Yesterday, Business of Sports Network staff author Jeff Levine was on KLAV 1230, Las Vegas with Papa Joe Chevalier discussing the landmark anti-trust case that will be heard by the US Supreme Court. The case involves an appeal from American Needle Inc., an Illinois company that challenged the NFL exclusive deal with Reebok to manufacture licensed apparel.
Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International. He can be reached at\n \n \n \n
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Against the advice of U.S. Solicitor General Elena Kagan, the US Supreme Court has granted certiorari to hear the case of American Needle v. NFL. As earlier reported, the NFL was petitioning the High Court to hear the case so the NFL could formalize the Seventh Circuit’s ruling that NFL is a single entity for certain activities and is therefore immune to antitrust scrutiny.
Here the activity being examined is the NFL’s licensing practices of team intellectual property. As Professor Gabe Feldman, Director of Tulane Law School’s Sports Law Program, explains in a great Sports Law Blog entry, the NFL is really pushing for the Supreme Court to hear this case because “[t]he NFL—and other professional sports leagues in the U.S.—have a tremendous amount to gain from the Supreme Court’s decision, but not much to lose.”
The Seventh Circuit’s holding in favor of applying the single entity defense to the NFL defies the great weight of virtually all prior case law. As Feldman explains, the NFL appealed to the Supreme Court to gain an opportunity to widen this exemption and strike a victory that will negate decades of contrary authority.
Feldman predicts that the NFL will now argue that “professional sports leagues are single entities for all purposes and thus should be completely exempt” from all antitrust scrutiny. In the alternative, the NFL will assert that sports leagues are single entities for all “core venture functions,” which can be virtually anything.
NFL spokesman Greg Aiello reflected the League’s excitement to potentially receive antitrust immunity, “saying that the league looked forward to explaining why the [C]ourt should extend, on a national basis, favorable appeals court rulings on how antitrust laws apply ‘to the unique structure of a sports league.’”
If the NFL loses the above-mentioned arguments, all that will happen is the Court will analyze the licensing issue according to traditional antitrust law, the rule of reason analysis. This happening would be commensurate with the last fifty years of case law. However, if the NFL is successful in their argument, professional sports would have carte blanche by receiving single entity protection related to methods of restricting player mobility (i.e. the draft and free agency). In effect, as Feldman bluntly states, “a broad ruling in favor of the NFL could rewrite almost all of sports antitrust law.”
The business implications could be immense if the NFL manages to convince the Court to expand the Seventh Circuit’s ruling. Virtually any League decision, whether related to revenue streams, merchandising, licensing or player restraints could be defended as immune from antitrust challenge. The NFL could wield the Supreme Court’s holding as both a sword or a shield by classifying League decisions as being outright exempt or as “core venture functions” of the business and therefore insulated against antitrust challenge.
Thus, the sports law world will be carefully watching this matter play out in Washington late this year or in early 2010.
Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International. He can be reached at\n \n \n
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In a preemptive move intended to secure independence from antitrust law, the NFL is asking the Supreme Court to affirm an appellate court decision in which the appellate court sided with the League.
The case involves a challenge from American Needle, a company that manufactured apparel for the NFL up until the League signed an exclusive supplier contract with Reebok in 2000. The most important issue here is whether certain business activities within professional sports leagues are insulated from antitrust scrutiny, such as pooling the trademark rights of its member clubs and then collectively licensing them to the highest bidder. If the Supreme Court affirms the ruling, it could give rise to a backhanded argument by all professional sports that teams are not subject to antirust law.
A major reason why the NFL filed an appeal to reaffirm a case they won below is because, as Tulane Law School Sports Law Director Gabe Feldman so accurately states, “the Seventh Circuit’s decision conflicted with nearly every other court’s determination that sports leagues are not single entities.” So basically, now that a court finally ruled in the NFL’s favor, the League is trying to get an endorsement from the High Court in an effort to finally be rid of any future lawsuits.
As sports law guru Gary Roberts simply states, the NFL seems to think that the current make up of the Supreme Court could secure the League a favorable ruling, thereby settling the issue of whether the NFL acts as a single entity, which would mean it is not subject to the antitrust laws. “Even though they [the NFL] risk losing this case [by appealing it], the potential gain for all sports leagues from having the Supreme Court affirm the decision would be huge.”
