Oliver Green

NYU Sports Law Association’s 10th Annual Colloquium Preview

This Friday, March 5th, the Sports Law Association of NYU Law will be hosting its 10th annual Sports Law Colloquium. The flagship event has hosted industry leaders such as NBA Commissioner Adam Silver (University of Chicago Law ‘88), President of the New York Yankees, Randy Levine (Hofstra University School of Law ‘80), and NYU Law’s own Gary Bettman, Commissioner of the NHL (‘77).

This year, SLA will be hosting a unique slate of panelists given the unprecedented nature of sports in 2020 – 2021. The keynote conversation will feature Big Ten Commissioner, Kevin Warren and distinguished Brooklyn Law and NYU Law professor, Jodi Balsam. This article will preview the panels and the brilliant panelists who will be speaking. Click here to register for the colloquium. Registration will close Wednesday night, March 3rd.

This event has been approved for a maximum of 3.5 New York State CLE credits in the Areas of Professional Practice category. The credit is both transitional and nontransitional; it is appropriate for both experience and newly admitted attorneys.

Keynote Conversation
Kevin Warren (Panelist) is the Commissioner of the Big Ten Conference. Previously, Mr. Warren served as the Chief Operating Officer of the Minnesota Vikings and was the highest-ranking African-American executive working on the business side for an NFL team at the time. Warren played college basketball at the University of Pennsylvania, where he was a member of the 1981-82 Ivy League Championship team before transferring to Grand Canyon University. Warren later graduated from University of Notre Dame Law School. In 1992, Warren established his own sports and entertainment agency. Five years later, he joined the St. Louis Rams as a front office executive and earned a Super Bowl Ring following the Rams’ Super Bowl XXXIV victory. Warren went on to work for the Detroit Lions, Greenberg Traurig LLP, and then the Vikings for fourteen years before being named Big Ten Commissioner in 2019.

Jodi Balsam (Moderator) is an Associate Professor of Clinical Law and Director of Externship Programs at Brooklyn Law School, and an Adjunct Professor of Law at NYU School of Law. Professor Balsam is a graduate of NYU Law and previously served as Counsel for the National Football League. Balsam began her legal career at Simpson, Thacher & Bartlett LLP and clerked for The Honorable Dennis Jacobs as well as The Honorable Charles L Brieant. Professor Balsam is frequently published for her commentary on sports law about topics including the NFL players’ concussion lawsuit, Tom Brady’s “Deflategate” lawsuit, sports betting, and more.

The Sports World’s Pandemic Response
Ron Klempner (Panelist) is Senior Counsel, Collective Bargaining at the National Basketball Players Association and has served in this role for over two decades. Klempner began his legal career at Weil, Gotshal & Manges and clerked at the U.S. Court of Appeals for the Second Circuit. He is a graduate of the Maurice A. Deane School of Law at Hofstra University.

Michael Goldsholl (Panelist) is the Director of Operations for Business & Legal Affairs at Women’s National Basketball Players Association (WNBPA). Goldsholl began his career working with a talent agency as well as a sports marketing company. He is a graduate of Brooklyn Law School and also interned with the WNBPA as a law student.

Vanish Grover (Panelist) is Counsel at Major League Baseball (MLB). He began his career as a labor relations intern with MLB before joining Davis Polk LLP. Grover then clerked for the U.S. District Court for the Eastern District of New York, before rejoining MLB in his current role. He is a graduate of NYU Law.

Dr. Daniel Kelly (Moderator) joined NYU’s School of Professional Studies in 2019 as the Academic Director of Graduate Programs and Clinical Assistant Professor for the Preston Robert Tisch Institute for Global Sport. Dr. Kelly has consulted on strategic leadership and global business initiatives with international sports organizations based in Spain, Argentina, Qatar, and elsewhere. He has also organized recruiting events with various professional teams such as the New York Mets, Boston Celtics, and many more.

The Next Generation of Sports Broadcasting Deals
David Pahl (Panelist) is a partner at DLA Piper and focuses his practice in the media, sport and entertainment sector. He previously served as the Chief Legal Officer at ESPN for over two decades and oversaw all legal affairs, including programming acquisitions for broadcasting rights. Pahl was responsible for ESPN’s first MLB and NBA package purchases as well as the NFL’s Monday Night Football addition. He has negotiated or overseen carriage and distribution agreements with all of the major MVPDs, including Comcast, DirecTV, Time Warner and Dish. Pahl is a graduate of University of Michigan Law School.

Richard J. Birns (Panelist) is a partner at Gibson, Dunn & Crutcher LLP where he is Co-Chair of the Sports Law Practice Group. Birns regularly serves as a personal advisor to owners of sports franchises and sports industry leaders on “bet the company” matters. He is also recognized as a leading sports lawyer by The International Financial Law Review. Birns is a graduate of Columbia Law School.

