Why Congressional Regulation Should Be Embraced by the NCAA

In a letter to Mark A. Emmert, Ph.D., President of the NCAA, dated October 29, 2011, I asked the following question:

I believe that given the current circumstances of the NCAA, its sustainability is questionable, and I believe that the only hope that it has for survival is to seek regulatory approval and supervision by the Congress. Given the paradox of its genesis juxtaposed with what it has become, this is something the NCAA would cringe at, but in terms of crisis management, what other choice do you really have, if you impartially consider the factors now impinging upon your organization? I am very interested to learn if you actually appreciate the severity of the current situation, and I am fascinated by crisis management or the lack thereof in such circumstances. 

In Dr. Emmert’s letter back to me, dated November 18, 2011, he chose to ignore answering this question.

So is the NCAA on its slow decline into oblivion?

Certainly, the current onslaught of major lawsuits threatens the NCAA's very existence, and the recent settlement by EA and CLC leaves the NCAA left holding the bag it created.  At the end of the day, in regards to the broadcast rights, which is the vast bulk of the money, nobody can explain how the NCAA or its members have the right to be paid for recording or televising college athletes at play, since they do not receive releases from any of them for this.  Essentially, the networks just assume that they can contract with the NCAA and its members without ever having considered why that would be so.  Video games and t-shirts won’t sink the business model, but a redistribution of this broadcast money will sink the NCAA and the major conferences like an iceberg at sea.

As the outgoing Princeton A.D., Gary Walters, said recently, the current tension is between the NCAA and its Division 1-A members and the major conferences on one side, who make the vast majority of the men’s football and basketball revenue, and everyone else in the NCAA, who do not run for-profit football and basketball programs.  These are irreconcilable.  When the NCAA gets hit for the recording and television revenue in one of these pending lawsuits, the major conferences will pick-up and go, if they haven’t by then already left, and those conferences will then negotiate a business deal with their players rather than kill the golden goose.  As they say, that will be that.  Whether the NCAA continues to exist to serve the interests of its unprofitable members, who knows, because there’s not much benefit for the remainder of Division 1 to be allied with Division II or Division III, and vice versa.

Assuming that the money issue is resolved by paying college athletes, how does this solve all of the other problems affecting college sports, other than taking a pot of gold off the table to pay for everything else that needs to be done, from the concussion issue to the insurance issue to the student welfare issue and so on?

I previously wrote about why Congress should regulate the NCAA, but if the NCAA was smart, it would have already gotten the Department of Education on board and proposed comprehensive legislation to Congress.  The fact that it hasn't shows a complete failure in leadership in the top, not just in the executive office, but also on the executive board or whatever they call it now that actually runs the NCAA, some sixteen college and university presidents.  The time is now for the NCAA leadership to actually start thinking about controlling the NCAA’s own destiny, and this cannot be done without regulation by Congress.

Then how do you enforce rules?

I am going to take issue with Geoff on this: Penn State University as an institution was being punished. And if Penn State cannot be punished, then the entire scheme of NCAA regulations is unenforceable (and humor me for the moment and assume NCAA regs are worth enforcing). Any long-lasting institution survives its individual members; old members are replaced by new members, but the institution is understood to survive uninterrupted. And the institution bears responsibility for the conduct of its members--past, present, and future. The players and coaches who break rules are always gone by the time enforcement comes down. If that punishment is wrongful because current (rather than rule-breaking) players are in the institution at the time of enforcement, then punishment of the institution always becomes wrongful. Even in a case of lack of institutional control (as Penn State arguably was), the institution could always argue that its failure was to control previous players, but that shouldn't be taken out on current players. But then the university gets off scott-free and has no incentive to police its future members, because it always can argue against punishment falling on its current players.

Taken to its conclusion, Geoff's argument applies to any institution and institutional punishments. Germany should not be made to provide reparations or other compensation to Holocaust victims because the punishment falls on the current German government and citizens; ditto for arguments with respect to slavery. International law (which I rarely cite or discuss) recognizes the concept of successor governments. Why not for universities in the field of NCAA enforcement?

