Hashtag: #SLAC13

Thursday, May 16th

12:15-12:25pm:  SLA 2012 Annual Membership Meeting from Anthony J. Agnone

12:25-12:30pm:  Opening Remarks from Wm. David Cornwell, Sr.

12:30-2:00pm:  An Overview of Recent Legal Developments in Sports by Gary R. Roberts

2:00-3:15pm:  Legal Impact of Head Trauma on Professional Athletes

3:30-4:30pm:  Defending Athletes in Criminal and Administrative Disciplinary Matters

4:45-6:14pm:  Round Table: Current Legal Issues in the War on Sports “Doping”

6:15-7:15pm:  Opening Reception sponsored by Greenberg Traurig

Friday, May 17th

7:30-8:30am:  New Member Breakfast

8:30-10:30am:  When Universities Fail: The Legal Ethics of Penn State and Its Aftermath

10:45-Noon:  New Media: Legal Implications of the Growth of Twitter, Streaming and iPads on Sports Brands, Media Rights and Delivery

12:15-1:30pm:  SLA Luncheon and Award of Excellence

1:45-2:45pm: Current Legal Issues in Motorsports

2:45-3:45pm:  The Internationalization of Sports: Successes and Legal Pitfalls of U.S. Sports Expanding Into Europe and European Sports in the U.S.

4:00-4:55pm:  Breakout Session 1

5:00-5:55pm: Breakout Session 2

6:00-7:00pm:  SLA President’s Reception sponsored by Akin Gump

Saturday, May 18th

7:10-9:00am:  Women in SLA Breakfast

9:00-10:45am:  General Counsels’ Forum

11:00-12:45pm:  Executive Directors’ Forum

1:45-3:15pm:  Breaking into the Sports Law Industry

The complete schedule can be found here.

Marc Isenberg

Marc is a nationally-recognized athlete advocate for high school, college and pro athletes.  He is passionate about helping professional athletes and entertainers invest wisely, both to maintain income levels and standards of living, as well as to avoid being defrauded.  Marc is the author of several publications on the business of sports, including Money Players and Go Pro Like a Pro. He assisted several college athletes, together with their families, on their selection of player agents and marketing representatives.  A national columnist for Basketball Times, Marc is a frequent speaker at elite basketball camps and athletic programs and teams, including UCLA, RbkU and the Orlando Magic. In 2012, Marc, with Nolan Smith of the Portland Trail Blazers, founded Hoops Family , an organization devoted to educating and mentoring basketball players—and advocating on their behalf.

Jenn Yuen

Jennifer Yuen is a sports and entertainment attorney at the Benz Law Group in Los Angeles.  She represents athletes in a variety of employment and transactional matters and is currently representing an international sports federation before the Court of Arbitration for Sport.  Previously, she served as the Business Affairs Coordinator for the Los Angeles Matadors of the World Series of Boxing.  In this capacity, she advised amateur and professional boxers regarding eligibility compliance under USA Boxing, AIBA, and state athletic commissions in California, Florida, and Mississippi.  Notably, she helped to organize nationally televised boxing matches at the Nokia Theatre and Club Nokia at L.A. Live.

“The NCAA defines recruiting as ‘any solicitation of prospective student-athletes or their parents by an institutional staff member or by a representative of the institution’s athletics interests for the purpose of securing a prospective student-athlete’s enrollment and ultimate participation in the institution’s intercollegiate athletics program.”  The clause may keep the Oregon Duck’s Football team out of post-season play for two years and cause the loss of scholarships.

Two Violations and the Dispute

Between 2008 and 2010, Willie Lyles, a scouting agent considered to be an agent of the University, made “impermissible telephone and contacts” with prospective athletes and failed to make written scouting service reports as required by the NCAA.  The University of Oregon (Oregon) admits that Lyles committed major NCAA violations when he made impermissible contact with prospective athletes.  However, the NCAA and University of Oregon disagree on the severity of the violation for Lyles’ failure to make written scouting service reports.  Although Lyles failed to provide the written information, he did provide oral reports to the school.  The NCAA considers this to be a major violation while the University considers it a minor violation. This dispute will ultimately be heard in front of the NCAA hearing committee.

