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- Financial Fair Play: A Messi Situation
A teary-eyed Lionel Messi said goodbye to Barcelona on Sunday morning. Addressing a crowd largely made up of current and former teammates, Messi expressed his love for the club and his desire to stay. Messi who came to Barcelona as a 13 year old said goodbye to the club after 21 years. After years of speculation if Messi would ever leave the club he finally has. Why? It would appear Messi is the first high profile casualty of Financial Fair Play regulations. In the future, history may record today as a win for the financial health of the game. Financial Fair Play was introduced by the Union of European Football Associations (UEFA) in 2010. The premise was simple. Many European soccer clubs were in massive debt because they spent inordinate amounts of money on players, staff etc. in the hopes of winning competitions. In reality, most of them just ended up in massive debt. UEFA recognized this and introduced FFP as a safeguard to protect clubs and overall, the health of the game in Europe. The rules are quite clear: Depending on the amount of debt a club owes there is a limit on how much they can spend on transfers and/or player wages etc. Barcelona could be considered a case study for FFP. At one point Barcelona was the first club in any sport to surpass 1.4bn in annual revenues. Now the club reportedly has a gross debt of over 1.4bn. This has been largely due to poor management of transfers and the losses from Pandemic have only made things worse. If Barcelona had kept Messi on the salary from his last contract the club would have had salaries represent 110% of the club’s earnings. Even with Messi willing to take a 50% pay cut the club would still have been in breach of FFP regulations. This is because without Messi on their books the club would still hold wages that are 95% of club’s earnings way above the recommended 70% by La Liga. Javier Tebas, the La Liga Chief, had said a month ago that for Messi to stay, Barcelona would have to significantly lower their wage bill and no leniency would be shown. As it’s happened Barcelona were unable to do this, and Messi is gone. Financial Fair Play regulations have been mocked at times by the football community. A great example of this being when Manchester City’s ban from the Champions League for breaking FFP rules was overturned by the Court of Arbitration for Sport. According to reports at the time, many felt City was “getting away with it” or that FFP was a “joke”. Consequently, this Messi situation is a major win for FFP. As the Barcelona President put it “The club is above everything - even above the best player in the world.” This has shown that the FFP regulations can be taken seriously. If the FFP regulations can prevent Messi from staying at Barcelona, then every other club around Europe is on notice now. There is no way this was an easy decision for Barcelona or La Liga for that matter. Messi was the face of the franchise and the league. Will the financial losses from sponsors from losing Messi outweigh the losses from keeping him? We will find out soon enough but most likely not. La Liga will still remain one of the top 5 leagues in Europe. At the end of the day rules are rules. If rules are to be effective, they must be applied equally across the board. If European super clubs are to improve their debt without the formation of a super league, then more tough decisions lie ahead. Some may not like it, but Financial Fair Play is working exactly as intended. David Abunaw is a rising second year law student at the University of Pennsylvania Law School and Sports Events Chair of the Entertainment & Sports Law Society. Connect with him about sports and entertainment on Instagram: @davidako10 and Twitter: @davidabunaw.
- Revival Of Indian Football Culture By The Indian Super League: A Study On The IPR And Sport
In 2010, International Management Group (IMG) and Reliance Industries Ltd. (RIL) signed a joint-venture agreement which leads them to secure the commercial rights for organizing an IPL-style football tournament with the help of the All India Football Federation (AIFF). The deal was close to Rs. 700/- crores. AIFF won the bidding to host FIFA U-17 World Cup in 2017. 21st October 2013 was the date on which IMG-Reliance, AIFF, and Star Sports formed an organization which is known as Football Sports Development (FSDL). In 2014, the I-League team Chennai City FC send the desist notice to Chennaiyin FC regarding the dispute of infringement of the trademark. However, things get sorted between both parties as they get settled their dispute. The credit shall be given to the legal team of Chennaiyin FC for successfully defended their dispute without an alarming huge litigation process. Therefore, the team owners need to protect their intangible assets like Trademark to avoid such disputes which can cost a huge amount of damages. In 2010, the All India Football Federation cancel their deal with ZEE Entertainment Enterprises regarding the telecast of their domestic league matches. After the inception of IMG Reliance with Star Sports as the promoter were to introduced a league in IPL style, the AIFF, later on, agreed to sell their telecast or broadcasting rights to Star Sports for their Durand Cup, Indian Super League, and other domestic leagues, excluding I-League. The Indian Super League is the fourth most viewed football league in the world. The total market value of the Indian Super League is EUR 45.38 million. In the 2019-20 season of ISL, Spanish player Javi Hernández was signed by ATK at Rs. 4.37/- crore [Rupees Four Crore Thirty-Seven Lakhs only] and declared as the most expensive signing have ever done in the history of the Indian Super League. Sunil Chettri is the most expensive Indian Football player signed in the ISL by the Bengaluru FC at the amount of Rs. 2.5/- crore [Rupees Two Crore Five Lakhs only]. In Indian Super League, various club owners don’t know how to operate the club, how to sign any player, what kind of players they needed, what kind of gameplay can be suited in the Indian Subcontinent, and what kind of style can be benefited to the Indian players. Therefore, many club owners come to a legal arrangement to acquire such knowledge. Delhi Dynamos, a former ISL club in Delhi was done their alliance with the Eredivisie elite club, Feyenoord Rotterdam. Atletico de Madrid was partnered and buy 25% shares in the Kolkata franchise which was formally known as Atletico de Kolkata. FC Pune City was also done their technical partnership with Italian-based Serie A club