Sports Law Blog
All things legal relating
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Tuesday, March 31, 2015
Guest Post -- NCAA Academic Requirements: A Lesson for Antitrust Analysis of Amateurism
The following is a guest post by Sherman Clark, Kirkland & Ellis Professor of Law at the University of Michigan:
NCAA Academic Requirements: A Lesson for Antitrust Analysis of Amateurism
Sherman J. Clark
Here is hypothetical but I think illuminating question. If courts determine that it violates antitrust law for NCAA schools to collude in refusing to pay players, might it also violate antitrust law for schools to collude in requiring players to be full-time students? It might seem obvious that academic eligibility and academic progress requirements do not implicate antitrust law; but it seemed equally obvious a generation ago that amateurism requirements do not implicate antitrust law. It seemed obvious; but it was wrong. The logic from Board of Regents to Law to O’Bannon was inexorable. And it does not stop there.
One might be tempted to dismiss this comparison out of hand on the grounds that eligibility rules are fundamentally different from amateurism requirements; and that such rules do not amount to price fixing. But price fixing is not the only thing that violates the Sherman Act. Any restraint of trade that has a substantial impact on competition is illegal if its anti-competitive effects outweigh its pro-competitive benefits.
Here one might say that college sports are different. Exactly. Being a college student has nothing inherently to do with working as a barista, but it has everything to do with playing college sports. What makes college sports what they are is that they are played by student athletes. And that is the point. Colleges are allowed to collude in this market in a way that would be illegal in other labor markets because the nature of the labor is essential to the nature of the product in a way that is not true in other markets. Where a restraint is necessary to define a product, it is not illegal.
But is it necessary that players be full-time students? Bear with me here. Would it really alter the nature of the product to let part-time night students play. Granted, if teams were made up of players who are not students at all, even in name, that might well alter the nature and appeal of the game. But it would probably not make a measurable difference to the character or appeal of college sports if the current academic progress requirements were relaxed a bit.
In the same way, it will probably make little difference to the nature and appeal of college basketball or football if players are paid a $3,500 stipend, or even $20,000. But at some point it might. And how are the courts to draw the line? Of course, courts could simply draw a line by fiat; but the line will be arbitrary and the cases unpredictable. There is no coherent stopping point short of a full free market. In such a market, stars would be paid large amounts and most other players much less—perhaps less even than what their scholarships are now worth. And that might well alter the nature and appeal of the game.
Sherman J. Clark is the Kirkland and Ellis Professor of Law at the University of Michigan Law School.
New Article: Navigating the Legal Risks of Daily Fantasy Sports
It's my pleasure to announce the online publication of sections 1-4 of my newest law review article "Navigating the Legal Risks of Daily Fantasy Sports: A Detailed Primer in Federal and State Gambling Law." This article explores the legal status of "daily fantasy sports" in light of both federal and state gambling laws. The full version of this article will be published in the January 2016 edition of University of Illinois Law Review.
Monday, March 30, 2015
The NCAA Business Enterprise: Crumbling Under its Own Success?
We just enjoyed perhaps the most exciting college sports weekend of the year: the Regional Finals of the NCAA's March Madness Tournament. Four men's basketball games are played, in sold out arenas (or domes), in front of a staggering number of television viewers. The demand for this event is so large that the broadcast rights of the March Madness tournament were contracted to CBS/Turner for $10.8 billion over 14 years. And therein lies the rub: is the NCAA about to crumble under its own success?
This weekend, three articles were published that addressed this very issue. First, Mark Alesia, an outstanding reporter for the Indianapolis Star, dug into the financials of the NCAA and wrote that the NCAA is "poised to top the eye-popping mark of $1 billion in annual revenue." As the NCAA's annual revenue has increased each year since 2001, legal claims have arisen on behalf of college athletes looking to share in this economic growth.
Our own Michael McCann spoke with Alesia for this article, and aptly stated "This is a transformative era for the NCAA, and at the end, the student-athlete will have a different role. There will be changes to amateurism." But what about defining this seemingly simple concept of 'amateurism?' Allen Sack, professor at the University of New Haven, states that "amateurism is whatever the NCAA arbitrarily decides to call it."
