Top 10 Sports Law Stories in 2013 & Predictions for 2014

I've authored a Top 10 Sports Law Stories of 2013 article for Sports Illustrated.  My list from 2013:

10. Chris Christie and sports betting in NJ
9. NHL concussion litigation and fighting
8. Jonathan Martin and the forthcoming Ted Wells Report
7. Lance Armstrong admits to doping and hit with lawsuits
6. NFL reaches proposed settlement in Concussion Litigation, but some retired players say no
5. Jameis Winston cleared in rape investigation, but civil lawsuits may follow
4. New Legal Strategy in Biogenesis case, but A-Rod fights back
3. Ed O'Bannon's class certified, setting table for historic trial
2. Aaron Hernandez charged with murder
1. Boston Marathon bombing

Hope you have a chance to check out my analysis and predictions.

Head Injuries and Baseball

I have a short piece in the December Sports Litigation Alert, called Head Injuries and Baseball. It elaborates on an exchange between Nathaniel and me on this post regarding what baseball can do about concussions.

Rooney Rule

Check out the third item ("My Pal the Tortoise") and footnote 7. If this is really how teams operate--and I have no doubt it is--then the Rooney Rule is a joke.

Athlete speech and hate speech

Mike passed along this story about French soccer player Nicolas Anelka, who made a possibly anti-Semitic neo-Nazi salute after scoring a goal in an EPL game yesterday. Anelka (who converted to Islam and whose parents emigrated to France from Marinique) made the "quenelle" signal, in which the right hand is pointed downward and the left hand grasps the right shoulder. The signal, which was created by a controversial French comedian, is becoming popular among neo-Nazis and anti-Semites in France, where the Nazi salute is banned under strict hate-speech laws. The signal sort of looks like an inverted Nazi salute, but is unknown outside of France and thus allows people to express themselves without anyone out-of-the-known understanding what was being said; there have been stories and photos of people making the gesture outside Auschwitz and at the Western Wall. Anelka denies that he was doing the gesture as a racist or anti-Semitic statement and claims to be "gobsmacked" by the international uproar he has caused; he insists the gesture is "anti-system" (which I assume means anti-establishment). The English Football Association has opened an investigation.

The reaction is doubly intense here, as compared to if a U.S. athlete had done this after scoring a touchdown or hitting a home run. Europe's approach to hate speech is much different than ours (although the First Amendment would not be in play in any event). More importantly, Europe is especially sensitive to anti-Semitic and Nazi speech, given its history.

On a different part of this, on-field athlete speech is a different and interesting issue, one I hope to  examine if/when I get back to writing about the sport/speech connection. Expression--verbal and physical--is endemic to what athletes do on the field. Content aside, it is a nice question how much room sports teams and leagues should leave the players to express themselves, especially on what must be understood as political matters (even if hateful ones).

Update 12/30: The plot thickens and comes across the pond. French NBA players Tony Parker and Boris Diaw posed with the comedian who started all this while making this gesture; the photos, which are a few years old, hit the interwebs on Sunday. Parker apologized, saying he saw the gesture as part of a comedy act and only recently learned about its anti-Semitic connotations. The Simon Wiesenthal Center asked that he make a further statement, in French, directed to French Jews.

Anelka has promised not to make the gesture again.

If Facebook’s Zuckerberg Was A Sports Fan What Would He Do With His Billions In Charity?

I am not the one to tell someone how to spend his or her money. But if it is acceptable to dream about winning the lotto, it’s still OK to imagine a movie on how a nerdy Harvard dropout became the richest youngster in the world, and then had a sports epiphany. If done well, it could top Adam Sandler’s golf dreams in Happy Gilmore. So in the most unusual of dreams, and without a man-crush, and like most good comedies, there is a touch of reality.

The reality is that billionaire Zuckerberg is so rich he has a tax bill bigger than many city budgets. He has the acumen to say something like, “OK, I am not going to use my cash to pay the IRS. It hurts at a visceral level to do that – and I have choices.”  Rather, SEC filings reveal a complex transaction where he will take advantage of Facebook’s doubling in stock price since January 2013 to pay those taxes and donate to education, including the local school district around Facebook’s headquarters.  His wife is a teacher and influenced him to teach as well.

