Outline

I. College and Olympic Sports A. Amateur athletes

1. historical def: amateurs pay to play 2. Amateurism really only exists in high school and college athletics3. Background of NCAA (3 divisions)

a. Basic governing structure of NCAA divided into 3 (really 4 subgroups)i. Div I (divided for football reasons)

o Div Ia – big football schoolso Div Iaa – small football schools

ii. Div IIiii. Div III

b. scholarship rulesi. max # per sport: only cover tuition, fees, room and brd; any benefit beyond this can render athlete ineligible;

Are college athletes on a full ride professionals?c. eligibility

i. allowed 4 seasons of competition, must be completed w/in 5 yearsii. freshman eligibility: must meet certain requirements iii. can be professional in one sport and not another and still have eligibility

d. Recruitingi. Heavily regulated: who can contact, how often can contact; what materials can be sentii. High school athlete allowed 5 paid recruitment visits, can’t receive any additional benefit

e. Practice limitsi. vary depending on whether in/out of season

f. Doping controli. Schools responsible for making sure football & baseball players available for testing

g. NCAA is legally considered to be a private organization, no gov’t reg4. Olympic Movement

a. IOC governs entire structure: power comes from who gets to have a sport at Olympics i. IF – International Federation: each sport has its own governing body ii. NOC – National Olympic Committee: each country has its own governing body

o NGB – National Governing Body of each sport: must follow all rules of IOC, NOC, NGB o NADA: national anti doping agencies: enforce WADA

iii. WADA – world anti doping agency: oversee doping control b. NOC legally considered to be a private organization, no gov’t reg

5. Contractual Naturea. Collegiate world & Olympic movement are contractual in nature; athletes agree to all terms & conditions of K in

exchange for being allowed to competei. Occasionally public law steps in: in US, Amateur Sports Act

o Act gives athletes certain minimum rightsB. Athletes rights

1. Right v. Privilege: Is there a right to participate in sports, or is it a privilege?a. Basic presumption is that participation is a privilege

2. Breach of K claims:a. Reasonable academic performance (Taylor v. Wake Forest)

i. Most Scholarships are Ks for academic and athletic performance; Ks are regulated by NCAA regs, bulletin, etc; athlete couldn’t determine academic performance on own, school generally gets to decide what qualifies as reasonable academic performance, not athlete

b. For a breach of K to exist the student must allege more than insufficient education (Ross v. Creighton)c. Financial aid agreements don’t amount to K right to play (Jackson v. Drake)

i. Cts don’t recognize educational malpractice claims for policy reasonsd. Fraud claims may stand if athlete relied on promises made about educ & tutoring support

3. MySpace problems

a. Some schools prevent athletes from having postings on MySpace; is this ok – depends on if participation is a right v. a privilege; and who is imposing the restrictioni. not a violation of 1st Am rights, if restriction imposed by private institution (i.e. Loyola, Valpo)ii. might be a violation if done by state schools, b/c it is a state actor

C. Coaches Contracts 1. 2 situations:

a. Negotiating coaches Kb. When coach is fired

2. Perquisites: (Rodgers v. GA Tech)a. Coach may be reimbursed for things that were personal benefits (anything w/ direct accrual); but not for things that

were tools to perform job (i.e. secretary) b. Depending on understanding of parties may or may not need to specify these benefits in K

3. Reassignment of individualsa. School can reassign individuals based on assessment of staffing needs (Monson v. Oregon)b. Public v. Private schools: more restrictions on state schools & coaches have more rights during hiring/firing process

i. Due process may apply4. Things to consider when negotiating Ks for college coaches

a. lengthb. compensationc. duties (grad rate, fundraising, following NCAA rules, answer to, etc)d. reassignmente. liquidated damages (if coach leaves for better situation)f. reasons for fireg. outside incomeh. supervise assistantsi. fringe benefits

D. Constitutional Protections (Amateur Sports Associations: Rules, Procedures, Eligibility and other Issues)1. State Actor v. Private Actor

a. If can prove state action then broader range of protections existb. Test for state action

i. Joint action: 3 things must be proven to show joint action o 1) Legal frame work; (2) Delegation of authority (3) Accepting benefits

ii. Close Nexus: actions of private group need to be attributed to state by showing state control; must show private entity is an agent of govt and govt must approve its decisions

iii. Possible 3rd test: entwinemento Interactions must be so that private association and govt are truly entwined together o School athletics have an educational component, making them a public function

2. State action related to Olympic & NCAA athletesa. Olympic sports: is USOC/USADA a state actor (2 theories)

i. No joint action if no funding ii. And no joint action if governing body (i.e. USOC) has exclusive jurisdiction

b. College sports: i. No joint action regarding NCAA b/c NCAA creates framework, not govt

3. Old exam Q: why have state HS athletic assoc been found to engage in state action, but NCAA has nota. Tarkanian is major case:

i. Ct said NCAA not a state actor b/c its members are from many different states, thus NCAA can’t be state actor of single state since it has nationwide membership – focus is on collective membership

ii. Ct noted that it would be different if all members were from same state – created justification for finding state action in HSAAo However, even if all members from same state, must still show: joint action; close nexus; or entwinemento Tests for state action met regarding HSAA b/c HSAA controlling bodies comprised of public school

officials and there is delegation/control over a function that public schools would normally carry outE. NCAA Enforcement

