The Fox-Cable Wars -- Sports Fans' Woes

In addition to sports law, I teach and write about communications law issues. With a new year approaching, a nasty access war between Fox and Time-Warner Cable, one of the nation's largest cable operators is simmering, which may wreck havoc on college football fans (and devotees of other Fox programs) once the new year begins.

Basically, it comes to a game of economic chicken. The 1992 Cable Act (and subsequent FCC regulations) gives over-the-air broadcasters a choice of carriage options: the first is known as "must-carry," meaning that in a given market served by a cable operator the over the air station must be carried on that cable system, but does not receive any compensation. However, a broadcaster may opt for an alternative, known as "retransmission consent," which involves a negotiated payment to that station for carriage on the cable system. Here, if the station elects this option, the cable operator may decline the request, and that station is off the cable system. If this occurs (and it has on rare occasions over the last 15 years), cable subscribers will be greatly inconvenienced, since they have to get an additional equipment (such as an antenna or converter box) to access that station.

The greatly majority of stations have opted for must-carry, but a few stations, sensing their economic power, have sought retransmission consent. Most of those disputes have been settled a few days after the station was blacked out. But this particular dispute may have far greater ramifications.

With dwindling audiences for network and over the air television in general, these stations are seeking greater revenue streams than just the advertising model of the past. Fox is seeking $1.00 per cable customer from Time-Warner in cities such as New York and Los Angeles. If not, Fox is prepared to let some major stations opt-out -- leaving sports fans without some marquis events, such as the Fiesta, Sugar and Orange Bowls in the next few days. If Time-Warner agrees, this would set a major precedent because other cash-strapped networks and stations could very well want the same thing. That could help the networks raise billions of dollars, but also result in higher fees for cable subscribers.

If indeed Fox makes good on its threat, look for Congress to hold hearings. Look for the sports entities (e.g. Major League Baseball) to be concerned and possibly recalculate rights fees if Fox's ratings drop. Look for some subscribers to ditch their cable operators for satellite (or for nothing at all). Something that has not been addressed involved the constitutionality of this schema. I think that if this problem festers, look for a legal challenge to the must-carry rules. In the 1990s, the Supreme Court upheld their constitutionality by narrow 5-4 votes, using an intermediate scrutiny standard, (see Turner Broadcasting v. FCC I and II), and a very elastic one at that. The majority opinions gave great deference to the FCC's reasons, but since then the composition of the court has changed to, arguable, a more sympathetic First Amendment court and the numbers of television options (including more cable channels, the advent of digital broadcasting and Internet streaming options) that may render this regulatory framework obsolete. If that happens, then the gloves can really come off. Stay tuned.

New SI.com Column on Mike Leach and Texas Tech Legal Battle: Was He Wrongfully Terminated?

I have a new SI.com column that looks at the Mike Leach firing from Texas Tech and the possibility of a wrongful termination lawsuit. Here's an excerpt:

* * *

Was Texas Tech legally entitled to fire Leach for cause? In addition to requiring Leach to follow Texas Tech procedures and polices and to provide responsible treatment of players' health, Leach's contract lists the circumstances under which Texas Tech could dismiss him for cause:

1) The commission of a major NCAA violation or an excessive accumulation of secondary violations by Leach.

2) Knowingly condoning NCAA violations by any staff member under his direct control.

3) Failure to take appropriate disciplinary action against any staff member committing NCAA violations.

4) Failure to take appropriate disciplinary action against football student-athletes.

5) Indictment for a felony criminal act.

6) A misdemeanor involving moral turpitude.

Worded literally, the six circumstances for cause might not cover Leach's alleged misbehavior. Leach has neither been charged with a felony nor a misdemeanor (Nos. 5 and 6), nor is there any indication that he will be. Even if Leach is eventually sued by James in a civil claim, such as for false imprisonment or intentional infliction of emotional distress, such a claim would not constitute a criminal charge. There is also no indication that Leach failed to take appropriate disciplinary action against football players in this situation (No. 4). Similarly, there are no allegations of major NCAA violations or accumulation of secondary violations (No. 1).

An arguable nexus between James' behavior and the "for cause" stipulations could emerge in Nos. 2 and 3. The NCAA has developed player safety rules that Leach arguably breached when he instructed staff members to isolate Leach. The NCAA is also considering new rules that would demand particularly safe care for players who have suffered concussions.

* * *

I hope you have a chance to read the rest of the column and also hope you read Howard's excellent piece on this topic from earlier today.

Update 12/31/09: I was interviewed by Scott Drake on the Legal Broadcast Network this afternoon to discuss the dispute:

Texas Tech coach fired: Updated and moved to top

Texas Tech has suspended football coach Mike Leach for its bowl game, because of Leach's alleged treatment of a player (receiver Adam James, the son of ESPN college football analyst Craig James) who had suffered a concussion and was unable to practice. The James family alleges that Leach ordered the player to sit in an equipment closet or equipment bin (reports conflict) and was told that if he came out, he would be kicked off the team. Leach's attorney insists that Leach had James sit in a cooler, darker area than the practice field because it would be better for the player, given his sensitivity to light. The school has begun an internal investigation.

Two questions, not really going to the substance of anything.

First, is it me, or are we beginning to hear more complaints about, and challenges to, barbaric coaching methods? Are players (themselves or through their parents) beginning to stand up to what often can best be described as hazing, if not outright brutality by the adults in charge? Are players less fearful of complaining, knowing that the school might somewhat have their back? And are schools beginning to take player complaints seriously, perhaps out of fear of liability? Kansas' Mark Mangino lost his job amid reports of being verbally and physically abusive towards players. There was the initial story of South Florida Coach Jim Leavitt slapping a player (reported by the player's father), although that story quickly petered out. And now this. Maybe it's just a blip, but maybe it marks a sea change in the relative power relationships in college sports.