The plan is that he will exercise his options on 60 million shares, sell 41.35 million of them to pay capital gains taxes he will have on the transaction. He had the option to buy at – get this – 6 cents a share. That will net him about $1 billion.  Then by donating about 18 million shares ($990 million in value) to a nonprofit, he can save the same amount in taxes – i.e. a little-known dollar-for-dollar tax benefit under a certain adjusted gross income threshold.

But what if his passion was for sports, not teaching? Or why not a passion that weds the two? My movie (which I am writing and is already copyright protected) has him playing touch football, getting knocked unconscious, having a concussion and then having the following epiphany:

“I am providing a matching grant to the NFL, NBA, and MLB and their respective players associations if they amend their collective bargaining agreements (“CBAs”) to mandate two items noted below.

First, 10% of the player salaries will be allocated to certain education-related designated charities designed to equalize opportunities. Many inner city and Appalachian-like rural schools are severely under-resourced compared to suburban schools, with teachers buying materials from their own pockets without comparable technology.

Second, to the maximum extent permitted by ERISA laws, player salaries over a certain multi-million dollar threshold are placed in a trust fund or a vetted deferred compensation plan. That appears to be the most immediate way to reverse the sad statistic that approximately 60% of the NBA players file for bankruptcy protection after retirement. That way, the CBA can protect the athletes from themselves, and redirect their futures away from being an impending lost resource and into a future family and community asset. Hence, a burgeoning class of New Age Athletes.

These provisions are legal because the players have to agree to it, so it is voluntary. It is also likely immune from any antitrust concerns of third-party contractors who provide financial services to the players or the leagues because the clauses fall within the well-established nonstatutory labor exemptions for collectively bargained items.

Sometimes dreams come true. Even business plans start with imagination – a vision of what can be, not what already is, a reality.

Video of UNH Law & Sports Illustrated Town Hall on O'Bannon v. NCAA and Future of College Sports

Last month, the University of New Hampshire School of Law's Sports and Entertainment Law Institute and Sports Illustrated co-hosted a Town Hall on the O'Bannon case and the future of college sports.  The Town Hall examined how this class action lawsuit could radically change college sports as we know it.  As you know if you've followed this case, through legal arguments sounding in intellectual property and antitrust, O'Bannon—a former basketball star at UCLA—contends that current and former Division I men's basketball and football players should be paid for their image and likeness on television broadcasts, video games, trading cards, apparel and other commercial ventures. The Town Hall also considered related cases, including Sam Keller v. NCAA and Ryan Hart v. Electronic Arts, as well as pending federal legislation in the NCAA Accountability Act. Collectively, these legal developments could lead to the compensation of college student-athletes and impact their unionization and quasi-employment rights.

The Town Hall featured some of the most influential and insightful people in college sports. It was moderated by B.J. Schecter (Sports Illustrated & SI.com executive editor and UNH Law adjunct professor of sports law and investigative reporting) and panelists were: Sonny Vaccaro (unpaid adviser to O'Bannon and leading advocate for college athletes' rights), Charles Grantham (former executive director of the National Basketball Players' Association), Alan Milstein (litigator for Allen Iverson, Carmelo Anthony, Maurice Clarett & other sports personalities), Pete Thamel (Sports Illustrated senior writer), Marty Scarano (UNH Director of Athletics), Alexandra Roberts (UNH Law entertainment law professor) and me.

The Town Hall attracted more than 140 people to attend, including students, attorneys and former basketball players, including NBA Hall of Famer and former Boston Celtics forward Satch Sanders.

On December 17, 2013, video highlights of the Town Hall and accompanying commentary were shown on SI.com.

Yesterday the complete Town Hall video was made available on Youtube.  I hope you have a chance to watch:

Concussion-Related Injuries (and Litigation?) Come to Major League Baseball

Media outlets reported yesterday that doctors have confirmed that former Major League Baseball player Ryan Freel was suffering from chronic traumatic encephalopathy (CTE) at the time he committed suicide last December.  Freel is the first MLB player to be diagnosed with the concussion-related disease. Prior to his death, Freel, who was known for his aggressive brand of play, estimated that he had suffered as many as 10 concussions throughout his playing career, resulting from various plays such as colliding with a teammate in the outfield and getting hit in the head by an errant pick-off throw.

