Yesterday, the New York Rangers announced that they agreed to terms with 2-time Stanley Cup champion Barclay Goodrow on a six-year contract. Goodrow is a pesky, versatile 28-year-old winger who can also hold his own in the faceoff dot. Ian Pulver, Goodrow’s agent, reported that the deal holds a total value of $21.85 million over the aforementioned six years. The average annual value (AAV) of the deal will therefore come in at $3.642 million. The AAV of a player’s deal is often very different from the actual dollars the player takes home each year. Below, you will find a layout of Goodrow’s contract structure, provided by the good folks at Puck Pedia [records]. The highlighted rows above are “Cap Hit” and “Total Salary.” Total salary is a player’s gross annual income, and consists of base salary and signing/performance bonuses. Goodrow’s cap hit and AAV have the same, fixed value: $3,641,667. Yet, Goodrow’s base salary varies, starting at $750,000[1] this coming season and reaching a peak of $5,100,000 by the 2023-2024 season. The maximum salary cap allowed of all players counting towards an active roster, or the “salary cap ceiling,” is currently $81,500,000. Goodrow’s contract will carry a cap hit of $3,641,667 (his AAV) towards that figure. That is why fans tend to care more about cap hit than total salary. Once the monetary value and term (length) of a contract are agreed upon, players and corresponding front offices can’t adjust the cap hit and AAV. Those figures are automatically calculated; a simple math equation (total dollars/years) even for a law student like me. Total salary simply represents how much money a franchise owner will pay a player in a given year; it has no effect on salary cap. In the past, teams often tried to “front-load"[2] a contract to minimize long-term risk and entice players to sign. As in most sports, players tend to decline with age, so teams looked for ways to diminish risk with time. For example, in 2010, the New Jersey Devils signed then superstar winger Ilya Kovalchuk to a 17-year, $102 million deal. Over the final five years of the deal, Kovalchuk’s base salary was set to just $550,000. The AAV was $6 million! The NHL Commissioner’s Office was not at all fond of what it labeled “cap circumvention,” and thus revoked the contract while issuing penalties and fines. NHL franchises with historically low budgets often look to acquire players with modest base salaries owed. Under that principle, a franchise without liquidity concerns would typically be happy to front-load a player’s total salary. Therefore, if that franchise looked to move on from the player in the latter years of the deal, they would undoubtedly have an easier time finding trade partners. The backend years would come with a lower base salary owed for the acquiring team’s owner to have to shell out, even though the cap hit and AAV remain constant. Franchises with real-dollars budgets find value in contracts that carry a larger cap hit than actual dollars owed. The NHL has implemented rules under the current collective bargaining agreement, adding structure to this space. The leading guideline mandates that “[f]ront-loaded contracts in any ‘immediately adjacent years’ can’t exceed 25% variance with the first year of that contract, and any year of the contract can't exceed 60% variance from the highest year of the deal.” With that established, let’s revisit the newest member of the New York Rangers. Goodrow was acquired from the almighty, yet cap-suffocated, Tampa Bay Lightning last week. While it may have made sense to front-load this deal in the past, PuckPedia points out that escrow rates likely led the parties to do the opposite. In the new CBA, years 3-5 of a contract carry the lowest escrow rate (6%), while the first year carries the highest rate (17.5-18%). The most lucrative chunk of Goodrow’s base salary deliberately falls in years 3-5 of the term: 2023-2026. P.S. For those claiming this is an overpay, please see the chart below from Shayna Goldman of The Athletic. The term admittedly raises an eyebrow, though. [1] The 2021-2022 base figure is intentionally low to avoid the NHL’s high first-year escrow rate. Goodrow is set to pocket $1.75 million upon signing along the dotted line as a bonus, in an effort to sidestep the rate. [2] A contract is considered front-loaded if the majority of a player’s base salary is paid in the first half of the contract’s life.