The NBA and NHL both filed briefs in support of the NFL. However MLB did not file anything because it is the only professional sport to be exempt from antitrust law, which prohibits any contract that restrains trade.
Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International. He can be reached at\n \n
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Last week Donte Stallworth, still currently a member Cleveland Browns, pled guilty to the alcohol-related vehicular death of a Miami area man in the early hours of the morning. As punishment, a Miami-Dade Circuit Court Judge sentenced Stallworth to thirty (30) days in jail, several fines and a slew of other measures, including the permanent revocation of his license.
In defense to the Circuit Court Judge’s light sentence, the victim's family had urged him to quickly settle the matter and Stallworth had been extremely cooperative with police investigators since the incident occurred on March 13, 2009. An undisclosed financial settlement between Stallworth and the victim's family also contributed to the wide receiver's expeditious sentencing. At the time of arrest, Stallworth's blood alcohol level was reported to be at twice the State's legal limit. Under Florida's DUI Manslaughter and Vehicular Homicide statute, he could have been sentenced up to fifteen (15) years in prison.
At the time of sentencing, some had questioned the Judge’s leniency on Stallworth. However, NFL Commissioner Roger Goodell had a different take on the conviction and wasted little time in levying an indefinite suspension against the former Tennessee standout. In the letter addressed to Stallworth, the Commissioner stated:
“The conduct reflected in your guilty plea resulted in the tragic loss of life and was inexcusable. While the criminal justice system has determined the legal consequences of this incident, it is my responsibility as NFL Commissioner to determine appropriate league discipline for your actions, which have caused irreparable harm to the victim and his family, your club, your fellow players and the NFL.
The conduct that led to your conviction plainly violates both the Personal Conduct and Substances of Abuse policies…[t]here is no reasonable dispute that your continued eligibility for participation at this time would undermine the integrity of and public confidence in our league. Accordingly, I have decided to suspend you indefinitely, effective immediately…”
Goodell’s brand of exacting discipline thus far has been well received by those in the media and other League critics. As ESPN’s Len Pasquarelli writes, “Goodell thinks in black and white.” There is a right answer and a wrong answer. Stallworth’s guilty plea was evidence enough of wrong doing; there are no mitigating factors. Goodell’s draconian style appears to be the hallmark of his League stewardship, which is a significant departure from his predecessor’s approach, Paul Tagliabue.
As mentioned above, Goodell handles player discipline issues radically different from Tagliabue, the seminal Commissioner who presided over nearly two decades of labor peace and billions of dollars in League revenue. During his time as Commissioner, from 1989 to 2006, it was Tagliabue who had the option of severely disciplining former Defensive Lineman Leonard Little, who was also convicted of Involuntary Manslaughter in 1998. However Tagliabue only penalized Little by suspending him for 8 (eight) games.
As Goodell mentioned in his letter to Stallworth, he as Commissioner is empowered to take appropriate action against those who engage in “conduct [that is] detrimental to the integrity of and public confidence in the National Football League.” This authority is derived from, among a few areas, the League’s Personal Conduct Policy. Created in 2008, the Personal Conduct Policy gives the Commissioner seemingly unfettered power and discretion to discipline “all persons associated with the NFL” in a myriad of circumstances. Thus, this policy provides the NFL with a tool to quickly and definitively deal with public relations nightmares. However, the issue remains whether every disciplinary act made pursuant to the Personal Conduct Policy is a breach of the NFL’s collective bargaining agreement with the NFL Players Association (yes, the same CBA that NFL ownership opted out of in 2008).
One voice who has yet to publicly weigh in on Stallworth’s indefinite suspension and the validity of the Personal Conduct Policy is NFLPA Executive Director DeMaurice Smith. This is Smith’s first encounter with the Personal Conduct Policy. It remains to be seen whether Smith is planning on challenging the Policy under applicable labor law. Under labor law, mandatory subjects of bargaining, topics that effect terms and conditions of employment, must be agreed upon through the collective bargaining process. Player discipline certainly falls into this category, as discipline usually results in the loss of pay and or the inability to play football for a certain period of time.
The validity of the Personal Conduct Policy has never been directly challenged by the Players’ Union. However Gene Upshaw, the late Executive Director of the NFLPA, did have some issues with the Policy’s lack of a meaningful appeals process. As astutely pointed out by ESPN’s Chris Mortensen, when the Personal Conduct Policy was strengthened in 2008, Upshaw voiced concern over Goodell’s ability to suspend individuals longer than a year with little recourse. He felt that lengthy suspensions should have been appealed to an independent arbitrator for decision.