1. Freshman eligibilitya. Requirements

i. Qualifier: student who meets core course and GPA/standardized tests requirementso 14 core courseso Minimum GPA and standardized test scores

ii. Non-qualifiero Student who hasn’t graduated from high school, or does not meet either GPA or standardized test scoreso Non-qualifiers may not attend practices or team meetings

b. NCAA rules that a are discrim on their face (Pryor)i. Rules that have the effect of limiting those eligible for admittance based on race are facially unconstit (i.e. rules

aimed at producing higher grad rates for blacks unconstit b/c result in fewer blacks getting athletic scholarships)2. NCAA Enforcement

a. Staff Investigationi. Why would an institution self report

o To reduce the severity of the penalties for non-complianceo NCAA expects schools to cooperate and not act in an adversarial fashion

ii. If not self reported how does NCAA find outo Reporters inform media; Anonymous tips (from competition or others)

iii. if info is reasonably substantial, institution will be informed that a preliminary investigation is under way o NOTE : if NCAA informs school athlete is investigated best thing to do, is w/hold athlete from competition

b. Preliminary Investigationi. Institution is presumed guilty and has to prove its innocence ii. People notified of investigation are institution president, & individuals involved in infractioniii. Following prelim investigation process can go in one of 3 ways

o Case can be closed for lack of evidence; oro Major violation can be found and summary disposal discussions begin w/ school; or

If major violation NCAA serves Official Inquiry on CEO of institution to begin a Formal Investigation Before this, school will usually hire independent outside counsel to conduct internal investigation If school disagrees w/ violation it may appeal to the Infractions Appeals Committee

o Secondary violation may be found and appropriate penalties then discussed and imposed If school disagrees w/ secondary violation it may appeal to VP of NCAA staff

c. Official Inquiryi. Burden of proof is on institution to show why add’l penalties should not be assessed

d. Infractions Appeal Commission i. To argue penalty go to NCAA past decisions data banks, this is very difficult to do

e. Classification Infractioni. Major: all violations that aren’t secondary, or multiple secondary violationsii. Secondary: violation that is isolated or inadvertent in nature; provides only minimal advantage, and doesn’t

include any significant recruiting inducement or extra benefitf. Penalties – see rules handout (enforcement, rule 19.5)

i. Secondaryo (1) Termination of recruitment of prospect; (2) forfeit matches in which ineligible athlete competed; (3) bar

coaching staff from off-campus recruiting; (4) fines; (5) limit # of fina aid awards available; (6) suspension of coaching staff (7) public reprimand

ii. Major:o (1) public reprimand; (2) probation; (3) reduction in # of fina aid awards; (4) prohibition against

recruitment; (5) individual or team awards/records may be stricken; (6) financial penalty; (7) no TV coverage; (8) no postseason eligibility

3. Ethical Conduct: Article 10a. All participants in collegiate athletics must act honestly at all times, to represent the honor and dignity of fair play

associated w/ competitive sportsb. Gambling Activities, 10.3:

i. Individuals associated w/ athletics department must not knowinglyo Give info to individuals involved in organized gambling activities concerning college competitiono Solicit a bet on any teamo Accept a bet on any team representing school

o Solicit/accept a bet on any intercollegiate competition for any item that has tangible valueo Participate in any gambling activity that involves intercollegiate or professional athletics using any method

employed by organized gambling (i.e. booky, parlay card, etc)ii. NCAA manual is very ambiguous regarding what is permitted and what is not

4. Attorney’s rolea. When school charged w/ major violation, definitely higher outside counsel to conduct investigation

i. rules that apply here are not grounded in reality; must keep communication lines open w/ enforcement staff; keep media in the loop; fashion plan that shows how you’ll control staff

F. High School Eligibility 1. Due process analysis

a. State actionb. Trigger

i. To get a full analysis an athlete must showo he was treated differently that those similarly situated,o some sort of property or civil interest at stake

ii. However, there are no rights to play sports c. Was state action arbitrary and capricious

2. Equal protection analysisa. Classification of a transfer student

i. 2 elementso Must be distinct group

All that transfer from one district to another without parentso Some rational basis for distinguishing this group

Used to deter school jumping and recruiting Treat all within the group the same Everyone was treated the same within the group

G. Gender Equity 1. Equal protection analysis/elements: (Hoover & Williams)

a. Intermediate scrutiny appliesi. Important govt interest for preventing one sex from being involved, and ii. Methods must be substantially related to achieving that interest

o interest can’t just be to protect girls, b/c girls must be permitted full participation in educational programs o however, if there are actual physical differences b/t sexes and classification based on sex is only way to

ensure a team will remain all one sex, then standard may be metb. Exclusions under EP

i. it is not ok to exclude one sport from determining equal # of opportunities for both sexes, even if not excluding means that many other sports will need to be created for opposite sex

ii. ok to allow 1 sport to retain own revs b/c it provides incentive to all sports to develop rev-generating capability of their own

c. “Separate but Equal” is okay regarding gender equality as long as it doesn’t result in stigmatizing one group2. Remedies:

a. athletics is not a fundamental right, thus cts won’t order that there be male and female teams; but if the school opts for having sports it must do so equally so school must provide:i. Either separate teams for males & females, or allow girls to play on boys teams