It is well-known and well-contemplated how the new Name, Image and Likeness laws and regulations will affect the wide world of sports. One effect that may be felt within the coming years is a stifled outlook for the NBA G-League, the developmental league for the National Basketball Association (NBA). The NBA G-League In 2019, the NBA had announced that the G-League would be offering “Select Contracts” of $125,000 to high school graduate athletes they considered to be elite. They would later increase this amount to make themselves a more attractive option. This would offer a new path for high-level high school prospects to develop themselves and get ready for the NBA Draft. The most prominent example was number one overall high school prospect Jalen Green, who signed with the G-League Ignite for $500,000 in 2020 instead of taking the college route. This aspect of the G-League set itself apart from the NCAA by giving elite basketball prospects the opportunity to make money right away. No tired regulations or risks of losing eligibility for endorsement deals, either, as they were allowed to enter into them immediately. It has proven to be an attractive option for some of the nation’s biggest high school basketball stars, but will its advantageous luster fade with the ushering in of the new NIL era? The G-League’s New Top Competitor Though entering into the G-League had its various advantages over the collegiate route, they also had distinct disadvantages. For instance, the only athletes who were initially considered had to be classified as “elite.” This drastically narrows the pool of talent the G League can pick from. Perhaps the NCAA’s biggest advantage lies within media exposure, where the G League pales in comparison. With the opening up of endorsement opportunities, this advantage becomes more apparent than ever. So, how will the G-League separate itself heading into this new era? There has already been a large investment into the advancement of the developmental league. Aside from the large playing contracts, there were promises of paying scholarships, establishing developmental academies, and much more. The G League has spent millions on recruiting these elite athletes and could be losing out on this investment as the NIL era immediately positions the NCAA as the G-League’s top competitor. What’s Next? Luckily, all is not lost for the NBA G-League. It doesn’t look as though the league needs to completely reposition itself. It still has enough power in its current positioning to obtain some of the game’s best talent. Its offerings of financial literacy and life skills training paired with elite basketball development are still miles ahead of many collegiate basketball programs. Being able to play against professional-level athletes is a major advantage, as is the guarantee of playing alongside other top recruits from your class. I believe the G League is primed to make aggressive moves in the near future to compete with the NCAA even more effectively. Few know exactly what these moves will look like. I can speculate, however, that the G League may try to “retool and readjust” itself in multiple ways. Whereas the NCAA promises a new era of NIL, the G League would be wise to frame itself as the “reliable option.” For instance, many states are passing restrictive Name, Image and Likeness laws for college athletes with no active enforcement mechanisms. At the moment, these laws, and the punishments for violating them, remain uncertain. The developments in this could be volatile. The G League provides a virtually restriction-free endorsement market for its athletes, who are not subject to these statutes at the professional level. Additionally, as the NCAA provides history and development, the G-League can point out how history may be moving away from the sport of college basketball. Times are changing and the G-League plans to change with them. The G-League also has endless resources at their disposal to make aggressive pushes towards legendary coaches, scouts, and other development facilitators to separate itself further from the NCAA. Though the Name, Image and Likeness era may seem to be a major roadblock for the G-League, it actually gives it a chance to emphasize its numerous advantages over the NCAA. It also provides a chance for the league to become even more aggressive and push itself further ahead. I, for one, am extremely excited to see what lies ahead. Britton Yoder is a rising 1L at Penn State Dickinson Law For inquiries, email [email protected]

Hats off to the Syracuse Orange Men’s Lacrosse Team. There has been a large “believe women” movement for quite some time, and very rarely, if ever, have we seen a team actually take a stance regardless of if they have any stake in the controversy. But like all else, there’s a first time for everything and certainly I hope this becomes far more widespread, throughout colleges, professional sports, and everywhere else. Elite Syracuse lacrosse player, Chase Scanlan, was arrested and booked on a misdemeanor domestic violence charge back on May 7th stemming from an incident taking place back on April 17th at a South Campus apartment. The Onondaga County District Attorney said that Scanlan is accused of engaging in a physical altercation with a woman and destroying her phone. As destroying a phone is a fourth-degree criminal mischief charge, Scanlan was essentially permitted to be released without bail because criminal mischief is not a crime that bail could be set for. Furthermore, based on the nature of the offense, destroying a phone, Scanlan could not be charged with assault under state law. In New York, assault requires proof of injury stemming from the altercation. While New York’s laws on the matter are a tad “skimpy,” the team took matters into its own hands to punish Scanlan for these deplorable actions. Under New York Law, a person is guilty of assault in the third degree when 1) with intent to cause physical harm, the actor causes such injury to another or third party; 2) the actor recklessly causes physical injury to another person; or 3) with criminal negligence, the actor causes physical injury to another person by means of a deadly weapon or otherwise a dangerous instrument. Two days after the incident took place, Scanlan was suspended indefinitely from the team. While Coach Desko, head coach of the Orange, has since reinstated Scanlan, the Orange’s captains gave an ultimatum that players would walk out on April 27th if Scanlan returned and practiced with the team following his reinstatement. To that end, Scanlan spent time practicing, but not with the team. Since being reinstated, Scanlan has not played in any games for the Orange, nor has he appeared on any game logs. While Scanlan maintains that it was “nothing that became something,” credit must be given to the team. No matter what, violence towards women, in any capacity, is absolutely unacceptable, and for the captains to hold firm in their position is commendable. As ally ship is becoming more important than ever, this is a perfect example of zero tolerance for abuse and using one’s position to hold friends, teammates, and members of the community accountable. This action has garnered attention from Vera House, a Syracuse-based shelter for survivors of domestic violence. Vera House has commended the captains for taking a clear and definitive stand against domestic violence. Scanlan’s last game he played was April 17th against the Tar Heels, though their season ended May 15th. To that end, Scanlan’s high school coach suggested that Scanlan explore his options and transfer. One can certainly hope that regardless of if Scanlan stays with the Orange, he has learned the lesson that violence towards women will not be tolerated whatsoever, and to the team… hats off to you! That’s how you stand up for those with a quieter voice; that’s being a *true* team player. Certainly, I hope to see this trend continue in any and every team, league, and sport regardless of level.