ACF Fiorentina. City Football Group, who owned London based Manchester City FC and partly owned New York City FC in the US, Melbourne City FC in Australia, Yokohama F. Marino in Japan, Montevideo City Torque in Uruguay, Spanish Club Girona, Sichuan Jiuniu in China, and Lommel SK in Belgium, acquired 65% stakes of Mumbai based football club which is Mumbai City FC. This deal was one of the biggest acquisitions done by any foreign football club in the Indian Super League. ATK has done its merge with Mohun Bagan FC. It is one of the oldest and historic clubs in India. After this merger, the historic club again rejuvenated and changed its name to ATK-Mohun Bagan FC. The two champions club already had a great history in terms of their participation in a different league. East Bengal FC which was previously owned by the Bengaluru-based Quess Corp. was not been able to operate this organization due to financial instability in the company. On Sep. 3, 2020, Shree Cement Limited which is a Kolkata-based company, agreed to buy majority shares of 76% of the club. After 3 weeks, the club transferred its sporting rights to Shree Cement East Bengal Foundation including its assets, liability, and intellectual property to the new company. The German powerhouse club, Borussia Dortmund did a partnership with Hyderabad FC for developing a youth development program system for Indian football. Such more investment needs to be done by big corporate houses. Barcelona FC has a very unique concept of ownership which is known as Club Member Ownership. There are 1,40,000 socis or members in Catalan who have the club owner membership. Such a concept can be adopted by Indian football clubs by inviting subscription of membership at an affordable rate. This can further become a norm to involve more fans by giving voting rates, exclusive season tickets, and many other perks. The Indian Football players were part of the European clubs like Bhaichung Bhutia who spent five years in English Club Bury, Sunil Chhetri played for Kansas City Wizard in the USA & also for Sporting CP (Portugal Club) in their reserve team and recently Gurpreet Singh Sandhu becomes the first Indian football player to play in UEFA Europa League. The ISL is heading in the right direction. The Indian Super League is valued around INR. 3.7 billion. However, we need to evolve our football structure if we want to qualify for the FIFA World Cup 2026. It is also the responsibility of Football Clubs and player’s sports agents/ lawyers to protect the interest of the clubs and players before it gets infringed or any legal dispute arises.
- Kyrie Irving Pivots on Kyrie 8’s
Kyrie Irving, having recently voiced his opinion on the latest version of his signature sneaker has apparently softened his stance. Through NBA Reporter, Shams Charania, Irving issued the following statement: “When you’re building something great, there sometimes comes a point when you need to recalibrate and refocus to ensure everyone involved is aligned. This is where the KAI11 brand and Nike are. It was unfair to put the blame on Nike or any one person. With that being said, we are diligently working, restructuring, and reimagining things together to make sure we get it right.” This is a full 180 from his previous stance, taking to Instagram to call the sneakers “trash” and lamenting that he hasn’t been involved with the design or creation of the shoes. To say that this sort of retraction was unexpected could not be more of a falsity, but I am surprised that Nike decided to play ball and not void the contract or otherwise initiate a lawsuit. In my last article, “Nike Won’t Get a Kick Out of Kyrie’s Instagram Comment,” I suggested that Irving’s initial statement could have constituted a breach of contract with Nike, specifically violating a clause that prevents the ambassador, in this case Irving, from making disparaging statements about the products or the brand. It stands to be confirmed if such a clause does indeed exist in his contract, but I would be incredibly surprised if it didn’t. It’s also not surprising that Irving walked his statement back because according to Forbes, as of 2019, he was making $11 million annually from Nike. If Nike had voided the contract because the comment was a breach, he would have lost out on that and that’s a lot of money to lose, especially because of an Instagram comment. Irving has long been known to be very vocal, speaking his mind on just about anything, from the planet being flat to the need to “cleanse the energy” in the Celtics arena and burning sage to do so. It is very possible that Nike really didn’t have too much of a problem with his statements, or rather it was almost expected to happen at some point since they contracted with a “Wild Card.” However, if anyone is in any sort of sponsorship, partnership, or otherwise influencer type deal, I would advise them to avoid publicly disparaging the company’s product, at least while the contract is still in effect. Let this be a lesson, there seems to be a happy ending for Irving, but I don’t think the average person would be quite as lucky. Anyone entering into any sort of agreement, especially a sponsorship, partnership, or otherwise influencer deal should be very aware of the terms of the agreement including potential remedies for a breach. Whenever you’re entering into any sort of agreement, in order to understand terms and remedies, I would also advise reaching out to an attorney for review, just to err on the side of caution. Stephon Burton is a rising 3L at Duquesne University School of Law in Pittsburgh, PA. He obtained his undergraduate degree from Washington & Jefferson College in 2019. He can be reached at [email protected] and on twitter @stephonburton3, Instagram @stephonburton, and LinkedIn https://www.linkedin.com/in/stephon-burton-7abb06125/
- Barstool's Next Move: A Mandatory Fyre-Esque Social Campaign