Second, an interesting twist in the Texas Tech story is that Craig James no longer will work the game for ESPN, because there now is a personal issue between James and the school that implicates his objectivity in announcing. But why was he scheduled to work the game in the first place? Didn't James already have a personal issue with Texas Tech simply because his son plays on the team? Was he really expected to be objective in a game his son (or his son's team) is playing in? I know sports broadcasters are not held to similar ethical standards as news journalists. But if ESPN is aware enough to make a change when there is a unique conflict (as now), why not when there is a unique affinity (as when a close family member is in the game)?

Update:

Leach has been fired "with cause effective immediately." Leach had filed suit in Texas state court seeking a TRO permitting him to coach in the bowl game and a hearing was scheduled for his morning. Texas Tech's lawyer handed Leach's lawyer the termination letter right before the beginning of the hearing; the hearing then was canceled, since the request for reinstatement had become moot. Expect Leach to file some sort of wrongful termination/breach-of-contract lawsuit soon, if for no other reason than to make sure he gets paid the balance of his contract (last February, Leach signed a contract extension through 2013). The whole issue of the "with cause" finding is to relieve the university of having to pay the balance due under the contract.

The NFL's Brief in American Needle v. NFL

For those who have been waiting to read the brief filed by the NFL in the upcoming American Needle v. NFL case, it is now available to be downloaded. Meanwhile, a complete collection of all the briefs filed with the Supreme Court in the case can be accessed here.

The Aroldis Chapman Sports Law Saga Continues

A couple of weeks ago, Ed and I discussed an interesting lawsuit filed in a Massachusetts state court by the former agents of 21-year-old Cuban defector Aroldis Chapman against his new agents for "stealing" Chapman as a client. The lawsuit -- Athletes Premier International v. Hendricks Sports Management -- is based on a tortius interference claim, which Jimmy Golen of the Associated Press has discussed. Chapman, a lefthander who can reportedly throw 100 miles per hour, remains a free agent, having turned down a $15 million (guaranteed) offer from the Red Sox. He apparently seeks a deal that will guarantee him $30 million, which will be harder to obtain when 2010 arrives because of federal laws which tax signing bonuses when a person works in the U.S. but not when the person does not work in the U.S. (see below).

David Frank of Massachusetts Lawyers Weekly has a new and extensive story (subscription only) on the agency commission that will be owed when Champan signs with a team. Frank interviews the allegedly aggrieved agent, Edwin L. Mejia (a 2001 graduate of Boston University School of Law whose agency is based in White Plains, New York and who is being represented by Gary Greenberg of Greenberg Trauig in the litigation) and me for the story. Here are some excerpts:

* * *

Chapman, a 21-year-old member of the Cuban national team, signed a contract in July naming Mejia as his exclusive representative . . . From that point on, Mejia, who heads up Athletes Premier International, says he spent the summer in Europe helping guide Chapman through the complicated legal process of being declared eligible to play ball in the majors.

"It's tough to quantify how much time went into all of this, but we met on July 2, and from then until [Chapman] arrived in the U.S. in mid-October, I spent virtually the entire time with him," Mejia says. "I did everything from make breakfast for him to deal with the legal and procedural stuff. "

With Chapman's 100 mile-per-hour fastball wowing teams, including the Red Sox, it was clear that some big bucks were headed his way - a percentage of which would land in Mejia's bank account. "I was negotiating with a couple of clubs and knew several other teams were also interested," he says . . .

Then, on Nov. 16, Chapman suddenly disappeared. "I didn't know where he was, which was very odd because he and I talked every day," he says. "We did some research and found out, in part through cell phone records, that he had been contacted by representatives from [Hendricks Sports Management]. Subsequent to notifying [Hendricks] that we knew they were talking to [Chapman], we received documentation that indicated he had allegedly fired me. "

* * *

Although representatives from Hendricks Sports did not return calls from Lawyers Weekly, the agency issued a written statement to the Associated Press . . .

* * *

While the concept of tortious interference clearly covers attempts to interfere with another's business relationship, Michael A. McCann, a Vermont Law School professor who writes for Sports Illustrated, says Mejia is facing an uphill battle.

"There is a deference by the courts to the competitive nature of sports agents, and the reality is that, while the behavior isn't praise-worthy, it is very much a part of the industry," McCann says. "It would truly be a ground-breaking decision if a court were to find that poaching players constitutes tortious interference. "

* * *

There's another angle to the story, though, that I think is very interesting: the tax implications of Chapman still not being signed as 2010 approaches. Basically, by waiting until 2010, Chapman will cost himself millions of dollars in taxes and its not clear if any of his agents were aware of that.

Jorge Aranguré Jr. of ESPN Insider (subscription only) has the details:

* * *

By signing in 2010, Chapman's bonus will now be eligible to be taxed by the U.S. government. "Signing bonuses that are received outside the U.S., by a non-U.S. resident, and in a tax year in which the person did not work in the U.S., are not subject to U.S. taxation," wrote agent Joe Kehoskie, who has represented Cuban players for several years, in an email. "As far as I'm aware, neither the Hendricks brothers nor Rodney Fernandez (who represent Chapman) have ever completed a contract for a foreign free agent, so I bet this issue flew right under their radar.