Freel's diagnosis shows that football and hockey players are not the only professional athletes exposed to potential concussion-related injuries.  Indeed, as CNN reports, concussions are more common in MLB than one might at first suspect:

This season, 18 baseball players were placed on the disabled list after concussions -- 10 of them were catchers. In 2012, 13 players were placed on the DL after a concussion, and in 2011, the number was 11, according to MLB data.

Therefore, Freel's diagnosis raises the question of whether MLB will be the next professional sports league to face a wave of concussion-related lawsuits.  It would not be surprising if some affected former baseball players (or their families) file suit against MLB.  However, because concussions do not appear to be as widespread in baseball as in football, class action litigation may be less likely.  Indeed, with baseball concussions arising from a variety of different causes (collisions on the field, players getting hit with thrown balls, catchers getting hit by foul tips), the injuries alleged by former baseball players will likely prove to be more dissimilar than those involving contact sports such as football or hockey, arguably making class action treatment less appropriate. 

Nevertheless, it might be possible for a group of similarly situated players, such as former catchers, to jointly sue MLB for failing to take greater precautions to prevent their injuries.  Should such a class action be filed, MLB would be able to assert many of the same defenses that were available to the NFL in its own concussion-related lawsuits.  However, MLB might decide -- as did the NFL -- that despite these potential defenses such a case carries sufficient negative publicity and litigation risk to warrant a settlement of the claims.

For its part, MLB has already been relatively proactive in dealing with concussions over the last several years.  Back in 2011, MLB implemented a series of protocols to deal with head injuries, including the creation of a new 7-day disabled list for concussed players.  And then last week, the league announced that it intends to ban home plate collisions beginning in 2014.  While such steps will not completely eliminate MLB's risk of potential legal liability, they do reflect a concerted effort on behalf of the league to lessen the chance that future players experience a significant head injury.

Alan Milstein's Role in ESPN's 30 for 30 on Maurice Clarett (Airs Tomorrow Night)

Alan Milstein and Maurice Clarett, September 2003

10 years ago, an Ohio State football player named Maurice Clarett filed an antitrust lawsuit against the NFL over its eligibility restriction, which required that players be three years out of high school before they could be eligible for the NFL draft.  Clarett was too young to satisfy the rule.  He was one of the best running backs in college football and had he been eligible for the 2004 draft, would have been a first round pick.

Clarett's lead attorney was Alan Milstein, who crafted--in my opinion--a brilliant argument against the rule.  There were other great lawyers on Clarett's team including Jeffrey Resnick and Michael Dube. I had the honor of also being on Clarett's legal team and working for Alan.  It was an extraordinary opportunity for me, especially as a 27-year-old lawyer.  It was my break into sports law.

Alan argued successfully before U.S. District Judge Shira Scheindlin that the rule, which was borne through a memo written by then-Commissioner Paul Tagliabue in the early 90s, had not been collectively bargained with the NFLPA and did not primarily affect NFL players' hours, wages and other working conditions.  The legal jargon made sense on a more practical level: Clarett, a college player, was not challenging anything about NFL employment (he didn't object to wage restrictions, rules for rookies, the draft itself etc).  He only challenged the rule that barred entry.  His inclusion in the draft would have primarily affected one person: not an NFL player, but rather the guy who wouldn't be drafted because of Clarett's inclusion in it.  That player, presumably, would have been the last player selected in the draft--the last pick of the seventh round, #255 overall.  That guy is also known as "Mr. Irrelevant."

Because the NFL's eligibility rule was not collectively-bargained, it was subject to Section 1 of the Sherman Act and was deemed an unlawful conspiracy among the 32 NFL teams.  Those teams were competing businesses for purposes of antitrust law, and had joined hands in an anti-competitive conspiracy: to impose a bright-line rule on eligibility where talent and merit were ignored, arguably because college football was a free minor league system for those NFL teams.  Judge Scheindlin's order in February 2004 meant that Clarett would be in the 2004 NFL draft, to be held that April.