We all remember Fyre Festival, AKA the Greatest Party That Never Happened (as Netflix described it). Although Fyre is now infamously known for defrauding investors out of $26 million dollars, its now-jailed founder and CEO, Billy McFarland, and rapper Ja Rule, did do something right; they masterminded an ingenious marketing campaign. Tickets for the 2017 music festival cost anywhere from $1,000 to as much as $12,000 – more if you bought a package deal. And yet the fraudulent festival sold out in just 48 hours. Why? Because its organizers utilized social media and online influencer culture like never before. Fyre flew films crews, models and digital influencers to a remote island in the Bahamas where they produced an epic promotional video. Those hired to be featured in the video included Kendall Jenner, Bella Hadid and Emily Ratajkowski, to name a few. The trio and another 250 influential individuals posted photos on-location to Instagram and Twitter to their millions of followers. Jenner was reportedly even paid $250,000 for a single Instagram post. (Photo Credit: The Fashion Law) With every photo and video, Fyre looked more and more like a luxury dream party and an exclusive, must-attend event. And the global online community bought into all the hype. Unfortunately for the scarred ticket holders – and the influencers – they ultimately discovered that Fyre Festival was more like the Hunger Games, and not Coachella like they thought. See Exhibit A below: the delicious dinner served. But the defunct festival proved one thing; traditional advertising was no longer going to cut it, and one sports media company had been taking note. Enter Barstool Sports. Barstool, led by Dave Portnoy, has created a global empire – drastically growing their fan base without the use of traditional marketing tactics. The brand has become so popular due to its free publicity and social media campaigns, which have created viral videos and stories spread across all media outlets. With the NCAA finally announcing that college athletes can earn compensation for the use of his or her name, image and likeness (NIL), Barstool identified yet another unconventional marketing opportunity: Barstool Athletics. Portnoy posted a video on Twitter, announcing Barstool Athletics and explained how the idea came to fruition. "I didn't give it a ton of thought, until a couple of hours ago when Adelaide Halverson, she is a volleyball player [from] Jacksonville State DM'd me. She was like 'Yo I want to be the first Barstool Athlete." He later went on to say, “Barstool Athletes Inc is the most barstool thing ever. No thought put into it. No clue what we were doing. And 2 hours later the most powerful student athlete organization in the country. Still no clue what’s happening. #fortheplayers #barstoolathlete.” And now, more than 140,000 athletes across the country have submitted applications to become “Barstool Athletes.” But is Barstool Athletics really #fortheplayers or is it just Barstool orchestrating one of largest marketing pushes we’ve ever seen? A few days ago, Barstool started sending out branded merchandise to thousands of collegiate athletes enrolled in their program. This is when it starts getting interesting… Many might not realize it but, depending on specific state law, an athlete may actually lose his or her eligibility by entering into a deal that is clearly not commensurate of the fair market value of the services provided (i.e. A $5 Million sponsorship for one social media post). As we learned from the Lululemon Team Program, a company can’t just send college athletes their products solely because they are college athletes. The athletes MUST do something in return. If they don’t, such athletes and the businesses are violating NCAA rules and potentially state law. It’s not Lululemon who told us that. It was the NCAA and Oklahoma. Everyone in the NIL world knows this, so Barstool must too. You'd hope... From the NCAA’s interim NIL policy: “While opening NIL activities to student-athletes, the policy leaves in place the commitment to avoid pay-for-play and improper inducements tied to choosing to attend a particular school. Those prohibitions would remain in effect.” So is putting "Barstool Athlete" in your bio enough? If you're looking at Lululemon-- they played it safe and appeared to ask their athletes to go one step further, actively posting in support about the company. See below: This combination appears to have been acceptable to the NCAA and affected schools. However, keep in mind that Lululemon has a mere fraction of the athletes that Barstool has. Assuming Barstool goes the Lululemon route, a logical option all things considered, it means that Barstool Athletes that receive any sort of product from Barstool could soon be asked to actively post about it across their social media channels. Otherwise, once again, the athlete could be viewed as directly engaging in pay-for-play and would be considered an NCAA and NIL violation. Portnoy is under a microscope now... he SHOULD play it safe... Interestingly, the Barstool Athlete application explicitly requires the individual “to add Barstool Athlete to [their] social media bios.” By participating in the program, the athlete is also agreeing that they will comply with all relevant laws and policies relating to NIL. This additional language is why Barstool may have to follow Lululemon's lead and ask for a further quid pro quo. Needless to say, simply calling yourself a "Barstool Athlete" might not be enough anymore. As Barstool continues to lean into the gambling side of their business, more questions arise as to whether they can even partner with schools. If schools weren't on red alert about this potential compliance issue, they sure are now. Late last night, Sports Attorney and Professor at University of Florida Law, Darren Heitner, announced that the first Division 1 program reportedly told athletes to cease all NIL involvement with Barstool Sports. The question that remains is whether Louisville’s is an outlier... or just the first domino. And, moreover, what - if anything - Barstool can do to fix this impending problem. While Barstool may not have an epic promotional video like Fyre Festival (yet), with thousands of college athletes already forced to push the Barstool brand on their social media, "Barstool Athlete," it certainly has garnered significant attention and engagement. This next step would reach an entirely new, Fyre, level. And this seems logical assuming Barstool has learned anything from Lululemon. While the chief marketing mastermind behind Fyre Festival is in prison, the team at Barstool Sports is working overtime, making waves, and making money. And Barstool stands to cash in huge if Portnoy can just convince athletes to promote the company in exchange for free merch. Stephanie is a recent graduate of New York Law School and a law clerk at Geragos & Geragos. You can find her on Twitter @SWeissenburger_ and Instagram @Steph_ExplainsItAll
- Joke or Not, Diving is a Financial Liability in the UFC