Step One – Investigation

Earlier this year, the NCAA received an anonymous tip that the University of Oregon committed major rule violations.  Relying on that tip, the NCAA launched a formal investigation.  During this time, NCAA officials conducted interviews, received documents, including phone logs, academic records, compliance files and email transcripts.  On April 15, 2013, the University of Oregon provided the NCAA staff with a 515-page report documenting the hiring of Lyles and other recruiting services.  With that information, the NCAA deemed there to be a possible major infractions.

Step Two – Charges

After deciding the University of Oregon violated NCAA policy, the NCAA sent charges to the school.  Once received, the University had to decide whether they agreed with the alleged infractions. If the University disputed the allegations, the school had to request a hearing with the NCAA committee.  In this case, Oregon admitted to the severity of the first infraction – that Willie Lyles had impermissible phone calls with prospective student athletes.  With the admission, Oregon proposed to impose sanctions on themselves of two years probation and a loss of one scholarship for each of the next three seasons.  However, the University and the NCAA disputed the severity of the second violation, which will result in a hearing.

Step Three – The Hearing

Enforcement staff and University officials will attend a hearing, each armed with their own arguments.  The NCAA will be represented by the investigators of the case and the vice president of NCAA enforcement.  The University of Oregon will be represented by school counsel, the Chancellor, athletic staff, and possibly student athletes. It is likely the Oregon Ducks will argue that although they did not receive the written reports on prospective student athletes, they nevertheless received the reports orally.  They will argue that this was not a major violation as they were still receiving the pertinent information required by the NCAA rules. The NCAA will argue major violations occurred because written reports were not received.

Step Four – Penalty

The NCAA will have to decide if the lack of written reports was a major violation of NCAA rules based solely on the facts of the case.  Applying NCAA case precedent and predicting an outcome of Oregon’s case is nearly impossible due to the varied case precedent and inconsistent rulings of the NCAA. However, we can speculate on the NCAA’s ruling by looking at the 2012 University of Southern California (USC) sanctions.

After receiving information that Reggie Bush forfeited his amateur status by accepting money as a student athlete, the NCAA doled out some of the harshest sanctions ever imposed on a Division 1 football program.  The team vacated their 2004 National Championship, all wins in 2005, had a two-year bowl ban and lost 30 scholarships over three years – all because one player accepted payment and gifts from an agent.  If such harsh punishment was dealt because one player violated NCAA rules, how harsh will the punishment be for a scandal that affected multiple student athletes and prospects?

The NCAA has a strong interest in protecting student athletes’ amateur status, as it is the fundamental principle of their program.  Allowing student athletes to be paid either by an agent or by a University would destroy college sports, as we know it.  It would cause multiple complications too numerous to set forth here. Protecting the amateur status of student athletes is the NCAA’s utmost concern and such violations are punished accordingly, as was seen with USC’s punishment.

In the case of Oregon’s violations – they were simply administrative rule violations and do not compromise the heart of college sports. Receiving an oral report instead of a written report does not affect student athlete’s amateur status.  Thus, the NCAA simply does not have a large enough interest in this matter to consider it a major infraction.  As such, it is likely the University will only receive their self-imposed sanctions for impermissible contact: a two-year probation period and a loss of one scholarship per year.

Griffin Finan

Griffin Finan is an associate at Ifrah, PLLC, in Washington, D.C. His practice is concentrated on iGaming, regulated sports betting, fantasy sports, and white-collar criminal defense. Griffin has counseled clients on a range of issues including compliance with federal and state gaming laws, structuring fantasy sports games, and litigation related to gaming issues.

Athletes and other team officials are fined for a number of reasons – arguing with the officials, improper dress code, and tweeting during games. Fines and punishments range from suspensions with or without pay and monetary fines. With tweets limited to 140 characters, these slips-ups cost about $297 per character on average. Although these fines for inappropriate tweets might seem outrageous because it is “just Twitter,” or “violates a player’s first amendment rights,” that is simply not the case.

Social media has grown from a way for teens and college students to share photos of their friends (or their meals) to an incredibly valuable – and indispensible – way for businesses, sport leagues, and individuals alike to express their views. Social media has granted individuals the power to overturn their government, set up petitions for change and even “shut down” the internet for a day to protest a bill. The power of social media is boundless.