The second article over the weekend was an opinion piece written by Smith College economist Andrew Zimbalist titled "Paying College Athletes: Take Two." While everyone tries to frame the debate as 'should we pay college athletes?', Zimbalist accurately reminds us that "college athletes have been paid since the 19th century."
Perhaps the heart of his article can be summarized in the following quote:
"If we want to preserve the educational model of intercollegiate athletics, here's a more attractive option: Take the definition of amateurism away from its current arbitrary, hypocritical and morphing state imposed by the NCAA and follow the lead of the AAU and other amateur organizations. The working definition should be simple: an amateur athlete is one who is not paid a salary for playing his or her sport."This definition, under Zimbalist's concept, would allows institutions the ability to: 1) provide full cost of attendance; 2) year-round health insurance; 3) lifetime health insurance for athletically related injuries; 4) disability insurance and; 5) due process. YES PLEASE!
The third article demanding your attention is the wonderfully written piece "A March Madness Underdog: Free Enterprise" by Allysia Finley in the Wall Street Journal. In her article, Finley interviews none other than noted NCAA critic Jay Bilas who explains why players should be paid, and how to overhaul the 'exploitive' NCAA.
Using eloquence and humor, Bilas argues for a system that allows college athletes to be paid what the market deems them to be worth. Note the term 'allows' as he states "I'm not advocating and never have that some athletes should be paid. It might be a distinction without a difference to some, but what I'm saying is that it shouldn't be disallowed."
Last month at the MIT Sloan Sports Analytics Conference, I was lucky enough to moderate a panel titled "Amateurs or Industry: NCAA Reform." Joining me on the panel was the NCAA's Oliver Luck, Northwestern AD Jim Phillips, the NBA's Rod Thorn, and some sports lawyer named Michael McCann. MIT has just released the conversation and, while I'm biased, I think it's well worth your time to watch.
As you get ready for this coming weekend's Final Four in Indianapolis (note: that's where the NCAA is headquartered) I encourage you to read these three articles and watch this video. Think. And then debate with others. What's right and where does college athletics go from here?
Monday, March 23, 2015
The First Amendment and the Redskins Tradement, part I: Government speech
The following post is by Robert L. Tsai and Christine Haight Farley (both of American); it is the first several guest posts on the Washington Professional Football Team trademark case. It is cross-posted at PrawfsBlawg.
The ACLU recently filed an amicus brief in the Washington Redskins trademark case, arguing that the Patent and Trademark Office’s (PTO) cancellation of Redskins registrations constitutes viewpoint discrimination contrary to the First Amendment, and urging the federal court to strike down those portions of Section 2(a) of the Lanham Act that prohibit the registration of “immoral,” “scandalous,” or “disparage[ing]” marks. We are deeply concerned with the ACLU’s position. Its proposal to thrust First Amendment law into an area of commercial regulation in unprecedented ways would wreak havoc with trademark law’s careful balance of concerns for property rights, economic exchange, and consumer protection. We believe that the ACLU’s fundamental misunderstanding of trademark law has caused it to misapply First Amendment doctrine.
In this first post, we wish to focus on the ACLU’s invocation of two First Amendment doctrines: viewpoint discrimination and unconstitutional conditions (we leave for a separate post whether the commercial speech doctrine might be appropriate). The ACLU’s position erroneously elides the various forms of government regulation and their contexts, treating trademark law like criminal law, municipal ordinances dealing with protests, laws creating public fora, and public subsidies. But the strongest First Amendment doctrines designed to ensure robust public debate simply don’t map on to trademark regulation without creating a major upheaval in trademark law. First Amendment doctrine requires strict scrutiny whenever there is a direct, content-based regulation of private speech. The federal trademark registry, however, does not operate like a direct regulation of private speech, nor does it create a forum for the expression of private speech.
Read more »
Thursday, March 19, 2015
Tomorrow: "New Era in Gaming Law" Symposium
The Northern Kentucky Law Review and the W. Bruce Lunsford Academy for Law, Business and Technology will host "The New Era in Gaming Law" Symposium on Friday, March 20, 2015, at Northern Kentucky Law School. Featuring some of the country's leading gaming law experts, including Sports Law Blog Contributors Ryan Rodenberg and Marc Edelman, this symposium will explore emerging regulatory and legalization issues regarding sports betting, fantasy sports, and online gambling. I will be speaking about the latest developments in the New Jersey sports betting controversy and how the path to legalized sports betting has taken a unpredictable due to the emergence and popularity of daily fantasy sports and the "partial repeal" strategy employed by New Jersey (with the apparent blessing of the Third Circuit and the federal government). The symposium will also include a student scholarship showcase of law review students presenting their student notes on gaming law issues.