Brian Ortega, the #2 ranked featherweight in the Ultimate Fighting Championship (UFC), recently joked that he would take a dive in his upcoming championship fight for a million dollars. When former two-time bantamweight champion T.J. Dillashaw pressed Ortega on his seriousness, Ortega said, “Bro, I’d get my ass beat for a million dollars.” Although Ortega was joking, it is not absurd to think that many fighters would take such an opportunity without hesitating. Last year, the UFC paid its’ fighters only 20% of 980 million dollars in revenue. In comparison, the competing mixed martial arts promotion Strikeforce paid its’ fighters 63% of revenue and Bellator paid theirs 44.7%. Although the UFC has such a large revenue flow, they continue to pay their fighters only a small fraction of what they are worth. On August 7, Ciryl Gane defeated fan favorite Derrick Lewis to win the interim heavyweight title. With this title, Gane is guaranteed to fight heavyweight champion Francis Ngannou for a chance to become the undisputed heavyweight champion. Despite participating in a fight of such high magnitude, both Gane and Lewis were only paid $32,000. Bellator paid its fighters significantly more money at their last big pay-per view. At Bellator’s last championship event, A.J. McKee submitted Patricio “Pitbull” Freire by guillotine choke to win the featherweight championship. This main event was the last fight in a grand prix tournament for a million dollars. McKee was paid $150,000 for participating in addition to the million-dollar bonus and Pitbull was paid $250,000. Even some fighters on the preliminary card were paid more than UFC fighters Gane and Lewis who were the main event on an important pay per view. For example, the fighters Kiefer Crosbie and Georgi Karakhanyan were paid $50,000 and $70,000 to show, respectively. Although either Kiefer or Karakhanyan could possibly become champions one day, it is shocking to see that they were both paid more than a man who actually won a belt, Ciryl Gane. With this in perspective, it becomes possible to believe that some UFC fighters would take a dive to win a million dollars. Brian Ortega is one of the best fighters in the world and even he was willing to talk about taking a dive. Joke or not. Moving forward, the MMA community and sport world’s eyes will be directed at the lawsuit pending against the UFC. This lawsuit was class certified in December 2020. In the lawsuit, a group of former fighters filed a complaint that states that the UFC used its monopoly and monopsony power to suppress fighter’s pay. If the fighters are successful, the UFC will have to change its business structure in a way that would guarantee that fighters would be paid more than they are now. In this world, the UFC would use more its revenue to pay fighters with contracts that reflect this. For now, the fighter’s attorneys will continue to fight for the pay they are owed.
- Sports Money: La Liga Goes To Battle With The Premier League
In a deal that is first in its kind for a major European league, Spain’s La Liga has announced that it has agreed in principle to sell 10 percent of its business to private equity firm CVC Capital Partners for 2.7 billion euros (3.2 billion USD). It is said that around 90% of the funds will be channeled directly to the clubs. This should benefit both lower and high tier clubs in the league. The clubs still need to vote on it, but Barcelona and Real Madrid have already publicly rejected this deal. Both Barcelona and Real Madrid oppose this deal because it will hand over the rights for 50 years and CVC would come out on top with annual returns of over 20%. The proposed deal would give CVC Capital a 10% stake in La Liga. This is likely a deal that La Liga was forced to enter due to the money the Premier League has seen come in recently along with the demise of the Super League, which would’ve given the top three clubs in Spain a big cash boost. The Premier League has done an extremely good job in marketing the league and giving it a worldwide appeal, while La Liga has failed to do this even at a time where they had the two best players in the world in Messi and Ronaldo. This has hurt La Liga in the long run due to the Premier League clubs having much more money to sign players and attract top talent. La Liga realizes this and said in its statement, “It is an ambitious plan which will give La Liga and its clubs the resources to continue the transformation into a global digital entertainment company, strengthen the competition and transform the experience for fans.” This comes at a time where Spanish clubs have struggled financially due to the pandemic forcing teams to play in empty stadiums. The Premier League on the other hand, have had no problem splashing hundreds of millions on new signings, even with teams playing in empty stadiums. In what will be the biggest deal of the Premier League transfer window, Chelsea are on the verge of signing Belgian striker Romelu Lukaku for 115 million pounds (159 million USD) according to the Adam Schefter of soccer, Fabrizio Romano. This is just one of a few big deals that English clubs have been able to pull off due to how big the Premier League has become and the revenue they bring in via TV deals, sponsorships, etc. La Liga is different to the Premier League as they introduced somewhat of a salary cap back in 2013. This salary cap or “financial fair play” sets a maximum amount of money that a club can spend on players and coaching staff each season in relation to the amount of revenue the club has made throughout the season. Barcelona rejecting the deal means they lost one of the best players in the world in Lionel Messi. Messi agreed to take a 50% pay cut to stay with Barcelona, but this would still put Barcelona over the salary cap. Barcelona needed to reduce 100 million euros worth of wages from other players according to newly re-elected president Joan Laporta, but were unable to as players didn’t want to reduce their wages after the pandemic. Messi also could not take a huge pay cut to the extent of being paid a miniscule amount due to Spanish laws that require any new contract to be a minimum of 50% of previous wages. Had Barcelona accepted the deal with CVC, they may have been able to keep Messi. Instead, they rejected it in favor of a long-term approach and have lost arguably the biggest player in the club’s history. This will put a huge dent in La Liga’s appeal with them having lost one of the best players ever in Lionel Messi. La Liga has lost three of their biggest players in Messi, Raphaël Varane and Sergio Ramos all in the same summer while the Premier League is spending big money on top tier talents like Romelu Lukaku and Jadon Sancho. La Liga will need to hope that the rumors of Madrid going after Kylian Mbappé come true to give La Liga a new face of the league that will give the league more appeal after the departure of Messi.
