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  • Swap Deal Summer: How Premier League Clubs are Changing Transfer Tactics Under PSR Rules

    This summer’s Premier League transfer window has been relatively quiet, in part due to the CONMEBOL Copa America and UEFA’s European Championship tournaments. [1] While many of the world’s best players were away on international duty, several swap deals quietly became one of the bigger stories of the summer. [2] While American sports fans have grown familiar with the idea of a team trading one player to secure the rights to another, this practice is far less common in the world of soccer. [3] However, due to the Premier League’s changing financial squad-building regulations, the player swap may become a more common occurrence for teams looking to fit their squad under the League's Profit and Sustainability Rules (PSR). The Premier League (as well as UEFA for its European club competitions) have implemented their own “salary cap” regulations for some time now. [4] However, The Premier League agreed upon a “sanctions policy” in August 2023 after fines failed to elicit any significant change in economic restraint. [5] Following the League’s enforcement of the PSR penalties to deduct points in the season standings from Everton and Nottingham Forest, clubs scrambled to comply before the League’s financial year ended June 30th. [6] The League’s PSR are not salary cap rules per se. Unlike American leagues in which salary caps literally limit a team’s player salary expenditures, the PSR and Financial Fair Play (FFP) regulations limit a club’s financial losses. The League defines “PSR Calculation” as “the aggregation of a Club’s Adjusted Earnings Before Tax” for the preceding three years. [7] Earnings Before Tax are a club’s profits or losses after depreciation and interest, [8] whereas “Adjusted Earnings Before Tax” refers to a club’s earnings less costs of: (a) depreciation and/or impairment of tangible fixed assets, amortisation or impairment of goodwill and other intangible assets (but excluding amortisation of the costs of Players’ registrations); (b) Women’s Football Expenditure; (c) Youth Development Expenditure; (d) Community Development Expenditure; (e) in respect of Seasons 2019/20, 2020/21, and 2021/22 only, COVID-19 Costs. [9] While the League’s rules are not explicitly designed to limit player acquisition expenses, those costs represent a massive part of a team’s total expenditures when looking at the entire club as a business. [10] The rules were created partly to prevent clubs from reckless spending and getting into financial trouble, such as Leeds in the late 90s (their conduct spawned the phrase “Doing a Leeds” which refers to financial mismanagement), [11] but the rules have also had ancillary competitive balancing objectives. Under Premier League Rule E.52, clubs that lose more than £15m under the three-year PSR calculation are subject to heightened financial reporting standards. [12] But Rule E.53 is the main driver of the changes to team spending we see now. Notwithstanding adjustments for playing in lower-tier leagues during the three-year PSR window, clubs with losses of in excess of £105m are subject to discipline including the dreaded points deductions. [13] One of the fastest ways for a club to raise money quickly is through transfer fees from selling players. While the benefits of traditional sales may be limited because buyers will prey on a selling club’s need to comply with the spending rules, swap deals might allow for a bit more leeway. When a player is transferred out of a club for a fee, the fee is registered as profit instantly, but when acquiring a player, the expense from the fee is amortized over the contract's life up to five years. [14] Players developed through a team’s academy as seen as “pure profit” because no transfer fees were paid to acquire them. Therefore, swapping academy players in separate deals closely linked can quickly generate short-term profits on the books for both teams. The short-term benefits are not permanent solutions because if the swapped players are later sold at a loss, that is still a loss on the books. But, for a team in need of a quick compliance fix, they can be quite useful. Teams can ensure they are not subject to punishment now and can worry about generating more revenue in the future.  If the regulations were originally created to promote healthy financial positions amongst the League’s members, this sort of salary capology, while legal may not be within the spirit of the regulations. One way the league has sought to combat potentially inflated fees is through its power to make “Fair Market Value Assessments” which examine whether the valuations assigned were within an acceptable range of those expected by clubs negotiating at arm's length. [15] The League is reportedly transitioning towards a new framework influenced by creative accounting measures, the failed Super League initiative, and state-backed ownership groups. The proposed framework comprises two primary components: a squad cost control ratio and an upper spending cap linked to broadcasting revenue. The squad cost control ratio will limit club spending on wages, amortized transfer fees, and agent fees to 85% of revenue (70% for clubs in UEFA competitions) within any given season. [16] Additionally, an upper hard cap will be introduced, restricting spending on wages, transfers, and agent fees to a multiple of the broadcasting revenue earned by the lowest-ranked Premier League club. For example, last season, Southampton earned £103.6 million ($131 million) from television revenue. Under the proposed rules, a multiple of five times that amount, or $653 million, would serve as the cap. [17] This new proposal aims to work in conjunction with the squad cost controls set to be implemented in 2025, replacing the existing Profit & Sustainability rules that led to points deductions for Everton and Nottingham Forest this season. Starting in 2025, teams will be restricted to spending 85% of their total revenue on wages, transfer payments, and agent fees. A Professional Footballers’ Association (PFA) spokesperson has stated that “we will obviously wait to see further details of these specific proposals, but we have always been clear that we would oppose any measure that would place a ‘hard’ cap on player wages.” [18] Given the comparison to American sports, where artificial wage suppressors like salary caps may require collaboration with unions, it makes sense why the PFA has steadfastly asserted its right to be consulted on the matter. In the United States, the non-statutory labor exemption has been a fundamental aspect of labor relations in American sports. [19] This exemption allows for salary caps in exchange for a guaranteed portion of league income. European Union “competition law” and its application by the Court of Justice of the European Union (CJEU), along with U.K. labor law, particularly the Trade Union and Labour Relations Act 1992, [20] could provide a basis for understanding the challenges associated with implementing a salary cap. These legal frameworks could be examined in a future article to explore the potential hurdles a salary cap would need to overcome. Caleb Clifford is a third-year law student at USC Gould School of Law with an interest in labor, employment, and IP law. He was the president of USC’s Sports Law Society and can be found on (X) @Cliffnotes_ and LinkedIn (Caleb Clifford).   [1] https://www.thetimes.com/sport/football/article/premier-league-transfers-latest-deals-3wdffdk5m [2] https://www.cbssports.com/soccer/news/premier-league-transfer-swaps-explained-why-chelsea-aston-villa-and-more-are-selling-players-to-each-other/ [3] https://www.youtube.com/watch?v=gxVctUN1GFM [4] https://www.cnn.com/2014/05/16/sport/football/financial-fair-play-uefa-football/index.html [5] https://www.toffeeweb.com/season/23-24/news/44393.html [6] https://www.skysports.com/football/news/11661/13112071/profit-and-sustainability-rules-premier-league-points-deductions-here-to-stay-for-financial-breaches [7] https://resources.premierleague.com/premierleague/document/2024/03/04/0910e1b3-f94a-41a5-9818-6e1b5c961a9a/PL_Handbook_2023-24_DIGITAL_26.02.24-v3.pdf at 98. [8] Id. at 89. [9] Id. at 80. [10] https://swissramble.substack.com/p/tottenham-hotspur-finances-202223 [11] https://en.wikipedia.org/wiki/Doing_a_Leeds [12] https://resources.premierleague.com/premierleague/document/2024/03/04/0910e1b3-f94a-41a5-9818-6e1b5c961a9a/PL_Handbook_2023-24_DIGITAL_26.02.24-v3.pdf at 134. [13] Id. [14] Id. at 84. [15] Id. at 90. [16] https://www.nytimes.com/athletic/5407740/2024/04/11/premier-league-ffp-rules-new/ [17] https://www.dailymail.co.uk/sport/football/article-13038695/How-Premier-League-team-earned-season-huge-new-TV-deal-created-record-prize-pot.html [18] https://www.espn.com/soccer/story/_/id/40049924/premier-league-clubs-agree-spending-cap-begin-2025 [19] https://www.lw.com/people/admin/upload/SiteAttachments/Nonstatutory-Labor-Antitrust-Exemption-Risk-In-Sports-Unions.pdf [20] https://www.legislation.gov.uk/ukpga/1992/52/contents

