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  • Name, Image, Likeness, and—Health Care?

    John Roaux, AP Images The NCAA has been a lightning rod of criticism over the years, and it wasn’t until the legislative and judicial walls came closing in that they recognized name, image, and likeness rights on July 1. While states began enacting their own NIL legislation, Alston dampened amateurism as an ironclad defense to antitrust scrutiny. Perhaps the public’s appetite for NCAA reform has been satisfied—but it shouldn’t be. Following a series of football-related deaths, two White House conferences were ordered by President Theodore Roosevelt to ultimately create the NCAA in 1906. The NCAA’s establishment centered around protecting student-athletes from catastrophic injuries, an alarming irony in how the NCAA projects itself today. Before a 2015 rule change, Power 5 programs could cancel year-to-year scholarships for injury or poor performance. Non-Power 5 programs are still able to do this today, strikingly. Eligibility requirements demand that student-athletes prove they have $75,000 in healthcare coverage of their own, failing to trigger the NCAA’s catastrophic injury insurance until this amount in expenses is met (Wood, 2013, p. 561). Admittedly, most programs assist athletes with medical expenses in some way. This article, nevertheless, is tasked with dissecting the standard of care—if any—that the NCAA maintains for its student-athletes. A 30-page filing in response to a wrongful death lawsuit in 2013 revealed again that the NCAA adamantly asserts it has “no legal duty to protect college athletes.” Instead, the NCAA bestows this responsibility on its member institutions. We must ask ourselves, considering where the NCAA does choose to enforce rules, what exactly are the NCAA’s priorities? It seems as if the NCAA takes an á la carte approach to safeguarding the rights of athletes, leaving the difficult parts up to the discretion of the schools. A 2008 NCPA request to all D1 institutions sought disclosure of “key medical policies that can affect…student athletes.” Unsurprisingly, 90% of these programs declined to share any medical information whatsoever. With little to no transparency as to what medical policies each institution has in place, it is even more concerning that only 60 percent of all NCAA revenue is shared with conferences and institutions. In 2010, Power 5 and “Group of Five” conferences brought home over 61% of NCAA revenue that was distributed where the remaining 21 conferences received 38.4% (Lawrence, 2013, p. 29). An overwhelming number of smaller programs are under-resourced as a result, leaving student-athletes within this category disadvantaged when it comes to footing medical expenses. Athletic departments, for the most part, aren’t exactly financial powerhouses—only 25 of 65 D1 athletic departments profited in 2019. With these numbers in mind, schools can legally default to student-athletes’ private healthcare plans when athletic-related injuries arise. It is hard to imagine that the current structure of paying athletically related medical expenses is pro-competitive in nature, an exemption from antitrust laws. The Court felt differently in Alston under a “rule of reason” standard, and it is my hope that the same fervor behind NIL is given to healthcare considerations in collegiate sports. References Wood, K. (2013). NCAA student-athlete health care: Antitrust concerns regarding the Insurance Coverage Certification Requirement. Indiana Health Law Review, 10, 561-627. Lawrence, H. (2013). The impact of intercollegiate athletics financial inequalities. Journal of Intercollegiate Sport, 6, 25-43.

  • PSL Holders Fight… For Their Right… To Profit?