3. Title IX - Statutory remedy separate from constitutional claimsa. OCR Policy: programs don’t have to be identical but opportunities must be similar/equivalent, things should be fair

i. Title IX is applicable to universities b/c they receive federal fundingo only need to touch fed funds for a moment and you are governed by Title IX (Horner v KHSAA)

ii. Civil Rights Restoration Acto Following Grove City (where ct said Title IX applied only to particular programs) Congress extended full

reach of Title IX to all programs of any institution of public school that accepts federal fundingiii. Monetary damages are available in actions pursuant to Title IX (Franklin)

b. OCR Enforcement Areasi. Athletic financial assistanceii. Equivalency in other athletic benefits and opportunities

iii. Effective accommodation of student interests and abilitiesc. Test for Equal Opportunity

i. Individual sport equivalents (i.e. baseball to softball)o If there’s a team for 1 sex & limited ops for the other then need to offer same equivalent op to other sex

ii. Program test (3 prong test):o (1) Proportionality: what % of athletes are women, what % of student body is women

following proportionality scheme is not a quota system b/c substantial proportionality is just 1 factor to look at

o (2) History of trying to expand: to give opportunities to underrepresented sex; If off on proportionality, you may still meet Title IX if this applies

o (3) Effectively Accommodate: (P seeks to show unmet interest) if disproportionate and historic expansion attempted institution must show that the interests and abilities of the members of that sex have been effectively accommodated by current program Disproportionality is not enough, but must show unmet interest Would cause quotas There must be historical discrim against one sex and an unmet interest

o plaintiff starts out w/ burden must show proportionality is not equivalento then burden falls to D to show historic expansion or effectively accommodating

d. Relative interest arg (discrim ok b/c women have less interest) is invalid b/c Title IX is designed to remedy discrime. Analysis: (Pederson v. LSU)

i. Must prove that specific team discriminated againsto Must show that there was a comparable sport for other sexo Then show disproportionalityo Must show there’s an interest: party is able & ready to compete (expression of interest in sport is enough)o If there’s request for specific sport there must be sufficient competition w/in region school normally

competes inii. Prove intent to discriminate

o To show violated Title IX just need to show that women were treated differently4. Old exam Q: Why won’t cts impose a remedy if it finds a university violated Title IX and what compliance

options are available to school:a. Cohen v. Brown reasons why ct won’t impose remedy

i. School is in better position to fashion remedies that are feasible for school to accomplish;ii. Sports have educational elementiii. Cts defer to schools need to control education processiv. Schools have better understanding of student body, alumni, and finances

b. School has 3 major options for compliance:i. Cut positions from over represented sexii. Eliminate athletics completelyiii. Increase opportunities for under-represented sexiv. Ultimate goal is to have opportunities substantially proportionate to enrollment of sex to meet Title IX

o school meets Title IX if it can show history of expansion for under-represented sex; oro if no historical expansion interest of underrepresented sex has been effectively accommodated

II. Professional League Sports A. Business Model

1. League 2. Tour: i.e. golf, tennis

a. Players participants are entitled to be part of tour by qualifying3. Open Event: everything else; individual events where athletes try to earn prize money

B. League: baseball, football, etc1. Contract

a. Look to league bylaws, constitution, collective bargaining agreementb. K define common controls

2. Common controla. Over revenues, expenses, broadcasting rights, licensing for merchandise

3. Teams

a. They are the member of the leagueb. In most situations they retain some autonomy – i.e. what business approach it will

4. Self containeda. Legislation – maintain own rules for regulationsb. Dispute settlement – own internal discipline and dispute settlement process

5. Challenge K, systema. Although there are internal processes for resolving disputes sometimes outside challenges arise when unhappy w/

how internal regs handle issueb. Arise in 2 ways:

i. Use rules of K to go to ct and arg rules aren’t being properly applied – 2nd guess of how league decides thingsii. Mandatory laws: laws can’t K out of – i.e. antitrust

C. Anti-trust exemption1. Sherman Act: intended to preserve free/open market competition, not individual competitors2. Threshold – interstate commerce3. 2 Activities prohibited

a. Agreements/conspiracies that restrain tradei. Looking for something that harms consumers

b. monopolization of a particular market4. Reserve Clause

a. Backgroundi. 1879

o 1st implemented b/c of competition b/t teams for players, drove up salaries; resulted in allowing each team to reserve 5 players per team so they couldn’t be stolen

o Initial reason was to keep salaries down ii. 1883

o Nat’l agrmt signed b/t existing teams & # of players reserved went from 5 to 14, also put in players K that they are reserved player

iii. 1890o Beginnings of players union, but it was powerless

iv. 1922o Federal baseball exclusion – exempts baseball from antitrust suits

v. 1970-75o Flood pushes reserve clause towards a matter of collective bargainingo Messersmith arb: arbitrator asked to rule on reserve clause, said there has to be some limit on reserve clause

leads to CBAvi. 1976

o Concept of free agency comes about becomes a part of CBAvii. Option clause

o Differs from reserve clause – NFL/NHL others use as a way of accomplishing reserve clause to a degree, allow teams to have 1st rights to players, a restriction on free agency to protect teams

b. Old exam Q: if an anti-trust claim is brought against pro league when is rule of reason analysis applied, and what are steps in rule of reason analysisi. Under Sherman Act 1st must show existence of an agreement b/t 2 entities that harms/restrains trade and