  • You Can't "Just Do It": Nike Suit May Impact the Custom Shoe Industry

    Who doesn’t love a pair of Nike Air Jordan 1s made out of a Louis Vuitton bag or the Travis Scott AJ1s made with alligator skin leather. Well, Nike doesn’t. The company has filed a complaint in the S.D.N.Y. against popular L.A. based sneaker customizer Dominic Ciambrone, aka “The Shoe Surgeon.” The complaint alleges that The Shoe Surgeon has engaged in widespread trademark infringement through customizing and creating bespoke Nike shoes, selling counterfeits, and offering kits and classes to make fake Nike shoes. Nike says his work misleads consumers, who might wrongly believe his creations are legitimate Nike collaborations.   Nike seeks to recover “the maximum amount of statutory damages for Defendants’ willful counterfeiting of over 30 Nike trademarks, totaling over $60 million, or the profits Defendants generated from counterfeiting, trebled, along with attorneys’ fees.” Nike also seeks to destroy all the infringing shoes.   The Shoe Surgeon is extremely popular among the sneaker community, celebrities, and professional athletes. His Instagram account alone has over 1.1 million followers. In the past, Nike themselves has commissioned The Surgeon on several occasions. Notably in 2018, Nike obtained Ciambrone to create a custom pair of Nike LeBron 15s to commemorate LeBron James reaching 30,000 career points. Ciambrone adorned the Nike LeBron 15 shoes in 24-karat gold and diamonds valued at $100,000. Then again in 2023, Nike had Ciambrone create a pair of custom Nike Lebron 20s to commemorate Lebron surpassing Kareem Abdul-Jabbar as the NBA’s all-time leading scorer.   The complaint states that “these commissions—limited engagements to commemorate the achievements of one of Nike’s signature athletes—did not give Defendants the unfettered right to use Nike’s marks to customize Nike shoes and manufacture fake “Nike” shoes from scratch, yet that’s exactly what Defendants have done.”   Ciambrone started his career in high school painting white Air Force 1s. Since then, his customization ability has evolved to reconstruct shoes with different leathers and fabrics. His custom pairs can range from $3,000-$30,000. Nike feels he has gone too far by “materially altering” the shoes to the point they can no longer be considered an authorized Nike product, yet still feature Nike trademarks. The Surgeon puts his logo onto the shoe, typically on the tongue, in a Nike-style font alongside Nike’s famous Swoosh. This logo is less prominent, and Nike says creates a “false impression that Nike has entered into a collaboration with Defendants on these products.”   The complaint then highlights The Shoe Surgeon’s practice of creating “unauthorized collaborations” without official endorsement or affiliation. Some examples included using Nike’s shoes in his collaborations with Celsius, Wingstop, Ruffles, and eBay. Nike says this is likely to confuse consumers into thinking that Nike themselves are collaborating with these brands. He also often uses patterns or designs made popular by luxury brands such as Dior, Louis Vuitton, and Gucci, who either have separate collaborations with Nike or none at all. This suit comes one month after French fashion brand Goyard filed a trademark infringement suit against The Shoe Surgeon for customizing Nike shoes with a pattern that closely resembles Goyard’s interlocking Ys and dots pattern.   Nike also complains that The Shoe Surgeon Academy teaches students in their 3-4 day classes not only how to deconstruct Nikes for customization, but also how to construct Nike shoes from scratch, which Nike deems are “counterfeit.” Amongst the products offered for sale in the “SRGN Creator Store” is The Shoe Surgeon Starter Bundle for Air Jordan 1 which “includes all the must-have tools and materials to create your own pair of custom AJ1s.”   For determining trademark infringement, the court will look to whether there is a likelihood of confusion among a reasonably prudent purchaser of the products at issue. Some general factors that are considered are: 1. Strength of the plaintiff's mark 2. Relatedness of the goods or services 3. Similarity of the marks 4. Evidence of actual confusion 5. Marketing channels used 6. Likely degree of purchaser care 7. Defendant's intent in selecting the mark 8. Likelihood of expansion of the product lines   The Shoe Surgeon will likely assert defenses such as fair use, having an implied license to customize shoes based on past collaborations with Nike, and the asserting exhaustion rule. The exhaustion rule means once a trademark holder sells their product, the buyer is free to resell the goods without permission. While I believe The Surgeon has some legitimate arguments for purely customizing already-made Nike shoes, he likely will have a tough time arguing constructing shoes from scratch for commercial sale is not trademark infringement.   Nike says they are not anti-customization, they just want it to be done within “Nike-controlled parameters” such as Nike I.D. After filing the complaint, Nike released a statement saying that they do “not have any issues with the limited, one-of-one customization he’s been doing for us or his clients, when allowed under Nike-sponsored athletes’ contracts. In fact, we value opportunities for our athletes, consumers and partners to express themselves through their own style and creativity.” This translates to Nike being okay with customizing when they give consent.   How this will affect smaller customizers who use Nike shoes as a canvas to paint on and customize is unclear. However, selling a customized shoe that features another brand's logo or trademark, or creating your own Nike shoe from scratch is clearly against Nike’s wishes. Depending on the outcome of this case, shoe customizers may have to be more cautious with their designs, meaning not being able to “Just Do It.”   For those wanting to track the case on Bloomberg Law: Nike Inc. v. S2, Inc. d/b/a The Shoe Surgeon et al . , S.D.N.Y., 1:24-cv-05307, complaint filed 7/15/24.   Andrew Gagnon is a rising 3L at the University of Kansas School of Law where he is a representative in the Student Bar Association and President of the Sports Law Society. He can be found on Twitter @A_Gagnon34 and LinkedIn as Andrew Gagnon .

  • Navigating College Athlete Employment Status: Judge Porter's Critique and Considerations

    Judge David Porter's concurring opinion in Johnson v. NCAA addresses the employment status of college athletes under FLSA and state laws. Judge Porter expresses general concerns in his concurring opinion and breaks down the difficulty of applying the four-part economic realities test.    In his concurring opinion, Judge Porter calls for a need to distinguish between revenue-generating athletes who may qualify as employees and those in non-revenue sports who likely do not. He argues for a nuanced approach rather than a one-size-fits-all, stating that “the question presented necessarily invites finding, weighing, and balancing a multitude of as-yet undeveloped facts that will vary widely across many thousands of student-athletes, teams, sports, colleges, and universities.” [1] Judge Porter also highlights potential legal and practical implications of recognizing college athletes as employees, including impacts on tax laws, immigration regulations, and Title IX considerations.   Furthermore, Judge Porter addresses the majority opinion’s lack of clarity and guidance on assessing college athletes under the economic realities test. The test considers four factors when assessing college athletes. It asks if the athlete: (1) performs services for another party (the college or NCAA), (2) necessarily and primarily for the college’s benefit, (3) under the college’s control or right of control and (4) in return for “express” or “implied” compensation or “in-kind benefits.”   Below is a breakdown of Judge Porter’s concerns with applying each of the four prongs of the test.    (1) Nature of the Work: Whether the individual performs services for another party, in this case, the university or NCAA.                     i.     Judge Porter argues that the majority's definition of "services" could encompass all team players, potentially categorizing all athletes as employees based solely on their participation. He warns that an athlete’s “contribution in the service of teamwork does not necessarily create an employment relationship.” [1]   (2) Benefit: Are the athletes' activities necessarily and primarily for the benefit of the college?                      i.     Judge Porter critiques the majority's view on how collegiate athletes' membership benefits the university, arguing that such benefits are fundamental to team participation rather than indicative of employment. He contends that participating in sports at the collegiate level serves educational purposes and fosters personal growth, factors that extend beyond financial gain for the institution.    (3) Degree of Control: The extent to which the university controls or has the right to control the athlete's activities.                     i.     Judge Porter questions whether the university's control over athletes' recruitment, eligibility, and participation should establish them as employees, suggesting these criteria may extend too broadly to the point where even high school athletes could meet this factor. He states that “the players do not act independently of each other and the coaches because, again, team sports are collective actions requiring significant direction and coordination.” [1]   (4) Compensation: Whether the athlete receives express or implied compensation or other benefits.                     i.     Judge Porter notes lucrative TV deals in top college sports, pointing out that many athletes, especially in non-revenue sports, operate at a financial deficit for their universities. He highlights the need to differentiate between athletes who contribute tangibly to their schools and those whose participation is not a benefit to the school.   Other Considerations as the case moves forward: ·      How different forms of compensation, including indirect benefits like scholarships and facilities use, should influence the determination of employment. ·      How would recognizing college athletes as employees affect international collegiate athlete’s visa status and compliance with immigration laws? International athletes often require specific visas (such as F-1 visas for students) to study and compete in the United States. If deemed employees, would this status affect their eligibility for these visas or potentially complicate their immigration status? [1] Johnson v. National Collegiate Athletic Association   Bobby Hartwick is a second-year law student at Saint Louis University School of Law. He can be found on Twitter @BobbyHartwick and on LinkedIn (Bobby Hartwick).