    A recent lawsuit filed against the Tennessee Titans could offer the latest interpretation of the rights and obligations of parties to a PSL Agreement. Professional sports teams began selling PSLs, Personal Seat Licenses, to offset new stadium construction costs in the 1980’s. Today, PSLs or some equivalent are sold by nineteen out of thirty-two NFL teams and numerous other major league sports organizations. For a one-time fixed fee, a buyer may purchase a PSL for an extended period of time, often as long as thirty years. The PSL gives the holder certain rights to specific seats in a stadium. Generally, the PSL holder has the right to purchase season tickets for those seats before the season begins and, depending on the language of the agreement, the right to sell or transfer the rights to the seats. As first reported by Paul Kuharsky, in March of 2021, a group of “Permanent Seat License” owners (PSL equivalent) filed suit against Tennessee Football, Inc. (the Tennessee Titans) and Cumberland Stadium, Inc. (Nissan Stadium). The complaint alleges that the Titans, through ticket transaction data, determined the plaintiffs to be “ticket resellers.” Although all of the plaintiffs are PSL holders, six of the eleven plaintiffs are not residents of Tennessee and Kuharsky stated that it was his “sense that the franchise sought to identify ticket buyers who have not attended a game themselves for multiple years.” The complaint alleges that the Titans limited the sale of tickets, “grossly inflated” ticket prices, limited the amount of time to purchase season tickets, limited relocation options, eliminated season ticket member perks and gifts, and did not allow for the standard six-month payment plans to those deemed “ticket resellers.” The complaint further alleges that this treatment of “ticket resellers” was a large departure from the Titans course of dealing with its PSL holders in the past. One plaintiff claimed that the resale, transfer, and/or purchase of additional PSLs was traditionally encouraged. The same plaintiff stated that, based on the suggestion of a Titans’ ticket representative, he purchased approximately eighteen PSLs, in contradiction to the publicly stated policy that PSL holders could hold no more than four PSLs. Ultimately, the plaintiffs claim that the Titans and Nissan Stadium violated their duty of good faith and fair dealing under the PSL Agreement and “have substantially and negatively impacted the value of all PSLs,” resulting in a breach of contract and a violation of the Tennessee Consumer Protection Act. Section 3(e) of the most recent Titans PSL Agreement states the Titans, “in its sole discretion and without regard to good faith or any other standard,” may limit the number of seats, prohibit any transfer/sale of seats, or terminate PSLs for any individual or entity determined to be a “ticket reseller” or “ticket broker.” Although the PSL agreement does not cover price increasing, payment plans, relocation, or timing to purchase season tickets, it appears that the Titans expected and addressed such a scenario within the agreement. Does a PSL holder have the right not to attend a single game, while selling each ticket for personal profit? Does an NFL team have the right to inflate pricing and treat ticket resellers differently than the average fan who attends each game? Absent a settlement, these questions will likely be determined by the court’s interpretation of the PSL Agreement. Courts generally do not want to reshape or reconstruct contractual agreements among private parties. Rather, the court will look to the intent of the parties, evidenced by the words within the agreement. Here, the interpretation of Section 3(e) will be crucial to the court’s decision. New stadiums are being built. More teams are relocating and rebranding. The professional sports landscape is everchanging. It will be important for teams, stadiums, and fans to monitor cases such as this one to better understand their rights and obligations regarding their Personal Seat Licenses.

  • Vince McMahon named as Defendant in Shareholder Derivative Lawsuit

    Image from Sky Sports Yesterday, a WWE stockholder filed a derivative lawsuit on behalf of the WWE and its shareholders against CEO Vince McMahon and former Co-VPs George Barrios and Michelle Wilson. Barrios and Wilson were terminated from employment with the WWE in January 2020. The plaintiff alleges that the defendants breached their fiduciary duty to the company and its stockholders by misappropriating information, specifically related to the WWE’s contract with Orbit Showtime Network (“OSN”), a Middle Eastern broadcast provider. The complaint asserts that WWE’s relationship with OSN had become “increasingly shaky,” ultimately resulting in OSN canceling its contract with the WWE. In late 2018, OSN had approached the WWE regarding the early termination of the parties’ agreements and on or about December 18, 2018, OSN and WWE entered into a settlement agreement terminating their relationship as of March 31, 2019. However, as the plaintiff alleges, prior to the time that those relevant material facts were properly publicly disclosed, WWE corporate insiders acted to sell over $280 million of WWE common stock based upon their “superior knowledge of those material, non-public facts.” These facts were also the subject of a Securities Class Action, which was filed in federal court in NY. There, after denying the WWE's motion to dismiss on August 6, 2020, the judge later approved a settlement of the claims for $39 million. Here, the plaintiff had demanded that the company take action against the defendants to recover from misleading statements and profits obtained while trading off of misappropriated information. Such profit refers to trading activity from McMahon and his counterparts in 2019: 3/27/19: McMahon sells $261M worth of $WWE at $81/share 3/31/19: OSN and WWE relationship terminates Trading activity provided by OpenInsider The plaintiff brought this derivative lawsuit on behalf of the WWE after its board of directors ignored his 10/1/20 demand. A derivative lawsuit is one brought by a shareholder(s) of a company, on behalf of the company, when the company has refused to bring suit itself. Companies make decisions through their officers and directors. Therefore, when an officer or director has committed a wrongdoing that directly hurts the company and its shareholders as a result, shareholders have the right to “demand” that the company bring suit. As this lawsuit directly names McMahon, it could have significant ramifications for the future of the WWE.

  • Cleveland Guardians: Is It Blank Check Time?