Andrew Marchand (Panelist) is a senior sports writer for the New York Post. Marchand began his career as a reporter for the New York Post before becoming a regular contributor to ESPN programs such as Sportscenter, Baseball Tonight, ESPN News, and ESPN New York radio broadcasts. After 11 years with ESPN, Marchand rejoined the New York Post in 2018.

Mark Conrad (Moderator) is an Associate Professor of Law and Ethics at Fordham University Gabelli School of Business. He also is the director of Fordham’s Sports Business Concentration. Professor Conrad has had multiple works published on various areas of sports law including the First Amendment rights and social media in sports, disparaging trademarks against the Washington Football Team, and many more. Professor Conrad is a graduate of New York Law School.

Social Activism in Professional Sports
Pamela Wheeler (Panelist) is a Consultant to the National Football League for diversity and inclusion as well as executive leadership development. Ms. Wheeler previously served as Director to the WNBPA for more than 15 years. She then lectured at Columbia University on labor and employment law, as well as leadership and personnel management. She is a graduate of Boston University School of Law.

Ben Meiselas (Panelist) is a partner at Geragos & Geragos. He is best known for representing former quarterback and civil rights activist Colin Kaepernick in his lawsuit against the National Football League and continues to represent Colin in all related endeavors. Meiselas has previously served as the General Counsel for the Big3 Basketball League, and currently serves as General Counsel for Colin Kaepernick’s “Know your Rights Camp,” Meiselas was awarded the 2019 Variety Impact Lawyer of the Year for his legal achievements. He is a graduate of Georgetown University Law Center.

Charles Grantham (Panelist) is the Director of Center for Sport Management at Seton Hall University’s Stillman School of Business. Grantham has deep expertise in sports having formerly represented or advised NBA players including Charles Oakley, Amare Stoudemire, and Tobias harris. Grantham began his career with the NBPA as a former executive for almost two decades, then serving as the Union’s Vice President before being names its first Executive Director. Grantham was a consultant to the plaintiffs in the O’Bannon v. NCAA lawsuit. He earned his M.B.A. from The Wharton School of University of Pennsylvania.

Cameron “Cammy” Myler (Moderator) is a Clinical Assistant Professor at NYU’s Tisch Institute for Global Sport. Myler is perhaps best known for her time as an American Olympian and competed in four Winter Olympic teams as a luge athlete. After retiring from luge, Myler earned her J.D. from Boston College Law School and began her legal career at Milbank LLP before moving to Frankfurt Kurnit Klein & Selz, P.C. In 2016, Myler created the Women in Sports Initiative, which provides students with an opportunity to meet with and learn from successful professionals in the sports industry.

1 Mar 2021

Oliver GreenLeave a comment

2021 Preview: Litigation

In this second installment of previewing 2021, I take a look at some of the compelling storylines to follow in the world of sports litigation. As trials now occur virtually, several ongoing disputes are expected to reach resolutions this year, including a six year-old lawsuit against the National Collegiate Athletic Association (NCAA), which will fundamentally rearrange the way college athletes are “defined” and compensated. Let’s take a look at what is on the docket to be decided this year.

NCAA v. Alston
For fans of EA Sports’ NCAA Football, the dream of the beloved video game making a comeback has become a reality following a surprise announcement last week. O’Bannon v. NCAA, a class action lawsuit against the NCAA, Collegiate Licensing Company, and video game publisher Electronic Arts, brought an end to the game franchise in 2014 when college players sued over the unauthorized use of their name, image, and likeness (NIL). A $60 million settlement ended the dispute — and with it — any NIL-related profit opportunities for college players, such as broadcast rights and merchandising. Rather than simply license NIL rights with college athletes, all profiting parties were forced to abandon these lucrative areas of college sports, stemming from the NCAA regulations prohibiting athletes receiving outside compensation. This concept had become known as amateurism. Amateurism has prevented college athletes from profiting from their NIL.

This is just a snippet of the NCAA’s long battle against its athletes and their authority over NIL rights, however a new chapter may be on the horizon. The relevant lawsuit, NCAA v. Alston, is a years-old case that will be making its way to the Supreme Court. Following the Ninth Circuit’s decision in favor of the plaintiffs, the NCAA’s petition for certiorari was granted, meaning the Supreme Court will hear the case and make a final ruling. If the Supreme Court affirms the Ninth Circuit’s judgment, the NCAA rules restricting education-related pay and benefits for college athletes will be stricken down. However, if the Supreme Court goes a different route, a win for the NCAA may essentially grant antitrust immunity to the organization, which would allow it generous latitude in terms of what changes — if any — the NCAA would make to its current compensation structure. The debate over amateurism will take place on March 31st, and regardless of outcome, will have permanent, far-reaching consequences for the future of college sports.