actually caused injuryo There may be per se violations (i.e. price fixing); but they’re rareo Rule of reason analysis applied If no per se violation

ii. steps in rule of reason analysiso this is basically a balancing test b/t competitive and anti-competitive effectso ct also looks to see if there are less restrictive alternativeo to determine effect ct must determine what the market is (geographical or product)

in determining market ct looks at interchangeability and cross elasticity of demando once market is determined will balance harms to competition v. benefitso regarding leagues it’s hard to determine b/c teams compete against each other but at the same time work

together to have viable competition/league

D. Modern Scrutiny of the Exemption1. BB as interstate commerce: Flood v. Kuhn

a. Federal Baseballi. Ct looked at threshold Q, is BB interstate commerce; ct said not exactly bus thus not engaging in interstate

commerce, just putting on exhibitions, crossing state lines was only incidental; b/c not interstate commerce it was exempted

b. Toolsoni. Ct again affirmed exemption for 2 reasons: (1) b/c Cong was aware of status of BB and it did nothing, so defer

to Cong; (2) BB developed a detrimental reliance system that rests on reserve clause, if take exemption away would cause all kinds of problems, Ct deferred to Cong to draft a solution

c. Shuberti. Antitrust action against promotion of theatrical attractions throughout US, Ct said exemption only applies to

BB, not to any other types of exhibitions; Ct upheld exemption on stare decisisd. Radovich

i. Other pro sports weren’t able to have same anti-trust exemption as BB, e. Results from Flood

i. Ct said BB is interstate commerceii. Fed BB exemption limited only to BBiii. Fed BB still has some stare decisis valueiv. Since Cong has known about Fed BB exemption and has not done anything about exemption, then it is ok and

only Cong may change exemptionf. Result from Flood was to uphold Fed BB exemption only to Reserve Clause; but if 7th Cir is right and it does

apply to business of baseball (specific market) Ct then analyzed that issueg. Dissent

i. Douglaso If Ct originally made the mistake we should fix it; if Cong won’t fix it, Ct should; Ct has auth to fixo victims of reserve clause: can’t practice trade so it is a restraint on players

ii. Marshallo Discusses economic freedom that players being denied is taking away players personal rights/freedom, only

Cong can take those away, not Ct – Cong hasn’t expressly done so, thus Ct should reverse2. Reserve Clause applied to business of baseball (Piazza v. MLB)

a. Still must let BB have an exemption even though underlying reasoning (not interstate commerce) for exemption no longer exists

b. Specific Marketi. Market anti trust – anti trust applies to specific marketsii. Fed BB market

o Ct interpreted business of baseball and Fed BB exemption to only apply to the “games” market of baseball, not other aspects of the BB market

iii. market does not include market to buy and sell teams, but relocation of teams might fit into “games” market of BB

c. Piazza v. MLB:i. P allege that MLB and an affiliated individual frustrated their efforts to purchase San Fran Giants and relocate it

to Tampa. P’s charged Ds infringed upon rights under Constit & violated fed antitrust laws ii. P allege BB never intended to permit Giants to relocate to Florida and failed to evaluate fairly and in good faith

their application to do soiii. P claim: BB placed direct/indirect restraints on purchase, sale, transfer, relocation of, & competition for teamsiv. Ct concluded antitrust exemption created by Fed. BB limited to BB’s reserve system, and b/c reserve system not

in issue here BB’s arg that it’s exempt from antitrust liability in this case is rejected v. market to which Federal Baseball exemption applies:

o product: i.e. exhibition of BBo sellers: i.e. team owners, ando buyers: i.e. fans and, perhaps broadcast industry

vi. physical relocation of a team and baseball’s decisions regarding such a relocation could implicate matters of league structure, and thus be covered by the exemption

3. Curt Flood Act

a. Act said anti trust act does apply to employment of Major League playersb. Act did not speak/apply to Minor League player contracts, the way the Minor League system is set up, the buying,

relocating, and merchandizing of minor league teams (doesn’t mean anti trust doesn’t apply to Minor League); left Reserve Clause in force regarding Minor Leagues

c. Exemption Nowi. Cong did not grant a specific anti trust exemption to BB in these areas, but Cong won’t mess with exemption

implemented by Cts; Cong really just saying that exemption does not apply to players Ksii. Thus can still bring anti-trust claims against MLB in some areas

E. League Decisions1. Structure –

a. NFL example: has 2 entitiesi. Unincorporated – i.e. Brd of Comm, Committees, Commissionerii. Properties – manages all profit making activities of NFL, makes things more efficient and maximizes profits (to

leave to Brd would be problematic b/c of too many individual interests)2. Membership Decisions Requirements

a. Interference w/ Ks (Morsani v. MLB)i. Elements Tortious Interference (P must allege and prove)

o Existence of business relationshipo Intentional and unjustified interference w/ relationship by Do Damage to P as a result of breach of business relationship

ii. Defense to tort of interferenceo If people bringing claim are parties to K; can’t tortiously interfere w/ own K

iii. Exception to defenseo Can lose privilege by acting w/ malice

iv. main thing to take is that product is broader than individual teams it is right to play other teams; so ct will look at other teams when making anti trust decisionso product of entertainment: membership rights, etc

