from past behavior -- that the NFL teams (or at least 28 of the NFL teams) had a "meeting of the minds" or a "unity of purpose" in refusing to exceed a purported salary cap.

5. Mike Florio's Use of a Confidential Source in his March 12 Article Might Cause Chaos: Finally, although most evidence of collusion emerges in the discovery process of a claim, the NFL Players' initial complaint cites three public statements that they believe help to show collusion. Two of these statements are made by NY Giants owner John Mara and refer to the lack of 2010 salary cap as a "loophole" that has come up several times in owners' meetings. Meanwhile, the third statement comes from Mike Florio's Pro Football Talk website (owned by NBC Sports) in which he cites "a source with knowledge of the situation" as saying that NFL teams were told “at least six times” during ownership meetings that taking advantage of the lack of the salary cap would lead to “serious consequences.” The nature of Florio's source here is critically important; however, he refuses to divulge his source's identity. If the case moves forward, I would fully expect both Florio and NBC Sports to receive a subpoena from the NFL Players Association seeking disclosure of this secret source.
_____________________________________________________________________________
As the White v. National Football League case progresses, I will continue to share my thoughts on Sports Law Blog. You can also follow me via Twitter at MarcEdelman. (Note: this post has been cross-posted on Above the Law).

Friday, May 25, 2012
 
VADA Mess!


A Quick Look at the Legal and Regulatory Issues Raised by the Cancellations of Khan-Peterson II and Berto-Ortiz II Following Positive Drug Tests
                In one famously bad month for top-level professional boxing, two highly anticipated rematches of 2011 “Fights of the Year” were aced as a result of participants testing positive for banned substances.  The unfortunate news began in early May, when it was disclosed that unified junior welterweight champion Lamont (Havoc) Peterson tested positive for synthetic testosterone in advance of his May 12, 2012 rematch with Amir (King) Khan.  It continued about a week later when it was disclosed that the June 23, 2012 welterweight rematch between Andre Berto and “Vicious” Victor Ortiz was canceled after Berto tested positive for noandrosterone, a banned steroid.  Both positive tests came during random testing administered by the Voluntary Anti-Doping Association (“VADA”) and agreed to by the contestants in their bout contracts.  In the wake of these positive tests, what once looked like an outstanding device for making certain that professional boxers did not seek unfair advantages behind closed doors during their pre-fight preparations has now become the flashlight that illuminated what may be a long-time practice in professional boxing.  What can be taken away from Peterson’s and Berto’s positive tests? A quick look follows....
 To read more, please see:  http://www.mp8.ph/news/vada-mess/16193

Wednesday, May 23, 2012
 
NFLPA sues NFL for Collusion

I have a new column for SI.com on today's big news - another legal headache for Roger Goodell.

Tuesday, May 22, 2012
 
Impact of Brian McNamee's Testimony on U.S. v. Roger Clemens

I have a new column for SI.com on McNamee's testimony and what it could signal about each side's strategy going forward - as the case is in its 6th week.

Monday, May 21, 2012
 
The Year in Review: College Sports Reform Reaches the Tipping Point

Just posted an article on the Huffington Post in an attempt to provide an overview of the past year in college sports.  The article begins....

On college campuses across the country the academic year is winding down—making it an opportune time to review the changing landscape of college athletics.  The nature, business, and management of college sports has been debated and criticized these past 12 months more so than any other period in recent history, and the NCAA is facing scrutiny on whether it has deviated too far from its stated mission: to ensure that college athletics is “an integral part of higher education with a focus on the development of our student-athletes.”

To read the rest of the post, here's a link.