Realizing the dual importance of having a social presence and maintaining brand, businesses, ranging from “mom-and-pop” shops to Fortune 500 companies, have climbed aboard the social media train. In fact, businesses have created entirely new employee positions, where the sole job description is to write and maintain social media content, respond to consumer comments both positive and negative through social media, and manage the company’s “online brand.” These positions are usually referred to as online community managers. Companies recognize community managers play an important role because while social media has made it easy to circulate information and commentary, negative news tends to spread even more rapidly. If a negative tweet goes viral, it can reach millions upon millions of people all over the world, and businesses must seek to avoid that risk as best as possible.

Professional sports leagues are no different. A sports league is a private sector industry, and the individual teams make up the constituent businesses. Their objectives are similar to those of other businesses and industries: they look to turn a profit. With the volatility of their specific product – namely, the players and other outspoken members of the organization – it makes sense that the leagues regulate all forms of social media. Therefore, leagues created social media policies which typically include prohibited behavior and penalties for those behaviors.

These social media policies do not create violations of the players’ first amendment rights for two reasons: first, the first amendment is only applicable to government actors, and second, the players had already agreed to be governed by their league’s rules.

First amendment protections would be applicable if the government were to intervene and restrict the player’s speech. Here’s an example: remember when the government tried to package the SOPA and PIPA bills as a copyright protection laws last year? After the immense protests those bills were recanted after successful first amendment rights protests. Congress knew, or was made aware, that these laws would face a legal challenge and would most likely lose, so they were pulled.

In contrast, professional sports leagues are private entities. A private entity has the right to create their own rules regarding employment contracts and policies as long as they don’t violate federal employment laws. The first amendment is not considered an employment law, so private employers can restrict their employees’ speech within reason. The recent case regarding Costco’s social media policy provides a convenient point of contrast. The Costco policy attempted to restrict employees from posting any language that may damage the company and employees could be subject for discipline or even termination for violating the policy. The National Labor Relations Board deemed the policy “too broad” and required Costco to change it.

Professional sports leagues’ social media policies do not violate the first amendment for another, more intuitive reason: the players have agreed to it.

Leagues acquire the authority to make these social media policies from the collective bargaining agreements they negotiate with the players associations.  Social media policies are conditions of the players’ immense contracts, and when players sign their contracts they adopt the conditions of the contract, including abiding by all league rules. It remains to be seen whether someone disputes the professional sports leagues’ social media policies for being over-broad.

Additionally, even when these pictures or tweets are being posted from the players’ personal accounts, it’s often hard to separate the player from their team. When you hear of Kobe Bryant, you likely think “professional basketball player for the Los Angeles Lakers. Or Mark Cuban, you likely think “Dallas Mavericks’ owner,” and so on. These athletes and owners have become celebrities in their own right but are also brand ambassadors. Their negative actions can reflect poorly on the organization or league as a whole.

Social media policies in sports have become the norm, just as they are in everyday businesses. The leagues try their best to limit negative exposure, and they believe that fines, fees, and penalties will hopefully inhibit the players from posting an inappropriate tweet. If a player can be fined for yelling at a referee when no one but the referee can hear and maybe no one in the arena saw, then does it not make sense to fine a player for conduct that could instantly and permanently be seen by millions?  I believe so.

In order to fully understand third party ownership, it is first important to make a distinction between so called “federative rights” and “economic rights”. Federative rights (or “sporting rights”) refer to the right of a club to register a player in a national federation or association. This registration is required for the player to play for an affiliated club and to compete in the different tournaments organized by the federation. Naturally, federative rights can only be held by a club.

Economic rights, on the other hand, refer to the pecuniary value generated from the transfer of the player’s federative rights. Generally, unlike federative rights, economic rights can be owned not only by a club, but also by third parties outside of the football family, that is, a business, company, agency, individual or other entity. These third parties purchase part of or all the economic rights of a player in the hopes of making a profit if and when the player is transferred to a new club for a big transfer fee.

To illustrate the workings of third party ownership, let’s assume that you purchase from Santos Futebol Clube (Santos FC) 30 percent of the economic rights of the Brazilian superstar Neymar for $3,000,000 USD. Now, let’s suppose that after your investment, Santos FC sells Neymar to Real Madrid for $70,000,000 USD. As the holder of 30 percent of his economic rights, you would be entitled to $21,000,000 USD, or a profit of $18,000,000 USD, of the transfer fee paid by Real Madrid.