Clarett (along with USC sophomore wide receiver Mike Williams, who relied on Judge Scheindlin's order) was then focused on getting ready for the 2004 draft as an eligible player.  At the time, we were very confident he would be a first round pick and no later than a second round pick. Our understanding was that the Patriots and Cowboys were especially interested in Clarett.  Had Clarett played for Bill Belichick or Bill Parcells, his career and life may have turned out quite differently.

But then the NFL sought an expedited appeal before the U.S. Court of Appeals for the Second Circuit.  Even though expedited appeals are rarely granted and are usually reserved for emergencies--someone is on death row etc.--the Second Circuit granted a hearing.  At the hearing, I knew within about 10 seconds that we had lost.  I believe it was (then) Judge Sonia Sotomayor who interrupted Alan with an, "I don't know why you are here" type remark.  Not a good sign and it was indeed predictive: the 2nd Circuit reversed Judge Scheindlin.  We then worked quickly on drafting a petition to the U.S. Supreme Court, but our petition was declined.  Clarett and Williams had to sit out a year until the 2005 NFL draft.  In many ways, that set Clarett on the wrong course, though he has since turned his life around in a big way.

Clarett, the Clarett case and Clarett's life after the case are the subject of an ESPN 30 for 30 to be aired tomorrow night.  It is called Youngstown Boys.  I have not yet seen it, but my understanding is Alan is interviewed extensively in it. I look forward to watching it.

You can read more about the Clarett case and its context in the history of sports law in my article on Justice Sotomayor and Sports Law. 

Sports rules and essentialism

Travis Waldron at Think Progress has some good thoughts on the decision by MLB to outlaw home-plate collisions by prohibiting runners from running through the catcher and prohibiting catchers from blocking the plate. Essentially, home plate now is treated the same way as every other base--fielders can block the plate only if making a play on the ball and runners must slide. The move is driven by safety considerations--not only concussions, but also injuries such as the broken leg that Giants catcher Buster Posey suffered in 2011 or the infamous collision between Pete Rose and Ray Fosse that changed (for the worse) Fosse's career).

Not surprisingly, this has caused handwringing among those who insist this will change the very nature of the game, including some who liken it to eliminating tackling in football. Waldron has great responses to all of these arguments. And his responses call attention to two analytical ideas in thinking about sports rules and whether and how to change sports rules to make games safer.

One is essentialism--which aspects of a sport are "essential" to the sport, such that if you remove or alter them, you are changing the nature of the game. Many of you will remember this as one point of departure in PGA v. Martin, where the Court divided on whether walking the course was part of what made golf golf. My view is that few rules or plays are ever so essential to a game; most are simply the way things always have been done and can be changed without altering "the game." Certainly tackling is essential to tackle (as opposed to touch or flag) football. But home-plate collisions are not essential to baseball; if they are, one would have to explain why similar collisions are banned at the other three bases.

Second is distinguishing what we can control from what we cannot control in the search for increased safety. Waldron highlights the fact that the most common cause of concussions in catchers is foul tips, which leads to the argument that the next move is to ban foul balls. That's stupid, of course. We can't ban foul balls because we can't control foul balls, which are an incidental rather than intentional part of the game. No batter tries to foul a ball off the catcher's head and no pitcher tries to get the batter to foul the ball off the catcher's head; it just happens sometimes. But catchers do try to block home plate and runners do try to barrel catchers over (see Rose, who has had some typically inane things to say about this). It thus is possible to prohibit the conduct by both sides that leads to these collisions.

College football and the Brandenburg Concerto

[Update: Reports are stating that police have identified the man in the picture and want to interview him, in part to find out how (and if) he caused the events in East Lansing.]

Students at Michigan State University celebrated their football team's Big Ten championship last weekend the way many sports fans do: Setting things on fire. Police responded to a large civil disturbance and reportedly responded to at least 57 fires throughout the city. In many cases, the favored object to burn was a couch.