Saturday, May 19, 2012
 
2nd Annual Sports Law for Rookies and Veterans

From Attorney Steven Silton of Hinshaw & Culbertson:

You are invited to the 2nd Annual Sports Law for Rookies and Veterans on June 14, 2012 at the Minneapolis Club in Minneapolis. This premier sports law seminar includes the following confirmed speakers: NFL sports agents Drew and Jason Rosenhaus, Minnesota Vikings CAO and General Counsel Kevin Warren, Minnesota Timberwolves CMO Ted Johnson, former Minnesota Wild GM and current hockey agent Tom Lynn, MLB agent Charisse Dash, the Honorable David Doty, who presided over every major sports labor dispute over the last 25 years, numerous inside and outside sports lawyers, media professionals, law professors and sport franchise executives. In addition, Ross Bernstein, best selling author of over 50 sports books, will give his signature presentation on "The Champion’s Code." The current agenda with confirmed speakers is at
http://www.hinshawlaw.com/2nd-annual-sports-law-seminar-for-rookies-and-veterans/.

This interesting and compelling seminar will be submitted for 8 continuing legal education credits in the jurisdiction of all attendees, and includes 1 ethics credit and 1 elimination of bias (diversity) credit. The cost of the seminar is only $199.00 and includes breakfast and lunch. Employees of professional sports franchises or university athletic departments can attend without charge. Anyone who works directly or indirectly with sports teams or professionals or is interested in sports law should attend this event. You should be able to follow the attached link on the PDF to sign up or you can follow the link on the event page of our firm website at http://www.hinshawlaw.com/2nd-annual-sports-law-seminar-for-rookies-and-veterans/. Unlike last year, this event is open to the public, so feel free to forward this invitation to anyone you think may be interested.

Please direct any registration issues to Marie Pocock at mpocock@hinshawlaw.com and contact me or Steve Silton at ssilton@hinshawlaw.com with any questions regarding the seminar.

Friday, May 18, 2012
 
Thoughts on Vilma v. Goodell: Personal Jurisdiction and Sports

Having read through Jonathan Vilma's defamation complaint against Roger Goodell, my first thought (Mike's thoughts are here) is that there is an interesting potential personal jurisdiction issue here. And its resolution may depend, ironically, on Roger Clemens' defamation action against Brian McNamee.

Vilma sued in Louisiana, where he works but does not live, over comments that Goodell made in several press releases written and issued in New York about the bounty program, which largely took place or came out of Louisiana, statements that Goodell intended and expected to be disseminated publicly and, presumably, nationally. In Clemens, Clemens sued McNamee in Texas over statements McNamee made to the Mitchell Commission and Sports Illustrated in New York about conduct occurring in New York and Toronto. The Fifth Circuit (which also includes Louisiana) held there was no personal jurisdiction over McNamee because he did not target his statements at Texas. He was speaking in New York about non-Texas events and had no control over where the statements ultimately were disseminated. The majority never really considered whether he knew or intended his statements would be published in Texas.

If Goodell does challenge jurisdiction, Vilma must overcome Clemens. A few distinctions leap out, suggesting there is jurisdiction here, accepting the facts in the complaint as true. First, Goodell's statements, although made in New York, concern conduct occurring in Louisiana, so his statements were "directed" at Louisiana more than McNamee's were at Texas. Second, it could be argued that Goodell was more in control of the ultimate dissemination of his statements (since he knows national media, including media in Louisiana, will report his every word) than McNamee was in talking to a reporter from Sports Illustrated. Third, the lawsuit targets not only Goodell's press releases, but also reports he sent to all 32 teams about the investigation and findings; one of the teams to receive that report, of course, is the Saints, in Louisiana. Goodell had more affirmative control over the publication of his comments, including their entering the forum state.

Still, it is another nice Civ Pro hypo jumping from the world of sport.

Thursday, May 17, 2012
 
New Sports Illustrated column: Jonathan Vilma v. Roger Goodell

Jonathan Vilma, suspended for one-year because of his alleged role in Bounty Gate, has filed a defamation lawsuit against Roger Goodell. I have a new SI.com column on the lawsuit.

Here's an excerpt:

The league's best argument may be the simplest: truth is an absolute defense to defamation. The problem for the league in making such an argument is that, through the discovery process, it would likely have to disclose information it does not want to reveal. For instance, the league may have to divulge it's sources of information, including the identities of players and coaches who were informants. The backlash of such disclosures could be considerable. Moreover, much like the Mitchell Report has been criticized for relying on disreputable persons, expect similar critiques if the same proves true of the NFL's Bounty Report.