b. arbitrary and capricious acts (New Orleans Pelicans)i. Elements

o Rule violationso Must be arbitrary & capricious

If acts of D are arbitrary and capricious P will be entitled to specific performanceii. ct misapplied challenge for arbitrary and capricious

c. Elements of anti-trust claim (Piazza v. MLB)i. Need to ID particular market in which competition is being harmedii. MLB is a market, and it was being harmed b/c team was later sold to another buyer for a lesser amt

d. Anti trust law and players (Levin v. NBA)i. Anti trust law protects competition; it does not protect individual competitorsii. league is not market it is just an organization, b/c there were rules that could not be violated, thus precluded sale

e. Ownership in multiple leagues (North American Soccer v. NFL)i. NFL structure v. Soccer structure

o Soccer brought claim b/c said NFL rule to require NFL owners to sell shares in soccer violated antitrust law Parties were fighting over capital investors – market was capital

o NFL worried about soccer taking its fans and support basisii. Sherman Act prohibits agreements and conspiracies to restrain tradeiii. Types of violation

o Per se: plainly anticompetitive: i.e. limiting markets, price fixing, etco Rule of Reason: inquiry into whether challenged agreement is one that promotes competition or one that

suppresses competition, i.e., whether procompetitive effects of restraint outweigh anticompetitive effectsiv. NFL defended ban saying it ensured loyalty of owners in competing against other leagues

o Ct said no b/c NFL’s long term success despite several cross ownership agreements proved ban was not necessary to accomplish expressed goal; nor was ban needed to protect confidential NFL info

v. Marketo There is a submarket for sports capital and skill o In sub market owners of major pro sports teams constitute a significant portion of market players

o existence of submarket & importance of the function of existing team owners as sources of capital in that market are implicitly recognized by the defendants' proven intent in adopting the cross-ownership ban

vi. Proof Necessaryo Must show that any legitimate purposes could not be achieved through less restrictive means

in absence of evidence that cross-ownership restrains or threatens competition b/t 2 leagues or their member teams, the mere common ownership of some teams and membership of some owners on league committees do not constitute a violation of the antitrust laws

f. Old test Q: in what circ (other than negotiating w players’ union) can pro league be a single entity for anti trust purpose:i. if there’s a “complete unitary of interest” then can be considered single entityii. these occasions are rare since at core each team does compete against othersiii. even if 1 league competing against another probably can’t use single entity defense b/c would result in too many

restrictions on sportsiv. leagues might be able to argue “single entity” in relocation cases, since they’re needed for league survivalv. might also be able to use “single entity” regarding merchandising

3. Relocationa. Agreements w/in league (LA Coliseum v. NFL)

i. Elements of anti-trust claimo Agreement among 2 or more persons (or distinct business entities)o Intended to harm or unreasonably restrain competitiono And which actually causes injury to competition

ii. Single entity def.o NFL says it is only 1 entity and individual clubs are not competing against each other; NFL says it is only

producing entertainment, and must compete against other types of entertainmento Ct said no, NFL missing central control (single decision maker for all NFL activity) to create a single entity

iii. Restrain Competitiono NFL Rule 4.3 restrained movement of teams so it was a restraint

iv. How agreements Cause Injuryo Market Tests for injury

Product (real battle is over this): - Whether the team is marketing an entertainment product or something more specific i.e. football- high price of tickets and people not switching to other forms of entertainment showed that product

was football, not just entertainment Geographic – not that important

o Harm v. Benefit There is a rational reason to dividing territories, even though that creates a harm

v. Least Restrictive Means Factorso in the face of anti trust laws leagues must act in way that is least restrictiveo Factors: population, economic projections, facilities, regional balance, etc.o Reasons NFL had for restricting movement were weak b/c LA was large enough to support 2 teams

b. Restraints on movement (NBA v. SDC Basketball)i. Raiders – per se

o Ct said rule of reason analysis should govern ii. Factors: if a team bases decision on factors discussed in Raiders then decision is likely safeiii. Continues idea that leagues can restrain movement of teams & each case must be examined on case by case

basis c. Prohibitions on negotiations due to league actions (St. Louis CVC v. NFL)

i. Atmosphere o League may prevent various teams from entering into negotiations to move to a specific city out of fear of

having to pay high NFL feesii. Proof elements

o Must be able to prove actual fear of other league teams from biddingo Must show they didn’t bid due to anti-trust reasons other than other legitimate business reasons

iii. Tagliabue believed NFL should not be subjected to anti-trust b/c marketing entertainment in form of sports and should be allowed to act and be treated as a single entity

iv. Zimbalisto Why move:

To augment profit and increase franchise value But current situation allows teams to do this w/o moving b/c leagues have created monopoly, so supply

is kept just below demand; allows teams to extort local govts to treat them nicely or they will moveo Monopolyo Stadiums construction

Stadium has no greater impact than a department storeo Economic benefit

Of teams/stadiums is greatly exaggerated; not new revenue being spent, just diverting existing revenue May not be true if team draws in non local fans

o Extortion (see above)o Remedies

Create more supply by creating more teams Allow cities to buy teams that want to relocate Create national sports council that would regulate and decide which cities get franchises