Jeffery Kessler, head attorney at Winston Strawn LLP, will be arguing on behalf of Alston and college athletes as a whole, while the NCAA and its athletic conferences will be represented by a plethora of law firms.

Bryant v. Island Express Helicopters Inc.
Little more than a year ago, the helicopter carrying Kobe Bryant, his daughter Gianna, and seven other passengers crashed, tragically resulting in the deaths of everyone on board. Many of the details are well-known at this point: despite traveling the same route to a girl’s basketball tournament 24 hours earlier, pilot Ara Zobayan became disoriented in the heavy fog that hung over the Calabasas hillside that day and misperceived the helicopter’s final plunge, apparently believing that they were climbing to four-thousand feet shortly before impact. However, what still remains to be determined is the outcome of the litigation against Island Express, Zobayan’s employer and the owner of the helicopter.

Vanessa Bryant, the widow of the Lakers’ legend, brought suit against the helicopter company and Zobayan on twenty-eight counts alleging negligence resulting in the wrongful deaths of the passengers. Island Express attempted to cross-claim the Federal Aviation Administration, alleging that the air traffic controllers had negligently handled a shift change that occurred during the flight, according to Law360. Both Bryant and the federal government have filed a motion to dismiss, which — if granted — would remand the case from federal court to Los Angeles Superior Court, where Bryant is more likely to find a favorable verdict if the case goes to trial. However, both sides must first await the investigation results of the National Transportation Safety Board (NTSB). These findings will determine if the crash was due to a mechanical failure or human error, as previously suspected. The NTSB is expected to announce the release of its report tomorrow on Tuesday, February 9th via livestream.

Vanessa Bryant is represented by Munger, Tolles & Olsen LLP and Robb & Robb LLC. Island Express is represented by Cunningham Swaim LLP and Worthe Hanson & Worthe. The federal government is represented by the U.S. Attorney’s Office for the Central District of California and U.S. Department of Justice

Senne v. Office of the Commissioner of Baseball
The Minor League (MiLB) system of Major League Baseball (MLB) has been a lightning rod of controversy over the past year following the MLB’s decision to cut the number of minor league teams from 162 to 120 — or one affiliate per MLB team for each of the four “levels” of MiLB. Commissioner Rob Manfred has faced backlash from minor league team executives and Congress alike. However, it seems that the MLB’s “120 Plan” not-so-coincidentally comes at a time where the league awaits a verdict on a class action lawsuit that would make the operation of the Minors Leagues exponentially more expensive. Enter Senne v. Royals.

Seven years ago, former minor leaguer Aaron Senne filed a lawsuit against the Kansas City Royals. The litigation has since expanded to include thousands of players — past and present — who are alleging that they have received unlawfully low wages from MLB for their services. These claims include zero compensation for spring training as well as its fall counterpart, both of which are reportedly “strongly implied” to be mandatory. Further, some players even claim to have made as little as $1,100 per month during the five-month regular season, which, assuming a minimum forty-hour workweek, would make their hourly wage $6.875. Of course, this figure falls well below the $7.25 federal minimum wage; however the MLB may already be shielded from this apparent discrepancy.

Hidden on page 1,967 (of 2,232 total) of Congress’s 2018 $1.3 trillion spending bill, the “Save America’s Pastime Act” essentially exempts minor league players from the protections of the Fair Labor Standards Act (FLSA). This legislation meant that minor league players could no longer receive overtime, nor payment for spring training, rendering minor leaguers “seasonal employees” by default. There are many other considerations that fill out this complicated picture, but in short, the MLB’s lobbying for these provisions may signal that the MLB is not expecting the court to rule in its favor. Hence, why eliminating 42 teams – or roughly one-thousand players – will mitigate some of the blow the MLB will face if it loses this case.

The MLB petitioned the Supreme Court to reject the class action on the basis that the claims lacked commonality; however the land’s highest court declined to hear the case. Therefore, the lawsuit will proceed in the Ninth Circuit where Judge Joseph C. Spero has tentatively scheduled a trial for June 2022. However, allowing such an expensive (and contentious) lawsuit to reach trial may threaten the MLB’s most valuable commodity: its antitrust exemption. While a settlement appears unlikely, all eyes are on the league as it prepares for its next move.

The minor league class is represented by law firms Korein Tillery LLC and Pearson, Simon & Warshaw, LLP. MLB is represented by Elise Bloom of Proskauer Rose LLP.