Perhaps Mr. Upshaw had a point. It seems unfair for appeals to go to Commissoner Goodell, considering he is the individual responsible for the initial disciplinary action. Certainly, it is not a question of whether Goodell is setting precedent in regard to league discipline by his actions. Indefinite suspensions for conduct not currently covered in the CBA must be a part of the bargaining process. It is up the Union to challenge excessive discipline, if it is deemed to be so. But the question remains: Why hasn’t the Union objected publically?
In the meantime, it appears that Goodell is comfortable with filling the role of disciplinarian when the court system seemingly does not do its part. The Union is mum in response, which seems to implicitly condone Goodell’s decision and the public seems to approve of the decision as well.
Although players did have some degree of involvement in designing the Personal Conduct Policy, that does not mean that it was a product of collective bargaining. The Union is not objecting to Goodell’s use of the Policy, but player discipline is an issue that both sides will negotiate over a potential lockout in 2011 nears.
Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International. He can be reached at
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NFL.com is reporting that Carolina Panthers defensive end Julius Peppers signed a one-year, $16.7 million franchise tender Wednesday, five months after the four-time Pro Bowler requested a trade. Peppers, who is the team’s all-time sacks leader, should be present for the start of training camp in August.
Following the Panthers January playoff loss to the Arizona Cardinals, Peppers insisted that he would never sign a long-term contract with the Panthers and pleaded for them to not place the restrictive franchise tag on him, which the team did anyway. The Panthers had to give Peppers a contract that would pay him more than $1 million per game, but any team interested in signing him would need to give up two first-round draft picks. This situation has limited the number of teams willing to make a deal to acquire Peppers.
Peppers initially refused to sign the tender or attend off-season mini-camps and optional workouts, but is nowwilling to sign with the Panthers after realizing his options are limited.
In addition to the $16.7 million in guaranteed money, Peppers could earn $1.5 million if he makes the Pro Bowl along with $250,000 for each playoff win, giving him one of the highest one-year contracts in the history of the NFL.
The 6-foot-7, 283 lbs Peppers was the No. 2 overall pick in the 2002 draft out of North Carolina, and recorded a career-high 14.5 sacks in 2008. That followed a sub-par 2007 season when Peppers had only 2.5 sacks and the team did not make the playoffs.
Green Bay Packers wide receiver Greg Jennings is close to athree-year, $27 million contract extension according toESPN.com’s John Clayton.
ESPN.com’s Len Pasquarelli reports that $16 million is guaranteed, and the front-loaded deal could reach as high as $30 million if he performs at a Pro Bowl level. Jennings is in the final year of his rookie contract and was set to earn $535,000 in 2009.
The 5-11, 197 lbs Jennings is coming off an 80-catch, 1,292-yard 2008 season in which he caught nine touchdown passes and was a Pro Bowl alternate. The 25 year-old was a second-round choice of the Packers in 2006 out of Western Michigan and has developed into one of the top young wide-outs in the NFL.
Starks Agrees to New Deal
The Pittsburgh Steelers have signed left tackle Max Starks to a $26.3 million four-year contract, according toESPN.com.
The deal is believed to include $10 million in guaranteed money. It also ends a two-year stretch in which Starks, a transition player in 2008 and the franchise player in 2009, took up a large portion ofPittsburgh’s cap room. The Steelers are now poised to save roughly $3 million in salary-cap space.
The 6-foot-8, 345-pound Starks had been an unsigned franchise player with an $8.451 million tender. The 27-year-old formerFlorida Gator was a third-round draft pick by the Steelers in 2004, and has started 45 games.
The National Football League (NFL) today announced that it has selected Grey New York to create a comprehensive new branding initiative, unifying all of its marketing efforts behind key business units. This assignment, following a creative review, consolidates all league marketing efforts in a single brand campaign that will further drive growth and enhance the brand value of the NFL and its various business units, including media, consumer products, and e-commerce efforts.
Mark Waller, the NFL's Senior Vice President of Marketing and Sales, said, "We have wanted to create a single brand campaign throughout the league for years, but we've never seen an idea from an agency that addressed all of our varied business issues with equal effectiveness. Grey presented us with creative that promises to pay tribute to our sport and fans and resonate across media channels to further drive consumption of each of our properties."