All that said, I agree with Geoff that this is an example of "punisher's remorse", a term I wish I had used in a radio interview I did last week. But the remorse is over punishing Penn State--the NCAA does not want one of its flagship institutions under such a harsh punishment.

Geoffrey Rapp: the NCAA's "Punisher's Remorse"

Geoff and I were interviewed by Mike Dawson of the Centre Daily to talk about the NCAA reducing Penn State's penalty and other challenges for the NCAA (O'Bannon case; concussions etc.).  Geoff has some powerful and smart quotes in it.  Here's a a couple of excerpts:

* * *

“I think what’s going on here is largely ... punisher’s remorse of sorts,” said Geoffrey Rapp, a sports law expert at the University of Toledo in Ohio. “As they now have lived with the sanction for a year, they realized the victims are the current players. It’s not really putting any hurt on the people that we think are really responsible.”

* * *

“All of these are examples of duplicitousness and double standards on the NCAA, which then makes them uncomfortable with the moral high horse they were riding last summer,” Rapp said, referring to the time the Penn State sanctions were handed down.

Read more here: http://www.centredaily.com/2013/09/28/3812610/ncaa-acting-on-punishers-remorse.html#storylink=cpy

To read the rest, click here.

Read more here: http://www.centredaily.com/2013/09/28/3812610/ncaa-acting-on-punishers-remorse.html#storylink=cpy

 

Electronic Arts' Settlement is a "Win" for Consumers

Electronic Arts' settlement of the O'Bannon-Keller litigation, assuming it gets approved by the court, is a big win for the consumer because it creates a new market opportunity for numerous video game producers.  These companies can now compete against each other by negotiating with college players, collectively as a group, over the payment of a licensing fee for the exclusive right to use clear images and actual names of players, which will result in a better quality game with better graphics for the consumer.  And the payment of a licensing fee to the players might not increase the price of the game for the consumer.  Case in point, EA pays a licensing fee to NFL players for the use of their names and images, yet the price of EA's Madden NFL game is the same as the price of its NCAA Football game in which a licensing fee is not paid to the players.  According to basic principles of supply and demand, price is determined by what the consumer is willing to pay.

The underlying basis for recognition of publicity rights is the prevention of unjust enrichment.  For years EA has been profiting from the free use of college players' identities, and now they must disgorge the unjust gain.  The "Principles of Amateurism" should not be used as an excuse by a video game company or anyone else, including the hundreds of people who run big-time college sports and pay themselves multi-million dollar salaries, to unjustly enrich themselves at the expense of the players whose efforts make such revenue generation even possible.

The NCAA, the conferences and the universities can continue to dig their heels in and keep fighting this battle but, even if they end up winning the legal battle, the principles of supply and demand will ultimately prevail.  Baseball won the battle in Curt Flood's antitrust lawsuit but it ultimately lost the war, and not necessarily because of the National Labor Relations Act but essentially due to principles of supply and demand.  There is a small supply of elite college football players with unique skill and talent known as Four- and Five-Star recruits who are not fungible and are in huge demand because the product of big-time college sports, and the revenue it generates for all of those who produce it, simply does not exist unless these players agree to participate.  Can big-time college football make the same money with "scab" college players?  What would happen if these players ultimately got together and simply decided not to participate unless certain conditions were met, and not necessarily the right to compete for wages (which these players would concede changes the product of "amateur sports") but rather the right to receive payment for the commercial use of their names/likenesses, the right to have an agent negotiate with professional teams, or the right to better insurance and more scholarship funds?  And they do not have to be declared employees by law nor form a labor union to do it.      

Ed O'Bannon reaches Proposed Settlement with Electronic Arts and Collegiate Licensing Company

Some major sports law news today - my take for Sports Illustrated.

Aaron Hernandez Discussion at UNH Law on Friday September 27

On Friday at 2:45 p.m., I'll be giving a talk at the University of New Hampshire School of Law alumni weekend on the Aaron Hernandez case and the range of legal and business issues at stake.  Those issues include (obviously) criminal law, but also issues in tort law, contract law and labor law. I've reported on this case for Sports Illustrated and SI.com, and I'm looking forward to talking about it.