Right now, it's shaping up as a $3 million (or more) loss for Chapman."Unless Chapman signs for well over $20 million, he'll net less money than if he had simply signed with Boston for $15 million when that offer was presented."

* * *

For a guy who still hasn't signed with an MLB team, let alone thrown a pitch for one, Aroldis Chapman has certainly generated a lot of controversy.

Texas Tech coach suspended--some questions

Texas Tech has suspended football coach Mike Leach for its bowl game, because of Leach's alleged treatment of a player (receiver Adam James, the son of ESPN college football analyst Craig James) who had suffered a concussion and was unable to practice. The James family alleges that Leach ordered the player to sit in an equipment closet or equipment bin (reports conflict) and was told that if he came out, he would be kicked off the team. Leach's attorney insists that Leach had James sit in a cooler, darker area than the practice field because it would be better for the player, given his sensitivity to light. The school has begun an internal investigation.

Two questions, not really going to the substance of anything.

First, is it me, or are we beginning to hear more complaints about, and challenges to, barbaric coaching methods? Are players (themselves or through their parents) beginning to stand up to what often can best be described as hazing, if not outright brutality by the adults in charge? Are players less fearful of complaining, knowing that the school might somewhat have their back? And are schools beginning to take player complaints seriously, perhaps out of fear of liability? Kansas' Mark Mangino lost his job amid reports of being verbally and physically abusive towards players. There was the initial story of South Florida Coach Jim Leavitt slapping a player (reported by the player's father), although that story quickly petered out. And now this. Maybe it's just a blip, but maybe it marks a sea change in the relative power relationships in college sports.

Second, an interesting twist in the Texas Tech story is that Craig James no longer will work the game for ESPN, because there now is a personal issue between James and the school that implicates his objectivity in announcing. But why was he scheduled to work the game in the first place? Didn't James already have a personal issue with Texas Tech simply because his son plays on the team? Was he really expected to be objective in a game his son (or his son's team) is playing in? I know sports broadcasters are not held to similar ethical standards as news journalists. But if ESPN is aware enough to make a change when there is a unique conflict (as now), why not when there is a unique affinity (as when a close family member is in the game)?

The Rules Regarding Blood That May Put Mayweather-Pacquiao in the Crypt

It is being widely reported this week that the proposed mega-fight between the two best fighters in professional boxing today, Filipino sensation Manny (Pac Man) Pacquiao and the undefeated Floyd (Money) Mayweather, Jr., tentatively scheduled for March 13, 2010, may now be in serious jeopardy. The reason: Pacquiao does not wish to contractually consent to Olympic-style drug testing procedures. According to Dan Rafael of ESPN.com:

“Olympic style drug testing is more rigorous than the drug testing performed by the Nevada State Athletic Commission [the commission with jurisdiction over Las Vegas’ MGM Grand, where the fight is reportedly now scheduled to be held] and other state commissions. It would involve
random blood and urine testing before and after the fight. Nevada commission testing only tests urine for banned substances, only just before the fight and once immediately following the fight.”

Mayweather, whose father has been quoted in the press since after Pacquiao’s November 14, 2009 bout with Miguel Cotto as saying that he believed that Pacquiao uses performance enhancing drugs, reportedly wants a provision for random drug testing in their bout agreement “to ensure fair play and sportsmanship by both fighters.” The Pacquiao camp, in turn, has reportedly stated that Pacquiao has difficulties with taking blood and does not wish to do so in close proximity to the fight. Regardless of the rationale, two of the many questions that arise are where exactly does this request find its origin, and what are some of the possible implications and extensions of contracting to Olympic-style drug testing? A quick analysis of each question follows...

For the full article please go to http://www.8countnews.com/news/125/ARTICLE/2169/2009-12-23.html.

Instant replay and standards of review

There has been a free-ranging blog conversation recently on why video-replay review in the NFL is so deferential rather than de novo. Joseph Blocher started things off, triggering responses here, here, and here, as well as my limited comments. Mitchell Berman weighs in at Slate today.

It's all worth a read.

City of San Francisco Threatens to Sue MLB

The San Francisco Chronicle reported on Friday that San Francisco's City Attorney has sent Major League Baseball officials a letter threatening a lawsuit by the city of San Francisco should MLB approve the relocation of the Oakland Athletics to San Jose. MLB has been exploring the possibility of moving the A's to San Jose following the collapse earlier this year of a plan to move the franchise to Fremont, CA, with a decision on the San Jose relocation expected as early as next month.

San Francisco's purported basis for suing MLB stems from its financial interest in the Giants. The city reportedly receives $3.6 million in rent the from the Giants annually for AT&T Park, as well as taxes on game day revenues such as ticket sales and parking. The city apparently believes that these tax revenues would be threatened should the A's relocate to San Jose, a territory which has historically been assigned to the San Francisco Giants.

On first impression, the threatened suit by the city of San Francisco seems problematic on several fronts. First, the city would have to convince a court that its interest in protecting its tax revenues from the Giants gives it sufficient standing to legally challenge MLB's approval of the relocation of another franchise into the Giants' assigned territory.

However, even if San Francisco is able to establish standing, such a suit would also place the city in the awkward position of effectively asking a court to enforce MLB's anticompetitive territory allocation system. While professional baseball's practice of granting franchises exclusive rights to certain geographic territories has previously been challenged by those seeking to enter a restricted market -- suits which have historically been dismissed pursuant to MLB's antitrust exemption (see, e.g., New Orleans Pelicans Baseball, Inc. v. National Association of Professional Baseball Leagues, Inc., Case No. 93-253, 1994 WL 631144 (E.D.La. March 1, 1994)) -- a suit by San Francisco would mark the first time that MLB has faced a lawsuit seeking to require the league to enforce this restriction. The optics of such a suit, being filed by a municipality no less, would be less than ideal. I suspect most courts would be uncomfortable issuing an order requiring baseball to enforce its territory restriction, especially in a case where MLB had already decided to set aside its long-standing anticompetitive policy.

