Sports Law Blog
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Monday, March 03, 2014
 
The Role of Fans

Over the past several decades, sports have become far more fan interactive. Want proof? According to the Fantasy Sports Trade Association's data over 33 million people played fantasy sports in 2013 and they generated well over $ 1 billion in revenue. For those interested in better understanding the role of fans in sports moving forward, I call your attention to two items:

1. Catalyzing Fans

Two of our own contributors--Michael McCann and Howard Wasserman--collaborated with Dan Markel to write a law review article titled "Catalyzing Fans." You may download this paper here. According to the authors:
"This paper proposes the development of Fan Action Committees (“FACs”), which, like their political counterpart (PACs), could mobilize and empower fans to play a larger role in the decision-making associated with which “production teams” the talent will work. We outline two institutional options: FACs could directly compensate talent by crowdfunding, or they could make donations to charities favored by talent. We then discuss both obstacles and objections from a variety of policy and legal perspectives ranging from competitive balance to distributive justice. Finally, we consider possible extensions of the FAC model as well as offer some ruminations on why FACs haven’t already developed.
 Importantly, FACs create the potential for more efficient valuations of talent by registering not only the number of fans but also the intensity of their preferences. This insight, which stresses the upside of price discrimination, has relevance for a wide range of human endeavor where bilateral contracts have third party externalities that are not currently calibrated or adequately valued."
[Editor's Note: This piece is currently being reviewed by law reviews and journals. If you are interested in publishing this article, please contact Professor Markel immediately and directly]

2. Fans Paying College Athletes

Last year, I authored an article for The Huffington Post titled "Time to Embrace Change in College Athletics."  I wrote, in part, that:
"At some point in the not too distant future, the structure of college athletics as we know it will change. There are a multitude of possibilities of what this future world may look like -- and it may be far stranger than either George Orwell or Aldous Huxley could predict. Open markets and competitive bidding wars for high school players, salary caps for conferences, revenue sharing, agent representation and sponsorship deals for college athletes, and maybe even a student athlete union all within the realm of possibility."
Introducing FanPay, the brainchild of Tony Klausing.  Tony writes: "The idea is that fans would contribute to a pot of money to pay student athletes.  This money is escrowed, then when the student graduates, he has the right to claim the funds--or else are refunded to the contributor in full."  To see a beta of this website, check it out here. If you'd like to contact Tony directly with thoughts or comments, you can email him at: tony@prizl.org.





3 Comments:

The problem with FanPay is that the athletes are not getting paid while they're playing in college; the basic problem of athletes not having money while spending 1-3 years in college remains. They get a big payday when college is over. But that is what star players (the one likely to have fans pay for them) already have now.

Blogger Howard Wasserman -- 3/03/2014 9:55 PM  


Thanks Howard - I really enjoyed your paper as well. There are a number of parallels that I've found with your ideas and mine. I'm the Founder of FanPay.co, Prizl.org, and FundRun.us.

I agree that students not getting paid while in school is an issue. Nonetheless, the fact that they are not compensated for their efforts at all skews student-athletes in favor of leaving school to earn money professionally, quite obviously. If they were guaranteed a pot of gold upon graduation for their athletic efforts, then there is no doubt in my mind that they would be relatively more likely to remain in school.

Furthermore, it is not evident how fans would use the system. It may be the case that not only high-profile athletes would command salaries, but that lower-tier athletes (the type who may never earn a dime professionally) would earn crowdfunded compensation, as well. Thanks again for your comments. -Tony


Blogger Tony Klausing -- 3/06/2014 5:38 PM  


Thanks Howard - I really enjoyed your paper as well. There are a number of parallels that I've found with your ideas and mine. I'm the Founder of FanPay.co, Prizl.org, and FundRun.us.

I agree that students not getting paid while in school is an issue. Nonetheless, the fact that they are not compensated for their efforts at all skews student-athletes in favor of leaving school to earn money professionally, quite obviously. If they were guaranteed a pot of gold upon graduation for their athletic efforts, then there is no doubt in my mind that they would be relatively more likely to remain in school.

Furthermore, it is not evident how fans would use the system. It may be the case that not only high-profile athletes would command salaries, but that lower-tier athletes (the type who may never earn a dime professionally) would earn crowdfunded compensation, as well. Thanks again for your comments. -Tony


Blogger Tony Klausing -- 3/06/2014 5:39 PM  


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