It is worth noting that a player can also hold his own economic rights. Indeed, in 2012, when the Brazilian midfielder Oscar was transferred from Internacional to Chelsea for approximately $40 million USD, the transfer was divided up between the midfielder himself, two Brazilian teams and other third parties.

While this sort of transaction is permitted in Italy, Spain, Portugal and South America, it is not legal everywhere. For instance, France’s Professional Football League (LFP) in Article 221 of its regulations, the English Premier League (EPL) in rules L37 and L38, and the English Football Association (FA) in clause A.2 of its Third Party Ownership Regulations, have completely banned third party ownership, the latter two in specific response to the infamous “Tevezgate”.  Now the FA for example, requires that “before registering a Player for a Club, The Association must be satisfied that there exist no agreements between the Club or the Player and a Third Party under which a Third Party will own or continue to own any registration or economic rights or the like in the Player following registration.”

FIFA, on the other hand, has not gone as far as to ban third party ownership. Instead, it has adopted Article 18.bis of the FIFA Regulations on the Status and Transfer or Players which only prohibits a club from entering “into a contract which enables…any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.” UEFA holds the same position as FIFA.

It is unknown whether FIFA and UEFA will follow the footsteps of the FA and place an outright ban on third party ownership. What is certain is that up until now, FIFA has only expressed its concern about third parties influencing the autonomy of clubs and has left the door open for national federations to permit third party ownership. With this in mind, now is the time to open up the checkbook and invest in who you think will be the next Oscar before it is too late.

This article was co-authored by Francisco A. Larios and Rebeca Molina.*

*Rebeca Molina @BekaMolina is a Mexican attorney with an LL.M. in International Sports Law. Most recently, she worked at Bichara e Motta Advogados, a Rio de Janeiro law firm that specializes in football related matters.

Darren Heitner

Darren Heitner is a Partner at Wolfe Law Miami, P.A., Professor of Sport Agency Management at Indiana University Bloomington, a contributor to FORBES SportsMoney, Co-Founder of Collegiate Sports Advisors (a consulting firm for universities’ athletic departments), and Founder/Chief Editor of SportsAgentBlog.com.  He has a wealth of experience covering the business of sports at Sports Agent Blog since 2005 and at FORBES since early 2012.  Additionally, he has been asked to provide his legal opinion on a Sports Law issues for a variety of top publications, and is a transactional and litigation attorney with a plethora of sports-related clients and matters.  Heitner’s legal scholarship has been published in the Harvard Journal of Sports and Entertainment Law, Virginia Sports & Entertainment Law Journal, Dartmouth Law Journal, and more, and he recently had the cover article in the New York State Bar Association Journal and the lead article in the Sandra Day O’Connor College of Law at Arizona State University Sports and Entertainment Law Journal.  Heitner has a Bachelors of Arts and Juris Doctor degree from the University of Florida and is young, a hard worker and very knowledgeable and passionate about sports business and law.  In 2011, he was named to SportsPro Media’s 10 NEXT, which honors ten stars of the sports business industry under the age of 30 that have achieved a level of success that is truly rare at such a young age.

Pre-Trial Bail Hearing

Bail in South Africa, like many countries is not meant to be punitive.  It is established in order to protect the public.  The court must first determine if bail can be granted, and if so how much.  Bail is based on evidence submitted by the suspect as well as the harshness of the crime.  In order for the prosecutors to establish that no bail should be set, they must prove beyond a reasonable doubt that the suspect is a risk to the public or has a propensity to violence.  In the Pistorius case, the prosecution failed to do this, and bail was set at 1 Million Rand, about $110,000.

The cost of bail was established because the judge charged Pistorius with premeditated murder.  The issue of premeditation is only discussed at the bail hearing.  If a judge deems a murder to be premeditated, it falls under the most serious of crimes, elevating the bail.  If the charge were to be filed as ‘culpable homicide’, where premeditation was not presumed, the bail would be less.  The bail hearings in South Africa are like a mini trial; evidence is submitted, the prosecution and the defense attorney’s battle, and a verdict in the form of bail is rendered.  Pistorius is a free for now, but come June, the agonizing trial process begins.