There are few things that scare NHL fans more than not making the playoffs. There is the trade deadline, free agency, offseason trading and expansion drafts. All of these come with the possibility of a fan’s favorite player being traded to another organization. However, some trades are made with the player’s best interests in mind and can benefit the player in the long run. In recent weeks trade rumors have been surrounding the expansion draft for the NHL's 32nd team the Seattle Kraken but also the fate of Jack Eichel. Eichel is the current captain of the Buffalo Sabres and was drafted by the organization in 2016. He is the face of the Sabres and the organization’s highest-paid player. Eichel signed an 8 year / $80,000,000 contract with the Sabres. With five years left on his contract, Eichel may be looking to part with the Sabres after the handling of his neck injury. Eichel has not outright said he wants to be traded. However, teams like the Ducks, Flames, Wild, Golden Knights, Bruins, and Rangers are looking to acquire Eichel if he is traded On March 7, 2021, in a game against the New York Islanders, Eichel took a hit in the game that would ultimately end his season. Following the hit, Eichel was examined by team doctors and diagnosed with a herniated disc. While the injury ended his season, how to treat the injury is causing the most trouble. The Sabres organization is recommending a 12-week rehab, but Eichel is requesting surgery after seeking a second opinion. The surgery that he is requesting is a cervical disk replacement surgery, which has never been performed on an NHL player. Recovery time for this surgery is an average of 4 to 6 weeks. Eichel and general manager Kevyn Adams are at ends with each other despite trying to find common ground. However, a trade deal and the Collective Bargaining Agreement (CBA) may be on Eichel’s ticket to getting the surgery. The new CBA was approved in July of 2020 and is in effect until 2026. The CBA is a legal contract between the NHLPA and the NHL that sets out the terms and conditions of employment for all professional hockey players playing in the NHL, as well as the rights of the NHL Clubs, the NHL, and the NHLPA. Sections 32 to 50 lays out the Medical – Legal Issues of the agreement. Section 34 Second Medical Opinion List – Selection and Removal is applicable in Eichel’s situation. Attachment C of Section 34 says; “A Player may seek a second medical opinion regarding a diagnosis made by a team physician or a course of treatment (including the timing thereof) prescribed by a team physician ("Second Medical Opinion") from a list of medical specialists with outstanding reputations and experience in their area of expertise...”.[1] This allows Eichel to seek a second opinion after receiving a diagnosis or treatment from the Sabres’ medical team. Eichel was in his legal right to seek a second opinion after not agreeing with the team doctor’s recommendation for treatment. Potential teams looking to acquire Eichel may permit him to get the surgery that he wants. But it doesn’t seem likely that the Sabres will relent easily. The team is looking for young players and that could require teams to give up prospects and high-level draft picks to get Eichel. The complicated part of this is that the Sabres could limit teams’ access to Eichel’s medical records unless the trade is serious. If access to medical record is limited, teams may walk instead of going through the hassle. In the coming hours, days, and weeks, it will be interesting to see whether Eichel stays in Buffalo or is sent elsewhere. Either way, this will create fascinating NHL precedent moving forward. A trade could happen any second – stay tuned. [1]Collective Bargaining Agreement, The PA | NHLPA.com, www.nhlpa.com/the-pa/cba.

Recruiting has never truly been a “leveled” playing field from year to year, but why should we sit back and allow the lack of legislation to make it worse? "American Top Team," a company owned by Dan Lambert, an avid Miami Hurricane fan, is offering $600 a month to every Hurricane football player for endorsing his company through their respective social media platforms. If all 90 Miami players sign the deal, it would be worth over $540,000.[1] Right now, the current state of college athletics might look a little more like the wild west than anything else. While legislation has indeed allowed players in many states to benefit from their name, image, and likeness, there are not firm and universal legislation or rules on how to regulate such deals in a manner that maintains a "level" playing field for recruiting.[2] The Miami deal is a byproduct of that legislative gap. Simply put, these team-wide deals create a clear discrepancy in recruiting capability. Unlike individual endorsement deals which cannot be guaranteed up front as universally present for all players that attend a certain university, flat team-wide deals like this allow coaching staffs to use such a benefit as a part of their recruitment pitch. Miami’s deal fits the bill as a recruiting advantage and has led some coaches and administrators to question its place among the new NIL world. One such administrator is the athletic director for Baylor University and Sports Business Journal AD of the year (2021), Mack Rhoades. On Sic Em' 365 Radio, Mack expressed his concern over Miami's deal by stating that “when it’s [NIL deals] across the board. . .then it just feels a little different."