American Needle Updates

Two quick items for those closely monitoring the American Needle v. National Football League case before the United States Supreme Court. First, American Needle filed a reply brief yesterday, which is available here. Unfortunately, the NFL's brief is still not yet publicly available for download.

Second, SCOTUSBlog reports that the Supreme Court has extended the oral argument schedule by 10 minutes, so that the United States Solicitor General may argue for a position different than those asserted by the petitioner and respondents. The oral argument is set for 10 a.m. on Wednesday, Jan. 13.

Arn Tellem on NCAA Ban on Use of Attorneys during Contract Talks with Teams

Arn Tellem, a prominent agent to MLB and NBA players and Principal at the Wasserman Media Group, has a thoughtful piece on the Huffington Post on how the NCAA largely prohibits student-athletes from legal representation during contract talks with professional teams. Here are some excerpts from Tellem's piece:

* * *

Athletes and their parents are allowed to get advice about proposed contracts only if their advisors don't represent them openly in negotiations. Athletes and their advisors can discuss the merits of a deal, but to maintain eligibility at NCAA schools, the advisors may not act as a go-between or be present during bargaining sessions or have any direct contact with the team on the athlete's behalf.

The rule is intended to keep agents away from amateur athletes. By rendering agents powerless, it effectively turns them into potted plants. But if you're hammering out a deal with someone, isn't it your prerogative to get professional advice? Absolutely, wrote an Ohio judge in a 2008 judgment against the NCAA. He likened the rule to "a patient hiring a doctor, but the doctor is told by the hospital board and the insurance company that the doctor cannot be present when the patient meets with a surgeon because the conference may improve his patient's decision-making power." The case involved Andrew Oliver, a former pitcher for Oklahoma State University.

* * *

Earlier this month James Paxton became the latest student-athlete to sue over this issue. In October, the University of Kentucky pitcher was notified by the college that he must submit to an interview with an NCAA investigator. Paxton was drafted in June by the Toronto Blue Jays with the No. 37 pick, but passed on the club's offer and returned to college for his senior season. He was the only college ballplayer among the top 100 selections who didn't sign.

According to the lawsuit Paxton filed against UK, when he turned down the NCAA's request, school officials threatened to kick him off the team and strip his financial aid. He also claims that they instructed him not to tell his parents or his lawyers about the interview. Last week Kentucky's legal counsel promised that Paxton will be allowed to practice with the Wildcats and won't be punished despite the pending litigation. Still, the case is going forward.

* * *

College athletes should be allowed to seek legal help to make informed decisions about their future. Those who are drafted should be encouraged to have the representative of their choice communicate directly with the club that drafted them, and assist in any negotiations. Experienced advisers can help players determine their fair-market value and protect them legally. To deny an athlete the right to retain such counsel is not just patently unfair, but patently unconstitutional.

* * *

To read the rest, click here.

To read related coverage from Sports Law Blog, see Alan Milstein's "The NCAA is at it Again", Rick Karcher's "The NCAA's "No Agent" Rule Discriminates Against Baseball Players", and my post "Oliver v. NCAA ends in settlement". Other related posts include one on the NCAA Compliance Blog, one by Dan Fitzgerald on Connecticut Sports Law, one by Tassos Kaburakis on National Sports and Entertainment Law Society Blog, and one by Darren Heitner on Sports Agent Blog.

The Next NCAA President?

The next NCAA president will oversee the organization's policies in a number of controversial areas, including player rights to names and likenesses, a potential college football national championship playoff, and policies regarding the hiring of minority coaches.

News has begun to leak regarding potential candidates under consideration for the position. Bowling Green State University president Carol Cartwright appears to have taken herself out of the running. University of Georgia President and former NCAA executive committee chairman Michael Adams and Notre Dame Athletic Director Jack Swarbrick (a finalist for the job in 2002) are apparent candidates. Interim NCAA President James Isch isn't interested in being a "caretaker," and has suggested he does not want to take on the job permanently, though he may at some point emerge as a candidate.

Other reported candidates include NCAA executive VP Bernard Franklin and University of Michigan president Mary Sue Coleman.

New Sports Law Scholarship

Recently published scholarship includes:

Nadir S. Ahmed, Inclusionary seating: application of the principle of inclusionary zoning to stadium event ticket pricing, 16 SPORTS LAWYERS JOURNAL 301 (2009)

Manav K. Bhatnagar, Comment, Fantasy liability: publicity law, the First Amendment, and fantasy sports, 119 YALE LAW JOURNAL 131 (2009)

Peter Charlish, Dwain Chambers runs out of time, 10 TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW 57 (2008)

Colin J. Daniels & Aaron Brooks, From the Black Sox to the sky box: the evolution and mechanics of commissioner authority, 10 TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW 23 (2008)

Marc Edelman & Brian Doyle, Antitrust and “free movement” risks of expanding U.S. professional sports leagues into Europe, 29 NORTHWESTERN JOURNAL OF INTERNATIONAL LAW & BUSINESS 403 (2009)

Timothy Liam Epstein, Prep plus: evaluating the motivations for and effects of enrollment multipliers and other measures in high school sports, 10 TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW 1 (2008)