4. Merchandising/Broadcastinga. Merchandising and Trust agreements

i. NFL Properties v. Cowboys: Cowboys tried to circumvent NFL trust (i.e. Pepsi, Amex allowed to use specific team logos)

ii. Trust Agreemento Breach: Cowboys effort to circumvent NFL trust was close enough to a breacho Duty of good faith: breach of these would result in punitive damages (ct did not address it here)

iii. Lanham Acto Focus of test is are consumers being tricked into buying something that is not the original; damages and

right to protect that is the trademark holdero Must prove valid trade mark; ando That D intentionally exploited markso Doesn’t require exact trademark infringement

iv. Misappropriations: monies that Cowboys earned from infringement should go to NFLv. Old exam Q: what needs to proved to show violation of trademark

o Must show violation of Lanham act To do so must show you are lawful owner of trademark and not alleged violator Must also show that unauthorized use of logo creates confusion among consumers

o could also argue tortious interference if team allowed violator to use logo must show D knew of K, and D intentionally induced 3rd party to break K or render performance

impossible (i.e. prevent league from honoring Ks)b. Broadcasting:

i. Bulls v. NBA: NBA req’d clubs to transfer broadcast rights to NBA, to increase NBA revenues; NBA sold broadcast rights to NBC, what NBC didn’t use went back to clubs

ii. Sherman Acto Sec 1 – prohibits conspiracy (2 or more parties getting together to restrict competition)o Sec 2 – prohibits single actor from abusing power to restrict competition

iii. Sports Broadcastingo In certain professional leagues, league will be allowed to violate Sherman Act when selling

broadcasting rightso Exception: Protects leagues when dealing w/ national network, not working w/ local broadcast

marketsF. Authority of League Commissioners

1. Best interest power (Finley v. Kuhn)a. Commissioner has power to negate any deal if he believes it is not in best interest of baseball

b. Ct said commissioner has unfettered authority to 2nd guess/change some conduct of owners that is otherwise permitted by rules of baseball

c. Possible limitation – at one point there was an express limitation but that is no longer the case2. Arbitrary & capricious

a. General rule – cts very reluctant to look into these types of matters and won’t decide if decisions are right/wrongi. Exception – cts will only review decisions to make sure they are made in a procedurally fair manner ii. Decisions can’t be arbitrary and capricious

3. leagues may have rule stating can’t take any waiver recourse to ctsa. rule is generally applicable but there are 3 situations where rule won’t be applied

i. if bargaining process is unequalii. if it is forced upon you unknowingly, oriii. if it is as a result of fraud (did not knowingly accept clause)

b. exceptionsi. clause will stand but not in face of challenges to mandatory law; or if it is procedurally unfair

c. thus commissioners have very broad powers4. Should the commissioner be the final decision maker: (Pete Rose)

a. Basic claim: Rose argued ok for commissioner to investigate but commissioner should not be final decision maker b/c he is biased

b. Barry Bonds, suspended?i. Would commissioner have power under best interest of baseball to suspend Barry Bonds for supposed steroid

use o According to Finley yes he does have power; but he probably should not invoke power

c. CBA is other possible limit on commissioner powerG. Labor Relations – CBA

Union – CBA – League

Players – K – Owners1. CBA covers gen’l work related requirements w/in league

a. Minimum working conditions, minimum compensation, length of CBAb. May deal w/ disciplinary matters and enforcement

2. Rolesa. Union organizes players and negotiates for them

i. Union negotiates checks on commissioner’s powerii. Creates unbiased arbitrators

b. Commissioner is like the lead negotiator for the leaguec. League intended to be an arbiter; but really just represents ownersd. Owners have divergent views but negotiate opposite unione. Agents – not much in CBA, put negotiate players individual interests

3. Big problem b/t league and union is over revenue sharing 4. NLRA v. anti trust

a. Rights – i. CBA allows to collectively negotiate to achieve best interest, allow competitors to conspire/agree on a common

approach to dealing with other side, players may also do thiso This is really a restraint on what options are available to negotiating partieso Parties get together to restrain tradeo Congress has said that labor interests are better protected under CBAs than under anti-trust, so allow CBA

to governb. Unfair labor practicesc. Monopoly subjects

5. NLRB a. function

6. Two example of CBAsa. NFL

i. Certified 1968

ii. Attempts to save players, satisfy anti-trust laws, and still restrict movement of players:o Rozelle Ruleo Right of First refusalo Plan B: 37 players on each team were protected and rest weren’t

iii. Currento Salary cap tied into revenue – 50:50 revo Free agency 5 year plan, once in league 5 years, may become free agento Franchise player – allow to keep a player even if he could be free agento Rookie pool – reduced # of draft rounds and amt of money available to spend on rookies

b. NBAi. Right of 1st refusal; replace option clauseii. Hardship waiver – if can prove financial hardship then could be eligible for draft (and void 4 yr restriction)iii. 1983 salary cap; right of 1st refusaliv. 1988 2 draft rounds; 1st refusal onlyv. Current

o Hard cap – determined by years of serviceo 5 yr planso Team cap 55% of BB revenue can go to players salary