Here's an outline of my discussion:

Outline

1. A Brief History of Aaron Hernandez : From Bristol, Connecticut to Bristol County (Massachusetts) Jail.

2. The murder charges and associated evidence for the death of Odin Lloyd.  Discussion will include analysis of:

·         Roles played by the alleged accomplices, Carlos Ortiz and Ernest Wallace;

·         Possibility of federal charges;

·         Hernandez’s possible defenses, including those connected to drug use; and

·         Hernandez reportedly being target of a Suffolk County (Boston) grand jury investigating the 2012 deaths of Safrio Furtado and Daniel Abreu.

3. Can Hernandez Receive a Fair Trial?  Lessons from People of the State of California v. Orenthal James Simpson and Samuel Sheppard v. E.L. Maxwell.

4. Possible Wrongful Death Action against Hernandez and Possible Vicarious Liability for New England Patriots.

5. Dispute between New England Patriots and Hernandez over money purportedly owed to him under his NFL contract.

6. Duty of Fair Representation of National Football League Players’ Association to advocate for Hernandez.

7. Expectations for how Hernandez saga will impact the ways in which NFL and college teams investigate and evaluate players.

Although seating is reserved for alums of the school, a limited number of seats will be made available to others.  If you're interested in attending, please contact Matthew Solo at matthew.solo[at]law.unh.edu.

For more information about our law school's sports and entertainment law institute, click here.

AALS Section Call for Papers on O'Bannon v. NCAA

The AALS Section on Law and Sports is looking for one speaker to join a panel in January to explore the theme, O'Bannon v. NCAA: Is There An Unprecedented Change To Intercollegiate Sports Just Over The Horizon? The deadline is Oct. 1.  HT to the Legal Scholarship Blog.

Don't Mess With Texas

I am headed to a symposium in Texas, where this weekend three professional football games are scheduled. The Cowboys are out of town but the Texans, the Longhorns and the Aggies are all playing at home. The highest priced tickets according to the scalpers is that last one, a rematch of the game that last year launched the legend known as Johnny Football. 

That moniker, by the way, is pending trademark approval for JMan2, LLC, Johnny's company which has already filed two federal lawsuits against some internet tee shirt hawkers to enforce a mark which was initially denied by the United States Patent and Trademark Office. Interestingly, the NCAA has taken the position that Manziel could keep the money he might win in the lawsuits, even though he would be in serious trouble if he had  sold the shirts himself. He might even face being suspended  for three whole quarters of a game. Thus rides the legend of Johnny Football, cover guy for this week's Time Magazine story on why college athletes should be paid. After the economic injustice heaped on  so many desperately poor college players in the past,  it would be ironic if Manziel, the son of a wealthy Texas oil man, becomes the catalyst for a change in the  NCAA Commandment: Thou Shalt Not Pay Student Athletes (so we can keep all the money for ourselves).

I wonder if in England there is as big a hoopla for the football (what we call soccer) game between Oxford  and Cambridge. Surely, in a land which so passionately embraces professional soccer there must be similar fervor for the college game. Of course, there is no such match. While universities in England and around the world have some intercollegiate sports, soccer is not one of them. These are strictly amateur affairs and the players actually call themselves clubs as opposed to teams; sports scholarships are almost nonexistent, and the coaches are anything but the highest paid employees of the University.  

The argument against paying college players is that what would be lost is the soulful beauty of young athletes competing for the love of the game; the word "amateur" actually comes from the Latin for "lover." There is some truth to that concept if you are watching, for instance, Oxford and Cambridge scullers rowing down the Thames.  But the argument is reduced to absurdity when one considers the billion dollar industries  of big time  college football and basketball where coaches average more than a million dollars a year and often make more in one game than most professors take home annually.

Hook 'em horns, as they say, whatever that means.