[3] I agree. I think that NIL is going to outgrow itself in potentially unhealthy ways before it eventually corrects itself. This deal provides an example in the first month of NIL legislation for overgrowth. If this style of endorsements becomes widespread, the handful of universities that are benefiting from it will have a unique advantage, especially for recruits that are on the fence. Let's be clear... legally speaking, Miami has done nothing wrong. I think most will agree with that. However, this is one of those circumstances where legislation or regulation needs to impose itself to reel in one of the major concerns associated with NIL from the beginning – recruiting advantages. There is no need to punish Miami or the players that plan on benefiting from the current deal because they have not broken the rules. Nevertheless, we should use this as opportunity to redirect the endorsement ship as it pertains to team-wide financial gains going forward. Let the players obtain their own individual NIL deals, but do not allow team-wide deals to create what is essentially a guaranteed salary for all players because this in turn creates an unfair recruiting advantage. If these monthly fees begin to stack on one another, we could be looking at a canyon-wide split in what a player could make as a baseline, and that will in turn contribute to the death of “leveled” recruiting. [1] (https://www.palmbeachpost.com/story/sports/college/2021/07/09/miami-hurricane-players-offered-nil-deal-head-american-top-team/7919591002/) [2] https://www.natlawreview.com/article/college-athletes-now-allowed-to-earn-money-use-their-name-image-and-likeness [3] (https://youtu.be/majxivPx2GU) at 10:31

According to Brent Zerneman of the Houston Chronicle, Texas and Oklahoma, two of college football’s blue bloods, have inquired about a potential move from the Big 12 to the Southeastern Conference. There is no debate that the SEC is the King of College Football. Playing football in the SEC is an absolute cash cow for any athletic department that is lucky enough to spend their Saturdays Down South. Under the conference’s revenue share agreement, each SEC school received $45.5 million last year, whereas, each of the Big 12’s schools only received $34.5 million. In a post-pandemic landscape where athletic departments are scratching and clawing for the extra penny, that $11 million difference could do wonders for any institution (even Texas and their $187 million annual budget). While the college football world is excited about seeing a renewed Texas vs Texas A&M rivalry every year, there are a lot of legal issues that must be dealt with first. For one, both schools will struggle to reach the requisite votes needed to be added as a member of the conference. Additionally, the Big 12 will fight in court to recoup previous distributions to the schools under the conference’s grant of rights agreement and prevent the institutions from joining its rival. Need The Votes The SEC Constitution lays out how the conference members may choose to add another member institution. Under Article 3.1.1, membership to the SEC may only be granted through a vote of at least three-fourths of the conference’s members. Since there are 14 teams in the SEC, a new institution would need the consent of 11 institutions before joining the conference. One thing is definite, Texas can not count on rival Texas A&M’s vote to join. In a statement to ESPN, Aggie athletic director Ross Bjork said that his athletic department wants to be “the only SEC program in the state of Texas.” The Aggie athletic department recently dethroned their Longhorn neighbors as the most profitable athletic department in the country, mostly thanks to its membership in the SEC. Allowing another Texas institution into the conference would affect their ability to recruit, and ultimately, their bottom line. Other institutions with strong bases in Texas like Arkansas, LSU, Mizzou, and even Alabama might not want to see the Longhorn machine mess up their current state of affairs. If Texas does not make it past the vote, it is unlikely Oklahoma will jump ship on its arch-rival. Big (12) Litigation Oklahoma and Texas bolting would be disastrous for the Big 12. The athletic departments are the machines that keep the lights on at Big 12 HQ. As such, the Big 12 requires each of its institutions to sign a Grant of Rights Agreement. The terms of the agreement can be found in Section 3 of the Big 12 bylaws. Big 12 members are committed to remaining a member of the conference for 99 years. If a member voluntarily chooses to withdraw from the conference, the withdrawing member must pay the conference a buyout fee that equals the sum of that institution’s distribution for the previous two seasons. Based on Big 12 revenue distributions for the past two years, it is believed that Oklahoma and Texas would each have to pay the conference $72.2 million in their respective buyout fees. On top of that, any member wishing to leave the Big 12 would also need to pay for the amount of “all actual loss, damage, costs, or expenses” related to the member’s withdrawal. In the end, each school might have to pay over $100 million to leave the Big 12. Other Legal Implications Outside the contractual obligations of SEC and Big 12 institutions, there are myriad other legal issues related to Oklahoma and Texas coming to the SEC. As stated before, the SEC is the King of College Football, and two blue bloods migrating over will only increase their dominance. Tulane Sports Law Professor Gabe Feldman noted the potential implications of the move could lead to the potential determination that the conference has market power and, thus, any of their conference level agreements could pose antitrust issues. While the move to the SEC may seem like a great idea for these programs, their athletes in the age of NIL, and the college football fans around the country, Oklahoma and Texas have some legal hurdles to jump through before the Red Rivalry Rivalry happens on a Saturday Down South.