So what, you ask? Well because of the guy pictured at right, who attended the Big 10 Championship game in Indianapolis sporting that sign. According to the East Lansing Police Department Facebook page, they are looking for information on his identity. And rewards of up to $20,000 are being offered for information on the overall disturbance.

So the obvious question: Could this guy be charged with anything for holding up that sign? Could any prosecution satisfy  Brandenburg v. Ohio and the requirement that the  lawless action in East Lansing be imminent and likely to arise from his holding up a sign from a football stadium in Indianapolis?

Understanding the FANS Act

A piece of sports-related legislation was proposed in the U.S. House of Representatives and Senate last month: the Furthering Access and Networks for Sports (FANS) Act.  The bill was first introduced in the House by Rep. Brian Higgins (D-NY), with Senators Richard Blumenthal (D-CT) and John McCain (R-AZ) following suit in the Senate a week later (this is the second piece of legislation implicating professional sports proposed by Senator McCain this year).  The FANS Act features two main sections, the first dealing with blackouts of televised sporting events, and the second with baseball's antitrust exemption. 

Blackouts

The first part of the FANS Act is intended to reduce the frequency with which live sporting events are blacked out on local television networks and over the Internet.  While all four major U.S. professional sports leagues engage in blackouts to some extent, the NFL's policies have generally drawn the most criticism.  Traditionally, the NFL mandated that a game be blacked out in the local television market of the home team unless the stadium was sold out at least 48 hours in advance.  The NFL modified this restriction last year in the face of mounting pressure, now allowing games to be aired locally when as few as 85% of the tickets have been sold.  Meanwhile, the NBA, NHL, and MLB primarily utilize blackouts in connection with their pay-per-view cable (NBA Full Court, NHL Center Ice, and MLB Extra Innings) and Internet packages (e.g., MLB.tv), through which viewers purchase the right to watch every league game.  These packages typically prevent fans from watching any game on a pay-per-view basis if it is being broadcast locally on either network television or via a regional sports network (RSN).  The NHL's and MLB's blackout rules are the subject of pending antitrust litigation in the Southern District of New York.

The FANS Act attempts to force the leagues to modify their blackout policies by retracting the Sports Broadcasting Act of 1961 (SBA) for any league that engages in unauthorized blackouts.  The SBA currently provides a limited antitrust exemption to the four major professional sports leagues allowing them to collectively sell the broadcast rights to their games to over-the-air, broadcast networks (i.e., NBC, ABC, CBS, and Fox).  The SBA was passed at the behest of the NFL after the league's plan to sell a package of league games to CBS was struck down by a federal court in 1961.  The SBA does not apply to the leagues' contracts with cable stations, however, which courts have held do not fall within the SBA's protection of "sponsored telecasting."  See, e.g., Shaw v. Dallas Cowboys Football Club, 172 F.3d 299 (3rd Cir. 1999).

Section 3(a) of the FANS Act would eliminate the SBA's antitrust immunity for any league that allows its games to be blacked out on network television.  Meanwhile, section 3(b) of the bill revises a passage in the SBA authorizing blackouts of a team's home games in its local market.  These changes would have by far the greatest impact on the NFL, which is not only the biggest beneficiary of the SBA -- given its multi-billion dollar deals with NBC, CBS, and Fox -- but is also the only league that blacks out its network broadcasts in local markets based on the home team's ticket sales.  Thus, these provisions of the FANS Act appear to be intended to motivate the NFL to continue to relax its blackout restrictions.  As Senator Blumenthal explained, "they know the legislation is looming if they engage in blackouts. It’s a not-so-subtle pressure.”