* * *

Vilma v. Goodell is more than just a defamation lawsuit. It is a direct challenge to a commissioner who, until now, has acted with more power than any commissioner in U.S. sports history. It is also an attempt to import judicial review of an individual who, until now, has been judge, jury and executioner of NFL justice.

To read the rest of the column, click here.

Wednesday, May 16, 2012
 
British Pubs, Decoder Cards, and the Future of Intellectual Property Licensing after Murphy






It is a rare event when one has the opportunity to use the phrase "decoder cards" in the title of an academic article. However, the facts of the so-called "Karen Murphy case" presented exactly that opportunity in a co-authored piece with Tassos Kaburakis and Johan Lindholm that was recently published by the Columbia Journal of European Law. The abstract is below (and available here):

October 4, 2011 marked a new era in global sports media rights. On this day, the Grand Chamber of the European Court of Justice (ECJ) delivered its judgment in FA Premier League et al. v. QC Leisure et al. & Murphy v. Media Protection Services Ltd (“Murphy”). Murphy decided upon the legality of a scheme whereby the holder of intellectual property rights to a sporting event licenses the right to broadcast the event on a national exclusivity basis.

The central players in the Murphy saga were: (i) the Football Association Premier League Ltd (“FAPL” or “Premier League”), the rights holder who, on behalf of football clubs playing in the Premier League, licensed the rights to broadcast Premier League matches to national broadcasters; (ii) two joint ventures, BSkyB Ltd. and ESPN (“Sky”) and NetMed Hellas SA and Multichoice Hellas SA (“NOVA”), who were the national broadcasters in the United Kingdom and Greece, respectively; (iii) Karen Murphy, a British national who purchased NOVA decoding equipment for personal viewing and subsequently used it to display Premier League matches in her pub in Southsea, England, at a significantly lower cost than a commercial subscription with Sky; and (iv) QC Leisure and AV Station, two British enterprises that arranged for the NOVA subscriptions and imported the decoding equipment, which was subsequently sold to Murphy and others.

The system of nationally exclusive broadcasting rights challenged in Murphy was supported by a combination of private and national measures. First, the typical agreement between the Premier League and a broadcaster contained provisions giving the broadcaster exclusive rights to broadcast the events in one of the EU Member States and requiring the broadcaster to take precautions to prevent individuals situated outside that Member State from accessing their broadcast. Second, in order to uphold the latter provision, the subsequent agreement between the broadcaster and its customers contained terms whereby the customer undertook that the decoding equipment would not be used to access the broadcast outside that Member State. Finally, general copyright law and a specific British statutory provision criminalizing the import, sale, and use of foreign decoding equipment procured through dishonest means further strengthened the enforceability and seeming validity of these contractual arrangements.

This licensing system was challenged in two British cases in which the plaintiffs alleged infringement. Ultimately, two divisions of the High Court of Justice of England and Wales referred a total of eighteen questions (excluding sub-questions) to the ECJ regarding the interpretation and application of various provisions under EU law. The eighteen questions boil down to three principal inquiries: I) Are Member States’ measures discouraging parallel import of broadcasting services compatible with the right of free movement of services protected by Article 56 of the Treaty on the Functioning of the European Union (“TFEU”)? (II) Are the agreements between the Premier League and broadcasters anticompetitive, contrary to Article 101 of the TFEU? (III) How are the several European Directives on intellectual property rights and, in particular, copyright law applied to such broadcasting rights, and to what extent is the proprietary content protected? This Article will address each of these three principal inquiries in order. Additionally, this Article will examine which elements of the licensing system heretofore are consistent with EU law, and analyze the likely ramifications for rights holders and future business strategies available to them.

Tuesday, May 15, 2012
 
New Sports Illustrated column: How will Roger Clemens lawyers go after Brian McNamee on Cross-Examination?

Cross-examination of Brian McNamee has just begun. Here's my new SI.com column on what we learned from direct examination and how Clemens lawyers may go after him on cross.