- Think NIL Is Solely Benefitting Top Stars? Think Again
Exactly one month into the NIL era of college athletics, On3—a college sports and recruiting website—published an article that examined the impact of NIL deals already transpiring for NCAA student-athletes. The concise report highlighted several key takeaways, but none more significant than the fact that “53 percent of all transactions were reported by athletes playing sports outside of football or men’s and women’s basketball.” This important percentage demonstrates a flaw in the argument of many NIL critics who claimed that NIL would only benefit Alabama’s starting QB, or Duke’s star point guard. This is not to say that Alabama’s Bryce Young will not generate substantial revenue. In fact, head coach Nick Saban recently admitted the quarterback has received “ungodly” offers of “almost seven figures”. But the headlines around massive NIL deals do not represent what the novel NIL era is all about. As impressive as the six-figure deals are, the new legal policy allows all NCAA student-athletes from all three divisions to compensate off their Name, Image and Likeness. On3’s report uses research from INFLCR, a brand-building company that has over 100,000 athlete users. Their findings confirmed that: 1,361 total transactions had taken place as of July 29 Transactions totaled $1.256 million, with an average transaction value of $923 10% of transactions came from lacrosse, swimming, or diving athletes—most commonly from lessons and summer camp transactions 12% of transactions came from non-Power 5 schools It’s also important to note that this is an early snapshot, not a full list of comprehensive data. INFLCR is not the only company that works with student-athletes to monetize their NIL, as brands like Opendorse aim to disrupt the emerging space as well. Major sports and entertainment agencies have also started to recruit athletes for NIL marketing purposes, such as CAA Football landing Bryce Young, and Wasserman recruiting Paige Bueckers (who could make over $1M while still at UConn). Although only 1% of registered athletes made NIL transactions through INFLCR’s platform in the first month, expect these numbers to rise as football and basketball season come into full effect. INFLCR’s CEO Jim Cavale believes “we’re going to see double (those figures) next month or the month after because it’s starting to ramp up.” Although the start to the NIL era may seem slow, the principle that all college athletes can now monetize their Name, Image and Likeness remains that paramount takeaway. As exciting as the news story about UMiami QB D’Eriq King signing one of the first NIL deals worth $20,000 was, let’s not forget about the Division II softball player who can now legally make money from hosting a summer camp, or the Division III wrestler who can now profit off 1-on-1 lessons at his small-town college. The policy enacted by the NCAA was long overdue, and it’s essential to remember there are over 450,000 college athletes out there—including ones at schools people have never heard of—that can now make money off their name, image and likeness. Brendan Duggan is a 1L at Brooklyn Law School. You can find him on Twitter @SidelineDuggs.
- Seton Hall Responds to Lawsuit Filed by Former Star Myles Powell
In a lawsuit filed on July 14, Myles Powell, a former Seton Hall star basketball player, alleged that the university, its head basketball coach, and a trainer downplayed a serious knee injury that, he claims, ultimately prevented him from getting drafted to the NBA. While he was initially told the injury was a bone bruise, it was eventually revealed to be a torn meniscus. Powell believes the defendants knew all along. Powell alleged four counts in a civil lawsuit: (1) Negligence against Tony Testa (trainer/medical expert) (2) Negligence against Head Coach Kevin Willard and Vicarious Liability against Seton Hall (3) Breach of Fiduciary Duty (4) Breach of Contract The defendants filed a brief in support of their motion to dismiss the lawsuit on August 6, 2021 in United States District Court in New Jersey. In the brief, they claim that all counts must fail as a matter of law. Specifically, the defendants argue that counts 1 and 2 (Negligence) must fail because of New Jersey’s Charitable Immunity Act. Said Act, according to the defendants, “shields educational institutions like Seton Hall and its employees and agents, from the type of liability alleged in the Complaint." Further, the defendants argue that count 3 (Breach of Fiduciary Duty) must be dismissed because of an additional safeguard ingrained in law. Per the brief, the defendants write, “[t]his count is patently baseless as New Jersey, as a matter of law, does not recognize a fiduciary duty or any fiduciary duties owed between a university and student, or a coach to a student athlete.” The defendants give examples of the types of relationships that may give rise to fiduciary duties in New Jersey: “trustee and beneficiary, guardian and ward, agent and principal, attorney and client, corporate director and shareholder, and the members of a partnership.” None of which, they claim, includes university and student, or coach and athlete. Finally, Seton Hall and its allegedly culpable agents argue that Powell’s final count, breach of contract, must fail. The contract in question is the National Letter of Intent that Powell signed, originally binding him to play basketball at the university. The defendants reason, “Plaintiff has failed to state a claim for breach of contract because Plaintiff has not identified any provision of the contract that was allegedly breached, and an examination of the contract reveals that it does not even remotely contain the contractual duties that Plaintiff alleges and claims existed and were breached.” “Plaintiff yet again attempts to couch legal conclusions as factual allegations.” For the foregoing reasons, Seton Hall, Kevin Willard, and Tony Testa request that their motion to dismiss the lawsuit be granted. The defendants spent little time attempting to refute Powell’s factual allegations. At this time, the defendants feel that their position should succeed as a matter of law; thus, responding to factual allegations is not yet necessary. The motion is scheduled to be heard September 7. If the judge denies the motion and gives Powell the right to conduct discovery, the defendants will begin to refute the facts as well. At this stage, it was not yet necessary. Last season, Powell played in the NBA G League for the Westchester Knicks. Jason Morrin is a third-year law student at Hofstra Law School in New York. He is the President of Hofstra’s Sports and Entertainment Law Society. Additionally, he is a Law Clerk at Geragos & Geragos. He can be found on Twitter @Jmorr1.