Matthew C. Garner, Time to move on? Franchise relocation in MLS, antitrust implications...and the hope that FIFA is not watching, 16 SPORTS LAWYERS JOURNAL 159 (2009)

Christopher Hatch, Note, Fourth and short on equality: the disparate impact of the NFL’s use of the Wonderlic intelligence test and the case for a football-specific test, 41 CONNECTICUT LAW REVIEW 1669 (2009)

Zachary Herlands, Note, Borden v. School District of the Township of East Brunswick: how the Third Circuit extended the separation of church and state to the football field, 16 SPORTS LAWYERS JOURNAL 333 (2009)

A. Jason Huebinger, Beyond the injured reserve: the struggle facing former NFL players in obtaining much needed disability assistance, 16 SPORTS LAWYERS JOURNAL 279 (2009)

David Hutson, Note, Paying the price for sports TV: preventing the strategic misuse of the FCC’s carriage regulations, 61 FEDERAL COMMUNICATION LAW JOURNAL 407 (2009)

F. Scott Kieff et al., It’s your turn, but it’s my move: intellectual property protection for sports “moves,” 25 SANTA CLARA COMPUTER & HIGHT TECH LAW JOURNAL 765 (2009)

Janine Young Kim & Matthew J. Parlow, Off-court misbehavior: sports leagues and private punishment, 99 JOURNAL OF CRIMINAL LAW & CRIMINOLOGY 573 (2009)

Joshua M. Kimura, The return of The Natural: how the federal government can ensure that Roy Hobbs outlasts Barry Bonds in Major League Baseball, 16 SPORTS LAWYERS JOURNAL 111 (2009)

Jeremiah Kline, Black and blue: an examination of trademarking university color schemes, 16 SPORTS LAWYERS JOURNAL 47 (2009)

Joshua M. Liebman, Tip your “cap” to the players: 2007-2008 off-season reveals NHL’s salary cap benefits on players, 16 SPORTS LAWYERS JOURNAL 81 (2009)

John G. Long, High standards for high school athletes: defamation law and tomorrow’s stars, 16 SPORTS LAWYERS JOURNAL 255 (2009)

Kevin Mahoney, Note, Learning from the mistakes of others: changing Major League Baseball’s substance abuse arbitration procedure, 24 OHIO STATE JOURNAL ON DISPUTE RESOLUTION 613 (2009)

Neil M. Mazer, Homeruns and taxes: the IRS and its treasure trove regulation, 16 SPORTS LAWYERS JOURNAL 139 (2009)

Andrew T. Miragliotta, Note, Goldstein v. Pataki: down but not out, fifteen property owners stop the clock on Bruce Ratner’s eminent domain game, 16 SPORTS LAWYERS JOURNAL 319 (2009)

Robert F. Moore, The interaction between the Americans with Disabilities Act and drug and alcohol addiction in sports, 16 SPORTS LAWYERS JOURNAL 231 (2009)

Kimberly Jade Norwood. Adult complicity in the dis-education of the black male high school athlete & societal failures to remedy his plight, 34 THURGOOD MARSHALL LAW REVIEW 21 (2008)

Ross C. Paolino, Upon further review: how NFL Network is violating the Sherman Act, 16 SPORTS LAWYERS JOURNAL 1 (2009)

Jon Perrelle, Note, An opportunity of reform: Tennessee Secondary School Athletic Association v. Brentwood Academy and NCAA recruiting, 74 BROOKLYN LAW REVIEW 1213 (2009)

Geoffrey Rapp, Blue Sky steroids, 99 JOURNAL OF CRIMINAL LAW & CRIMINOLOGY 599 (2009)

Jeffrey Standen, The manly sports: the problematic use of criminal law to regulate sports violence, 99 JOURNAL OF CRIMINAL LAW & CRIMINOLOGY 619 (2009)

Steven Stewart, The development of sports law in the European Union, its globalization, and the competition law aspects of European sports broadcasting rights, 16 SPORTS LAWYERS JOURNAL 183 (2009)

Burgess Williams, Note, The fate of third party ownership of professional footballers’ rights: is a complete prohibition necessary, 10 TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW 79 (2008)

Tulane University School of Law Moot Court Mardi Gras Invitational: 2008 Competition, 16 SPORTS LAWYERS JOURNAL 353 (2009)

Tender Deadline and Additional Free Agents

Back on November 6, I offered an observation based on Buster Olney’s claim that many teams would not tender players by the December 12 deadline. Olney argued that this year many more players (he said he and executives had a list of 93 candidates) would be non-tendered and added to the free agent market. Well, the results are in. A total of 39 players were non-tendered - 17 in the American League and 22 in the National League. Of that number, 9 were not arbitration-eligible players (6 in the American League and 3 in the National League). A few signed quickly including some with their “old” team. Buster Olney offered some observations on his blog Sunday (“Slew of Signing Lie Ahead”). I got sucked in a bit with my earlier posting wondering if the predictions were going to be true. In Olney original article producing a different dynamic. The final results are pretty underwhelming. The increased number of non-tendered players is similar to the number from last year. Although there are many free agents on the market including recent non-tenders Chien-Ming Wang, Jack Cust, Ryan Church, Matt Capps, and Garrett Atkins, the stories usually make sense if you examine each case in its own context.

Did Aroldis Chapman switch agents because of Tortious Interference?

An interesting lawsuit has been filed in a Massachusetts state court by the former agents of 21-year-old Cuban defector Aroldis Chapman --whom the Boston Red Sox have reportedly offered a $15.5 million contract--against his new agents for "stealing" Chapman as a client.