    This past Friday, Paul Dolan, the owner and chairman of the Cleveland Indians Baseball Company, LLC, called a news conference to make the official announcement that they are changing the name to the Cleveland Guardians. Shortly after this announcement, many realized - for the first time - that another sports team in Cleveland, Ohio had been using the "Guardians" name. This was a men’s roller derby team that looks like they have been using this name since 2011, and rightfully owned and used the social media accounts and url associated with the name for some time. The roller derby team made their presence known with posts to ClevelandGuardians.com and their social media after the baseball team made their announcement. So it seems that Goliath thought that David would just fade into the background. Not the case. Sports Lawyer, Dan Lust, pointed this out and was right on point that acquiring the website and social media accounts from the roller derby team alone could cost a lot. In addition to likely having to make an agreement with the Cleveland roller derby team about the website and social media accounts, Dolan and Cleveland’s baseball team would also seemingly have to make an agreement to obtain the trademark rights to even use the name. That could be a lot more challenging, not to mention costly, based on what appears to be going on here. According to the United States Patent and Trademark Office, as of Tuesday, July 27th, there were two "live" trademark applications for the mark CLEVELAND GUARDIANS, covering three separate classes. The three classes are for: 1) Athletic apparel, shirts, pants, jackets, footwear, hats, athletic uniforms; 2) Entertainment in the nature of baseball games; and 3) Licensing of intellectual property rights. Diving deeper into the trademark system you see that the trademark application for athletic apparel (Serial Number 90383728) was Published for Opposition by the USPTO on July 13, 2021, and then Abandoned by the applicant eight days later on July 21, 2021. If the petition for express abandonment was in time to avoid publication - and the USPTO recognizes this - then the trademark application that was very close to being approved and registered will be denied. The second trademark application for the rights to the CLEVELAND GUARDIANS name in entertainment and licensing of intellectual property rights would be, in my opinion, the real money maker here. Looking into this trademark application further, it looks like the baseball team has been battling for this trademark since as early as April 13, 2021, by opposing the trademark application with the Trademark Trial and Appeal Board (TTAB). The Cleveland baseball team filed its Notice of Opposition to trademark application (Serial Number 90052176 ) on April 13, 2021, alleging that the trademark application should be invalidated because they had priority in the mark and for likelihood of confusion; because they did not have a bona fide intent to use the mark and only intended to reserve rights in the baseball team's mark; and for applying to register the trademark with a false suggestion of a connection with person, living or dead, intrusions, beliefs, or national symbols, or brings them into contempt or disrepute, amongst other common law claims. The main point of their Opposition is that the baseball team has been using CLEVELAND marks since long before July 14, 2020. In that regard, the constructive first use date provided in the trademark application, and because of this long and extensive use of the word CLEVELAND in baseball by the previous team names (CLEVELAND INDIANS, CLEVELAND NAPS, CLEVELAND BLUES and CLEVELAND BRONCHOS), the baseball team argues that the CLEVELAND GUARDIANS application should be denied for the applicant. Even assuming that this application was made by someone not directly associated with the roller derby team - or even if the application was withdrawn - it's not clear that this resolves all outstanding issues. For example, if the "live" trademark applications were filed by a "squatter" and not someone associated with the roller derby team, the issue of website and social media control would be an entirely separate battle. That might actually be what's occurring here: one battle against a squatter, and another against the roller derby team. Case in point, there was activity by the roller derby Guardians on ClevelandGuardians.com and Cleveland Guardians social media on July 24th and 25th -- after the baseball announcement occurred! So the baseball team is just going to allow some other entity to control and indefinitely use these moving forward? Doubtful. This recent flurry of activity seems to indicate that - even if the trademarks are resolved - that the website and social media accounts remain at issue. In other words, the roller derby team still could be in line for a big pay day. That said, knowing all of the above... why would Cleveland’s baseball team make the decision to choose a name that another Cleveland sports team already had been using for years ? More importantly, if the battle is not truly over, wouldn’t making an official announcement hurt your negotiation position to purchase all of the trademarks, website, and corresponding social media accounts? Of course, all of this could have been avoided if they simply picked another name. Usually, these situations arise when a brand or team fails to do any due diligence whatsoever before going public. However, that is not the case here. An article titled, The inside story of how Cleveland Indians became Cleveland Guardians, by Terry Pluto, stated that the name change had been in the works since 2020 and that the Indians were serious about the Guardians name roughly eight to twelve weeks ago. The USPTO records show it was as early as April that they challenged the trademark. According to the same article, the team conducted its due diligence of the Guardians name and found that “the only significant pro team called “The Guardians” is the New York Guardians of the XFL.” They even reached out and worked out an agreement with Marvel comics to clear use of the name. Brian Barren, the President of Business for the baseball team stated, "You’re not going to find a name that someone’s not using today…You’ve got to work through agreements with others…Those agreements are like toll booths, and they were fewer on the road to the Guardians than many other names under consideration.” Interestingly, he even stated that trademark concerns were a big factor in why they did not have fan voting as an option for the new name. So the decision to go directly after the roller derby team for the "Guardians" name was seemingly done on purpose, knowing full well that they would have to make agreements and spend time and money to battle to use the name. Naturally, the baseball team comes with far more resources at their disposal but that, alone, does not and can not guarantee a victory. At the kickoff baseball Guardians press conference, Dolan noted that, getting "final clearance on the name" was the last piece before the announcement. If you ask me... however... it does NOT look like final clearance should have been given at this stage. The premature showing of their cards likely costs them far more money than they had hoped. The question now becomes how much more money does it cost and whether the stench of the name change wears off in time for opening day. Zak Kurtz is the Founder and Principal Attorney at Sneaker Law Firm, a boutique business and intellectual property law firm that works with businesses and brands in sports, entertainment. fashion and technology industries. He can be reached at [email protected].