- The Draft is Illegal (& Un-American)
The structure of America’s sports leagues is an ironic reflection of the country’s ethos towards capital and labor. We love the free market until it’s the wrong cohort who can take full advantage. Athletes’ salaries are artificially capped, but team profit is unlimited. Revenues are split…but the dollars in that pool are open to interpretation (see NHL CBA §50.1(a)), and players can choose where they want to play…if they stick around long enough (see MLB CBA Article XX(B)(1). Players’ lack of control over their own destiny is astonishing. Depending on the sport, the free market does not exist before an athletes’ late twenties and a player’s fate is often left to the team’s development system (see The Edmonton Oilers). In May, I was at my buddy Joel’s place, watching his hometown Chelsea play for the FA cup. We spoke about the differences in player development and business structure of euro football and hockey and found great irony in football’s free market system contrasted against American sports’ egalitarian mandates. He then asked me an extremely law student question, “why is the draft legal?” Excellent question, Joel. At first glance any league’s draft ought to violate the Sherman Act, and that’s exactly what NFL player, Yazoo Smith, argued in 1968. He contended that if not for the NFL draft he could have negotiated a far more lucrative contract as an NFL rookie. The District Court agreed and held the NFL draft was a group boycott, and therefore, a per se violation of the Sherman Act. On appeal, the DC Circuit’s analysis differed but came to roughly the same conclusion. It held the draft was not a per se violation of the Sherman Act but still monopolistic under the rule of reason; where the court balances a provision’s anticompetitive effects against its pro-competitive benefits.[1] Justice Wilkey laid the hammer down in his ruling opinion: “the draft that has been challenged here is undeniably anticompetitive both in its purpose and in its effect”[2] and “the draft inescapably forces each seller of football serves to deal with one, and only one buyer, robbing the seller, as in any monopsonistic market, of any real bargaining power.”[3] So….why do the NFL, MLB, NBA, and NHL have drafts today? Collective bargaining. Months before Wilkey decided this case, the NFL’s lawyers brilliantly used two Supreme Court cases, Meat Cutters v. Jewel Tea & Connell Co. v. Plumbers and Steamfitters, to circumvent antitrust law under a “non-statutory labor exemption.” This theory binds parties of a collective bargaining agreement (“CBA”) to its provisions, whether they violate antitrust law or not. In the NFL’s case, it allowed the league to enforce the first-ever express entry-draft provision in its 1977 CBA and continued the NFLPA’s infinite ineptitude, which lasts to this very day.[4] PS. There are two awesome pieces on the subject: 1. Eriq Garder’s 2009 article “Rookie Abuse”: https://slate.com/culture/2009/04/in-1970-james-yazoo-smith-sued-the-nfl-to-shut-down-the-draft-what-happened-next.html 2. Joshua Kloke’s “The case for abolishing the NHL draft”: https://theathletic.com/2711295/2021/07/26/the-case-for-abolishing-the-nhl-draft-i-dont-think-its-that-crazy/?article_source=search&search_query=the%20case%20for%20abolish Sources: [1] Smith v. Pro Football, Inc., 593 F.2d 1173 (D.C. Cir. 1978) [2] Smith v. Pro Football, Inc., 593 F.2d 1173, 1185 (D.C. Cir. 1978) [3] Id. [4] https://slate.com/culture/2009/04/in-1970-james-yazoo-smith-sued-the-nfl-to-shut-down-the-draft-what-happened-next.html
- The Anatomy of a Conviction: State of Texas v. Jeff Gladney
As reported last week, now former Minnes Viking’s CB Jeff Gladney and 2020 1st Round pick has been indicted by a Texas Grand Jury of Felony Assault of a Familial Household member with their Breathing Impeded. Here is a copy of the indictment. Based on the information contained in the indictment, this is how I interpret the chain of events: It is alleged that the parties engaged in a verbal argument that turned physical when Mr. Gladney allegedly began to choke the victim (his romantic significant other) and that choking action allegedly caused the victim to lose the ability to breathe. Mr. Gladney then allegedly punched the victim numerous times and then allegedly shoved her into a car window. Grand Jury Process As seen above, Mr. Gladney has been formally charged by a grand jury. However, what does that actually mean? In the State of Texas, every felony must be indicted by a grand jury unless the Defendant chooses to waive the indictment. The grand jury gets to hear all evidence the prosecution has and that includes evidence that may be deemed inadmissible at trial such as hearsay. Thus, since Mr. Gladney was indicted, the grand jury heard all the evidence that the prosecution had at the moment and determined that there is sufficient evidence for the case to go forward. Building a Domestic Violence Case Those who has ever prosecuted a domestic violence case knows they are so difficult to get a conviction on. That is because often times the alleged victim is uncooperative. Currently, the alleged victim is cooperative. That being said, what could the prosecution base their case on if the victim decided later on in the legal process not to cooperate? 1. Independent Witnesses In domestic violence cases, true independent witnesses are few and far between. That being said, true independent witnesses are a godsend because they do not have a dog in the fight. Unless they have some relationship to one party, they tend to have high credibility with a jury. However, even independent witnesses do not want to get involved. Most will try every trick in the book to get out of testifying. However, if they are subpoena they do not have much of a choice but to cooperate. 2. 