Well folks, we made it. We have finally reached the NIL era, and boy is it sweet. As of July 1st, college athletes have the green light to make money off of activities relating to their names, images, and likenesses and, much to the NCAA’s surprise, the sky remains blue and above our heads. While the decision affects all college sports across all three divisions, only one sport receives this news with the backdrop of a season marked by traditional powers failing to make the postseason and losing Mount Rushmore-level coaches. That’s right y’all – it’s July and we’re talking college hoops. The basketball season as a whole was already expected to look different this past year given COVID-19 protocols. What few people expected, though, was the collective fall of teams that are accustomed to dominating and rise of new contenders. For the first time since 1976, neither of basketball’s perennial powerhouses and essential one-and-done factories – Duke and Kentucky – participated in the NCAA tournament. Two other blue-blood programs at least made the March Madness field but suffered disappointing exits. North Carolina was on the wrong side of a blowout in the first round and Kansas betrayed their Final Four aspirations in a second-round loss to USC. For Hall of Fame coaches Roy Williams and Mike Krzyzewski, this season served as a swan song (Williams retired this year, Coach K will after next season). This, paired with the rise of programs like Villanova, Gonzaga, and Baylor in recent years, could be evidence that parity in basketball is approaching an all-time high. Just a few short months after the historic 2020-2021 season ended with Baylor’s dominant win over Gonzaga in the national championship game, the United States Supreme Court’s opinion in the Alston case sent shock waves through the sports world and helped usher in the NIL era. But did it also save the big-name programs from a potential recruiting purgatory? The effect of new NIL rules remains an unknown, but that leaves plenty of room for speculation. Consider this: it’s a Friday night during conference season and you check the headliners for an ESPN double-header. Is there any chance that at least one of the matchups doesn’t feature a traditional power? Not likely. The brand names tend to get those primetime spots and, for the networks carrying the games, they almost always deliver. According to sportsmediawatch.com, this year’s Duke-UNC game posted the event’s lowest TV rating in 14 years. Even so, it was the fourth most watched game of the regular season. Despite the fact that these teams are suffering, their brands draw eyes to the television. As athletes look to financially capitalize on their names via sponsorships and merchandise, the promise of additional TV-time can be another valuable advantage for the brand names to hold over the little guys when recruiting and, with many of these programs reeling from disappointing seasons and recruiting cycles, it comes at just the right time. Look also for a resolution in House, another NIL case out of California still in its early stages. The case involves a class of current and former college athletes, led by Arizona State swimmer Grant House and Oregon hooper Sedona Prince, requesting rights to a cut of the TV revenue generated by their games and meets. They claim that, had the NIL rules been applied back then and going forward, the athletes would be getting some of that TV money. If the decision in House looks anything like the one in Alston it could expand athletes’ potential NIL earnings to include a share of the money earned by their televised performances. For reference, the NCAA Tournament alone fetched almost $2 billion in TV revenue in 2019. Getting a crack at that pot o’ gold is a dream for players and could lead to basketball’s brightest stars flocking back to the teams that see the most TV time. Even if the athletes don’t get their hands on that money, though, the exposure alone may be enough. Although nothing is certain, keep your eyes peeled. Those familiar teams that are down on their luck are in prime position for a huge rebound.

One issue that has not been greatly addressed with respect to student-athletes being able to monetize on their rights of publicity (i.e., name, image, and likeness – NIL) is how will universities and colleges monitor the use of their intellectual property (IP). Universities are very protective of their trademarks, copyrights, and any IP that is associated with the university. Time and time again, these institutions have asserted their rights against any number and type of organization or individual who attempts to use some aspect of a university’s IP, or something too similar, in a commercial manner. This could include logos, colors, names, mascots, likeness, or other that would be copyrighted or trademarked by the university or would readily associate with a university. For example, universities have gone after high schools for copying their logos or having too similar of a logo, have gone after apparel companies for using their trademarks and/or copyrights without permission, gone after breweries/distilleries for using a university’s likeness, and so on. With athletes now able to monetize their NIL, something to watch is how the athletes associate themselves with their universities, and how much leeway the universities will give the athletes. It is a given that at least some of the value of an athlete’s NIL is directly associated with his or her university. Fan bases, alumni, and even rivals know that athletes have short terms with a school, and thus, tend to root for or against a school as much as the athletes themselves. While it is true that some athletes may have greater popularity than the schools themselves, these are likely rare. Therefore, it will be beneficial to the athletes to be able to market themselves as an extension of the school itself, which may require use of colors, logos, names, or other IP of the school. The rulings of the Supreme Court and legislative acts to not allow for unmitigated use of a school’s IP for an athlete. Thus, it is likely that any attempt by an athlete to use an aspect of a school’s IP in a commercial manner will fun afoul of the university’s policies, and the university or other institution may need to make a determination whether to act against its own athlete and require them to stop use of the unlicensed IP, or to potentially take action and sue the athlete and any entity compensating the same as part of their use of their NIL. It will be a bit of a catch-22 for the universities – enforce their IP rights and risk athletes choosing to go elsewhere, or allow the unlicensed use of the IP, which could open the door to the weakening of the IP rights and inability to prevent others from using their IP. An easy solution will be education and working together between the universities and athletes. Bringing potential opportunities to the universities will allow them to evaluate the potential use of the university’s IP, and may even allow the university to license use to both the athlete and third-party working with the athlete, which can provide another revenue stream for universities. Take the following example, QB1 gets an opportunity to make money by selling t-shirts with their nickname. The t-shirts will include reference to QB1’s school in the use of the color schemes and helmets with logo. The school could license the use of the color/logo to QB1 and the apparel company, and all three could obtain a cut of any money made by sale of the shirts. Without the logo, the school would likely be able to stop any and all sales for violations of their trademark and/or copyright rights. While it is great that athletes are able to start making money on their rights of publicity, the universities will still be able to have at least some control on how they are presented. However it pans out, it is going to be a busy time to be in compliance and IP law associated with universities. UPDATE: On July 20, 2021, the University of North Carolina Tarheels announced a voluntary, Group Licensing Program for its current student athletes. The Program is intended to allow the athletes to “benefit from their NIL in conjunction with UNC's official trademarks and logos.” However, the athletes are not obligated to join this program, and are still able to negotiate their own licensing opportunities outside of the program.