Dena Kaplan, Senior Vice President, Marketing for the NFL Network, said, "We are excited to launch for the first time an integrated, dynamic, groundbreaking campaign approach that promises to build fan affinity and consumption across all of the NFL business units."
Jim Heekin, Chairman and CEO of Grey Group, said, "We are thrilled and proud to partner with the NFL to further their dynamic growth plans. We look forward to helping them leverage the strength of what is one of the most iconic American brands."
Tor Myhren, Chief Creative Officer of Grey New York, said, "We wanted to create a campaign that reflected the power and scope of the NFL while showcasing the extraordinary prowess of its athletes, the popularity of its teams, and the unparalleled passion of its fans. We are looking to capture the purest articulation of the NFL experience. In every game, monumental things happen in a fraction of a second, but then are re-lived over a lifetime. Our work is a celebration of those moments, and the players, teams and fans that create them."
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer.
University of Florida President Bernie Machen wants to make Urban Meyer the highest paid football coach in the SEC
Critics of unrestrained and outlandish spending in collegiate sports have a new target
Bernie Machen, President of the University of Florida, told the Orlando Sentinel that he intends to make Gators’ coach Urban Meyer the highest paid football coach in the SEC. For those of you who may not be keeping score, at $3.49 million a year Meyer isn’t exactly in need of a government bailout. Nor is he asking the university for a raise. But Meyer’s salary apparently doesn’t please Machen, who says he feels Meyer deserves a bigger paycheck.There’s no denying Meyer’s on-field success in Gainesville. The Gators have won two mythical (without a playoff, what else can you call it?) national championships in the past three years. And the school’s athletic program runs in the black, contributing approximately $6 million last year to the university, most of it from the football program.
On the other hand, it’s hard to argue that Meyer isn’t well-paid for his success. The issue, according to Machen, is that there are at least two coaches in the SEC - Les Miles at LSU and Nick Saban at Alabama - who make more than Meyer. And neither has been as successful as Machen’s man, Urban.
All well and good. But at the same time that Machen is championing a raise for Meyer, the university is cutting faculty, entire programs, and that rarity in academia, administration. As a result of declining state revenues, university trustees voted on May 26 to slash next year’s budget by $42.2 million. That’s in addition to the $69 million in cuts over the past two years. Despite the decreased expenses, students may see a 15% tuition increase, meaning they’re effectively paying more for less – fewer teachers, fewer courses and fewer programs.
Florida isn’t alone in throwing outlandish sums of money at coaches. The University of Kentucky recently lured basketball coach John Calipari away from the University of Memphis with an eight-year $31.6 million contract. Ohio State – with a $115 million annual sports juggernaut – pays its football coach, Jim Tressel, $3.5 million a year, almost quadruple what he made when he first arrived on the Columbus campus in 2001.
According to a report in the Columbus Dispatch, Ohio State’s athletic payroll has grown two-and-one-half fold in a decade, from $10.6 million in 1998 to $25.4 million last year. During that same period, the total number of employees in the athletic department has grown 43%, to 317. But OSU was ever-so-proud to tout a recent cost-saving measure by the department. In a joint press release with the University of Michigan, the Buckeyes announced that the Big Ten rivals would stop printing media guides, saving each school approximately $250,000 a year. Honk if you think that money won’t be spent elsewhere on athletics.
If you get the idea that athletics trumps academics at many BCS schools, you may be on to something. And the NCAA does its best to validate such action. The SEC recently announced its revenue sharing plan for the fiscal year ending August 31. Included in the $132.5 million to be distributed to the 12 league institutions is $23.1 million from NCAA championships. The NCAA threw in another $744,000, or roughly an additional 3%, to be divided equally for “academic enhancement.”
The reason Machen is determined to raise Meyer’s salary in the face of staggering academic cutbacks may have more to do with Machen than it does Meyer. Such action is guaranteed to curry favor with Florida alums and boosters, most of who are more concerned about losing Meyer than they are about the quality of academics at the university. The loss of Meyer would be a bigger blow to Machen’s popularity than his inept handling of the budget crisis and may seal his fate as the leader of Florida’s flagship campus.