Luxury tax applies if go over7. CBA cases

a. Brown v. Footballi. Post impasse

o Ct disagrees w/ P’s assertion (Once reach impasse labor laws no longer protect you and anti-trust law applies) and that there must be something practical going on

ii. Statutory exemption iii. non-statutory exemptions – NFL this existed and anti-trust laws should not be applied

o purpose - even if an impasse owners and unions must still talk and work together to get past impasse, so can’t go straight to anti-trust laws

o what’s permitted: Ct does not clarify what leagues can do when they are at an impasse – look at Mackeyb. Roselle rule (Mackey)

i. Roselle rule: commissioner to decide what compensation should be given to a team when a player becomes a free agent and leaves team

ii. Old exam Q: what is purpose of non-statutory labor exemption to anti-trust laws and when is exemption in forceo Purpose of exemption is to encourage collective bargaining and negotiation process

If no exemption then unions wouldn’t exist Cong/Cts want unions so created exemption to encourage bargaining

o Exemption is in force if following 3 elements of non-statutory exemption anti trust claim are met Restraint of trade that primarily only affects parties to CBA Agreement concerns a mandatory subjects of CBA

- wages, hours, working conditions- Roselle rule

Agreement is product of legitimate arms length bargaining- Not the case here b/c rule was unilaterally adopted by commissioner

iii. rule of reason o business purpose – don’t want players leaving smaller markets w/ lack of players b/c everyone flocks to big

marketso harm: suppression of salaries o but must apply least restrictive means, there are better ways to achieve purposes w less harm than Roselle

ruleiv. business purpose v. harm

o need to use least restrictive means to achieve business purposec. cases show that we are getting closer and closer to having no restraintsd. Robertson v. NBA

i. Non-statutory exemptiono NBA claims its protected from anti-trust laws by a labor exemptiono Exemption only applies to employers, not NBA (or leagues)

But the league would be protected if it was engaged in labor discussions Non-stat exemption protects employers clubs when they are participating in collective bargaining Merger talks don’t fit into a mandatory negotiations area under labor act

e. Smith v. Pro Footballi. For Smith this was a per se violation, could get treble damages b/c NFL draft violates Sherman anti-trust act

o Per se violation draft fell into was a group boycottii. rule of reason analysis

o business reasons: draft created parity w/in league parity needed to create interest and maximize profits – league is a single entity, need each other

iii. Ct analyzed NFL’s need for draft and said draft was not least restrictive or effective meanso Thus if draft creates some harm (reduces players ability to neg.), which it did, and there was not a good

business purpose b/c draft was not effective – teams at bottom weren’t getting any betteriv. Ct suggestions:

o limit draft to just 2 rounds, or o have multiple rounds and allow multiple teams to draft single player, but only 1 team can sign 1 player per

roundv. NFL draft now

o The NFL succeeded in creating parity, but this was more due to free-agency and salary capsf. MLBPA v. Clubs

i. New ruleo Issue: Players arg that any subjects that effect players must be approved by MLBPA 1st

o Clubs say no it doesn’t affect players, b/c “rookies” are not professionals yet they are still amateurs, not members of CBA yet

o Players said no it does effect them b/c there is a limited pool of players (free agents and rookies) that clubs are competing for and if there is a system that allows the salaries of the rookies to be suppressed it has a secondary effect of reducing salaries of free agents New rule did have an effect on salaries

g. Silverman v. MLBi. 1990 CBA

o There was a min salary for players w/ less than 3yrs service and players w/ 3-6 yrs could demand salary arbitration

ii. MLB offero MLB wanted to get rid of arbitration to keep salaries downo If there is an impasse if it pertains to a mandatory subject employer can implement change unilaterally

iii. Major question: was this a mandatory subject of bargainingo Ct gave lots of deference to NLRBo Said it was mandatory b/c it had a direct effect on wageso Ct would not protect MLB attempt to unilaterally implement elimination of 3-6 yr player salary arbitration

H. Enforcement of Sports Ks1. Grievance and Salary Arbitration

a. An obligation to submit a dispute to grievance arbitration may be created contractually (in CBA & player Ks)i. Rules for arbitration are all decided by Kii. Rules for arbitration come from CBA or references in K to rules created by governing arbitration bodies

b. If there are challenges in dispute process what law governs?i. This deals w/ K law so if there are conflicts in K law mandatory law applies – it regulates arbitration process

o sources of mandatory law that apply: Labor or commercial

- In labor settings there are some fed regs that govern c. Main pt: 3 types of law govern arbitration process

i. K law

ii. Mandatory law (govt created limits/guidelines that limit arbitration)iii. Common law surrounding CBA (may be traditional case law)

d. Challenges to arbitrationi. May be brought pursuant to mandatory lawii. However, common law may apply

2. Regulating off field/non-workplace conduct (John Rocker Arbitration)a. Here there was just 1 arbitratorb. Common law governedc. Arbitrator may allow league to regulate off field conduct if that conduct affects the league (i.e. affect ticket sales)d. Punishment

i. Objective of punishment is to deter conduct from happening againii. Commissioner has right to punish but punishment must be proportional and not unduly harsh