The blackout portion of the FANS Act would have a much more limited impact on the NBA, NHL, and MLB.  Not only do these leagues derive a much smaller share of their television revenue from the over-the-air networks, but they also do not typically blackout a home team's games from its local market on network television.  Therefore, the biggest impact of the FANS Act on the other three leagues would be with respect to their Internet blackout policies.  Specifically, section 3(c) of the FANS Act would prevent the leagues from blacking out games that are being aired on over-the-air network television (but not cable) from their Internet packages, but only if the game is unavailable on the fan's local television station.  For example, MLB's agreement with broadcast network Fox permits the station to televise up to four baseball games every Saturday, with different regions seeing different games.  Thus, under the FANS Act, MLB would lose its protection under the SBA if it continued to prevent fans from watching games on the Internet that were not available on their local Fox affiliate.  But MLB would still be able to blackout whichever game is airing on a fan's local Fox affiliate from his MLB.tv Internet subscription. 

The impact of this provision would be extremely limited.  Not only would the change have no impact on fans who subscribe to a league's cable pay-per-view package (e.g., MLB Extra Innings), but it would also do nothing to prevent the leagues from continuing to blackout games aired locally on an RSN from a fan's cable or Internet pay-per-view package.  Moreover, MLB and Fox had already gone one step further than the FANS Act, announcing in 2012 that they would cease to black out Fox's Saturday Games of the Week from both MLB Extra Innings and MLB.tv beginning in 2014.  Thus, it is unclear if the FANS Act would have any appreciable impact on the NBA, NHL, or MLB.

Meanwhile, although the FANS Act would potentially have a significant impact on the NFL, the league could nevertheless decide to preserve its blackout restrictions even if the legislation were to be enacted.  Indeed, the FANS Act would not actually force the NFL to change its blackout policies, but instead would simply condition the league's continued antitrust protection under the SBA on such a modification.  The NFL might thus decide that the odds of an antitrust challenge to its network television deal are so low, or that its prospects for winning such a suit under the rule of reason are strong enough, as to warrant maintaining its blackout policy despite the passage of the FANS Act.  Along these lines, each league's collective sales of television rights to cable networks such as ESPN have seldom been challenged under antitrust law, despite the lack of protection afforded to those deals by the SBA. 

Baseball's Antitrust Exemption

While the blackout restrictions in the FANS Act are fairly complex, the second half of the bill is perhaps even more difficult to decipher.  It purports to eliminate baseball's historic exemption from antitrust law, at least as applied to MLB (the bill appears to leave the immunity in place for the minor leagues, as discussed below).  In particular, the bill would amend the Curt Flood Act of 1998 (CFA), which repealed baseball's antitrust exemption simply in one respect: by allowing current major league players to file antitrust lawsuits against MLB. 

The FANS Act proposes to further limit baseball's antitrust immunity by revising a series of passages in the CFA that were intended to confirm that the 1998 legislation did not alter baseball's antitrust status in any respect other than for suits filed by MLB players.  For example, the FANS Act would amend section (a) of the CFA as follows (the crossed out text reflects what would be struck from the CFA by the FANS Act):

(a) Subject to subsections (b) through (d), the conduct, acts, practices, or agreements of persons in the business of organized professional major league baseball directly relating to or affecting employment of major league baseball players to play baseball at the major league level are subject to the antitrust laws to the same extent such conduct, acts, practices, or agreements would be subject to the antitrust laws if engaged in by persons in any other professional sports business affecting interstate commerce.

This revision would appear to largely revoke baseball's antitrust exemption by broadly exposing the activities of MLB to antitrust law (as is the case for the NFL, NBA, and NHL).  However, subsequent language in the FANS Act makes the intended effect of this modification less clear.  In particular, the bill would also amend section (b) of the CFA as follows (subsections (b)(1) and (b)(2), unaffected by the FANS Act, would preserve baseball's antitrust immunity for the minor leagues):

(b) No court shall rely on the enactment of this section as a basis for changing the application of the antitrust laws to any conduct, acts, practices, or agreements other than those set forth in subsection (a). This section does not create, permit or imply a cause of action by which to challenge under the antitrust laws, or otherwise apply the antitrust laws to, any conduct, acts, practices, or agreements that do not directly relate to or affect employment of major league baseball players to play baseball at the major league level, including but not limited to

...