The Trial

The main difference the American public will notice between the South African Courts and the American Courts is the absence of a jury.  Juries were abolished in 1969 because people feared there would not be a fair trial based on the racial segregation at the time.  Despite Apartheid ending in 1994, there are no jurors present at trial.  Instead, the entire case is decided by one Magistrate or one Judge. Because there is only one person reviewing evidence of the case, plea bargains are often an alternative, especially in Pistorius’ case where there is no doubt he pulled the trigger.

It is undisputed that Pistorius shot and killed his girlfriend.  The issue is if it was intentional or not.  Pistorius claims that he thought there was an intruder in his home (his home has been broken in to on numerous occasions).  Not wearing his prosthetic legs, he felt vulnerable and shot through the bathroom door in an effort to protect himself.  It was only after he noticed Reeva was not in the bed that he began to realize he may have shot his girlfriend.

Since there were no witnesses to the alleged murder, the prosecution must rely on extrinsic evidence to prove beyond reasonable doubt that Pistorius murdered Steenkamp.  This is going to be a difficult task as the crime scene was not properly analyzed.  The more mistakes by the investigators, the more damaging it is for the prosecution. Pistorius’ legal team may be able to make a case that any evidence submitted by the prosecution is unreliable due to the nature in which it was handled.

If Pistorius is found guilty of murder, there is a mandatory sentence of life in prison. If Pistorius is found not guilty of murder, he can still be found guilty of negligent homicide, a crime that could carry up to twenty years in prison.  It would be wise for the defense attorneys to strike up a plea bargain to avoid all the uncertainties that surround this case.  The fact that Pistorius did not seem to have a motive puts Pistorius’ attorneys in the driver’s seat to compile their evidence and put out a strong plea bargain at trial.

The Appeal Process

If Pistorius is found guilty in the lower Magistrates’ court, the blade runner could appeal to a higher court.  Pistorius’ chances for appeal rest in the hands of his initial judge.  If the initial judges decides that based on the facts, a higher court may rule differently, then the appeal will be granted, and the process begins again.

South African Criminal System

South Africa has been shaken by the death of Reeva Steenkamp, and the trial of Oscar Pistorius.  Pistorius is not only South Africa’s hero, but he is a world hero.  With the global spotlight on South Africa, trial not only begins for the double amputee Olympic hero, but also for the South African Legal System.  Through this process, some serious holes have been exposed in the South African system.  It has become apparent that the police investigation is lacking recourses.  The third world country does not have the adequate funding to properly train people, nor do they have the finances to fund labs to process the evidence.  Thus, much of the evidence slips through the prosecutions fingers.  It has already been discovered that the first response detectives did not wear shoe covers when entering Pistorius’ home, an active crime scene.  Much of the evidence was displaced or lost.  Additionally, the lead detective assigned to the case is under investigation himself.  Hilton Botha is facing seven counts of attempted murder for shooting at a mini-bus in 2009.  He has since been replaced, but sources have stated that this sort of problem is not unusual.  Regardless of the outcome, the crime scene investigation system, and the legal system as a whole will be under severe scrutiny worldwide.  Following this trial, changes are likely to be made as the nation is trying to reestablish itself in the global market.

Jaia A. Thomas

Jaia Thomas is a sports and entertainment attorney with seasoned experience on both coasts. Her principal clients include motion picture companies, as well as individual screenwriters and filmmakers. Her motion picture work encompasses finance and distribution transactions. She also assists in the drafting, negotiating and preparation of music licensing agreements, option agreements and product placement agreements. Ms. Thomas’ practice areas also encompass television, fashion, new media and social media.

Intellectual property is another key component of Ms. Thomas’ legal practice. Ms. Thomas assists individuals and entertainers in the selection, clearance, registration and protection of trademarks and service marks domestically and internationally. She also frequently counsels clients on legal issues pertaining to copyright protection.

Ms. Thomas frequently lectures at colleges and universities across the country, including Vassar College and Carnegie Mellon University. She has been featured in numerous publications including the The New York Times (“Sports Stars Seek Profit in Catchphrases”) and USA Today (“Colin Kaepernick Defends Move to Protect Personal Branding”).  Her new book, “Entertainment Law: The Law Student’s Guide to Pursuing a Career in Entertainment Law” will be published this Spring.