  • Sports Contracts Updates for the Week of June 24th

    While the spotlight this week was on the NHL, who hosted game 7 of the Stanley Cup Finals which the Florida Panthers won for the first time in franchise history, and the NBA, who hosted its 78th draft, the NFL made sure it was not forgotten. Two NFL teams are planning monumental stadium renovations - some much needed good news for the league that hopefully can detract a bit of attention from its Sunday Ticket settlement. Investments in the sports industry continue to boom as multiple high-profile individuals expand their investment portfolios.     Shaun White’s Unrivaled Sports acquires minority stake in indoor action sports company Snöbahn. Sportico Cleveland Cavaliers hire Golden State Warriors assistant coach Kenny Atkinson as new head coach. Atkinson was previously head coach of the Brooklyn Nets (2016-2020). The f inal contract is pending. ESPN NBA approved sale of 15% of BSE Global to Julia Koch. BSE Global is the parent company of many entities, including the Brooklyn Nets, Barclays Center, New York Liberty, the Nets’ G-League team (Long Island Nets) and Nets’ NBA 2K League team (Nets GC). Sportico Charlotte approves $800M renovation of Bank of America Stadium, home of the Carolina Panthers NFL franchise. $650M will come from public funds. Construction is expected to start in 2026 and be completed by 2029. Athletic Jacksonville City Council approves an agreement between the Jaguars and the city for a $1.4B renovation of EverBank Stadium. The deal still needs to be approved by the NFL owners when they meet this October. If approved, construction is scheduled to start after the 2025 season and will be finished for the 2028 season. The city will pay for approximately 55% total cost. ESPN Big East signs a 6-year media deal with Fox, NBC and TNT. Financial details to be released. ESPN Steve Cohen’s hedge fund, Point72 Asset Management, L.P. has acquired a 5.5% stake in Sphere Entertainment. Cohen’s (owner of the New York Mets) 1,560,170 million shares include 582,400 shares of Class A Common Stock. SEC Kirsten Flicker is a graduate of Fordham University School of Law from the class of 2021. She can be found on LinkedIn here .

  • Sports Contracts Updates for the First Two Weeks of July

    July got off to a slow start during the week of July 4th, though Q3 deals are now underway.  Headlining the week is the NBA’s highly-anticipated media rights deal.  The Orioles hired their first female president of business operations, and many more deals are on the way as we enter the back half of 2024.   The NBA finalized media rights deals with NBC, Amazon Prime Video and ABC / ESPN. The agreements will last 11 seasons and be worth about $76 billion.   The NBA governors still need to approve the agreements, though this should be just a formality.  TNT Sports may still match the offers. ESPN will pay $2.6 billion, NBC will pay $2.5 billion, and Amazon will pay $1.8 billion.  ESPN will host a conference final and the NBA Finals.  NBC and Amazon will alternate hosting a conference final, and Amazon will host the In-Season Tournament. Athletic Sportradar and the Union of European Football Associations agree on three-year deal for Sportradar to continue to exclusively distribute UEFA’s gambling data. Sportico F2’s Oliver Bearman to race for Haas in 2025. The 19-year-old driver is currently a member of the Scuderia Ferrari Driver Academy. F1 Willow Bay and husband Bob Iger are finalizing a deal to purchase Angel City FC. Athletic Fitch is monitoring the NFL’s credit rating in wake of Sunday Ticket class action outcome. A federal jury found the NFL liable under antitrust law, though the NFL is appealing the decision. Sportico David Yurman signs 7 NBA players as brand ambassadors. Kyle Kuzma, D’Angelo Russell, Jalen Green, Jaime Jaquez Jr., Kevin Love, Josh Hart and Seth Curry will all be brand ambassadors of the high-end jewelry band. Hollywood Reporter Baltimore Orioles hire Catie Griggs as president of business operations. Griggs is the first female president of business operations in the team’s history.  Previously, she served as president of business operations for the Seattle Mariners.  She began this role with Seattle in July 2021. MLB Audi becomes the official premium automotive partner of Inter Miami. Inter Miami CF Though Skydance announces cost-cutting measures following its merger with Paramount, incoming president Jeff Shell reported the company does not plan to cut CBS Sports’ portfolio. Sportico Kirsten Flicker is a graduate of Fordham University School of Law in the class of 2021. She can be found on LinkedIn here .

  • NFL's Christmas Day Contract With Netflix Adds to Mounting Antitrust Concerns in Wake of Sunday Ticket Verdict