  • How Aaron Rodgers Negotiated His “Last Dance”

    The rocky relationship between reigning NFL MVP/former Super Bowl champion Aaron Rodgers and the Green Bay Packers has led to a compromise from both parties. According to ESPN’s Adam Schefter, the two sides have negotiated terms that are close to ensuring Rodgers will report to training camp on time and play out the season in Green Bay. The agreement in principle is expected to include a laundry list of conditions to satisfy Rodgers, per Schefter: The 2023 year in Rodgers' contract -- the last one in his current deal -- would be voided, with no tags allowed in the future. The Packers would agree to review Rodgers' situation at the end of this season. Rodgers' contract would be adjusted with no loss of income to give the Packers more cap room now. Mechanisms will be put in place to address Rodgers' issues with the team. Once finalized, the Packers’ agreement to review the situation after the season sets Rodgers up to control his own destiny going forward and determine where the future Hall of Fame quarterback would like to finish his career. Both sides hope to finalize the agreement by the start of training camp, setting the stage for Rodgers’ franchise leading 17th season in Green Bay. Just this weekend, Rodgers and teammate Davante Adams simultaneously posted the same photo of another star duo – Michael Jordan and Scottie Pippen. Social media quickly went into a frenzy, wondering if the post indicated it would be the ‘Last Dance’ for the star duo in Green Bay. Following the news of this compromise, it seems the Bulls breakup is exactly what Rodgers and Adams were referencing. Rodgers’ likely departure from the Packers is sure to send shockwaves throughout the league next offseason as it is not very common in the NFL for a difference-making quarterback to become available. The list of suitors will surely be lengthy, with teams like the Las Vegas Raiders, San Francisco 49ers, New York Giants, New Orleans Saints, New England Patriots, Philadelphia Eagles, Denver Broncos, and Pittsburgh Steelers all potentially getting involved. With fellow star quarterbacks Russell Wilson and Deshaun Watson, legal case pending, also expected to be on the move over the next twelve months, the coming year could be quarterback roulette across the NFL. Rodgers’ reworked deal reaffirms the power of the star athlete today. In many ways, this type of amended agreement is unprecedented in the NFL. Green Bay is essentially voiding the final two years of Rodgers’ contract as an olive branch to ensure Rodgers reports to training camp for one final run with the franchise, with the Packers recognizing the value of an MVP caliber quarterback leading the way for their team. Like Jordan, Pippen, and the rest of the 1998 Chicago Bulls, Rodgers, Adams, and the Green Bay Packers will hope for one last hoorah and a season that culminates with another championship. By: Billy Reinhardt @BillyReinhardt Hofstra Law 2L, Fordham University Alum, Brooklyn Nets Reporter for NetsDaily