Here's an excerpt:
To advance these points, look for Clemens' attorneys to find contradictions in McNamee's testimony from his earlier statements. Even seemingly minor contradictions, such as in dates of events or names of non-essential persons present, will be exploited to frame McNamee as unreliable. They will also question why McNamee is the only person on Earth to have seen the highly-recognizable and attention-seizing Clemens take steroids and HGH. Also expect McNamee to be forced to explain his motivations for telling law enforcement authorities and Major League Baseball officials about his relationship with Clemens. Along those lines, McNamee will undoubtedly be asked about the proffer agreement he signed with law enforcement in 2006. The agreement ensured that McNamee would avoid prosecution so long as he revealed his knowledge about baseball players using steroids. Expect Clemens' lawyers to imply that McNamee, at risk of being prosecuted, had to make noteworthy revelations to authorities even if it meant stretching the truth.
To read the rest, click here.

Monday, May 14, 2012
 
Legal Issues in Emerging Sports

Over the weekend, I attended the Sports Law Association annual conference. I was privileged to be a panelist with Ryan Hilbert on legal issues in emerging sports. Over the last few years I have represented clients in snowboarding, rugby sevens and most recently Muay Thai. The legal issues raised by these sports, which we call emerging sports, do overlap somewhat with the established "stick and ball" sports can also be somewhat unique. Often these sports are underfunded, at least initially, and do not have an established corporate structure. These sports thus need legal guidance in corporate structure and governance issues at the entity level. Financial issues are also a huge issues for these sports. They need additional revenues to grow, obtain additional exposure and increase grass roots participation. Two of the key issues for emerging sports are thus television and sponsorship dollars. A number of emerging sports, such as rugby, are benefiting from tremendous growth in participation and are becoming more attractive to broadcasters. With the proliferation of cable channels looking for sports content, some emerging sports are well-positioned to increase their television exposure. A traditional sale of broadcast rights may be achieved by some emerging sports but others may enter into some type of joint venture with a broadcaster as an alternative. Sponsorship dollars often provide significant revenue to an emerging sport. It can be a cost-effective way for sponsors to connect with their target demographic. Drafting sponsorship agreements for emerging sports requires sensitivity in some cases to the desire for the sport to retain the "authenticity" of its culture. The sponsorship agreement may thus limit certain aspects of a typical sponsorship, so the sport does not seem too commercial. Social media is also a significant component of marketing campaigns for emerging sports, which may have a younger demographic that relies heavily on social media to communicate. It is important to make sure that there is compliance with FTC guidelines for social media and mobile marketing and other relevant statutes, such as the Children's Online Privacy and Protection Act. That act imposes obligations on marketers that target children under 13.Emerging sports can also raise risk management issues, especially for those emerging sports that are contested in non-traditional venues, such as on a mountain slope or offshore for a surfing contest. Fan safety, and the appropriate insurance, are paramount. The release language in admission tickets and disclosures to spectators about safety should be part of an emerging sports risk management program.As emerging sports continue to grow, these and other legal issues will continue to be significant for emerging sports.

Saturday, May 12, 2012
 
MLB Faces Antitrust Suit Regarding Its TV Blackout Policies

Major League Baseball's television blackout policies are the subject of a class action antitrust lawsuit that was filed on Wednesday in the Southern District of New York. The plaintiffs in Garber v. MLB allege that the league has violated Sections One and Two of the Sherman Act by unfairly restricting its fans' ability to watch out-of-market broadcasts in two primary ways. First, through its MLB Extra Innings cable package and MLB.tv Internet package, MLB refuses to offer fans the ability to purchase just their favorite team's games, instead requiring consumers to purchase a package including all out-of-market MLB broadcasts. Second, both the Extra Innings and MLB.tv packages blackout any games broadcast locally via a regional sports network (RSN), meaning that fans cannot use those packages to watch their local team play, but must instead purchase a cable subscription to watch the games on their local RSN. The complaint alleges that these exclusive broadcasting policies drive up subscription fees for all cable consumers by enabling the RSNs to charge monopoly prices for their highly desirable sports programming. The Garber plaintiffs' complaint is available here, while MLB's specific blackout policies are explained here (and depicted in the accompanying map).