    On May 15, 2024, the NFL announced a three-year contract with Netflix for the exclusive streaming rights to two Christmas Day 2024 games – Chiefs vs. Steelers, and Texans vs. Ravens – and at least one “holiday game” in 2025 and 2026. However, with the addition of Netflix, fans must now subscribe to seven services to watch all of the League’s games: traditional network channels (Fox, CBS, NBC, ABC, ESPN), NFL Sunday Ticket via YouTube TV, Amazon Prime Video, Peacock, NFL+, and ESPN+. [i] If a fan only subscribes to the respective streaming service for the shortest amount of time necessary, it will cost approximately $520. [ii] Additionally, fans do not have the option to support only one team. For example, if Alabama fans want to keep up with Jalen Hurts, or a Taylor Swift fan want to support Travis Kelce, neither fan has the option of purchasing only games in which the Eagles or Chiefs compete. They must either pay the full price of Sunday Ticket – a minimum cost of $350 without YouTube TV, $449 with a YouTube TV subscription – or settle for catching the highlights on Tik Tok and X. [iii] This cost analysis excluded streaming-exclusive games, such as the Netflix deal.     As of June 27, 2024, the above-described ultimatum very likely constitutes a major antitrust violation. A Los Angeles jury found that the NFL colluded with DirecTV, along with CBS and Fox, to drive up pricing of its DirecTV "Sunday Ticket" package and ordered the League to pay $4.7 billion in damages for violating antitrust law. [iv] During his closing remarks, plaintiffs’ attorney Bill Carmody showed an April 2017 NFL memo showing the League was exploring a world without "Sunday Ticket" in 2017, where cable channels would air Sunday afternoon out-of-market games not shown on Fox or CBS. [v] Callous conduct such as this apparently made the jury’s decision rather easy – deliberation lasted five hours over two days. [vi]   Still, the NFL staunchly defends its premium subscription structure, stating it believes its “ media distribution strategy, which features all NFL games broadcast on free over-the-air television in the markets of the participating teams and national distribution of our most popular games, supplemented by many additional choices including RedZone, Sunday Ticket and NFL+, is by far the most fan friendly distribution model in all of sports and entertainment,” and promised to contest the jury’s decision. [vii]   Though the opinion has yet to be released, one can certainly predict its legal conclusions based on the Nineth Circuit’s denial of the NFL’s motion for summary judgment. See In re Nat’l Football League’s Sunday Ticket Antitrust Litig , No. 15-02668, 2024 U.S. Dist. LEXIS 6373 (9th Cir. Jan. 11, 2024). (“ Sunday Ticket ”). The crux of the plaintiffs’ argument alleged that the NFL violated antitrust law, specifically §1 and §2 of the Sherman Act, by limiting competition, restricting over-the-air broadcasts, and selectively granting exclusive broadcasting rights. Sunday Ticket , 2024 U.S. Dist. LEXIS 6373, at *4-6.   The NFL argued that the Sports Broadcasting Act (“SBA”) protected its exclusive broadcasting agreement for Sunday games. The SBA gives the NFL, NHL, NBA, and MLB an antitrust exemption, allowing leagues to enter into league-wide television contracts with networks like CBS, ABC, NBC, and FOX on behalf of the teams. However, the language of the SBA’s does not cover satellite or digital distributions. The court found that the NFL’s conduct exceeded the boundaries of the SBA – that the act did not pronounce a broad, sweeping policy, but rather engrafted a narrow, discrete, special-interest exemption upon the normal prohibition on monopolistic behavior. Id. at *31.   The Nineth Circuit determined the SBA covers the NFL’s collective sale of telecast rights to free, over-the-air television networks, but does not cover league contracts with cable or satellite TV services for which subscribers are charged a fee. I d. at *26, 31. (emphasis added). Because streaming services operate in that very way, the court’s analysis in Sunday Ticket provides a realistic prediction of the outcome for future antitrust litigation involving streaming-exclusive games.   Plaintiffs challenged specific provisions within the NFL/Networks’ agreements, alleging they suppress competition outside the SBA’s limited authority by restricting resale of products. Id. at 15, 29. These restrictions mandate that the resold product (i.e. games) be marketed as premium products for avid League fans and sold on exclusively a subscription basis. Id. at 15-16. Also, when the games are sold as a premium package, the NFL must require the resale party (i.e. DirecTV or YouTube TV) to make the game unavailable in the area where CBS or FOX are broadcasting the local game, so that even a subscription package does not compete with local, over-the-air broadcasts. Id. at 17, n. 5. As a result of these restrictions, the only option for the NFL and its member clubs to resell out-of-market telecasts is as a premium subscription package, which DirecTV [and now, YouTube TV] has purchased the exclusive right to provide. Id. at 16.   The NFL/Direct TV Agreement limits NFL and its member clubs from offering additional over-the-air broadcasts, thus enhancing the value of Sunday Ticket. Id. at 17. The Agreement specifies a minimum number of games that must be restricted to certain local markets and cannot be made available as national over-the-air broadcasts. Id. Further, it prevents telecasts from appearing on more than one channel so that consumers only have access to three of the ten to thirteen Sunday games. I d. at 17-18. The agreement requires that no more than two over-the-air broadcasts can be shown in any location, giving DirecTV exclusive streaming rights to every single other game. Id. at *18-19.   Thus, the Nineth Circuit found ample evidence to support an inference of antitrust conspiracy that does not fall under the SBA’s protection. Id. at 19. DirecTV had exclusive control of out-of-market telecasts; both the NFL/Network Agreement and the NFL/DirecTV Agreement limit competition with DirecTV’s paid telecasts from the NFL and its member clubs; and the NFL/DirecTV Agreement contains provisions that also restrict over-the-air broadcasts. Id. (emphasis added). Conspiracy yields anticompetitive conduct, imposing unlawful § 1 violations, i.e., unreasonable trade restraints, on the market. Courts determine unreasonable anticompetitive conduct by analyzing the facts under the Rule of Reason, considering facts of the business, the restraint’s history, and the rationale for its imposition. Id. None favor the NFL. The league asserts such agreements are essential for the NFL’s operation, yet the NCAA’s television structure, which allows each school to form its own agreement to sell their television rights directly to a broadcast network, undermines the necessity of the NFL’s contention. Id. at 50.   Superimposing these findings in Sunday Ticket onto streaming-exclusive games, it appears that the NFL will gift its fans a flagrant antitrust violation this Christmas Day. While it is a choice whether to subscribe to Netflix, this choice transfigures into an ultimatum for Chiefs, Steelers, Ravens, and Texans fans. The “streaming exclusive” nature of this agreement means Netflix has exclusive control of out-of-market telecasts, thereby limiting competition from free, over-the-air broadcasts.   Despite the NFL’s confidence in its “fan friendly distribution model in all of sports and entertainment, ” the exclusivity and subscriptive nature of the “Sunday Ticket” package ultimately proved to be the League’s death kneel. By selling its package of Sunday games at an inflated price and restricting competition by offering “Sunday Ticket” only on a satellite provider, the jury quickly determined that the NFL’s conduct extended well beyond the SBA, thereby violating antitrust law. [viii] Thus, if forcing fans to purchase one subscription-based platform to access all the League’s Sunday games constitutes an antitrust violation, how would a jury rule when faced with seven subscription-based platforms?    Keeton Cross (Twitter: @keeton_cross) is a third-year law student at Cumberland School of Law. She holds degrees in Marketing and English from the University of Alabama.  [i] Max Molski, How much will it cost to stream every NFL game in 2024? Breaking down every subscription , NBC New York, https://www.nbcnewyork.com/news/sports/nfl/nfl-cost-breakdown-stream-every-game-2024/5429939/ [ii] Id. [iii] Id.   [iv] Ryan Kang, NFL Ordered to pay $4.7B in “Sunday Ticket” antitrust trial , Sports Business Journal, available at https://www.sportsbusinessjournal.com/Articles/2024/06/27/nfl-sunday-ticket-lawsuit-verdict . [v] Kevin Seifert, Jury rules NFL violated antitrust laws in “Sunday Ticket” case , ESPN, available at https://www.espn.com/nfl/story/_/id/40447020/jury-rules-nfl-violated-antitrust-laws-sunday-ticket-case [vi] Id. [vii] King, supra. [viii] Seifert, supra.