The historical rarity of Shohei Ohtani’s game has taken the baseball world by storm. Ohtani’s novelty—a player who provides superstar value on the mound and at the plate — has only one historical model: Babe Ruth. Even that is imperfect; Ruth’s hitting didn’t flourish until he abandoned pitching. Truly there is no precedent for Ohtani making the 2020 All-Star Game as both a hitter and a pitcher. Ohtani is shattering records on the field and will likely do so off it as well: unprecedented play deserves unprecedented compensation. At the moment, Ohtani is under contract only for 2021 and 2022. Technically, the Angels possess his rights through 2023, meaning if no extension can be reached, the two sides would head to arbitration, where a third-party judge would decide Ohtani’s 2023 salary. That figure would likely almost double the standing record. Arbitration The arbitration process was introduced to baseball as a way of staying demands from the Major League Baseball Players’ Association (MLBPA) for free agency. Though free agency was eventually enacted in 1977, arbitration remains part of the Major League Baseball landscape. Today, a player is eligible for arbitration after accruing 3 years of major league service time. In the fourth through sixth years, if no contract is agreed upon, the arbitration process begins. Both sides submit a figure and plead their case to a third party, who selects one of the figures as the player’s new salary. Shohei’s Case There are no set rules or limits to what is argued in arbitration. However, the most common topics tend to be the following: Player’s performance in their “Platform Year,” the year immediately prior to the arbitration. Player’s performance in the two years preceding the Platform Year, or PY-1 and PY-2. Recent salaries of players of similar position and production value. Contribution to team success. Individual Accolades. The current mark for the highest salary in the third year of a player’s arbitration is $27 million to Mookie Betts, then of the Boston Red Sox, in 2020. We believe each of the above factors favor Shohei Ohtani soaring past Betts’s award. Shohei’s PY-2 year, was affected both by an injury (which kept him off the mound) and the COVID-19 pandemic. But his performance this year, “PY-1”, clearly demonstrates a sky-high ceiling for Ohtani: one of the MLB’s ten best hitters and ten best pitchers. His platform year performance is unknown for now; we’ll cautiously assume it to be similar to, if slightly less than, this year’s. As for comparing him to players of similar production, one would have to believe he is in a class of his own. His value to the Angels lies in both his superb play on the field and his immense star power: He accounted for over 28% of All-Star merchandise revenue and has obvious marketing potential not just to American baseball fans but fans in Japan, the second biggest baseball market in the world. Metrics love Ohtani, and yet sell his performance short. His Wins Above Replacement are currently first in baseball. But because is a starting pitcher who produces at the plate on his off days, he effectively serves as two different players while taking only one roster spot, effectively creating a free roster spot for his club. An agent arguing for Ohtani in 2023 could state: Hits at an MVP caliber level, similar to Betts in 2020, when he got a $27 million award. Pitches at a borderline Cy young level, similar to David Price in 2012 who got $19.75 million after a Cy Young campaign. Creates a free roster spot for his team, an asset arguably worth millions on its own. Is one of the most marketable stars in the game both in this country and in his native Japan. Will Ohtani Even Make it? Given the unique nature of the player, it seems unlikely the Angels will allow the process to get to arbitration. But if they did, what would a fair offer be? His hitting alone would seem likely to be worth north of $30 million given Betts award in 2020 and the inclination of arbitration award to increase. Similarly, his pitching should be worth at least $20 million. Counterweighting his less impressive PY-2, yet giving some value to his free roster spot and marketability, $50 million seems like a reasonable place to start. we’d expect the Angels to submit a number just north of that. The real question is the value of that roster spot, and his marketing value. While those specific values are worthy of deep analysis on their own, it’s our position that $50 million— slightly less than double the current record – could be reasonable compensation. Britton Yoder and Samuel Roos are rising 1L students at Penn State Dickinson Law. Inquiries can be sent to [email protected] and [email protected]

After a frustrating first round of The Open last week, Bryson DeChambeau had some negative remarks towards his equipment, in particular his driver. In a post-round interview, DeChambeau said, “If I can hit it down the middle of the fairway, that’s great, but with the driver right now, the driver sucks. It’s not a good face for me, and we’re still trying to figure out how to make it good on the mis-hits.” He went on to say, “It’s literally the physics and the way that they build heads now. It’s not the right design, unfortunately, and we’ve been trying to fix it…” This understandably did not sit well with the people at Cobra Golf, who sponsor DeChambeau and manufacture his drivers. Ben Schomin, Cobra’s tour operations manager and a recent caddy for DeChambeau, told Golfweek, “Everybody is bending over backwards [for DeChambeau]. We’ve got multiple guys in R&D who are CAD-ing this and CAD-ing that, trying to get this and that into the pipeline faster. [DeChambeau] knows it. It’s just really, really painful when he says something that stupid. He has never really been happy, ever. Like, it’s very rare where he’s