The lawsuit was filed by the same law firm (Pomerantz, Haudek, Grossman & Gross) that filed a similar class action antitrust suit against the NHL in March 2012 (Laumann v. NHL). Two of the three named plaintiffs in the NHL case (Fernanda Garber and Robert Silver) are among the four named plaintiffs in the MLB lawsuit.

Interestingly, the Garber suit does not name all 30 MLB teams as defendants, instead suing only the Chicago Cubs, Chicago White Sox, Colorado Rockies, New York Yankees, Oakland A's, Philadelphia Phillies, Pittsburgh Pirates, San Francisco Giants, and Seattle Mariners, along with the Office of the Commissioner, MLB Advanced Media, DirecTV, Comcast, and various RSNs. Notably, the suit does not name any of the Fox Sports RSNs as defendants, nor any of the teams whose games are primarily broadcast on the Fox Sports networks. Instead, the suit targets only those teams whose games are televised on an RSN owned by DirecTV or Comcast (the one exception being the Yankees, who own their own proprietary RSN, the YES network). It is not immediately clear why the attorneys limited their allegations only to DirecTV and Comcast affiliates, but it may have something to do with a desire to pursue damages from cable service providers based on the allegations that all cable consumers have been charged higher prices due to MLB's exclusive broadcast policies.

One major hurdle the plaintiffs will have to overcome in their suit against MLB, of course, is baseball's historic exemption from antitrust law. Following the Supreme Court's 1972 decision in Flood v. Kuhn, lower courts have been divided regarding how broadly the exemption applies. As I explained in a recent law review article, subsequent lower courts have generally adopted one of three approaches to the exemption: (i) holding that the exemption broadly shields the entire business of baseball, (ii) holding that the exemption shields only the reserve clause (the specific restraint at issue in Flood), or (iii) holding that the exemption shields baseball's "unique characteristics and needs."

In Postema v. National League, 799 F. Supp. 1475 (S.D.N.Y. 1992), the Southern District of New York adopted the latter approach, holding that baseball's exemption did not shield the league from a suit filed by a former umpire because “[a]nti-competitive conduct toward umpires is not an essential part of baseball.” Id. at 1489. Undoubtedly hoping to draw upon this precedent and the related line of cases, the complaint in Garber argues that MLB's TV policies do not "reflect anything unique to baseball" insofar as "they are essentially identical to those in other major sports." Complaint at Paragraph 8.

The plaintiffs also seek to avoid application of the antitrust exemption by citing to Henderson Broadcasting Corp. v. Houston Sports Ass’n, 541 F. Supp. 263 (S.D. Tex. 1982), a case in which the Southern District of Texas ruled that the exemption did not apply to a dispute involving the Houston Astros' local radio broadcasting agreements. Based on this precedent, the Garber plaintiffs argue that the "distribution of video presentation of baseball games is subject to the antitrust laws." Complaint at Paragraph 8.

It will be interesting to see how the Garber court handles the antitrust exemption issue. Personally, I believe the "unique characteristics and needs" standard -- drawing upon dicta in Flood -- is flawed, given that the Supreme Court did not itself apply any such standard in the Flood case. I have similarly argued that the Henderson decision is poorly reasoned in several respects. As a result, I believe that baseball's broadcasting activities are encompassed by the exemption.  Nevertheless, the Postema and Henderson precedents could give the Garber court a potential basis for discarding baseball's antitrust exemption, if it is so inclined.

It will also be interesting to see if the Garber lawsuit finally motivates MLB to update its antiquated television blackout policies. The rules have been frequently criticized by baseball fans, and can lead to absurd outcomes such as fans in Iowa being unable to watch any game involving the Twins, Royals, White Sox, Brewers, Cubs, or Cardinals on either the MLB Extra Innings or MLB.tv packages, even though in many cases none of those teams' games are available from their local cable provider. MLB has reportedly been considering updating the rules for years, but has yet to act. Perhaps this threat to its cherished antitrust exemption, along with potential treble damages, will finally force the league to act.