If Athletes Premier International v. Hendricks Sports Management goes to trial, it could pose significant ramifications for agents who encourage baseball players to switch agents (which traditionally has not received legal scrutiny, though the MLPBA, which licenses agents with players on teams' 40 man rosters, regulates that practice). Jimmy Golen of the Associated Press has the story on this lawsuit -- here are several excerpts:

* * *

Chapman's original representative sued his current agent in Massachusetts state court on Tuesday, claiming that Hendricks Sports Management illegally lured him away from Athletes Premier International and agent Edwin Mejia. The lawsuit accuses Hendricks of tortious interference and unjust enrichment, claiming that Athletes Premier "invested substantial time and hundreds of thousands of dollars" on Chapman's behalf to help him defect, establish residency in Andorra and begin negotiating with major league teams.

Citing text messages and call logs from a cell phone Mejia provided to the Cuban left-hander, the suit claims that "Hendricks and its employees made material false and disparaging statements to Chapman concerning Athletes Premier and Mejia as well as provided improper enticements to Chapman in order to cause Chapman to terminate his contract with Athletes Premier and sign a contract with Hendricks."

In a statement e-mailed to The Associated Press, the Hendricks agency described its representation of Chapman as "an unexpected and unsolicited opportunity" and called the lawsuit "pure fiction and self delusion."

* * *

The statement said Mejia brought his complaint to the players association "and the union didn't buy it." It also noted that the suit was filed on the same day that Chapman was scheduled to work out for major league clubs in Houston, where the Hendricks brothers are based.

* * *

Stealing clients is a longtime and lucrative practice among some sports agents, who can earn up to 5 percent of salaries reaching into the hundreds of millions of dollars. Inducing someone to break a valid contract — called tortious interference — is illegal, but it depends on what the agreement was between Mejia and the former star of the Cuban national team.

"Generally speaking, players can change agents at their discretion," said Michael McCann, a sports law professor at the Vermont Law School. "There is certainly evidence of agents poaching clients (in cases) that don't result in litigation. Maybe it's unethical; maybe it's wrong; but it happens."

* * *

To read the rest of Golen's story, click here. For the lawsuit, click here. This lawsuit might make for an interesting law review/journal note for a law student looking for a topic to write about.

Update 12/16/2009: A lawyer who has represented several prominent MLB players e-mailed me and offers these thoughts:

I am a little surprised that they didn't try to bring it in Florida (where Chapman's agent Rodney Fernandez of Hendricks Brothers is based) - Florida has a "tortuous interference with prospective business opportunity" cause of action that I would find more advantageous in this type of case, rather than a straight tortuous interference with contract. Reasoning being is that per MLBPA regs, all player/agent contracts can be terminable at will (and have a maximum length of 1 year). I would have brought it in Florida - there are enough connections there.

I don't see how this claim, as currently posited, is much different from Speakers of Sport v. Proserv (involving Ivan Rodriguez), which was argued in federal court on a similar theory, and plaintiff agent did not prevail on the basis that the court found that it's a high risk/high reward business (agency), and that statements to the player that are "puffery" do not rise to the level of tortuous interference.

Likewise, there have been a number of agent/agent cases argued in the MLBPA arbitration forum that have held essentially the same thing.

Illegal Motion?

My wife loves this clip and it has grown on me. But I must ask: Is this Illegal Motion?

Utah's Attorney General Planning an Antitrust Suit against the BCS

Following a Congressional subcommittee voting to prevent the BCS from declaring its culminating game the "national championship," as Howard discussed on Wednesday, it appears that another legal challenge to the BCS may be brewing. ESPN.com's Lester Munson reported on Friday that Utah Attorney General Mark Shurtleff is prepared to file an antitrust lawsuit against the BCS as soon as early 2010. The suit would presumably be premised on the BCS' exclusion of an undefeated Utah team from the national championship game last year. AG Shurtleff has scheduled a meeting with Christine Varney, the head of the U.S. Department of Justice's antitrust division, to ascertain whether the federal government would be interested in participating in the suit.

With or without federal assistance, Utah's proposed suit strikes me as a much more serious threat to the BCS than the Congressional measure discussed this week.

Bill Belichick and Punishing Players Who Are Late for Meetings during Snow Storms

Yesterday morning four Patriots players -- including Randy Moss and Adalius Thomas -- were between 10 and 20 minutes late for an 8 a.m. meeting. It was snowing that morning in Massachusetts (which weather forecasts had predicted, so the snow was foreseeable to anyone with access to a forecast). Thomas had called the team to let them know that he would be late due to the weather; it's unclear whether the other players did as well.

In response to the players' tardiness, coach Bill Belichick sent them home. While the players were not fined, they felt embarrassed by the punishment. As a contextual point, the 7-5 Patriots, though in first place in the middling AFC East, have lost two in a row and many commentators have opined that the team has not played up to its potential. Thomas, in particular, has been cited as an under-performing player.

Thomas is now speaking out against Belichick's decision. Here are excerpts to what Thomas had to say to ESPN's Mike Reiss:

Reiss: What can you tell us about yesterday?

Thomas: “I got sent home. That’s pretty much it, for being late.”

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Reiss: Can you add more context to that; maybe a reason behind it?

Thomas: “I think everyone woke up to the snow yesterday. I didn’t know it was going to snow. There was traffic. I can’t run people over getting to work. I don’t do that. I actually almost had a car accident. It is what it is. He did what he thought was best for him. That’s what he did.”

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Reiss: Do you feel compelled to say something to them – an apology or what have you?