happy.” It’s not very often that professional athletes get into feuds with their sponsors, but when they do, the remarks made by the athlete could have significant ramifications including termination of the sponsorship. Almost every athlete endorsement agreement has legal language covering this exact type of scenario. Brands want to protect themselves from paying an athlete a good amount of money to endorse their brand and then have the athlete turn around and disparage the brand. Legally, a brand often includes language in the Termination section of an endorsement contract such as: “Brand may terminate or suspend this Agreement or withhold payment to Athlete in the event: (i) Athlete disparages Brand or its Products by Athlete’s words or conduct.” Some brands will even include a entire Non-Disparagement section in the endorsement contract that could read something like this: “Athlete hereby agrees that during the term of this Agreement and for ninety (90) days thereafter, Athlete will not make any statement or take any action that disparages, is derogatory, or is otherwise damaging to Brand and/or its subsidiaries. Violation of this provision is hereby deemed an incurable, material breach allowing for immediate termination of this Agreement.” Please note that these are not actual examples from DeChambeau’s agreement with Cobra, rather common language found in various athlete endorsement agreements. Although, it is very possible that Cobra includes similar language in their agreements with athletes. DeChambeau’s conduct almost certainly rises to the level of disparaging and derogatory towards Cobra. Although he did not expressly mention the Cobra brand in his rant, it was pretty apparent who he was talking about. Depending on the exact wording in his agreement with Cobra, it is cenceivable that DeChambeau’s actions rose to the amount of a breach of his endorsement agreement. DeChambeau later took to Instagram to apologize and walk back some of his comments. It remains to be seen if the relationship between DeChambeau and Cobra can be repaired. Of course, there are other factors involved when dealing with these situations but it is most likely the case that brands can suspend, withhold payments, and even terminate sponsorships over events like this one. Matt Haage is an attorney that has worked for four different sports agencies. He has reviewed hundreds of endorsement contracts for athletes in a wide variety of sports. Matt can be reached at [email protected].

On July 20, Oakland City Council is set to meet and vote on the Howard Terminal Stadium. While Oakland A’s President Dave Kaval has made it clear for the franchise to stay in Oakland, he has also recently expressed that the A’s have their eyes set on two sites in the Henderson, Nevada area for possible relocation. This potential relocation could have big implications on not only the Oakland A’s, but on the MLB as a whole. Generally, under Major League Baseball Rules, any request to move a franchise must be voted upon by the other team owners. The current rules require an affirmative vote by three-fourths of the clubs in the league affected (i.e., American League) plus a majority vote in the other league (i.e., National League) to approve movement of a franchise. However, there are exceptions to his rule. The two exceptions are when: (1) three-fourths of the clubs in the unaffected league must consent when a club relocates to a city with a population less than 2.4 million in which the unaffected league has a club; (2) If a club relocates to an area near an existing team, that team has veto rights over the move. The Commissioner is also involved in this process and is empowered to investigate any charged or suspected act not in the best interests of baseball. This power has been interpreted to extend to issues pertaining to a proposed relocation that may affect the MLB. One big potential implication of this relocation is that it could increase their brand appeal to young fans who are heavily consumed in sports and entertainment options. As we all know, Las Vegas is the premier spot of legal sports betting. Over the past few years, the MLB has built business relationships with many fantasy sports providers, and now has partnerships with sports betting companies, such as FanDuel, MGM Resorts International, and DraftKings. MLB Network and other broadcast networks include odds in the television presentation and Bally’s Sports has the rights to regional baseball broadcasts in many of the biggest markets in the United States. With the presence of the NFL and NHL already in the city, the arrival of MLB to Las Vegas seems destined to take place. However, there may be a big headache coming MLB’s way in the form of a lawsuit if the A’s do relocate out of Oakland and into Henderson, Nevada. At least that is what recent history tells us. For example, the NFL is currently in a legal battle with the city of St. Louis over the relocation of the Rams. And it looks like barring a settlement that this will culminate with a full-blown trial as according to Randy Karraker of 101 ESPN in St. Louis, a St. Louis judge ruled that the city of St. Louis has the ability to investigate the net worth of the NFL, Commissioner Roger Goodell, Rams owner Stan Kroenke, Cowboys owner Jerry Jones, Patriots owner Robert Kraft, Giants owner John Mara, and ex-Panthers owner Jerry Richardson. The general complaint in the 2017 lawsuit was the Plaintiffs claim the NFL broke league protocol and the league’s relocation rules by permitting the Rams departure from St. Louis and misled the public about staying in St. Louis, which allegedly cost the city millions in ticket and earnings tax revenue. If the Oakland City Council’s vote does fail and the A’s do relocate to Henderson, Nevada, it is a big gamble that MLB would be taking.