  • MLB Suspends Five Players - Including One for Life - For Sports Betting Violations

    Ever since the Supreme Court’s decision in Murphy v. NCAA , which overturned the Professional and Amateur Sports Protection Act, the sports betting industry has grown rapidly and has shown no signs of slowing down. Seeing this, the major professional sports leagues have signed lucrative marketing deals with companies like FanDuel, DraftKings, and BetMGM to generate significant revenue in the evolving landscape of sports and entertainment. While all this promotion allows leagues to line their pockets, it also comes with serious risk surrounding the perception of the structural integrity of their league's product.   In 2019, Arizona Cardinals cornerback Josh Shaw was suspended for gambling on an NFL game while on injured reserve. In 2022, star receiver Calvin Ridley was suspended for an entire season for gambling on NFL games. Then in 2023, 11 different athletes  — 10 NFL players and one NHL player — were punished by their respective leagues for gambling-related infractions.   It’s only gotten worse in 2024. NBA player Jontay Porter was banned for life after an investigation found Porter disclosed confidential information to bettors, limiting his own participation in games for betting purposes, and bet on other NBA games.   And this month, more gambling related suspensions were announced in MLB when commissioner Rob Manfred placed Padres infielder/outfielder Tucupita Marcano on the permanently ineligible list for violating the league’s sports betting rules and policies. Betting data showed that from 2022-23, Marcano placed 387 baseball bets, including 231 MLB-related bets, through a legal sportsbook. In total, Marcano bet more than $150,000 on baseball, with $87,319 of that on MLB-related bets. Of the MLB bets Marcano placed over this period, 25 of those bets included Pirates games while he was a member of Pittsburgh.   In addition, Athletics right-handed pitcher Michael Kelly received a one-year suspension, as did Minor Leaguers Jay Groome, José Rodríguez, and Andrew Saalfrank. The five players were disciplined for unrelated violations of the league’s gambling policy that did not rise to the extent of Marcano’s acts.     While most of us have never been in an MLB clubhouse much less a team meeting in Spring Training, it’s well-known that Rule 21 is plastered on the walls and read verbatim to players. Therefore, there is no excuse for any player or MLB employee to claim ignorance. Under Major League Rule 21, “Any player, umpire or club or league official or employee, who shall bet any sum whatsoever upon any baseball game in connection with which the bettor has a duty to perform, shall be declared permanently ineligible.” The rule also states that betting on any baseball game “in connection with which the bettor has no duty to perform, shall be declared ineligible for one year.”   While the 1919 Black Sox scandal and the banning of Pete Rose are the two most noteworthy instances of gambling malfeasance in baseball, they are far from the only episodes. Gambling scandals in the sport date back to 1877 when members of the Louisville Grays were discovered to have thrown games for money.   But in today’s environment where sports betting has become so normalized with advertisements shown multiple times a game and even discussed during broadcasts, the risk of players getting involved is higher than ever. Like any person who follows sports, players have phones and TVs too. They see the advertisements and hear analysts discuss betting odds just like the rest of us. But unlike us, they themselves could have inside knowledge or even a material impact on the games being bet on. For players making league minimum salaries or just trying to scrape by in the minor leagues, the temptation is palpable.   The good news is that when these issues may arise, sports wagering has never been more monitored.  From global position to real-time wagering data, highly sophisticated systems are in place to flag suspicious activity. After the rush to make wagering legal, states, books and leagues have now begun to focus on monitoring and detection. As more laws and data come in, these systems are becoming increasingly effective. In effect, legalized sports betting has actually allowed companies to uncover wrongdoing better than before.   In this environment, however, the risk is still tremendously high. While a system might instantly catch a player’s name placing a suspicious bet, what’s to stop them from using a burner account? What’s to stop the employing a friend to place their bets? The list goes on and on. But one thing is for sure, when leagues get any inkling of wrongdoing, they will undergo thorough investigations and hand down lengthy suspensions when necessary. There is nothing more important to the leagues than the structural integrity of the competition. Therefore, year-long suspensions and lifetime bans act as a deterrence for everyone to see. A player might place a $10 bet on a game he is not involved with whatsoever, but leagues justifiably will take any and every violation seriously and make an example of them.   While you’d like to think the lifetime bans of Jontay Porter and now Tucupita Marcano will serve notice to professional athletes across the country, it’s reasonable to think we’re just at the tip of the iceberg of this issue moving forward. Brendan Bell is a rising 2L at SMU Dedman School of Law and is the Southwest Regional Rep on Conduct Detrimental's Law School Student Board. He can be followed on Twitter (X) @_bbell5

  • The Slippery Slope of Self-Dealing and Manchester City

    Next week, an Independent Tribunal will convene to hear Manchester City’s case against the English Premier League. The Mancunian club is citing a “tyranny of the majority” and alleging anti-competitive violations, mainly in relation to the League’s recently amended Associated Party Transaction (APT) rule. Although, it should be noted that this case, was conveniently filed before Manchester City’s November hearing for 115 alleged Financial Fair Play violations, and also comes after the club’s chairman, Khaldoon al Mubarak, allegedly said “he would rather spend 30 million on the 50 best lawyers in the world to sue them for the next 10 years” than agree to any financial penalty. Putting those 115 alleged violations aside for the moment, this bombshell anti-competition case could also have massive legal implications for professional sports across Europe and the world. But, before we dive into the legal dispute and the ensuing drama, I am sure you are asking yourself, what is an associated party and what is an associated party transaction? Self-Dealing and APT Per the Premier League Handbook that was adopted in March 2024, an “Associated Party” is someone who either has influence over a club or could influence someone with control of a club. Generally, that includes your Board of Directors, their families and close relatives, and anyone with more than 5% ownership of a club.[1] Furthermore, the Handbook defines an “associated party transaction” as any transaction between “a Club and an Associated Party,” as well as “a manager or senior official of a club and an associated party of that club.” In the U.S., we often refer to these types of transactions as “self-dealing.” Transactions labeled or referred to as self-dealing generally involve two parties to a transaction that are, on paper, two separate entities. In reality, however, both entities are made up of a single group of individuals with fiduciary duties to both entities. Self-dealing is permitted under U.S. law, provided that the transaction simulates “arms-length-bargaining,” or in other words, fair market value is assessed for the transaction.[2] Now, I am sure your instincts are telling you that allowing people to transact with themselves will surely lead to corrupt transactions, and that is likely true, which is precisely why safeguards/restrictions have been and continue to be put in place. (I.e., the fair market value requirement for self-dealing) Much like U.S. jurisprudence—and mainly as a direct response to the ever-growing “influence” of Private Equity and Sovereign Wealth Funds within professional sport—it has now become a trend within professional soccer to institute these safeguards intended to ensure long-term sustainability and transparency, such as the English Premier league enacting the aforementioned APT rule. Financial Fair Play and APT The most notorious safeguard in professional soccer was enacted back in 2011, when UEFA, the sporting body notably in charge of the Champions League, enacted the Financial Fair Play (FFP) regulations. These regulations prevent European professional soccer clubs from spending more money than they earn within a fiscal year because, surprise to no one, soccer clubs were spending more than they made in order to stay competitive. So, after seeing a multitude of historically competitive clubs (dare I say “football heritage”) hoist the paperwork for bankruptcy instead of trophies, UEFA decided enough was enough and enacted the FFP regulations. However, in the same vein that a soccer player scores a goal even though there was a goalie, FFP alone would never entirely stop the modern-day business-savvy owners from finding legal loopholes to take advantage of, such as self-dealing. Whether it’s Chelsea F.C. engaging in (English Premier League approved) self-dealing by selling their training ground or Manchester City utilizing shell companies disguised as marketing campaigns/sponsorship deals to fund player costs, it has become clear that self-dealing has officially arrived in the ecosystem of professional soccer. Manchester City and APT Those “sketchy” transactions are likely part of what led the English Premier League to amend the APT rule this past February, in an effort to tighten up the scrutiny clubs will face if found to over-inflate any self-dealing or associated party transaction. Specifically, it is now the clubs who bear the burden of proving a “fair market value” for any associated party transaction. That amendment, at least in Manchester City’s viewpoint, is a drastic shift from the previous procedure of the English Premier League bearing the burden of showing an associated party transaction is overly inflated from the relative fair market value. But will this amendment to the APT rule and other similarly drafted regulations actually accomplish the goal of deterring impermissible self-dealing? If you ask the English Premier League, they will likely say that by increasing scrutiny on APT and other similar FFP loopholes, the League is ensuring the long-term integrity and financial sustainability of the League. Although, if you ask Manchester City, they see the recent amendment to the APT rule and other similarly designed safeguards as “discrimination against Gulf ownership” and “success-stifling” by the English Premier League and Clubs. The truth, however, is likely somewhere in the middle. (P.S. Todd Boehly: if you ever read this, please hire me!) Benjamin Kaner received his J.D. from New York Law School, with a specialization in Business and Finance. Benjamin was the Vice-President of the Sports Law Society at New York Law School and is passionate about Golf, International Football, and Formula 1. Benjamin is interested in working with sports leagues and teams in the future. You can find Benjamin on Twitter and Instagram @BenKaner. Footnotes: [1] Full list of associated party categories: https://resources.premierleague.com/premierleague/document/2024/03/04/0910e1b3-f94a-41a5-9818-6e1b5c961a9a/PL_Handbook_2023-24_DIGITAL_26.02.24-v3.pdf [2] https://www.law.cornell.edu/wex/arm%27s_length#:~:text=An%20arm's%2Dlength%20transaction%20is%20%22characterized%20by%20three%20elements%3A,their%20own%20self%2Dinterest.%22