The symposium has been approved for 5.5 hours of general CLE credits in Ohio, and is anticipated to e approved for 5.5 hours of general CLE credits in Kentucky and Indiana. Registration is complimentary and includes the anticipated CLE credits, breakfast, lunch, reception, and all published materials.
To register and to learn more about this symposium, click here. You can also register by contacting the symposium administrator, Jeannine Abukhater Lambert, at email@example.com or by calling her (859) 572-6403. Hope to see you there!
Schedule of Events
George and Ellen Rieveschl Digitorium
Monday, March 16, 2015
Testing the NBA Draft Waters in 2015
As you fill out your brackets for the 2015 NCAA March Madness tournament, it's time for my yearly rant on the preposterous rules that the NCAA imposes on men's basketball players and their ability to properly evaluate their option in leaving early for the NBA. Want to know how absurd the NCAA's rule regarding their deadline for early-entry into the NBA draft is? It has been called "one of the silliest, most cynical and least student-athlete-friendly decisions ever." [And there is a significant amount of competition by the NCAA for this award.]
Consider the following:
The NCAA program which allowed prospects the ability to work out and get an unbiased and informed perspective on their pro potential is nearly moot. Why? Because NBA teams won't work out players until their deadline (April 26th) has passed and someone has declared for the draft. And despite NBA Commissioner Adam Silver's intent on having the NBA, NBPA, and NCAA all in a room agreeing upon dates, age eligibility requirements, and other issues (as reported here at a 2014 Boston College's Chief Executives Club event) there is the legal barrier to this conversation ever taking place: collusion. The NCAA is not a legally recognized bargaining entity.
The bottom line is that in order to allow college coaches the ability to evaluate their roster needs for the fall, college students are handcuffed in their ability to get an unbiased evaluation of their NBA prospects. Yet somehow in the sports of baseball, football and hockey, league draft rules and NCAA bylaws enable players to take their time in weighing this career choice. If the mission of higher education is to educate and allow for career development, why does the NCAA choose college basketball recruiting needs over the best interests of the students?
There has been plenty written about the absurdity of these rules:
Saturday, March 14, 2015
Harvard Law School Sports Law Symposium 2015 #CSELsymposium
I'm honored to be speaking at Harvard Law School on Thursday, March 26, 2015 at their annual sports and entertainment law symposium. I'll be moderating a panel that will feature Ben Block (NFL attorney at Covington and Burling); Peter Ginsberg (attorney to Ray Rice and other players) and Heather McPhee (NFLPA attorney). Should be a great event - info on speakers is below (for info on logistics, click here).
2015 Sports and Entertainment Law Symposium
Hosted by the Harvard Law School Committee on Sports & Entertainment Law
Thursday, March 26, 2015
Milstein East, Harvard Law School
12:00 - 5:00 PM
Weiler Awards—12:00-12:20—Professor Peter Carfagna presents the 2014-2015 Weiler Awards to Joshua Lee and Jaimie McFarlin for excellence in legal writing for sports and entertainment. Lunch provided.
Keynote Address—12:20-1:20—Shawn Holley delivers the keynote address on her experience as Hollywood’s preeminent defense attorney. Ms. Holley, who rose to prominence as a member of O.J. Simpson’s defense team, has represented a long list of celebrities including Kanye West, Justin Bieber, Lindsay Lohan, Paris Hilton, the Kardashian sisters, Amanda Bynes, Michael Jackson, Tupac Shakur, Snoop Dogg, and Mike Tyson. She has also served as a legal correspondent for a various channels and NBC is said to be developing a television show about her career.