(3) any conduct, acts, practices, or agreements of persons engaging in, conducting or participating in the business of organized professional baseball relating to or affecting franchise expansion, location or relocation, [or] franchise ownership issues, including ownership transfers, the relationship between the Office of the Commissioner and franchise owners, the marketing or sales of the entertainment product of organized professional baseball and the licensing of intellectual property rights owned or held by organized professional baseball teams individually or collectively

By retaining the language in section (b)(3) of the CFA relating to expansion, relocation, and franchise ownership, this portion of the FANS Act would seemingly maintain MLB's exemption for those critical areas, while simply retracting the immunity for broadcasting and other merchandise licensing purposes.  Thus, it is unclear whether the bill's sponsors intend to broadly revoke MLB's antitrust immunity (as suggested by their revision of section (a) of the CFA), or if they only seek to apply the antitrust laws to MLB's broadcasting and other licensing policies (as seemingly suggested by their revision of section (b)(3)).  Indeed, both sections (a) and (b) of the CFA incorporate one another by reference, so it is unclear which of the two provisions would be given priority should the FANS Act be enacted.

I suspect that the drafters of the FANS Act intend for the bill to broadly revoke MLB's antitrust immunity.  Not only does the proposed revision to section (a) of the CFA appear to reflect such an intent, but the preamble to the bill states in part that the FANS Act would "require the application of the antitrust laws to Major League Baseball."  If that is the case, however, then it would be cleaner and clearer to simply excise subsection (b)(3) of the CFA in its entirety.

The drafters may have opted to retain the remaining language in subsection (b)(3) of the CFA in order to further protect minor league baseball, and specifically its expansion, relocation, and ownership restrictions.  Elsewhere, the FANS Act leaves intact subsections (b)(1) and (b)(2) of the CFA, which explicitly state that the antitrust laws do not apply to minor league baseball or its relationship with MLB.  These sections were originally inserted into the CFA following a massive lobbying campaign orchestrated by the minor leagues, which feared that the 1998 legislation would disrupt their relationship with MLB.  The drafters of the FANS Act may have thus left the remaining portion of subsection (b)(3) in place to placate the minor league lobby.  However, if that was the intent of the legislators, it would be much more effective if they inserted some language into subsection (b)(3) clarifying that it only applies to the minor leagues.

Alternatively, it is possible that the FANS Act is only intended to address the blackout and related licensing issues, and thus that the second half of the bill only seeks to expose MLB's broadcasting and merchandising practices to antitrust law.  If this is the case, then the drafters could accomplish this goal much more clearly by simply stating that baseball's antitrust exemption does not apply to MLB's broadcasting or other intellectual property licensing activities.  Ironically, MLB did not even assert its antitrust exemption in the pending litigation challenging its blackout policies in the Southern District of New York, potentially rendering the current bill unnecessary should its intended effect be more narrow.  Indeed, the only reported court decision on record, involving a dispute surrounding the Houston Astros' local radio broadcast agreements, held that the exemption does not shield baseball's broadcasting activities.  Henderson Broadcasting Corp. v. Houston Sports Ass’n, 541 F. Supp. 263 (S.D. Tex. 1982).

Regardless of the legislators' intent, as currently drafted the FANS Act's treatment of baseball's antitrust exemption is unclear.  I would expect this portion of the bill to be fine-tuned considerably should it advance through the legislative process.

Prospects for Passage 

Passage of the FANS Act does not appear to be particularly likely, as the four leagues will presumably lobby vigorously against the bill.  That having been said, of its two parts, the blackout section of the FANS Act would seem to have a stronger chance at passage than does the baseball antitrust exemption portion of the bill.  While the leagues can be expected to fight the blackout provision, that lobbying effort could be offset to some degree by the broadcast networks themselves.  Indeed, backers of the bill reportedly consulted with various television networks when drafting the legislation.  The value of CBS and Fox's broadcast packages with the NFL would rise (even if only incrementally) if the networks were assured of being able to broadcast each home team's game in its local market regardless of the number of tickets sold.  That fact, along with general fan discontent with blackouts, could potentially enable supporters of the FANS Act to overcome the leagues' inevitable lobbying campaign against this portion of the bill.