  • Just (Don't) Do It - Nike Attempts to Halt Custom Sneakers

    Image from The Undefeated The sneaker game has become bigger than ever, with an approximate value of 79 billion as of May 2021 (https://www.fastcompany.com/90637534/how-sneakers-became-a-79-billion-business-and-an-undisputed-cultural-symbol-for-our-times), and like any large company, Nike wants to keep expanding their piece of the market, which already totals to 31 billion. In a newly filed lawsuit in the Central District of California, “The Swoosh” is attempting to put an end to the many artists who make their livelihood off of buying genuine Nike products and putting their own twist on the shoes. Customizers typically do this through creative methods such as painting, changing around the midsole of shoes (a practice known commonly as “sole swapping”), among other creative methods. In the lawsuit, the behemoth from Beaverton, Oregon alleges that an influx of custom sneakers into the market will create a classic trademark confusion as consumers will not be able to discern what is a genuine product. This isn't the first time in the past year that we have seen a large fashion company attempt to forbid a repurposing of genuine goods, when earlier this year we saw Polo Ralph Lauren attack upcyclers who transformed old Polo apparel into hats. However, this is the first time it could have a major impact on sports. Custom shoes have become commonplace in major sports, especially in Basketball, Football, and Baseball for quite a few years now. A quick image search of “Custom Shoes NBA'' will bring up the bevy of players who don bespoke kicks on the court, including Suns Guard Langston Galloway. The NFL even has a grace week where it allows players to wear whatever crazy cleat designs they want for the benefit of charity under their “My Cause, My Cleats'' program (usually the NFL only allows for customs during warm-ups). (Houston Texans Wide Receiver DeAndre Carter My Cause, My Cleats” in support of the Juvenile Diabetes Research Fund. NFL/Houston Texans) So where does this go from here? If they win, Nike could corner the custom market, and make their athletes play by their rules, and shut out any non-endorsees or anyone who doesn’t want to play by their game. They could destroy a main part of the business of people who rely on their artistic visions to make ends meet - people like Mache Custom Kicks or Kickstradomis who have been paving their own paths for the last decade. A win for Nike would be a loss for creatives everywhere and could trickle to other sectors of sports business such as custom jerseys, and repurposed vintage clothing - which has seen an uptick over the last year. As for the Athletes and Creators, they have been looking at ways to also pave their own, to create their own IP, and to control their own brand. Namely, this includes the aforementioned Galloway who launched his own brand “Ethics” which he debuted during the NBA Finals, and New York Mets Pitcher Marcus Stroman who added to his clothing line “HDMH” (standing for Hype Don’t Measure Heart) with his new cleat line “SHUGO.” which he debuted at the beginning of the 2021 MLB season. On the creator's end, Mache Custom Kicks has been putting out his own designed shoes for the past couple of years on a pre-order basis, so perhaps the bespoke route will be the next wave in order to avoid potential trademark infringement. TOP - Ethics by Langston Galloway (ESPN) MIDDLE - SHUGO. by Marcus Stroman (@_SHUGO on Twitter) BOTTOM - The Mache Runner Centralia by Mache Custom Kicks (https://machecustoms.com/) It will be interesting to watch how Nike’s attempted bust on Custom Sneakers develops over the next few weeks and months. If they get their way it could ultimately lead to more players wanting to create their own way, and more customizers to get on board with them as well. The case is Nike, Inc. v. Customs By Ilene, Inc., 5:21-cv-01201 (C.D.Cal.)

  • Indefensible: Let Women Dress Themselves

    It is no secret that women’s bodies can achieve incredible feats, from childbirth to elite athletic performances. Unfortunately, society is still too focused on what women’s bodies look like, rather than what they cando. Last week, the International Handball Federation fined Norway’s women’s beach handball team for wearing spandex shorts, instead of the required bikini bottoms during their bronze medal match at the European Handball Championships. Required bikini bottoms, you read that right. The International Handball Federation requires women to wear bikini bottoms “with a close fit and cut on an upward angle toward the top of the leg.” The side fabric on the bikini bottoms is limited to four inches. In stark contrast, men can wear shorts as long as they are not too baggy and are no longer than four inches above the knee. Since it is permissible for men to wear shorts, it is clear that shorts do not provide an illegal competitive advantage. Thus, there is no reasonable justification for requiring women athletes to wear bikini bottoms when men do not face similar requirements. Even worse, the International Handball Federation was unable to produce any reasoning for the rule whatsoever. This is unacceptable. While the double standard regarding uniforms is abhorrent, it is important to note that banning bikini bottoms will not solve the problem. Unless there is a competitive advantage, an athlete’s clothing choice is none of any athletic federation’s business. As long as there is no illegal competitive advantage, athletes should be allowed to choose whatever uniform is most comfortable for them to compete in. A woman who prefers bikini bottoms should be allowed to sport them without question, comment, or punishment. A woman who prefers shorts instead of bikini bottoms should equally be allowed to do so without question, comment, or punishment. As women’s sports are featured on the global stage at the Tokyo Olympics over the next few weeks, let’s remember to appreciate what women can do instead of focusing on what they can wear. After all, it is what these women have done that earned them spots in the Olympics, not what they wore. It is time to let women dress themselves. Dani Bland is a 3L at Villanova University Charles Widger School of Law where she is Editor in Chief of the Sports Law Society Blog. She was a 12-time NCAA Track All American at Emory University. For inquiries, email [email protected] or dm on Twitter at @DaniB_315.