  • Nevada Supreme Court Sheds Light on Potential Issues with NFL Arbitration System

    The Supreme Court of Nevada recently overruled a lower court’s decision to deny the NFL’s motion to compel arbitration of claims brought against the League and Commissioner Roger Goodell by former Las Vegas Raiders head coach Jon Gruden. The state Supreme Court held that Gruden’s employment contract with the Raiders incorporated the NFL Constitution by reference, and that he agreed to arbitrate his claims under a valid arbitration clause contained in the NFL Constitution. Additionally, the court held that the district court erred in finding that the agreement to arbitrate was procedurally unconscionable. The majority opinion highlights three legal issues relevant to the NFL’s current arbitration system: procedural unconscionability, substantive unconscionability, and illusory promises. Because these issues are hotly contested in disputes about the enforceability of arbitration agreements, a closer inspection of the Nevada Supreme Court’s analysis is worthwhile. As explained below, courts often reach different results on these issues depending on the factual circumstances and the governing state contract law. Unconscionability Generally, a contract is unenforceable for unconscionability only if it is both procedurally and substantively unconscionable. Procedural unconscionability focuses on the circumstances of negotiation (such as a significant disparity between the parties in bargaining power or whether the contract is a “take it or leave it” proposition). Substantive conscionability, by contrast, pertains to the fairness of the agreement’s actual terms—and specifically, whether the terms are so one-sided that they are unenforceable as a matter of public policy. Courts often analyze these two components of unconscionability on a sliding-scale, such that a lesser showing of procedural unconscionability may be compensated by a greater showing of substantive unconscionability, and vice versa. While most states (including California) require at least a nominal showing of procedural unconscionability in order to render an agreement unenforceable for unconscionability, others (like Missouri) do not require a separate showing of each type of unconscionability. See, e.g., Brewer v. Missouri Title Loans, 364 S.W.3d 486, 492 n.3 (Mo. 2012).[1] i. Procedural Unconscionability In Gruden, the Nevada Supreme Court, applying California contract law, held that Gruden’s employment contract with the Raiders was not procedurally unconscionable for two reasons. First, Gruden’s status as a “sophisticated party” meant the Raiders lacked superior bargaining power. Second, the employment contract was not a “take it or leave it” offer because although Gruden could not negotiate the terms of the NFL Constitution (including the arbitration agreement contained therein), he was free to negotiate other terms of the employment contract, such as compensation. The majority’s reasoning seemingly leaves open the possibility that the same agreement would be procedurally unconscionable if challenged by an NFL employee who is not “sophisticated.” However, given the U.S. Supreme Court’s pronouncement that “[m]ere inequality in bargaining power . . . is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context,” an unsophisticated party would likely need to show more than unequal bargaining power in order to convince a court that the agreement is unenforceable. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33 (1991). For example, in 2012 a former equipment manager for the Rams brought a wrongful termination claim against his former employer. State ex rel. Hewitt v. Kerr, 461 S.W.3d 798, 804 (Mo. 2015). When the Rams moved to compel arbitration, the equipment manager argued that the arbitration agreement he signed was procedurally unconscionable (and therefore unenforceable) in part because of his unequal bargaining power. Id. at 809. Although the equipment manager would likely be considered an “unsophisticated party,” the Missouri Supreme Court, relying in part on Gilmer, held that the equipment manager’s unequal bargaining power was not sufficient to render the arbitration agreement procedurally unconscionable. Id. at 809-10.[2] ii. Substantive Unconscionability With respect to substantive unconscionability, the Nevada Supreme Court clearly indicated (but did not hold) that Gruden’s arbitration agreement was substantively unconscionable because it authorized Goodell, a defendant, to designate himself as arbitrator of Gruden’s claims. As the majority recognized, this is not the first time a court has found the NFL’s arbitration structure—by which Goodell retains discretion to appoint himself arbitrator—substantively unconscionable. For example, in Hewitt, although the Missouri Supreme Court refused to find procedural unconscionability, the Court held that a provision designating the Commissioner as arbitrator in a dispute between the Rams and the team’s former equipment manager was enough to make the contract substantively unconscionable. Hewitt, 461 S.W.3d at 813.[3] However, rather than invalidate the entire agreement, the Missouri Supreme Court severed the clause appointing the Commissioner as arbitrator and replaced it with a provision of the Missouri Uniform Arbitration Act, which provides for substitution of a new arbitrator when the designated arbitrator is disqualified. Id. To be sure, not all courts are of the opinion that an arbitration agreement designating Goodell as the arbitrator of claims against the League renders that agreement substantively unconscionable. In a recent lawsuit filed by Brian Flores against the NFL, for example, a court for the Southern District of New York rejected this very argument on the basis that courts should not interfere with parties’ freedom to select their arbitrator by rewriting the parties’ agreement to reflect what the court deems appropriate. See Flores v. Nat’l Football League, 658 F. Supp. 3d 198, 215-17 (S.D.N.Y. 2023) (citing Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 820 F.3d 527 (2d Cir. 2016)). Additionally, the court in Flores noted that parties have recourse against any improper bias on behalf of the Commissioner through § 10(a)(2) of the FAA, which grants courts the authority to review the Commissioner’s arbitration decision and to vacate the Commissioner’s award. Id. at 215. These cases demonstrate the different conclusions courts can and often do reach regarding the enforceability of arbitration agreements designating Commissioner Goodell as the arbitrator of disputes against the NFL. Illusory Promises Finally, the majority in Gruden rejected Gruden’s argument that the arbitration agreement was an illusory promise (and thus unenforceable) because the NFL could unilaterally modify it without notice. An illusory promise exists where a party’s obligation is purely optional. Typically, a contract containing an illusory promise fails for lack of consideration, though if a party’s unilateral-modification right is so one-sided, a court could also find the agreement substantively unconscionable. See Michael L. DeMichele & Richard A. Bales, Unilateral-Modification Provisions in Employment Arbitration Agreements, 24 Hofstra Lab. & Emp. L.J. 63, 76 (2006). A unilateral-modification right is more likely to be deemed an illusory promise that renders an agreement unenforceable where the unilateral modification right is unrestricted, meaning it grants one party the ability to modify arbitration at any time, without notice. In Flores, the federal district court concluded that the arbitration provision included in the NFL Constitution was unenforceable because it gave the NFL and its member clubs unilateral authority to modify the terms of the NFL Constitution without notice to the plaintiff. Flores, 2023 WL 2301575, at *1. But the majority in Gruden took a different view, holding that the NFL’s unilateral authority to amend the NFL Constitution without notice was not an illusory promise because the Raiders did not have the power to unilaterally modify any part of Gruden’s employment agreement. Rather, only the NFL—a non-party to Gruden’s employment contract—had the ability to do so.[4] And even if the Raiders could unilaterally modify the employment agreement, the majority reasoned, the duty of good faith and fair dealing would protect Gruden against any attempt by the Raiders to modify the contract in a manner that would frustrate its purpose or deprive Gruden of fair and reasonable notice. Thus, the fact that the NFL could modify its constitution without providing Gruden notice did not make the arbitration clause contained therein illusory. Takeaways The FAA requires courts to apply state contract law to analyze the enforceability of arbitration agreements. And because contract law varies by state, so too will decisions from courts about the enforceability of arbitration agreements, as demonstrated above by the different outcomes regarding whether a particular arbitration agreement is unconscionable or lacks consideration because of an illusory promise. Given the likelihood of such variance and the increasing frequency of attacks on the legitimacy of the NFL’s arbitration system, the NFL might consider revising its bylaws to protect its arbitration system against existing legal vulnerabilities. For example, the League could protect against the potential finding of substantive unconscionability by removing Goodell’s authority to arbitrate disputes and instead appointing a third-party arbitrator in every case.[5] Additionally, the NFL could amend its Constitution to require the NFL to provide employees of the NFL and its member clubs with 30 days' notice of any changes to the NFL Constitution. Doing so could shield the NFL from assertions by future litigants that their arbitration agreement with the League is illusory and therefore unenforceable for lack of consideration of substantive unconscionability. Alec McNiff (Twitter: @Alec_McNiff), an attorney licensed in California, earned his J.D. from University of Michigan Law School and holds a business degree from University of Southern California. All opinions are his own. Footnotes: [1] In Brewer, the Missouri Supreme Court rejected the notion that courts must find both procedural and substantive unconscionability and instead directed courts to limit their analysis of the defense of unconscionability “to the context of its relevance to contract formation.” Brewer, 364 S.W.3d at 492 n.3. [2] As discussed below, the majority in Hewitt ultimately found the agreement unconscionable on the basis of substantive unconscionability. And, as explained above, under Missouri contract law, a finding of procedural unconscionability is not required to render a contract unenforceable for unconscionability. [3] The majority in Gruden acknowledged the contrary holding in Hewitt, but distinguished Hewitt on grounds that Missouri law, unlike California law, does not require at least a minimal showing of procedural unconscionability to render a contract unenforceable for unconscionability. [4] Notably, the NFL may modify its Constitution only through the votes of its member teams—including, of course, the Raiders. NFL Const. & Bylaws Art. 25 (setting forth the procedures for amendment of the NFL Constitution). [5] Under the NFL’s current bylaws, Goodell has discretion to appoint a third-party arbitrator to hear disputes falling within his jurisdiction, but may (and often does) choose to hear those disputes himself.