Meanwhile, the legislation's attempted revocation of MLB's antitrust exemption appears less likely to pass.  Unlike with the blackout issue, there is no obvious, well organized constituency to counterbalance MLB's likely lobbying efforts against this portion of the FANS Act.  Moreover, while baseball's antitrust exemption is certainly anomalous, there is no immediately pressing, nationwide public concern that will be remedied by its repeal.  Thus, barring some unforeseen development, it appears unlikely that the FANS Act will mark the end of baseball's nearly century old antitrust immunity.

Legal Aftermath of Jameis Winston not being charged with rape

Last week, Florida State quarterback Jameis Winston was cleared in a controversial rape investigation. I wrote about the legal aftermath in an analysis for Sports Illustrated and also spoke with Tom Goldman of NPR's Morning Edition.   In addition, Maggie Gray, B.J. Schecter and I discussed the news in a video for SI.com:

Breaking News from the San Jose v. MLB Lawsuit

Ahead of next Friday's case management conference, the parties in the San Jose v. MLB lawsuit filed a joint case management statement last night (for earlier coverage of the suit click here).  While the parties laid out their positions on the strategic issues I discussed last month, the biggest piece of news coming out of the filing is that MLB now alleges it has already formally rejected the Oakland Athletics' proposed move to San Jose.  This is the first time that MLB has acknowledged issuing a decision on the matter.

In particular, MLB states in the filing (available here) that Commissioner Bud Selig sent the Athletics a letter on June 17, 2013 (one day before San Jose filed its lawsuit), notifying the team "that he was not satisfied with the club’s relocation proposal."  Consequently, MLB contends in the filing that the city's sole remaining claim for relief is rendered moot, because the league provided a decision within the two-year window allegedly anticipated by the city when it entered into the land option agreement with the Athletics, and thus did not wrongfully interfere with the agreement by unduly delaying its resolution of the matter.

Unfortunately, the court filing does not include a copy of the June 17th letter, so it is unclear how definitively Commissioner Selig rejected the proposed relocation.  It is of course possible, and perhaps even likely, that MLB would reconsider the move in the future.  Meanwhile, MLB states in the filing that it is waiting for the city to agree to an appropriate confidentiality order before supplying it with a copy of the communication, suggesting that the letter will not see the public light of day for quite some time (if ever).  In any event, this is the first indication that MLB has reached a long-awaited decision in its more than four-year consideration of Oakland's proposed move to San Jose.

With respect to the issues to be discussed before Judge Whyte next week, both San Jose and MLB urged the court to retain its supplemental jurisdiction over the remaining state law claim, on the basis that the judge is already familiar with the issues in dispute in the case.  However, while the city argues the court should allow discovery to commence immediately for the claim, MLB asks the court to temporarily stay the claim in deference to the Stand for San Jose, et al., v. City of San Jose litigation proceeding in California state court.  In that case, the plaintiffs are challenging the legality of the city's land option contract with the Athletics on several grounds (both environmental and procedural).  MLB alleges that should the option agreement be declared invalid in the Stand for San Jose litigation, then the city's sole remaining ground for relief in the suit versus MLB (alleging that MLB wrongfully interfered with the option agreement) will be rendered moot.

Meanwhile, San Jose predictably encouraged the court to immediately certify the antitrust issues in the case for appeal pursuant to Federal Rule of Civil Procedure 54(b), while MLB argued that an immediate appeal was unwarranted.  MLB contended that bifurcating the litigation is unwarranted because the remaining state law claim in the case arises out of the same factual relationship as the dismissed claims, and thus that they should all be appealed together upon completion of the district court proceedings.

While it will be interesting to see how Judge Whyte elects to proceed with the remaining claims following the hearing next Friday, the biggest news coming out of yesterday's filing is undoubtedly that MLB now alleges that it has already ruled on Oakland's proposed move to San Jose. 

Fan warning cards

Deadspin reports, with photo.

Assuming this is real, it raises every issue I have ever written about with respect to fan expression. Any "NBA Fan Code of Conduct" must comport with the First Amendment, at least at publicly funded or publicly owned arenas. Since little fan speech actually runs afoul of any known First Amendment categories, such an eviction would not satisfy constitutional scrutiny.