  • Federal Antitrust Law Continues to Protect Young Athletes - Even Professionals

    Just a few days before the Alston decision was released by the Supreme Court, another federal antitrust lawsuit handed a victory to a young athlete. Olivia Moultrie is a professional soccer player for the Portland Thorns in the National Women's Soccer League. She plays midfield, and she's very talented-- some say prodigal. She is also only fifteen years old, making her the youngest women's professional soccer player in the United States. However, before June 15, 2021, Moultrie was prohibited from signing a professional deal with any team in the NWSL due to a rule requiring players to be eighteen years old to play. She was, however, practicing and scrimmaging with the Thorns. Moultrie's father challenged the age rule in the United States District Court. The complaint alleges that the NWSL rule violates the Sherman Antitrust Act. Plaintiff (Moultrie) argued that the several teams comprising the NWSL have created a rule that players must be 18 years old to sign a professional contract to play in the league. Accordingly, this violates federal antitrust laws insofar as it is the only women's league that acquires and maintains professional soccer talent. Simply put, the teams colluded to exclude players of a certain age regardless of the player's talent. Without a reasonable alternative, it is unlawful. The complaint further compares similar rules in the men's league, the MLS. Demonstrating that the MLS has no similar rule, and there are a handful of MLS teams that had signed players under 18 years of age. In their motion for a temporary restraining order, which Judge Immergut granted, Plaintiff cites several antitrust cases that they say are strikingly similar and that no other cases oppose their conclusion. On the other hand, Defendant (NWSL), who has appealed the decision, argued that Moultrie was unable to prove "serious irreparable harm." The league also asserts that because there were ongoing negotiations with the NWSL Players Association, the Court would be impermissibly intervening for Moultrie's sole benefit at the expense of the rest of the league's players. Suppose the Player's Association and the League end up entering into a Collective Bargaining Agreement containing the same age rule. In that case, Moultrie could still lose her eligibility to play, notwithstanding Judge Immergut's decision to grant Plaintiff's motion. Meanwhile, Moultrie has already made her NWSL debut in front of tens of thousands of proud fans at Providence Park in Portland, Oregon. If the NWSL wins on appeal it can complicate her future with the club and - perhaps - unwind the historical precedent set by the Thorns. There is no better intersection of sports and law than a good antitrust showdown, and again young athletes are the winners.

  • More Money, More Problems: NIL and Tax Issues That May Arise

    The impending boom in wealth for college athletes benefiting from their name, image, and likeness (NIL) ushers in a newfound excitement for athletes across the country. College athletes like Hercy Miller, who will be an incoming freshman playing basketball at Tennessee State, claims to have a $2 million NIL deal. This should be celebrated as players will reap the benefits universities and conferences have monopolized to themselves. Unfortunately, for every benefit there is a cost. One cost is taxation on these profits. Like most college students, the only time taxes were relevant to me were the times I needed a refund to spend it on “Natty Light.” Beyond that, the terms “income bracket” and “corporate tax” were simply foreign to me. College athletes that benefit from their NIL, will now have to navigate the world of taxes. Depending on the state, some athletes will be obligated to learn the essentials on taxes, others will need to start learning on their own.[1] This is not to say that athletes are better off making $0 than earning an income for their NIL, but there are some additional costs that may factor in. NIL compensation could affect financial aid and Pell Grant eligibility. In addition, the work would be considered independent contract work. The reason this qualifies as independent contract work is since endorsement deals typically do not constitute full-time work but rather specific and “episodic obligations.” However, depending on the state, it has become more difficult for employers to classify their workers as independent contractors. Independent contractors do not see their company withhold income taxes, Social Security, and Medicare; the way employees typically do. Finally, some college programs may benefit depending on the state they live in as state taxes may be more lenient than other states. States like Florida, Nevada, Texas, or Washington may enjoy an advantage due to their tax laws. This would not be seen for a small-scale athlete, but take, for example, Hercy Miller. If Miller were to receive a $100,000 endorsement deal in California, he would owe, $32,820 in taxes, however in Florida, he would only pay $27,600. This may not seem like much, but for college athletes ready to profit on their NIL, every dollar counts. It should be reminded that not every college athlete is treated equally, and while some may go pro, others will need to find a second option for a career. Every dollar counts, but we are just on the cusp of learning the lay of the land when it comes to NIL and taxes. Austin is a Rising third year law student, Washington College of Law, Am. U.; M.S., Finance, Am. U.; B.A., Geo. Wash. Univ. [1] Michael McCann, Texas Joins NIL Fray With College Athlete Pay Law Effective July 1, SPORTICO, https://www.sportico.com/law/analysis/2021/texas-nil-law-1234631994/, Jun. 15, 2021 (last visited Jul. 23, 2021).