  • Game On: States Team Up to Tackle NCAA's NIL Rules in Epic Legal Showdown

    In a significant legal maneuver, Florida, New York, and the District of Columbia have joined forces with Tennessee and Virginia in a lawsuit against the National Collegiate Athletic Association (NCAA). At the heart of the matter are the NCAA's rules concerning the use of athletes' name, image, and likeness (NIL), which the Plaintiffs contend infringe upon federal antitrust laws by impeding athletes' ability to capitalize fully on their earning potential. Filed in federal court in Tennessee, the amended lawsuit targets the NCAA's restrictions on athletes exploring NIL deals before they enroll in college. The NCAA’s current policy prevents prospective student-athletes and students in the transfer portal from having discussions with any booster or NIL collective regarding NIL opportunities available to them before they enroll in the school or sign their letter of intent. The Plaintiffs argue that such constraints not only stifle athletes' financial opportunities but also violate Section 1 of the Sherman Act antitrust statute by restricting and suppressing competition in the marketplace. The amended complaint states that “by unlawfully restraining competition for NIL opportunities, the NCAA causes substantial harm to the general economies of the Plaintiff States and to the economic welfare of present, future, and putative college athletes in the Plaintiff States.” [1] The complaint and its supporters argue that under the NCAA’s current rules, athletes often find themselves committing to colleges before fully understanding the potential NIL opportunities available to them. This presents a significant challenge as the value of NIL rights for collegiate athletes’ peaks during their college careers, with only a small fraction transitioning to professional sports. The NCAA's ban on NIL-related discussions during the recruiting process exacerbates this issue, depriving athletes of critical information about the value of their NIL rights and forcing premature commitments to colleges. Consequently, this stifles athletes' ability to negotiate the most advantageous NIL deals, ultimately suppressing the compensation they receive for their NIL rights. Acknowledging the anticompetitive nature of its NIL-recruiting ban, the NCAA has inadvertently distorted the competitive landscape of collegiate athletics. By preventing schools and affiliated collectives from competing for recruits based on NIL compensation, the NCAA has artificially created a price structure for NIL rights that fails to reflect the true demand for athletes' services. This distortion undermines the competitive process, depriving athletes of fair compensation and perpetuating an environment where their earning potential remains untapped. Moreover, the strict timelines of the recruiting process compound this issue, leaving athletes with limited time to make informed decisions about their future, further reinforcing the need for reform in the NCAA's approach to NIL rights. This legal confrontation reached a pivotal moment when U.S. District Judge Clifton L. Corker granted a preliminary injunction against the NCAA's NIL rules in February. This injunction, effective until a final ruling is reached, bars the NCAA from enforcing its regulations on NIL benefits for athletes. Judge Corker's decision critically questions the NCAA's justification for the timing restrictions on athletes entering NIL agreements, suggesting that the organization has yet to convincingly demonstrate how such arrangements undermine the purported goal of preserving amateurism. This scrutiny is vital in ensuring that policy decisions within collegiate sports align with broader principles of fairness, competition, and legal compliance. As the legal battle intensifies and the debate over NIL rights in collegiate athletics rages on, it is clear that significant changes are on the horizon. The collaboration between states in challenging the NCAA's policies underscores the widespread recognition of the need for reform. With the preliminary injunction against the NCAA's NIL rules in place, athletes now have a temporary reprieve, allowing them to explore potential NIL opportunities without fear of reprisal. However, the broader implications of this legal showdown extend far beyond individual athletes or states. It speaks to fundamental questions about fairness, competition, and the rights of student-athletes in a multibillion-dollar industry. Ultimately, the outcome of this legal battle will shape the future of collegiate athletics, paving the way for a more equitable and transparent system that empowers athletes to fully realize their earning potential while pursuing their academic and athletic aspirations. Bobby Hartwick is a second-year law student at Saint Louis University School of Law. He can be found on Twitter @BobbyHartwick and on LinkedIn (Bobby Hartwick). Sources: [1] https://oag.dc.gov/sites/default/files/2024-05/52%20-%20Amended%20Complaint%20%281%29.pdf

  • Bipartisan Solutions: Leveling the Playing Field for International Student-Athletes in NIL Ventures