The Digital Distribution Revolution—1:30-2:30
Panelists:Rebecca Borden, SVP of IP for CBS; Kevan Choset, Legal Counsel for Spotify;Julian Petty of Nixon Peabody; Bradley Silver, an Assistant GC for Time Warner; and Bryan Tallevi, Senior Counsel for NBC Universal
Moderator:Chris Bavitz, Managing Director for Harvard Law School’s Cyberlaw Clinic at the Berkman Center for Internet and Society
Leaders in the entertainment industry will explore how the recent expansion of media distribution has changed their jobs. Specific issues to be discussed include protecting IP in digital distribution deals, piracy, challenges in creating live content, and predictions about where the industry is headed and what that means for lawyers.
Life After Law: Making the Switch, Tackling the Transition and Climbing the Ladder—2:45-3:45
Panelists:Jody Mooradian, Senior Athletic Director for Women's Sports at Boston College;Rob Simmelkjaer, SVP for NBC Sports; and Mike Zarren, Assistant General Manager and Team Counsel for the Boston Celtics
Moderator: Steve McKelvey, MS Program Director & Associate Professor Sport Management at University of Massachusetts, Amherst
Lawyers discuss life in the sports and entertainment industry outside of law. Specific topics include factors to consider regarding the switch, how to make the transition, the differences between the two roles, and how helpful a law degree is in their current job.
Changing the Game: Player Discipline and the Future of the NFL—4:00-5:00
Panelists:Ben Block, Partner at Covington where he regularly advises the NFL; Peter Ginsberg, the managing partner at Peter R. Ginsberg Law where he often represents players, recently including Ray Rice, in player discipline disputes; and Heather McPhee, Associate General Counsel for the NFL Players Association
Moderator:Mike McCann, Director of the Sports and Entertainment Law Institute at University of New Hampshire Law and legal contributor to Sports Illustrated
Lawyers from all sides will gather to discuss all things player discipline in the National Football League. Specific topics will include the new NFL personal conduct policy, the role of the Commissioner in determining punishments, the Collective Bargaining Agreement, and prior disciplinary cases.
Fantasy Sports Legislation by States May Run Afoul of PASPA
The emerging popularity of daily fantasy sports has focused increased attention on whether such activity--which many equate to sports betting--is legal. The question is unsettled under federal law, despite the enactment of the Unlawful Internet Gaming Enforcement Act. To date, no federal or state court has answered the question of whether a daily fantasy sports league is contest of "skill" or a game of "chance," which is central to the UIGEA exemption. The issue has been addressed only in the context of "season-long" leagues, with one federal court acknowledging that such leagues are "skill-based." But even the resolution of that issue under federal law does not necessarily lead to a similar result under state law. For example, five states--Iowa, Louisiana, Montana, Washington, and Kansas--expressly prohibit fantasy sports (either through an express statutory prohibition, as in the case of Montana, or through an advisory opinion from the state's attorney general, as in the case of Iowa and Louisiana, or because of an adverse interpretation by state gaming regulators, as with Washington and Kansas). Additionally, the legality of fantasy sports (of all types) is especially murky in those states (such as Arizona, Illinois and Arkansas) in which even a modicum of "chance" would transform the contest into an illegal lottery, and, thus, run afoul of that state's gambling prohibitions.
As a consequence, many fantasy sports operators do not accept entries from residents of Iowa, Louisiana, Montana, Washington and Kansas (where there are express prohibitions in place). Some fantasy sports sites, such as Star Fantasy Leagues, take it one step further and do not accept entries from residents of the so-called "any chance" states. In response, legislators in several of these states (Iowa, Washington and Kansas) have proposed legislation that would explicitly legalize fantasy sports. Previously, Maryland was the only state that had passed such legislation. While bills in Arizona and Montana failed last year largely due to opposition from segments of the gaming industry, the Iowa legislation has cleared one significant hurdle--approval by the Iowa Senate.
But are such state legislative efforts in direct and express conflict with the Professional and Amateur Sports Protection Act of 1992 ("PASPA")? While PASPA is commonly understood to prohibit state-regulated sports betting on the outcomes of professional and amateur sporting events, it also contains language that is arguably (and perhaps inarguably) directed at fantasy sports. Section 3702 of PASPA states in pertinent part:
It shall be unlawful for --
(1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or
(2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity,
a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographic reference or otherwise) on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.Focusing on the above-bolded language, PASPA plainly prohibits a "governmental entity" (defined to include a state) or a "person" acting pursuant to state law from sponsoring, operating or promoting any betting or wagering scheme based directly or indirectly on "one or more performances of . . . athletes" in games in which amateur or professional athletes participate. Fantasy sports are inherently tied to the individual performances of athletes in a game rather than on the final score of the game itself.