  • Hopkins Toeing the Conduct Detrimental Line

    Earlier this week, the NFL implemented a COVID protocol that, effectively, is “forcing” players to become vaccinated. The league sent a memo to the clubs: if a game is cancelled and cannot be rescheduled, due to a COVID outbreak from unvaccinated players, then that team forfeits the game and is credited with a loss. Further, players on both teams will not be paid for that game, and the team responsible for the cancellation is on the hook for the financial losses, and possibly, discipline by Commissioner Goodell. The memo specifically states: “Every club is obligated under the Constitution and Bylaws to have its team ready to play at the scheduled time and place. A failure to do so is deemed conduct detrimental. There is no right to postpone a game. Postponements will only occur if required by government authorities, medical experts, or at the Commissioner's discretion.” (Emphasis added.) As it currently stands, players are not required to be vaccinated, but Tier 1 NFL staff are, which has been causing issues such as those with Minnesota Vikings offensive line coach Rick Dennison and New England Patriots co-offensive line coach Cole Popovich. (Check out the article on this). Players across the league have expressed their disagreement with this protocol and the policy poses a particularly complicated situation for players who are choosing not to get vaccinated. After this memo was released, DeAndre Hopkins, in a since-deleted tweet, stated, “Never thought I would say this, but being out in a position to hurt my team because I don’t want to partake in the vaccine is making me question my future in the @NFL.” Hopkins followed this deleted tweet up with “Btw I got about 9 more years in me, y’all have a good day.” If Hopkins chooses not to be vaccinated, now that this policy that has been implemented, and causes an outbreak within the Cardinals, would he be in violation of the conduct detrimental clause? In this scenario Hopkins’ actions would: cause the Cardinals to forfeit and be given a loss for that game; put the Cardinals at risk of covering financial losses and penalties from the Commissioner; AND cause players on the Cardinals and their opponent’s team to not be paid for that game. Conduct Detrimental is a broad clause that gives power to the clubs and the NFL to protect the reputation of the league and those in it. Everyone who is a part of the National Football League (“NFL”) must refrain from “conduct detrimental to the integrity of and public confidence in” the NFL. There have been a number of NFL players in the past that have been penalized for conduct detrimental. According to the NFL collective bargaining agreement, the maximum fine for any conduct detrimental to the club is “an amount equal to one week’s salary and/or suspension without pay for a period not to exceed four (4) weeks.” Terrell Owens (“T.O.”) was suspended for the 2005 season by the Philadelphia Eagles for conduct detrimental to the team and was penalized $191,176 per game for the games he was suspended. The Eagles then “deactivated” T.O. for the rest of the season, ultimately releasing him at the end of the year. T.O. was in his second year of a seven year contract and was supposed to be the final piece for a Super Bowl contending team. In 2004, after three straight NFC Championship losses, the Eagles won the NFC Championship behind a great season for T.O. but lost in the Super Bowl to the New England Patriots. T.O. would never play for the Eagles again after an arbitrator upheld the suspension because T.O.’s conduct was a “destructive and continuing threat” to the team. The Eagles wouldn’t make a Super Bowl run until the 2017 season. If Hopkins causes the Cardinals to forfeit a game, along with his teammates’ and opponents’ salaries, then he could be penalized for conduct detrimental to the club. Hopkins’ choice to not become vaccinated leaves open the possibility for a team COVID outbreak. Thus, his actions could also be deemed a “destructive and continuing threat” to the Cardinals organization. Based on Hopkins’ current contract, he could be penalized $3,055,556, approximately $763,889 per game, under the maximum four game suspension. Hopkins is in the first year of his two-year contract extension signed last year and is a key player for the Cardinals. It is yet to be seen how this protocol and the decision of players not to get vaccinated will play out on the field, in locker rooms or on the sidelines, but in the case of Hopkins, a resulting COVID outbreak has steep monetary and career-impacting implications. Unfortunately, only time and experience will tell as to how this kind of scenario will play out and COVID-19 continues to spur unprecedented change in the NFL. Mike Lawson is an Associate for O'Connell and Aronowitz in Albany, NY He is the Producer of the Conduct Detrimental Podcast and can be reached on Twitter @Mike_sonof_Law

  • Should I Stay or Should I Go?

    Should I stay or should I go seems to be a question on many players’ and coaches’ minds across the NFL. According to @TomPelissero earlier this week, the NFL informed the clubs that if a game could not be rescheduled during the 2021 season due to a COVID outbreak among unvaccinated players, the team with the outbreak would forfeit the game and be credited with a loss. This news resulted in a rollercoaster of reactions across the league, from Deandre Hopkins questioning his future with the league, to Jerry Hughes publicly defending the vaccine and the scientists who created it. While the reaction from the players across the league was fiery, the action taken by coaches deserves attention as well. As a reminder, the players are not required to receive the vaccine, but the league has made it clear that the decision to remain unvaccinated could lead to massive consequences for an entire team. However, Tier 1 staff, which includes coaches, front-office executives, equipment managers, and scouts, are required to receive the vaccine. If a Tier 1 staff member refuses the vaccine, absent a valid religious or medical reason, he/she loses their Tier 1 status and cannot be on the field, in meeting rooms, or have any interaction with players. Surely an employment condition like that will not result in any newsworthy content, right? In the afternoon of July 23rd, 2021, Rick Dennison, OL coach and run game coordinator for the Minnesota Vikings reportedly left the team after refusing the COVID-19 vaccine, per @CourtneyRCronin. When faced with the question of whether he should stay by receiving the vaccine and maintaining tier 1 status, or go, and lose his job altogether, Dennison chose the latter. Before there was clarity that Dennison chose to leave the team as opposed to being fired, many asked the question of whether it would be illegal if he was indeed let go by the Minnesota Vikings for his refusal to receive the vaccine. The short answer is no. Minnesota, like the majority of the United States, is an at-will employment state. At-will employment is an employer’s ability to fire an employee without reason or warning, except for reasons such as an employee’s race, religion, sex, national origin, age, or disability. The policy reasons for at-will employment are that if an employee is free to resign from a job without reason or warning, then an employer deserves the same right. Here, Dennison chose to leave the Minnesota Vikings, as he refused to get the COVID-19 vaccine, which is his right. If it was the other way around, and the Minnesota Vikings fired Dennison for his decision, it would be their right as well.