Thomas: “I don’t know. That’s one thing about Mother Nature. You can’t control that. You can’t run people over getting to work. There is nothing to really apologize about. I didn’t try to be late. That’s basically it, though. I don’t know what else to say. You leave home, you have people there, cars sitting in the road, you’re sitting there, what do you do? It’s not the Jetsons, I can’t jump up and just fly. What the heck am I supposed to do?”

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Reiss: Can what happened yesterday serve as motivation?

Thomas: : “Motivation is for Kindergarteners. I’m not a Kindergartner. Sending somebody home, that’s like ‘He’s expelled, come back and make good grades.’ Get that [expletive] out of here. That’s ridiculous. Motivation?”

Should players be punished -- and I think being sent home is a punishment, even if it does not financially harm a player -- for showing up late when it's snowing or there is some other dangerous weather condition? Are they supposed to leave earlier for work? Who's right here?

Congress and the BCS

Yesterday, a subcommittee of the House Committee on Energy and Commerce passed H.R. 390, which prohibits the "promot[ion], market[ing], or advertis[ing]" of a post-season Division I college football game as a national championship game unless it is the final game of a single-elimination post-season playoff tournament rather than the current BCS system. It also prohibits the sale, marketing, or advertising of merchandise related to a national-championship game unless it is for the final game of a single-elimination playoff tournament. The Federal Trade Commission is given enforcement jurisdiction, with the practices prohibited in the act treated as unfair or deceptive trade practices.

The obvious reaction is to wonder whether Congress has anything better to do. Not because Congress cannot do many things at once--as co-sponsor Bobby Rush said, "We can walk and chew gum at the same time"--but because I am not sure why there is a sufficient national public interest to warrant congressional action.

My broader reaction is to wonder whether there is a First Amendment problem here. The bill clearly tries to limit itself to commercial speech--selling, marketing, advertising--that receives less (although still significant) First Amendment protection. Commercial speech can be restricted if it is untruthful or misleading and then is essentially subject to intermediate scrutiny--it must directly serve a substantial government interest and must regulate no more extensively than necessary to serve that interest. But is it "untruthful" or "misleading" to call the upcoming BCS Championship Game between Alabama and Texas a "championship" game (or to call the winner of that game "National Champion" simply because Congress or the FTC does not like the process used to decide the game's participants? This is not like the FTC prohibiting Tylenol from saying it cures cancer or prohibiting OxyClean from saying one use and you'll never have to clean your whites again or prohibiting Nike from directly stating that these new sneakers will enable you to run a two-hour marathon--empirically dubious claims, all. Plus, I am not sure what substantial government interest is at stake here; it does not appear to be public health, safety, or welfare--unless you happen to be a fan of TCU or Boise State.

Plus, this may come close to regulating fully-protected non-commercial speech. The prohibition on sales of merchandise "related to" a non-playoff national championship game would reach, for example, selling hats and t-shirts that say "Alabama/Texas 2009 National Champion." But the fact that something expressive (in this case the hat with the National Champion message) is sold does not make it commercial speech; the seller in this example is engaged in the sale of non-commercial expressive material and the attempt to regulate that sale should be subject to regular First Amendment scrutiny. And obviously the FTC cannot prohibit people from wearing merchandise pronouncing Texas/Alabama as National Champion based on victory in a BCS-based game. Nor can it prohibit the University of Alabama from, say, introducing its team as National Champions, hanging a National Champion banner on its stadium, or wearing special jerseys that say "National Champions." Any such effort would, it seems to me, plainly violate the First Amendment.

All of which calls into question why the bill takes the approach it does. Given the strong interstate commerce connections of collegiate sports, it seems that Congress could directly compel the NCAA and its members to adopt a playoff. It also could have attached a playoff system as a condition on federal funds (which every NCAA member school receives). So it seems odd to incentivize the NCAA into adopting a playoff by going after expression. Seems like what the First Amendment is designed to prevent.

Roundup of Interesting Links

The Sports Law Professor, Just so We're Clear, the NFL Steroid Policy is Dead

TaxProf Blog, Tax Consequences of Tiger Woods' Marital Troubles

Wall Street Journal Law Blog, The Fights and Suits over the Fighting Sioux

Title IX Blog, Article Examines Shortcomings in Title IX's Pregnancy Regulations

Cincinnati vs. Notre Dame

Yesterday, the New York Times reported that Notre Dame is interviewing Cincinnati's Brian Kelly today to see if he is interested in their coaching vacancy. Tell it like it is. Notre Dame is soliciting Kelly to breach his contract with Cincinnati. Here you have a university that has made a substantial investment in a coach based upon his express contractual commitment to stay for a period of years in order to develop a successful program, and a coach who is going to speak to another school about leaving at a time his players are preparing for the biggest game of their lives in a few weeks.

It is mind-boggling that the NCAA and its members allow this tampering to occur. If it is in fact true that 85% of bowl-subdivision university presidents feel that coaches' compensation is "excessive" as well as "a key contributor to the (fiscal) 'arms race' in intercollegiate athletics" and "the greatest impediment to sustainability," then they should seriously consider adopting a no tampering policy similar to the NFL's policy. In the meantime, Cincinnati owes all of the current and prospective student-athletes, as well as the taxpayers (because Kelly's salary is funded by tax exempt revenue), to enforce its contract and prevent Kelly from going to work for a competitor.