3. Appealing arbitrator’s decision in ct (MLBPA v. Garvey)a. Law governing – labor law applies b. Ct may not look into merits (even serious error by arbitrator)

i. there’s a fundamental value favoring arbitrationo don’t want to 2nd guess that by looking at merits

ii. however the ct may remand the case back to arbitratorc. Cts will set aside arbitrator’s decision:

i. If successful in challenging conclusion, cts won’t look at merits, but they will make arbitrator redo it, ii. Ct will send back if there are procedural errors/abnormalities as set out in K

o Based on procedural errors if result is unfair or denied due process d. What if rules created by CBA are unfair

i. Technically, arbitration must not recognize due process rights, however, US jurisprudence does not like conclusive presumptions (those that can’t be challenged)o Issue over WADA is that it exemplifies several conclusive presumptions that violate due process rights;

raises Q of are there mandatory laws that govern and if so what type?4. Review of various rules embodied in Ks that concern arbitration:

a. Substantive rules and b. Procedural rules

i. includes rules for how to deal w/ arbitration (i.e. either adopt someone else’s rules or create own)o mandatory laws comprise a part of procedural rules

which set of mandatory rules govern substance and procedure, depends on if K is a labor or commercial K

o common law of the procedural process also plays a part i.e. interpreting the K, or the arbitration process and how it works fair amt of contradiction in where do you go to fill in gaps b/t the sources

- i.e. adopt common law or civil law principles, or possibly int’l laws or quasi criminal procedures (anti doping)

5. Unconscionability and Arbitration (Dryer v. LA Rams)a. Req’s that must be showed for unconscionability

i. 1 st must show K of adhesion – unequal bargaining power o i.e. if owners have all bargaining power & dictate terms to players and terms create an injustice; o even if player can’t show unequal bargaining power, may not matter b/c these types of disputes are

governed by fed labor law, o Conclusion even if there’s unequal bargaining power if arbitration is req’d to resolve disputes can’t

challenge prior to going to arbitrationii. 2 nd must show there is something unfair about the K

o i.e. arbitration process is unfair b/c of possibility that claim could be decided by commissioner, an unbiased arbiter

b. Law governing unconscionability i. Unconscionability is a state law claim ii. If conflict b/t fed and state law, fed labors law apply, but if no conflict then both may apply iii. However, in labor situations governed by fed law there is a strong policy for parties to go to arbitration 1st

and then challenge result

c. Exception (when player may challenge policy)i. If can show the union does not really represent you

d. If the dispute is based in commercial law, not labor outcome is still probably the same (Morris v. NY Giants)6. Review : Situations when can challenge arbitration process

a. Pre arbitrationi. Depends on how ct classifies dispute: labor or commercialii. Typically a very tough time challenging iii. One Exception : If can show the union does not really represent you

b. post arbitrationi. may challenge if there are significant procedural irregularitiesii. real area of conflict is did process violate public policy

7. Arbitration decisions regarding teams decision to cut playera. Examples: Lions, Hawks, Angels

i. in all 3 cases club argues player released for lack of skill, in each player argues release was for something elseb. Rules established:

i. Team must establish rational basis to show player lacked sufficient skill; o can’t just show lack of money or that player no longer fits b/c could always trade player o (burden on team to prove lack of skill)

ii. Team mgmt is in best position to gauge lack of sufficient skillo arbitrators will give deference to team decisions o (burden on player to show release based on something other than skill)

c. Remaining issues following these cases:i. Should a player be able to bring arbitration after a coach determines player lacks sufficient skill to be on team ii. Should a club not be able to release a player for economic reasonsiii. Is it wise to have arbitrators decide issue of sufficient skill; does it impede coaches ability to run teamiv. There is no agreement as to who has burden for proving lack of skill

d. Nordstrom v. NLRBi. NLRB finding: can’t fire somebody for engaging in union activityii. Mitigation: employee has obligation to try and mitigate damages

8. Salary Arbitrationa. process-final offer arb process

i. primarily in BB if mgr and player can’t reach agreement on salary, both sides submit amt to arb and arbitrator decides which parties amt should apply (arbitrator does not have to give reason for decision)

ii. each side can argue for its position, but CBA limits topics that may be addressediii. Criteria arbitrator can’t hear: what’s going on in press, what athletes in other sports make, etc.iv. Criteria arbitrator can hear

o Contribution to clubo Public appealo Career contributiono Current salary

9. Old exam Q: where are rules governing grievance arbitration founda. Typically found in CBA

i. Here focus is on labor arbitrationii. Focus is on labor b/c giving up right to challenge in ct (there are a few very limited situations where judicial

review still exists)o Typically union negotiates arbitration arrangements (but if negotiating own K may be able to modify CBA

arbitration as applied to you)b. May also find them in league constitutions and/or bylaws

i. Here focus is on commercial arbitrationsI. Criminal liability

1. Regina v. Bradshawa. Criminal laws apply v. rules of game

i. As a basic proposition criminal laws do apply to gamesii. But if playing according to rules of game can’t act maliciously, but if acts motivated by malicious intent then

any serious injury or death can be criminally liable

o If intent to cause injury or reckless indifference can be criminally liable despite being w/in rules of game b. Not always liable for conduct b/c even though crim law applies athletes typically consent to conduct in game

2. Regina v. Makia. Consent

i. Athletes consent to whatever is inherent in gameii. What is scope of what’s inherent?

b. Self-defense – elementsi. 1) Must have reasonable apprehension of bodily harm, 2) must respond with intent to protect self and 3)

response must be proportionate only to repel attack and nothing more3. Regina v. Green

a. Consent defensei. Don’t consent to savage attacks that result in serious injury, but don’t know how far that goes

o Savage attack might be one that occurs from behindb. Self defense

i. Needed to swing at Maki to tell him to stop spearing himii. Might not be self dense if not proportional

4. should cts interfere w/ world of sports