  • To Leave or Not: The Watson Decision

    Deshaun Watson, Houston Texans quarterback, has been accused of sexual misconduct by several massage therapists. The investigation continues with no new answers or timeline in the lawsuit he is facing. Watson is facing 22 active civil lawsuits, each filed by women who accuse Watson of sexual assault and harassment. According to Jeremy Fowler of ESPN, Watson has not engaged in any discussions about settling with the women who are party to the lawsuit. Furthermore, he isn’t scheduled to give his deposition until February 2022, after Super Bowl LVI. While the legal battle seems to be far from over, and with training camp right around the corner, the NFL may be forced into making a decision about Watson’s playing status for the 2021-2022 NFL Season. The NFL has two choices, either the NFL allows Watson to play, or he is placed on paid leave pursuant to the Commissioner’s Exempt List. As NFL.com points out, the NFL Commissioner’s Exempt List is a “special player status available to clubs only in unusual circumstances” including those players “who have been declared by the Commissioner to be temporarily exempt from counting within the Active List limit. Only the Commissioner has the authority to place a player on the Exempt List; clubs have no such authority, and no exemption, regardless of circumstances, is automatic.” In other words, Commissioner Roger Goodell has broad authority and discretion in matters of this nature. However, when deciding if a player should be on the exempt list, the “Leave with Pay” section of the NFL’s Personal Conduct Policy comes into play: “A player may be placed on paid administrative leave pursuant to the Commissioner Exempt List under either of the following circumstances: First, when a player is formally charged with: (1) a felony offense; or (2) a crime of violence, meaning that he is accused of having used physical force or a weapon to injure or threaten a person or animal, of having engaged in a sexual assault by force or against a person who was incapable of giving consent, or having engaged in other conduct that poses a genuine danger to the safety or well-being of another person. The formal charges may be in the form of an indictment by a grand jury, the filing of charges by a prosecutor, or an arraignment in a criminal court. “Second, when an investigation leads the Commissioner to believe that a player may have violated this Policy by committing any of the conduct identified above, he may act where the circumstances and evidence warrant doing so. This decision will not reflect a finding of guilt or innocence and will not be guided by the same legal standards and considerations that would apply in a criminal trial. “Third, in cases in which a violation relating to a crime of violence is alleged but further investigation is required, the Commissioner may place a player on the Commissioner Exempt List on a limited and temporary basis to permit the league to conduct a preliminary investigation. Based on the results of this investigation, the player may be returned to duty, be placed on the Commissioner Exempt List for a longer period or be subject to discipline.” The first paragraph of this section is irrelevant unless Watson is formally charged with criminal charges. While a criminal investigation has been launched for Deshaun Watson, no formal decision about charges has been made. The second paragraph becomes vital to Watson and his playing status. If the outcome of the investigation causes Goodell “to believe that [Watson] may have violated” the Personal Conduct Policy by engaging in any one of the acts described in the first paragraph, Goodell is permitted to place Watson on paid leave. In other words, Watson would be paid his salary, but is not counted as a member of the active roster and cannot practice or play in games. The third paragraph applies when there are accusations but there is no opportunity for the NFL to investigate those accusations before the player takes the field. Throughout the NFL’s history, a number of players have been placed on the NFL’s exempt list. Most notably, Michael Vick was on the list from August 24, 2007, to July 27, 2009, after his dog-fighting incident. Ben Roethlisberger was also on the exempt list for the first six games of the 2010 NFL season because of a sexual assault allegation. Overall, the policy of putting a player on the Commissioner’s exempt list gives Goodell broad discretion. Unless Watson settles the 22 lawsuits, the decision as to his playing status looms large over the Houston Texans, the NFL, and ultimately, Deshaun Watson. And even if Watson settles the cases, the NFL might still take him off the field. He does not control his own destiny at this point. Jordan Inver is a 2L at Villanova Law and can be contacted at [email protected]

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