On July 1, 2021, the long-awaited Name, Image, and Likeness (NIL) era of collegiate sports commenced. Effectively, within the limitations of various State laws, University NIL policies, and the NCAA’s new flexible NIL approach, student-athletes are permitted to monetize based off their names, images, and likeness to formally grow their individual brands, a stark contrast from the NCAA’s previous Amateurism rules prohibiting such conduct. Within the first day of NIL eligibility, Barstool Sports founder and President Dave Portnoy, otherwise known as El Presidente, jumped on a live stream to announce the establishment of Barstool Athletics. Under this newly announced branch of the media giant that is Barstool Sports, Portnoy invited student athletes to apply to become members of the Barstool Athletics team. Details of the Barstool Athletics program are few and far between; Portnoy himself stated during the live stream that “I didn’t give it a ton of thought.” Nevertheless, within days of the announcement, Portnoy confirmed that over 100,000 student athletes had already applied to be founding members of Barstool Athletes. Portnoy’s comments and the speed at which Barstool Athletics “signed” student athletes has prompted the Sports Law world to raise questions about whether Barstool Athletics may cause student athletes to be ruled ineligible by their respective universities’ athletic departments. This comes as a direct result of Barstool Sports’ current nature; in January 2020, Penn National Gaming purchased a 36% stake in Barstool Sports for over $160 million. Since this purchase, Barstool has launched the Barstool Sportsbook, currently offering in-person and online betting in Pennsylvania, Michigan, Indiana and Illinois. Barstool also hosts multiple gambling shows and podcasts, further entrenching their status in the gambling sphere. The clear connection between Barstool Sportsbook and Barstool Athletics raises significant questions about the supposed legality of Barstool Athletics’ NIL program. As sports attorney and Conduct Detrimental Host Dan Lust noted, certain State laws and University NIL policies explicitly prohibit NIL agreements that promote sports gambling or casinos. Given Barstool’s roots in the gambling industry and popular Barstool personalities’ frequent promotions of Barstool Sportsbook, student athletes who have joined the Barstool Athletics frenzy may be risking their eligibility for currently uncertain rewards. And, with over 100,000 applicants to the Barstool Athletics program, the potential for mass ineligibility rulings may be looming ominously over uninformed student athletes. In response to concerns online regarding Barstool Athletics’ threat to student athletes’ eligibility, newly initiated Barstool Athletics member and New Mexico State University Swimmer Carli Baldwin took to TikTok to alleviate the uncertainty surrounding Barstool Athletics. In her TikTok video, Baldwin explains that in Portnoy’s welcome email to Barstool Athletes, Portnoy emphasized that Barstool Athletics would not be asking any interested student athletes to sign any sort of exclusive agency or branding contracts. Rather, Portnoy stated that Barstool Athletics’ plan was to enable student athletes to promote their own individual brands and likenesses via Barstool’s expansive online media presence. Baldwin continued to explain that, despite beliefs over the nature of the program, Barstool Athletics was acting marketing agency for student athletes, instead of what many believed to be a sponsorship program. If Baldwin’s TikTok explanation remains true in practice, it certainly could alleviate some of the concerns facing the legality of Barstool Athletics. On July 11th, Darren Heitner, a Florida sports and entertainment attorney and recurring guest on the Conduct Detrimental podcast, discovered that Barstool had filed intent-to-use trademark applications on July 2nd to protect the Barstool Athletics name. These trademarks sought to register the Barstool Athletics name as a service provider of business management and advice for athletes, as well as a service provider for entertainment services including podcasts, news, and commentary surrounding sports and entertainment. Barstool’s trademark filings support Carli Baldwin’s message that Barstool Athletics is not a student athlete sponsorship, but rather an entity to help support and grow student athletes’ individual brands. Due to the ongoing uncertainty in the absence of Federal NIL legislation, Barstool Athletics appears to be a vehicle to enable student athletes to achieve success and maintain appropriate compliance in expanding the reach of their names, images, and likenesses. Ultimately, whether Barstool Athletics can truly differentiate itself from Barstool’s gambling brand so as to ensure student athletes do not face eligibility questions will depend on how individual universities interpret their own NIL policy or State’s law regarding NIL agreements with gambling entities. Thumbnail link: https://www.blackhawkameristar.com/casino/sportsbook Thumbnail taken from the Blackhawk Ameristar website