Friday, May 11, 2012
 
Legal Fallout of Dave Duerson's suicide

Sports Law Blog contributor Alan Milstein was interviewed for a story (subscription only) by Greg Ryan in Law360 on Dave Duerson's son, Tregg, suing the NFL and Riddell helmet maker for failing to warn the father about the long-term risks of concussions.

Here's an excerpt:
A successful bid by the NFL to keep the case in federal court would “greatly expand preemption and federal question jurisdiction to a degree never contemplated by the legislature or our courts,” Duerson said.

Sherman Silverstein LLP shareholder Alan C. Milstein, a sports law expert, predicted Monday that the court would send the suit back to state court. If the case is remanded, it would likely be the first of the concussion suits against the league to go to trial, he said, and could see the courtroom as early as the end of 2012.

“The question for the federal judge is really whether this is something governed by the CBA and is an employee-employer dispute, or whether it is separate and apart from that,” Milstein said.

The fact that the allegations are against the league, rather than the team that employed Duerson's father, could be the deciding factor, according to Milstein.
For a very good resource on the bevy of lawsuits filed by retired NFL players against the NFL -- the number of retired players who have sued now tops 2,000 -- be sure to check out NFL Concussion Litigation.

 
The New York Times on Harlem Ambassadors suing Harlem Wizards

Back in February, I blogged about the Harlem Ambassadors suing the Harlem Wizards over the Wizards allegedly "stealing" one of the Ambassadors' players - LaMarvon Jackson, who averaged 1 point per game at the University of Arkansas Little Rock, but who is apparently a star "entertainment show basketball performer." Though coveted by two teams, Jackson reportedly earns $60 per game (which typically generates at least $4,000 in revenue), with a $20 per diem when out on tour. Small numbers, perhaps, but the requested damages in the suit exceed $73,000.

Ken Belson of the New York Times has an extensive piece on the lawsuit, and I speak with him for his story.

Thursday, May 10, 2012
 
Not the end of football

Back in February, I wrote about an essay on Grantland by Tyler Cowen and Kevin Grier describing how footbal could end as a major sport as a result of head-injury lawsuits. Today in Slate, Will Oremus challenges that conclusion, arguing that the difficulty of proving liability in these cases given an assumption-of-risk defense and state-law sovereign immunity, makes it unlikely that we will see the numbers of big-money judgments that would cause high schools and colleges to want to get out of the football business.

Interestingly, Oremus rejects the idea that change can happen through lawsuits against individuals or even educational institutions. In his view, any change should
come not from the courts but from high-school athletic conferences, scholastic sports associations, and the NCAA. As the research rolls in, they need to take a hard look at the aspects of the game that inflict the most damage and implement rule changes accordingly. If football ends someday, it should only be because the powers that oversee the sport have tried everything to make it safe and determined that it can’t be done—not because lawsuits have spooked schools into giving up.
This is a sharp reflection of the modern understanding of tort law, the courts, and the administrative state. The regulating institutions should take care of the problems--even if those institutions have vested interests in protecting what they are supposed to be regulating. And courts do not achieve justice or truth at the systemic level--they only play on people's fear to surrender and pay out windfalls to a few individuals.

Friday, May 04, 2012
 
New Sports Illustrated column: Rethinking Congressional investigation into Roger Clemens

I have a new SI.com column that addresses 5 popular myths or at least exaggerations that have emerged since Roger Clemens testified before Congress in February 2008. Here's an excerpt:

Myth 3: The hearing cost millions of tax dollars.

Truth: Contrary to popular belief, Congress did not expend unusually high resources investigating Clemens or, for that matter, HGH, B-12 and other substances. In fact, the costs associated with the two February 2008 hearings were comparable with most 110th Congress hearings, some of which also concerned "nonessential" topics but nonetheless failed to attract the same level of media scrutiny and public scorn.

According to people involved in the February 2008 hearings, no outside staff or attorneys were hired and most of the work entailed receiving and distributing statements from health experts. Clemens and Andy Pettitte were also interviewed, under oath, by staff members and their statements were recorded and transcribed. The staff did not incur any travel expenses in conducting the interviews. Clemens also visited several members of Congress in their offices for short conversations.