In my law review article that was just published, I discuss how college head coaches today meet the "unique skill" element for a negative injunction to prevent the coach from working for a competitor school. Indeed, there are striking similarities between today's college head coaches and professional athletes applying the court's rationale in the seminal case of Philadelphia Ball Club v. Lajoie:

The court below finds from the testimony that “the defendant is an expert baseball player in any position; that he has a great reputation as a second baseman; that his place would be hard to fill with as good a player; that his withdrawal from the team would weaken it, as would the withdrawal of any good player, and would probably make a difference in the size of the audiences attending the game.”….He has been for several years in the service of the plaintiff club, and has been re-engaged from season to season at a constantly increasing salary. He has become thoroughly familiar with the action and methods of the other players in the club, and his own work is peculiarly meritorious as an integral part of the team work which is so essential. In addition to these features which render his services of peculiar and special value to the plaintiff, and not easily replaced, Lajoie is well known, and has great reputation among the patrons of the sport, for ability in the position which he filled, and was thus a most attractive drawing card for the public.

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We have the further fact that the contract has been partially executed by services rendered, and payment made therefor, so that the situation is not now the same as when the contract was wholly executory. The relation between the parties has been so far changed as to give to the plaintiff an equity, arising out of the part performance, to insist upon the completion of the agreement according to its terms by the defendant….The plaintiff has so far performed its part of the contract in entire good faith, in every detail, and it would therefore be inequitable to permit the defendant to withdraw from the agreement at this late day.

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The defendant sold to the plaintiff, for a valuable consideration, the exclusive right to his professional services for a stipulated period, unless sooner surrendered by the plaintiff, which could only be after due and reasonable notice and payment of salary and expenses until the expiration. Why should not a court of equity protect such an agreement until it is terminated? The court cannot compel the defendant to play for the plaintiff, but it can restrain him from playing for another club in violation of his agreement.

Dwayne Bowe and the StarCaps Saga

I have a column up in the Huffington Post discussing the StarCaps saga and the recent suspension of Dwayne Bowe. For a different take on the issue, please check out Professor Standen’s post here. In a nutshell, I do not believe that the 8th Circuit’s decision in the StarCaps case poses a real problem for the NFL or other sports leagues. At least not quite yet. Professor Standen, in contrast, believes that the NFL’s performance enhancing drug testing policy is now dead…

Marcus Jordan and The Capacity of College Players to Choose their own Sneakers

Over on MSN Money, John Kelly of Minyanville News recently had an interesting story on Michael Jordan's son Marcus, a freshman at the University of Central Florida. Marcus Jordan wears Air Jordan sneakers even though his team, until a few weeks ago, had a sponsorship contract with Addidas. The piece came out before Addias decided to terminate its sponsorship contract with UCF, but addresses some of the key issues. Here's an excerpt:

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In an interview with AOL’s Fanhouse, UCF athletic director Keith Tribble said that Jordan could make his own choice on what to wear, and that he wouldn't be the first athlete at the school to get permission to wear something other than Adidas -- a football player wore a different pair of shoes because of a better fit.

But that concession didn’t sit well with Adidas. The athletic-gear company says it won't bend the rules, even if -- or perhaps, especially if -- it’s for a Jordan. "There is no compromise, and the contract is currently under review," Adidas spokeswoman Andrea Corso said. . . .

This situation is just the latest in a string of recent cases exploring exactly what control current and former college athletes have over their own image. Last year, former Nebraska University quarterback Sam Keller filed a lawsuit against video-game company Electronic Arts (ERTS) and the National College Athletic Association arguing that they were illegally using the images of college football and basketball players in video games without their permission or compensation.

Former UCLA star basketball player Ed O’Bannon is suing the NCAA over its use of former student athletes' images in DVDs, video games, photographs, apparel, and other material. In a federal lawsuit filed in July, O'Bannon said the NCAA illegally has athletes sign away their rights to the commercial use of their images and doesn't share any of the proceeds from their use with the former athletes.

Other than the name of the players on the back of the character’s jersey, the images on screen are often an exact replica of the more famous college athletes, including weight, height, uniform number, and athletic skills. EA and the NCAA claim that by not including player names, they're not stealing their "likeness."

Others are not so sure. Michael McCann, who teaches legal issues relating to sports at Vermont Law School, told Minyanville that while the scholarships that universities offer the student athletes may cover any revenues that the schools generate from the players’ images, "it seems like a separate matter when a third party like a video-game publisher profits off the players' apparent images, especially when the players are forbidden under NCAA rules from earning off of their celebrity."

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To read the rest, click here.

Legal Fallout of Tiger Woods Saga

I am a contributor to the Legal Broadcast Network, which was co-founded by environmental torts and consumer protection lawyer Jan Schlictmann, and I was interviewed this week by Scott Drake about a story that Rick also discussed in a different forum: the legal fallout of the Tiger Woods saga. Here's the interview:

Tiger's Privacy and Image

The Lawyer 2 Lawyer show of the Legal Talk Network has a 30-minute podcast on "The Tiger Woods Saga" that can be downloaded from here. Josh Galper, partner in Orrick, Herrington and Sutcliffe's Washington D.C. office, and I discuss and debate Tiger's right to privacy and the impact on his image.

American Needle v. NFL Moot Court

Two weeks ago, the Penn State School of Law hosted a moot court session considering American Needle v. NFL. Gary R. Roberts, dean of the Indiana University School of Law in Indianapolis, argued on behalf of the NFL, with Penn State's own Stephen Ross representing American Needle. Guest Judges were Judge D. Brooks Smith and Judge Dolores Korman Sloviter of the United States Court of Appeals for the Third Circuit, and Judge Richard Cudahy from the Seventh Circuit Court of Appeals.

Penn State has made a video of the event available online.