Recent Developments in the San Jose v. MLB Lawsuit

The city of San Jose's federal antitrust lawsuit against Major League Baseball -- challenging the league's refusal to approve the proposed relocation of the Oakland Athletics to the city -- has continued to progress since being filed in June (for earlier Sports Law Blog coverage of the suit, click here).  MLB announced in July that it has retained noted antitrust attorney John Keker to lead its defense in the suit, with assistance from Bradley Ruskin of Proskauer Rose.  Meanwhile, San Jose will be represented in the suit by long-time Bay Area attorney Joe Cotchett.  Cotchett previously helped represent the NFL back in the 1980s in its unsuccessful attempt to block the Oakland Raiders' relocation to Los Angeles.  Also in July, it was announced that San Jose's lawsuit had formally been assigned to Senior Judge Ronald M. Whyte.  Judge Whyte has presided over a number of high-profile lawsuits since being appointed to the federal bench in 1992 by President Bush. 

More substantively, MLB then filed a motion to dismiss the case on August 7th.  The league asserted a series of defenses in its brief, perhaps most notably contending that San Jose's suit must be dismissed pursuant to baseball's historic exemption from antitrust law.  In particular, MLB argued (correctly, I believe) that the exemption clearly protects the league's relocation and territorial allocation polices from antitrust challenge.  Not only did MLB contend that its antitrust exemption forecloses San Jose's federal antitrust law claims, but it also claimed that all of the city's state antitrust and common law causes of action also fail in light of the doctrine.  Specifically, the league noted that the U.S. Supreme Court's 1972 decision in Flood v. Kuhn held that the exemption effectively preempts any state antitrust law claims.  Similarly, characterizing San Jose's unfair competition and tort law claims as being premised entirely on MLB's alleged violation of antitrust law, the league argued that those claims must also be dismissed.  Finally, for good measure, the league also asserted that the city lacks standing to sue for any antitrust violations given the speculative nature of its alleged injuries (I previously discussed the standing issues in the case in greater detail back in June).

San Jose responded to MLB's motion on Friday (the brief can be found at the bottom of the link).  As expected, the city attempted to defeat the league's antitrust exemption argument by relying on the 1993 case of Piazza v. Major League Baseball, in which the Eastern District of Pennsylvania held that following Flood, the exemption only shields baseball's reserve clause from antitrust scrutiny.  Given the Piazza holding, San Jose asserts that MLB's relocation and territorial restrictions do not fall within the scope of baseball's exemption, and therefore that its suit should be allowed to proceed.

There are several problems with San Jose's reliance on Piazza.  First, as I argued in a 2010 law review article, the Piazza court's logic was highly suspect, overemphasizing a few passing references to the reserve clause in the Flood opinion in order to reach the conclusion that the exemption only protected the long since disregarded provision. Consequently, most subsequent courts to consider Piazza have rejected its reasoning.

Perhaps more importantly, however, the Piazza court also erroneously believed that the U.S. Supreme Court's 1922 decision in Federal Baseball Club of Baltimore v. National League, the case giving rise to baseball's antitrust exemption, only dealt with the reserve clause.  As I document in a forthcoming book chronicling the history of the Federal Baseball litigation (scheduled to be released in March by the University of Illinois Press), the plaintiff's claims in the 1922 case went well beyond just challenging the reserve clause.  Indeed, the Baltimore club specifically asserted in its complaint that the American and National League's exclusive control over their teams' geographic territories violated the Sherman Act.  Thus, even if one were to conclude that the exemption only shields those facets of the baseball business at issue in Federal Baseball, the doctrine would still apply to San Jose's suit.

San Jose's brief also attempts to avoid the application of baseball's antitrust exemption by citing the Curt Flood Act of 1998, a Congressional statute that revoked the exemption simply to allow current MLB players to file antitrust suits against the league.  Although the city asserts that the CFA endorsed the Piazza court's narrow interpretation of the precedent, in reality the Act is agnostic regarding the scope of the exemption, as the legislative history to the bill makes clear.