To read the rest, click here.


Wednesday, May 02, 2012
 
Junior Seau and head injuries

Former NFL great Junior Seau died today of an apparently self-inflicted gunshot wound. If that is what it turns out to be, expect this to become another high-profile exhibit in the ongoing debate about football and head injuries (much like the suicide last year of former Chicago Bear Dave Duerson). Curious to see if Seau had agreed to have his brain examined as part of the study at BU's Center for the Study of Traumatic Encephalopathy Brain Bank and, if so, what they find.

Update: Josh Levin at Slate has similar thoughts.

One More Update: This, unfortunately, gives me a chance to link to NFL Concussion Litigation, a blog started by a 3L at UMKC Law School that has been tracking the various lawsuits that have been, and are being, filed against the NFL by former players.

Tuesday, May 01, 2012
 
Commentary on Billy Hunter

Brishen Rogers (Temple Law), guesting at Concurring Opinions, has an interesting commentary on the recent allegations of misconduct by NBAPA Executive Director Billy Hunter, particularly as to what these allegations tell us about labor law generally and the unique nature of players' unions.

 
Tanking, Incentives, and the NBA Draft



Several years ago, Mike McCannanalyzed tanking on the Sports Law Blog (see posts here and here). More recently, ESPN’s TrueHoop blog had astring of posts devoted to tanking in the NBA. ESPN’s coverage included a discussion of emerging research by Adam Gold,a PhD student at the University of Missouri and President of Winning Unlimited,LLC.

Issues involving tanking overlapconsiderably with my own inquiry into competitive integrity andgambling-related corruption (more on that topic later this year), so I havefollowed the research line closely. Withthe close of the NBA’s regular season last week and non-playoff teams in thelottery set, Adam agreed to provide a guest post outlining a numberof important issues germane to incentive-based tanking that may occur late(early?) in the NBA season.

Adam’s guest post is below:

Mathematical elimination can be used as a mechanism to determine draftorder and maintain competitive balance in professional sports leagues. The worst teams are awarded the most games toearn the top draft picks. Teams areranked based on functions of winning. Here are a few key points from the 2011-2012 NBA regular season.

(1) The Charlotte Bobcats’ streak of 23 losses to end the regularseason 7-59 compromises the integrity of the NBA (and all professional sportsleagues that use reverse order drafts generally). There is an inherent incentive for teams tointentionally handicap themselves and limit improvement throughout theseason. Fans are asked to support ateam’s attempt to manipulate the NBA’s draft lottery. Inequities triggered by incentives to losethreaten the accuracy in identifying which team is the worst.

(2) The New Orleans Hornets and Washington Wizards could have ended theregular season playing for the first overall selection. The Washington Wizards could clinch the firstoverall pick if they beat the Miami Heat and if the Houston Rockets beat the Hornets. Games among the worst teams could have beenplayed with an intensity that parallels playoff atmospheres.

(3) In a desperate attempt to keep Anthony Davis out of their division,the Miami Heat play superstars LeBron James and Dwayne Wade in the final gameof the season in Washington. Miami’s dreamof a dynasty is threatened by the possibility that their division rival earnsthe first overall draft pick. The Heat reconsider the risk of entering theplayoffs with injuries and fatigue against allowing Washington a better chanceto get the top prospect.

Teams can be ranked based on functions of winning that give the worstteams the best chance at the best draft picks. Methods based on mathematical elimination shift the entertainment fromthe lottery towards games featuring the worst teams in the league. Supporting fan interest in their favoriteteams is more important than the attempt to award the first pick to the worstteam. Using my methodology, draft orderin the NBA for this year would be a function of the following:



A detailed video discussion of mathematical elimination draft ordersfor the NHL, NBA, MLB, and NFL, as presented at the 2012 MIT Sloan SportsAnalytics Conference, is available here. In the coming months, I will disseminate periodic updates via Twitterand can be followed at @WinUnlimited.