911 Call/Jail Calls Is there a 911 call(s)? If so, check it for excited utterances. You might even get lucky and even hear the Defendant at the other end of the call. My office once prosecuted a domestic violence case where the defendant was using a Taser on his girlfriend and you could actually hear the Taser on the other end of the 911 call zapping the victim. It was a very compelling piece of evidence. If he was arrested, did he make any calls from jail? I once obtained a conviction against a Defendant without the victim testifying in part because the Defendant called the victim after the incident to apologize what he did. He stated how sorry he was about 30-40x during the call. Another Defendant called the victim from jail and was confronted by the victim with, “Do you have any idea how hard you kicked me?” His response (clear as a bell), “Ain’t nothing I can about that now.” Needless to say, all three men were convicted or pled guilty and served jail time. 3. Forfeiture by Wrongdoing Texas Code of Criminal Procedure §38.49 states as follows: (a) A party to a criminal case who wrongfully procures the unavailability of a witness or prospective witness: (1) May not benefit from the wrongdoing by depriving the trier of fact of relevant evidence and testimony; and (2) Forfeits the party’s right to object to the admissibility of evidence or statements based on the unavailability of the witness as provided by this article through forfeiture by wrongdoing. Thus, if the victim in the case becomes uncooperative at the alleged hand of Jeff Gladney, then he cannot hide behind the Confrontation Clause and all previous inadmissible hearsay comes in. As previously reported by ESPN, Mr. Gladney attempted to bribe the victim and attempted to intimidate the victim into keeping quiet. If the victim eventually decides not to cooperate and a nexus was established between her failure to cooperate and the Defendant’s actions in procuring that unavailability, the prosecution could use everything that the victim said to law enforcement. This is important because one of the elements of this crime is that the victim’s breathing had to be impeded. If the victim doesn’t testify, Mr. Gladney would not be convicted of strangulation because there would not be any admissible testimony to that effect. That being said, using Forfeiture, law enforcement could testify that the victim stated to them that her breathing was impeded. Now you add in the evidence of the alleged attempt to silence the victim and you have the formula for a conviction as charged. Matthew F. Tympanick is an Associate Attorney at Wicker Smith in Sarasota, Florida. He is a graduate of University of Massachusetts School of Law where he served as a Public Interest Fellow and as a Staff Editor on UMass Law Review. He was previously a felony prosecutor in Sarasota, Florida. In over three years as a prosecutor, he prosecuted thousands of domestic violence cases. You can follow him on Twitter @Tympanick20.
- Sports Law Program Spotlight: University of Florida
Sports law is an ever-evolving and expanding subset of the law, and as the recent NCAA v. Alston ruling, NIL, and Super League controversy have shown, there are far more legal roles in sports than the typical pro agent. From arbitration and player unions to compliance and contracts, a law degree can open the door to a wide range of opportunities at both the collegiate and professional level of athletics. Many law schools around the country recognize the potential of sports law and offer some opportunities in the field, while some boast full-fledged sports law programs and concentrations. However, unlike business law and health law, U.S. News & World doesn’t offer lists detailing sports law programs; this makes the law school search difficult for a prospective 1L with aspirations for a career in sports. Enter the Sports Law Program Spotlight! Although this was originally intended to be a monthly series, we will be putting these spotlights on a more frequent basis due to the popular demand by both prospective law students and law schools themselves. We will highlight a law school that offers strong opportunities in the field of sports law. These opportunities include, but are not limited to: ● a sports-centric curriculum; ● sports law certifications; ● unique legal internship opportunities within the sports market; ● and sports law journals. The focus of this Sports Law Program Spotlight is… University of Florida Levin College of Law. When it comes to athletics, there are very few schools who can match the success of the Florida Gators. With 42 total national championships and 21 since the 2008-2009 academic year, it’s obvious that sports are a big deal in Gainesville. However, the University has high academic prestige as well and its Levin College of Law stands as one of the best law schools in the nation. Ranked 21st overall and 6th among public institutions by US News & World, there’s no wonder why the interest among prospective law students is extremely high. But to learn more about the intersection between sports and the law at Levin, I was honored to speak with Hunter Bedard, a 2L and fellow Conduct Detrimental contributor. Here is an overview of what the school offers to students with passion and interest in the field of sports law. Not all law schools have a formal sports law program, and Florida’s Levin College of law falls into that category. However, that doesn’t mean that prospective law students interested in sports shouldn’t consider the school. In fact, Hunter originally was averse to attending Levin because it didn’t have a formal program. But throughout the application process, he found that there were valuable opportunities within the school to develop as a future sports lawyer. The two biggest offerings that should interest sports minded applicants are the Florida Entertainment and Sports Law Review and the Entertainment and Sports Law Society. Florida Entertainment and Sports Law Review (FESLR) In the Levin College of Law, there were previously only four law journals offered to students. However, a fifth journal was recently added, much to the liking of those interested in sports law. The Florida Entertainment and Sports Law Review (FESLR) is a student-run, legal journal