In addition to the antitrust exemption issue, San Jose's opposition goes on to defend its state law claims, arguing that baseball's exemption does not preempt the application of state antitrust law to the case, and that its unfair competition and tort claims stand independent of the antitrust allegations.  Finally, it disputes the league's standing argument, alleging that only reason the Athletics have not yet moved to San Jose is because MLB has refused to approve the relocation, thus inflicting an actual injury on the city.

Moving forward, MLB's reply brief is due on Friday September 20th.  Judge Whyte will then hold a hearing on the matter on Friday October 4th, with a decision likely handed down sometime in late-2013 or early-2014.

We Are Everywhere!

OK, time for the contributors of The Sports Law Blog to take a bow.  In the past week, our esteemed staff has filled the media with a level of expertise that speaks volumes.  The biggest stories of the week--NFL concussion litigation, paying college athletes, and the beginning of the NFL season all demand commentary from our own experts.

Probably the highest profile story, and I'm biased, is the cover article in TIME Magazine this week.  Both Gabe Feldman and I were significant contributors to the piece.  However, there were a slew of other media imprints as well, here's a quick sampling of this week's highlights:

Marc Edelman
Forbes -- NFL concussion settlement
Forbes -- legality of fantasy football
Forbes -- legality of NFL survivor pools

Timothy Epstein
Forbes -- NFL concussion settlement
WWL -- Radio interview on concussion litigation

Gabe Feldman
New York Times -- NFL concussion settlement

Michael McCann
Sports Illustrated -- NFL concussion settlement
Los Angeles Times -- NFL concussion settlement
NPR - NFL concussion settlement
Comcast Sports New England - NFL concussion settlement
CBS Sacramento Grant Napear Show - NFL concussion settlement
Above The Law - NFL concussion settlement

Alan Milstein
National Law Journal - NFL concussion settlement

Warren K. Zola
New York Times -- reform in college athletics
NPR -- reform in college athletics

[Editor's Note: I apologize for any items of note from my fellow colleagues.]

Gladwell on PEDs

Malcolm Gladwell has a piece in The New Yorker (which he defends on this podcast) that basically lays out in detail an argument I've made previously--there is no good reason that performance-enhancing drugs are outlawed when performance-enhancing medical procedures (e.g., Tommy John surgery or eye surgery to improve vision) are permitted and that people with random genetic benefits (for example, an Olympic cross-country skier with a genetic mutation that over-produces red blood cells, which provides a tremendous advantage in endurance sports) are allowed to benefit from them. It is definitely worth a read, as is the new book The Sports Gene by journalist David Epstein, which Gladwell is reviewing in this piece.

People (particularly present and former players, who should know better) often criticize PEDs as short-cuts and PED users as lazy; the player used drugs instead of putting in the hard work of making himself a great player. In fact, many PEDs actually are all about hard work; the reason cyclists blood dope is so their bodies can work harder for longer and the benefit of steroids is to allow players to work-out longer and become stronger. When Lance Armstrong insisted "I am on my bike busting my ass six hours a day", he was telling the truth; the doping was what made it humanly possible for him to do that much work.  On the other hand, we don't think of genetic advantages (say, especially good eyesight for a Major League hitter) as a short-cut, but as a natural tool that the player then must maximize through hard work. The point of PEDs is to level that genetic advantage, which he then maximizes through hard work. What's wrong with that?

Next up for concussion litigation: The NCAA

The agreement between the NFL and more than 4,000 former players to settle a lawsuit over concussions for $765 million does not end the issue. Four more players -- Jimmy Williams, Rich Mauti, Jimmy Keyes and Nolan Franz -- filed a federal lawsuit in New Orleans on Sunday accusing the league and helmet maker Riddell Inc. of hiding evidence about the dangers of brain injury.

That case could be folded into the larger settlement, the lawyer in that case said.

But no such luck for the NCAA, which faces its own class action by three former players, Chris Walker and Ben Martin of Tennessee and Dan Ahern of North Carolina State. This is not the first case to make the claim that the college football governing body failed to educate players about the risk of concussions. But what makes it interesting is that the lead attorney is Michael Hausfeld, who is also handling the O'Bannon case that accuses the NCAA of using athletes' images and likenesses without just compensation.