    In 2021, the NCAA marked a historic moment by permitting college athletes to profit from their name, image, and likeness (NIL) through endorsements, autograph signings, and personal appearances. This policy shift sparked a booming market, estimated at $1 billion annually by NIL company Opendorse. However, amidst this wave of opportunity, international college athletes find themselves excluded from cashing in on NIL deals due to visa restrictions. In looking to solve this issue, international student-athletes find hope within bipartisan legislation. Most international college athletes enter the U.S. on F-1 visas, which severely limit their ability to work and earn money while in the country. International student-athletes on F-1 visas face a conundrum as NIL deals, which are deemed as labor, violate the terms of the student’s visas. F-1 visa regulations heavily restrict international students' ability to engage in employment, with exceptions mainly limited to on-campus work or post-graduate practical training directly related to their field of study. These restrictions clash with NIL opportunities, leaving international student-athletes facing a dilemma: sacrifice potential earnings from NIL activities or risk violating visa regulations and face severe penalties. Despite these challenges, some international student-athletes, like Purdue’s Zach Edey and UConn’s Aaliyah Edwards, have found innovative ways to monetize their NIL through avenues such as passive income streams and offshore NIL activities without violating visa restrictions. International student-athletes can explore opportunities for passive income, such as licensing agreements or royalties, which do not require active participation or work within the U.S. This could involve licensing their image or likeness for use in merchandise. For example, Edey has found a way to generate income from his NIL by licensing it to The NIL Store, operated by Campus Ink. This platform offers a range of merchandise featuring Edey and other college athletes, including custom jerseys, shirts, hoodies, and accessories. Despite being unable to actively engage in promoting his merchandise while in the U.S. due to visa restrictions, Edey's involvement in this business venture can be considered passive income. Engaging in NIL activities while off U.S. soil provides another viable option for international student-athletes. By participating in promotional events, endorsements, or media appearances on their home soil, international student-athletes like Aaliyah Edwards can generate income without violating visa restrictions. While these athletes have seized what opportunity they can to capitalize on their NIL, they often face a far more convoluted path compared to their American peers. International college athletes exhibit great dedication toward their athletic pursuits and generate revenue for their institutions, just like their American colleagues. Yet, these athletes must navigate the complexities of NIL regulations, jump through hoops, and risk their visas - all for the prospect of harnessing their full potential NIL revenue, a benefit seemingly more readily available to their American counterparts. In response to these issues, Representative Mike Flood (R-NE) and Representative Valerie Foushee (D-NC) introduced the “Name, Image, and Likeness for International Collegiate Athletes Act.” This proposed bill aims to amend the Immigration and Nationality Act to provide F visas and employment authorization for international student-athletes who enter into endorsement contracts for the commercial use of their names, images, and likenesses [1]. Unlike previous NIL reform bills, this proposed legislation offers a straightforward solution to the unique challenges faced by international college athletes. Representative Foushee has expressed that "[t]his bill would create a sub-category within the F-1 visa tailored for international student-athletes who want to pursue NIL opportunities, and they would be permitted to do so as long as they are progressing in their degree program." [2] If passed, it would afford international athletes the same opportunities to capitalize on their NIL as their American counterparts, marking a significant step towards equity in collegiate athletics. In another striking example of bipartisan cooperation, Senators Pete Ricketts (R-NE) and Richard Blumenthal (D-CT) have united with colleagues from various political backgrounds. Together, they crafted a letter directed to Department of Homeland Security (DHS) Secretary Alejandro Mayorkas, urging prompt action to safeguard international student-athletes’ access to NIL opportunities without risking their F-1 visas. The letter states that despite the DHS’s commitment to move quickly on the matter, the DHS has failed to update its rules over a year later, resulting in international students having to undergo another year without legal protections or clarity, leading star athletes to turn down opportunities, go through extreme hoops to stay in good standing with their visas or consider leaving school [3]. The letter also bore the signatures of Senators Chris Murphy (D-CT) and Shelley Moore Capito (R-WV), emphasizing the bipartisan nature of the initiative. Notably, while other facets of NIL regulation and proposed federal laws have encountered obstacles stemming from partisan divides on antitrust enforcement within collegiate sports, the endeavor to secure equitable rights for both domestic and international athletes appears to transcend party affiliations. While debates on various aspects of collegiate sports continue, bipartisan support for enabling international athletes to benefit from NIL opportunities should be a consensus. As discussions progress, ensuring fairness in equal monetary opportunity for all student-athletes, regardless of nationality, should remain a top priority. Bobby Hartwick is a second-year law student at Saint Louis University School of Law. He can be found on Twitter @BobbyHartwick and on LinkedIn (Bobby Hartwick). Sources: [1] https://www.congress.gov/bill/118th-congress/house-bill/7982/text [2] https://abc11.com/name-image-likeness-rep-valerie-foushee-introduces-legislation-to-expand-nil-opportunities/14761640/ [3 https://www.ricketts.senate.gov/news/press-releases/ricketts-blumenthal-call-out-dhs-for-failure-to-help-international-athletes-navigating-nil-visa-requirements/

  • The New Era of College Football May Feature Unlimited Coaching Staffs

    While the college athletics landscape has already seen great transformation over the past few years, it’s no secret that more change is coming in the near future. From the looming settlement of the House v. NCAA case, the prospect of college athletes being deemed employees, further conference realignment, etc. there’s little doubt that more change is on the horizon. As the NCAA becomes less powerful over the college athletics enterprise, some of their rules, regulations, and limits could be going by the wayside in short order. An example of this could be the elimination of the NCAA cap on how many on-field coaches a football program can have on staff. The Football Bowl Subdivision (FBS) Oversight Committee put forth a proposal to remove the cap while still limiting off-campus recruiting activities to 10 assistants (or 12 in the FCS) plus the head coach. If this comes to fruition, it would mean hundreds of analysts and quality control coaches around the country could finally coach in practice, bringing a monumental change to the profession. “The landscape has changed in college football,” said former Wyoming head coach Craig Bohl, who is now executive director of the American Football Coaches Association and sits on the oversight committee. “The competitive equity has changed.” Over the past decade and change, college football staffs have seen a dramatic increase in the number of off-field coaches oftentimes called “analysts.” Nick Saban most prominently started the trend and many of his former assistants who went on to become head coaches took the “Saban Blueprint” to other programs. While analysts provide value in scouting, game planning, and player development, they are technically not allowed to coach in practice or during games. While some believe this rule gets violated on a regular basis by some of the major programs, the NCAA has cracked down on analysts coaching in practice. In 2022, the NCAA laid down infractions on Nebraska for exceeding the countable on-field coaches rule. If the FBS Oversight Committee’s proposal goes through, these types of penalties would go away. Over the course of history in college athletics, rules have been strict, enforcement has been robust, and the preservation of the amateur model has been impregnable. However, as we enter this new era of NIL, the transfer portal, and player empowerment, the NCAA’s power to regulate is at its lowest ebb. This isn’t the first attempt to remove the cap on on-field coaches. A similar proposal was discussed NCAA transformation committee in 2022, but the Division I Council rejected it. In order to pass, the same Division I Council will have to approve it, but a lot has changed even over the last two years in the college athletics landscape to inspire confidence that the result will be different this time around. While in a different sport with different revenue figures, volunteer college baseball coaches filed an antitrust lawsuit against the NCAA for illegally limiting their pay to $0. In the aftermath of that lawsuit, the Division I Council reclassified all volunteer coaches across all sports as full-time assistants. The approval gave Division I baseball programs the ability to have three full-time paid assistant coaches. This, in conjunction with the legal environment surrounding the NCAA and college athletics as a whole, will likely lead to the end of the cap of on-field coaches in college football and perhaps other sports. If it comes to pass, there will be more opportunities for young coaches to break into the Division I coaching ranks. It means more actual coaching jobs, which will help younger coaches develop and older coaches stay in the game. Some have questioned whether all of this change in college athletics is healthy for the sport. While conference realignment has left certain schools behind, lessened the regionality of the sport, and widened the gap between the “haves” and the “have nots,” it is not all bad. Players finally getting to profit from their name, image, and likeness and coaches potentially getting more opportunities is certainly a positive moving forward. We’ll see if the FBS Oversight Committee’s proposal officially goes through, but the expectation is that the NCAA’s limit on on-field assistants will be gone in short order. Brendan Bell is a rising 2L and is the Southwest Regional Rep on Conduct Detrimental's Law School Student Board. He can be followed on Twitter (X) @_bbell5

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