Thus, a state which expressly legalizes fantasy sports (such as Maryland, and, soon, Iowa) would arguably be doing so in direct violation of PASPA's express prohibition against state sponsorship of sports wagering schemes that are based on the individual performance (e.g., statistics) of athletes participating in an amateur or professional sporting event. Likewise, "persons" that promote or advertise fantasy sports contests to residents of those states would also arguably be violating PASPA. Who might potentially fall into this latter category? Fantasy sports operators are the obvious one. What about professional sports leagues (such as the NBA) and teams that have lucrative sponsorship arrangements with daily fantasy sports operators? How about media outlets? An argument could be made that each of these entities would be violating PASPA by promoting fantasy sports contests in states that have expressly legalized such activity.
I am surprised by how little attention has been paid to this last sentence of PASPA. The sports legalization debate has focused largely (if not entirely) on the language pertaining to state-sponsored wagering schemes that are based on "one or more competitive games." In other words, single-game sports wagering. But as states move to expressly legalize fantasy sports, increased attention should be paid to PASPA's prohibition against wagering on an athlete's individual performance, which is at the core of fantasy sports. To date, no one in the fantasy sports or sports betting legalization space has raised this issue (not even the opponents of state legalization efforts). Time will tell whether this arcane provision of PASPA will hamper ongoing state legalization efforts. So far it hasn't.
Surprisingly, this issue has yet to emerge in the ongoing federal litigation between New Jersey and the professional sports leagues (and the NCAA) over New Jersey's latest attempt to legalize sports wagering. The leagues have argued that New Jersey's partial repeal of its state-law prohibition against sports wagering violates PASPA because it leaves state-regulated casinos and racetracks free to offer sports wagering to its patrons. The leagues maintain that anything short of a complete repeal of the state law ban on sports wagering contravenes PASPA. New Jersey has countered by arguing, among other things, that the leagues have "unclean hands" because they are embracing (and, indeed, investing in) daily fantasy sports, while using federal law as a "hammer" to block states from decriminalizing sports betting. But perhaps the better argument is that the leagues are "selectively enforcing" PASPA because they are fighting New Jersey's decriminalization efforts (which do not explicitly "authorize" sports betting), while giving a pass to those states that seek to expressly authorize activity that is plainly prohibited under the last sentence of PASPA. New Jersey could argue that the leagues are "estopped" from invoking PASPA against New Jersey because they are not enforcing PASPA against those states (such as Maryland) that have expressly legalized wagering based on the individual performance of athletes, activity which is plainly prohibited by PASPA. While this specific argument has not been made in the New Jersey sports betting case (which is set for oral argument before the Third Circuit on Tuesday), it may be viewed through the lens of "unclean hands," and, perhaps, may yet play a critical role in the outcome of the case.
Monday, March 09, 2015
Cleveland Marshall Brain Injury Symposium / CLE
The Cleveland Marshall College of Law hosts a symposium on Friday, March 20, 1-5pm, on "The Social, Ethical, and Legal Consequences of Sports-Related Brain Injuries" with four free C.L.E. hours. I'm excited to be a participant. More info here and here.
Latest developments in the Aaron Hernandez Trial
More key developments in the trial of former New England Patriots tight end Aaron Hernandez for the murder of Odin Lloyd. I have legal analyses of the trial for Sports Illustrated, including these recent pieces:
4th Annual NYU Law Sports Law Colloquium
NYU Law will be hosting what looks to be a great sports law event on April 3, 2015. NBA commissioner Adam Silver will be the keynote speaker and our own Marc Edelman will be one of many top panelists. Check it out if you can.