Here's the full release from Hausfield:

PRESS RELEASE

Hausfeld Files Medical Monitoring Class Action for Former College Football Players

Chattanooga, TN (September 3, 2013) -- Hausfeld LLP filed a medical monitoring complaint today on behalf of certain former NCAA football players seeking medical monitoring related to brain injuries caused by repeated head trauma.  The complaint alleges that the NCAA had a duty to the former players to educate them about the risks of concussions; to establish protocols to prevent, mitigate, monitor, diagnose, and treat brain injuries; and to offer education and needed medical monitoring to its former players.  The complaint further alleges that the NCAA failed to meet its obligations to the former players and these players are suffering the dramatic consequences of that neglect today.

Three former NCAA football players are bringing the case as representatives of a class of all former players.  Each of the former players suffered concussions, is at significant risk of brain injury, and is in need of medical monitoring.  Two of the named plaintiffs, Chris Walker and Ben Martin, played defensive-end for the University of Tennessee from 2007-2011.  Walker and Martin recall repetitive head trauma in scrimmages, practices, and games during their careers.  The third representative, Dan Ahern, played offensive guard for North Carolina State from 1972-1976.  Ahern recalled being flown from Pennsylvania to Raleigh for hospitalization after suffering a concussion in a game against Penn State during his senior year. 

Lead counsel on the complaint, Michael Hausfeld, stated “The NCAA has not taken the necessary steps to protect these former players even though the medical tools to assist them have been available for some time.  It is not too late now for the NCAA to offer important education and needed medical testing to these former players.”

The complaint seeks a court-supervised, NCAA-funded, comprehensive medical monitoring program to benefit former football players.  The class is limited to players who did not go on to play professional football in the National Football League as those players are covered by a separate proposed settlement.

Powerful Op-Ed by Alan Milstein in the National Law Journal on the NFL Concussion Settlement

In a new piece titled Brutality's The Winner in NFL Settlement, our own Alan Milstein looks at the broader implications of the NFL concussion settlement for The National Law Journal. 

Here's an excerpt:

What remains unsettled after U.S. District Judge Anita Brody in Philadelphia signs off on In Re National Football League Players' Concussion Litigation is whether the game itself should survive.

Fifty years ago, after boxer Davey Moore died after sustaining repeated blows to the head in a nationally televised fight, Bob Dylan asked whether the promoters, the writers and even the fans were responsible, singing their answer that "Boxing ain't to blame. There's just as much danger in a football game. It's just the old American way. It wasn't us that made him fall. No, you can't blame us at all."

Maybe. But it's worth asking whether it is even ethical to root on and support a game when we know the players are placing themselves at serious long-term risk. And even if we are not to blame, because we paid to watch the gladiators duel it out from our perch in the Coliseum, what does it say about us when we encourage young people to enter this very dangerous arena?

As bioethicist Arthur Caplan told me, the settlement "only reinforces my ethical anxiety about a league that knows its game greatly harms its players but won't fess up, and instead, talks about the 'safe' way to play the game to worried parents in its commercials." In 1905, a year when 18 athletes died in intercollegiate football, President Theodore Roosevelt threatened to abolish the game if the brutality could not be reduced. Perhaps he should have acted. 

To read the rest, click here.

Will NFL Concussion Settlement Lead to League Expansion?

On Friday, I wrote an article on Forbes SportsMoney discussing one interesting way that the NFL might seek to pay off its concussion settlement -- by expanding.

In the article I note: "If the NFL can sell an expansion franchise for just $1.275 Billion — a reasonable amount in light of recent franchise sales — this amount would fully offset the cost to paying off the recent concussion settlement, even presuming a 40% tax on the franchise sale."

For those interested in learning why the NFL might go this route, as well as the historical link between legal settlements and expansion in sports, please see here.

Happy Labor Day!  And best wishes on the new academic year to Sports Law Blog's many faculty and student readers.