If Machen succeeds in lavishing Meyer with additional millions - and don’t bet against him - it’s unlikely the coaching salary race in the SEC will end there. LSU’s Miles is reported to have a clause in his contract that guarantees he will be the highest paid coach in the conference. See you one and raise you one. Anyone want to bet what Machen’s next move will be?
Jordan Kobritz is a staff member of the Business of Sports Network. He is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University and teaches the Business of Sports at the University of Wyoming. Jordan can be reached at
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ESPN will televise the Rose Bowl Game starting in January 2011, it was announced today by John Wildhack, ESPN executive vice president, programming and acquisitions. The network had previously announced it would televise 15 other Bowl Championship Series (BCS) games – including the Fiesta, Orange, Sugar and BCS National Championship -- as part of a new, multi-year agreement also beginning in January 2011. The 2010 Rose Bowl Game and the 2010 BCS National Championship Game from Pasadena, Calif., will remain on ABC.
“Having all BCS matchups on one home, especially within ESPN’s year-round college football environment, is the very best scenario,” Wildhack said. “Fans will welcome ESPN's all-encompassing approach, and the additional opportunities and value resulting from our multi-platform presentation will benefit the college football community and our business partners.”
As part of its regular-season schedule, ESPN on ABC will continue to offer Saturday Night Football, broadcast television’s first-ever weekly college football primetime series. Additionally, ESPN Radio, which has broadcast all BCS games since 2000, is the national radio home of the BCS through 2014.
COLLEGE FOOTBALL ON ESPN
ESPN’s college football coverage features more than 400 regular- and post-season games, beginning this season on Thursday, Sept. 3, with South Carolina at N.C. State on ESPN and concluding Thursday, Jan. 7, with the 2010 Citi BCS National Championship Game on ABC. The company offers the most extensive coverage of college football across numerous platforms including ABC, ESPN, ESPN2, ESPNU, ESPN Classic, ESPN360.com, ESPN.com, ESPN Radio, ESPNEWS, ESPN Mobile TV, ESPN Regional Television, ESPN GamePlan pay-per-view service, ESPN The Magazine and ESPN International. Regular-season action includes numerous conferences, in addition to nearly 30 bowl games, and the NCAA Football Championship Sub-Division, Division II and Division III playoffs culminating with the championship of each. Also on the schedule: the Heisman Trophy Presentation and The Home Depot College Football Awards; the popular road show College GameDay Built by The Home Depot; the year-round daily College Football Live; the weekly College Football Final and College Football Countdown; and news and features throughout the year on SportsCenter, First Take, PTI and Outside the Lines.
MAJOR SPORTS ON CABLE
The 2011 BCS schedule will mark the first time BCS bowls will be featured on cable television, joining other major events with a cable home such as the NBA Conference Finals, British Open (all four rounds), Monday Night Football, MLB League Championship Series, Stanley Cup Finals and many more.
The Biz of football is part of the Business of Sports Network. For details on our interviews, latest new on MLB, the NFL, the NBA,and the NHL from outside the lines, check www.businessofsportsnetwork.com for information and links to the Network's sites.
According to ESPN.com, Donavan McNabb and the Philedelphia Eagles have reached an agreement to restructure the 11-year veteran’s contract.
The five-time Pro Bowler was due to make $9.2 million this season and $10 million next season. ESPN's Michael Smith reported the two-year deal is worth $24.5 million, with another $1 million in incentives.
McNabb had said recently that he was looking for a contract extension. Instead of the extension, he will see a bump in salary over the rest of his prior contract length.
MORE NEWS ACROSS THE BUSINESS OF SPORTS NETWORK (THE BIZ OF BASEBALL)
The Biz of Football is part of the Business of Sports Network. For details on our interviews, latest new on MLB, the NFL, the NBA,and the NHL from outside the lines, check www.businessofsportsnetwork.com for information and links to the Network's sites.
Jeff Levine is a staff member of the
Against the advice of U.S. Solicitor General Elena Kagan, the US Supreme Court has granted certiorari to hear the case of American Needle v. NFL. As 
Last week Donte Stallworth, still currently a member Cleveland Browns, pled guilty to the alcohol-related vehicular death of a Miami area man in the early hours of the morning. As punishment, a Miami-Dade Circuit Court Judge sentenced Stallworth to thirty (30) days in jail, several fines and a slew of other measures, including the permanent revocation of his license. 
Jennings Reportedly Extended
Starks Agrees to New Deal