focused on the practical application of the law in the sports and entertainment industries. The journal is structured where professors and practitioners with expertise in the field write articles while students like Hunter act as staff editors. This gives law students firsthand experience to scholarship and preeminent legal writing pertaining to sports law. As one of the 17 inaugural staff editors of the new FESLR, Hunter and his peers essentially act as gatekeepers when it comes to editing the work that is published for the review. Entertainment and Sports Law Society (EASLS) While FESLR is just getting started, the Entertainment and Sports Law Society at the Levin College of Law has been around for a while. Founded by prominent sports attorney, Darren Heitner, EASLS was established for the purpose of educating students of legal opportunities in the entertainment and sports business world, informing students about current issues in entertainment and sports law, and networking with other similar law schools and professional organizations across the nation. Hoping to follow in Heitner’s footsteps, Hunter serves as the current president of the society. The biggest event put on by EASLS is the annual Entertainment and Sports Law Symposium, where a collection of experienced professionals from the field of sports law come to Gainesville to share insights and advice. Overall, EASLS brings like-minded law students together to discuss and learn about the dynamic issues involved with the intersection between sports and the law. In summary, the University of Florida Levin College of Law offers a great experience for prospective law students interested in sports law. The overall educational experience prepares students for a career in sports. In terms of curriculum, the school does offer a “roadmap” of suggested courses to take for students interested in entertainment and sports law. The roadmap consists of courses that easily could overlap with the sports world like IP, antitrust, transactions, negotiation, etc. There is even a course dedicated to sports law issues and a sports law seminar as well. To be successful, every lawyer needs a well-rounded educational experience that can be applied to any area of law. The newly added Florida Entertainment and Sports Law Review to go along with the Florida Entertainment and Sports Law Society provide ample opportunities to get involved. So, while at the moment there might not be an offering of a sports centered curriculum model or sports law certificate, the Levin College of Law still is a great place for future sports lawyers to learn. Just ask Darren Heitner, he seems to be doing well :)
- The Return of the No Fun League
Well, those few years of celebrations were fun, weren’t they? In an effort to crack down on the issue of taunting (who knew there was an issue?), the NFL released a series of new rules today, along with a video showing certain actions that will now be penalties this season. In a statement from the league in the announcement video, the league claims that, “[W]e saw an increase in actions that clearly are not within the spirit and intent of this rule and not representative of the respect to opponents and others on the field.” As a result, the league has instructed to crack down and enforce these taunting rules strictly. The Fun Police are back at it again, levying heavy penalties should a player be called for such conduct. Now, two taunting penalties committed by one player will result in an automatic disqualification. In addition to this heavy penalty for repeat offenders, the taunting player may be fined and/or suspended depending on the severity of the actions. In the press release, the NFL provides some examples of what exactly constitutes a “taunting act.” Here, these acts consist of “using abusive, threatening, or insulting language or gestures to opponents, teammates, officials, or representatives of the League” and “using baiting or taunting acts or words that may engender ill will between teams.” Taunting is under the rules of unsportsmanlike conduct, which is “any act which is contrary to the generally understood principles of sportsmanship.” Who knew that the League would be so focused on ill will between the teams in a sport where the players are actively trying to inflict punishment on the other team? One thing that comes to mind here is how much celebrations have become part of the League’s culture, so much so that the NFL social media accounts typically release videos for Best Celebrations during the season. For reference, there were only TEN taunting penalties called all last season. In a league where spectators still jokingly wonder what exactly a catch is (ask Dez Bryant and Calvin Johnson about the NFL’s wonderful interpretation of that rule), the immediate concern that comes to mind is how exactly will this be enforced? The NFL has a well-known reputation of botching rulings with reference to these ambiguous rules. With the catch rule in mind, one can’t help but think that this rule will more affect the outcome of games, rather than merely being a guidelines for how the game should be played. Especially in the case of an all-star caliber player expressing emotion – a 15 yard penalty or ejection could seriously alter the trajectory of a game. It seems once again that the League can’t seem to get out of their own way. How long will this strict interpretation last? Will the NFL listen to their fans when the vast majority approve of such celebrations and taunting? It will be interesting to see whether the NFL digs their heels in, or whether they decide to pull back. Daniel A. Goldstein is a practicing attorney at Carnes Warwick PLLC in Raleigh, North Carolina. He is a graduate of Campbell University's School of Law, and obtained his undergraduate degree from the University of North Carolina, at Chapel Hill. He has written on sports law-related issues for the North Carolina Bar Association's Intellectual Property blog. You can follow him on Twitter @dgunc3 and on Instagram @dangoldstein3.