New Sports Law Scholarship
Recently published scholarship includes:
Michael Atkinson, Note, Let them play: why Kentucky should enact a “Tebow bill” allowing homeschoolers to participate in public school sports, 43 JOURNAL OF LAW & EDUCATION 433 (2014)
Charles Bahlert, College football, electronic arts, sand the right of publicity: reality-mimicking run amok, 18 INTELLECTUAL PROPERTY LAW BULLETIN 149 (2014)
Mary Meghan Balkin, “Take me out to the ball game” — the contractual implications of Wrigley Field renovations on the Chicago Cubs’ contracts with rooftop seat holders, 15 TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW 211 (2014)
Michael S. Beck, Note, Fair or foul? Major League Baseball’s use of a tortious interference lawsuit as a means of investigation, 32 CARDOZO ARTS & ENTERTAINMENT LAW JOURNAL 927 (2014)
Jonathan Becker, Comment, Stepping up to the plate: can the city of San Jose overcome baseball’s antitrust exemption?, 21 JEFFREY S. MOORAD SPORTS LAW JOURNAL 431 (2014)
Brett E. Beter, Mann v. Louisiana High School Athletic Ass’n: the game plan for eluding high school eligibility rules, 21 SPORTS LAWYERS JOURNAL 297 (2014)
Saturday, March 07, 2015
Colleges Need to Recalibrate Their Priorities
This week, Syracuse University and the University of Tennessee once again illustrate how a school's "lack of institutional control" over their athletic department can bring shame to campus. The unfortunate reality is that schools often distance themselves from what should be their primary mission (education) in an effort to remain competitive on the field or court. Values are compromised as wins are chased.
At Syracuse, the bubble has burst as Jim Boeheim's legacy is now, unequivocally, tarnished as ESPN's Dana O'Neill discusses here. The 94 page NCAA report states that Coach Boeheim "failed in his responsibility to promote an atmosphere of compliance" (i.e. he did not run a clean program). The stain of cheating will now follow an otherwise prominent coach. And, to be clear, the punishment meted out by the NCAA appears to be quite lenient for the Orange as new rules would require harsher sanctions. [Note: to understand the legal concept of ex post facto one merely needs to refer to the latest NFL disciplinary punishments relative to Ray Rice and Adrian Peterson.]
Now, reports from the University of Tennessee are surfacing that the athletic department is being accused of influencing the discipline of students. If true, such actions would be yet another example of an athletic department placing student and institutional integrity at "peril." And these charges are entirely separate from FIVE players on their 2014 football team being charged with sexual assault. These incidents come at a time when the University of Tennessee system (along with many others) is under investigation by the federal government over their handling of sexual assault cases.
While many of us, this author included, rail against the NCAA for lack of concern for student welfare, what's becoming more apparent is that too many schools are losing their bearings relative to their educational mission. By engaging in "big time" college sports, many schools appear to neglect their very purpose--to encourage student development both academically and socially. Athletics and academics are not mutually exclusive, but leaders within higher education ought to spend more time reassessing their priorities.
[Update: Here's a terrific piece written by William C. Rhoden of the New York Times titled "Coach Woven in Syracuse's Fabric Oversees Its Unraveling." He has a wonderful quote:
"Athletics will stay, but academic scandals like those at Syracuse and North Carolina can rupture the uneasy relationship between sports and the academy. They can also be demoralizing to faculty members who have to bite their tongues and hold their noses at places where the grandest campus buildings and the largest salaries belong to the athletics department."
Friday, March 06, 2015
Washington NFL Team and the First Amendment
The dispute over the Washington NFL Team's nickname may be turning into a mini-constitutional dispute. The ACLU has filed an amicus brief in the district court arguing that the Lanham Act's limitation on "disparaging" marks is viewpoint-discriminatory and violates the First Amendment. The team similarly raised the First Amendment in its papers.
Monday, March 02, 2015
UNH Law and Sports Illustrated Pro Sports Law Panel on Thursday, March 5
If you're in New England, we have a great professional sports law panel coming up this Thursday at the University of New Hampshire School of Law with topics including analysis of Donald Sterling, Ray Rice and Adrian Peterson controversies as well as legal issues surrounding Deflategate. The event will be co-sponsored by the UNH Law Sports and Entertainment Law Institute and Sports Illustrated:
Justice or Kangaroo Court? Rethinking Personal Conduct and Fair Play Policies in Professional Sports Leagues
A Panel Discussion Co-Sponsored by the University of New Hampshire School of Law and Sports Illustrated