8 Feb 20211 Mar 2021

Oliver GreenLeave a comment

2020 in Review, 2021 Preview: M&A

Having (finally) turned the page to 2021, today let’s take a look back at some of the biggest stories in sports law from the past year. 2020 was set to be a consequential year in sports even before the arrival of COVID-19. However, the pandemic only heightened the importance of a year that witnessed both blockbuster mergers and widespread layoffs in sports business, overdue support for athletes’ expression in social justice movements, and on-the-fly adjustments of how sports are watched and played.

Much of 2020’s chaos that rearranged the sports world will continue to have significant commercial impacts on the industry. Below are some of the fascinating stories that last year provided, and what we might expect 2021 to bring.

What happened:
Penn-Barstool Partnership
Perhaps the most surprising deal transpired at the beginning of the year with Penn National Gaming turning heads during Super Bowl week. The company announced that it had purchased a 36% stake in Barstool Sports for $163 million, valuing the Boston-based sports media group at $450 million. The deal was widely-regarded as a win-win as the oft-in-controversy Barstool gained the legitimacy and platform of a media superpower, while Penn acquired easy access to an ideal market audience for the rollout of a much-anticipated sports betting division. The agreement came at a time with sports betting experiencing skyrocketing growth, and in the court of public opinion, gambling has gone from taboo to tantalizing as more and more legislators rush to legalize the industry in their own states. However, the Penn/Barstool combo faces an uphill battle getting their share of the market as sports betting is already dominated by established operators in FanDuel, Draftkings, William Hill, and others.

Cohen Gets the Green Light
Steve Cohen, a hedge fund manager worth roughly $14 billion, gave Mets fans everywhere something to be excited about when he purchased the team for a MLB-record $2.475 billion this past fall. However, the acquisition did not come without significant hurdles. Back in February, he and the longtime Wilpon family ownership had reportedly agreed to a deal that would have transferred 80% of the Mets to Cohen, however talks suddenly fell through and the agreement was pronounced dead. The team went back on the market and Cohen – in his second effort – faced a competitive bid from longtime Yankees superstar Alex Rodriguez and entertainer-fianceé Jennifer Lopez. Then, when it became clear that Cohen was willing to far-outspend the competition, rumors swirled that New York Mayor Bill de Blasio was “trying to kill” any sale of the Mets to Cohen, reportedly stemming from the fact that Cohen’s former company, SAC Capital Partners, pleaded guilty in a 2014 insider trading case, which cost the firm $1.8 billion in fines. Despite these obstacles, Cohen’s purchase of a 95% stake in the Mets was approved in October. So, after years of being run like a mid-market team, the New York Mets are already seeing dividends now that Cohen, a longtime Mets fan himself, is at the helm. Following promises to spend big on the Mets, Cohen has quite literally put his money where his mouth is, already adding more than $100 million to the team’s payroll through various key moves. Since 2010 (and excluding last year’s pandemic-adjusted season), the Mets have had an average payroll of roughly $124 million. With the start of the MLB season still more than two months away and potentially more moves to be made, the Mets’ payroll already exceeds $160 million and only figures to increase. According to Forbes, the Mets are the 5th most valuable MLB team and the 41st most valuable team globally.

Spotify Snags Simmons
Spotify continued its run of podcast acquisitions with another big name buy. Having already shelled out $400 million for Gimlet Media, Anchor FM, and Parcast, Spotify reportedly spent more than $196 million to land Bill Simmons’ The Ringer in an effort to grow its sports vertical. In Spotify’s words, The Ringer, launched by Simmons in 2016, is a “website, podcast network, and video production house creating an innovative blend of sports, pop culture, politics, and tech content.” According to Statista, The Bill Simmons Podcast, part of The Ringer’s robust podcasting lineup, was the 5th highest earning podcast in 2019 bringing in over $7 million. While the growth of podcasting is hard to pinpoint, the following statistics paint a picture of its vast potential: in 2020, 55% of Americans had ever listened to a podcast, 37% of Americans twelve or older listen to one monthly, and podcasts accounted for 19% of all spoken-word audio listening in the U.S., compared to 2017 when these numbers were 40%, 24% and 15% respectively.

What to look for:
NFL to hit $100 billion?
With most NFL broadcasting rights agreements set to expire in 2022, the league will sign a new contract this year with many expecting that it will be a 10 year deal that could “far exceed” $100 billion in total value – and it’s easy to see why. Out of the 50 most-viewed TV Broadcasts of 2020, the NFL dominated claiming 33 of the largest audiences, including Super Bowl LIV, which reeled in one-hundred million viewers, unsurprisingly making it the most-watched broadcast last year – for the 28th year in a row. While core aspects of the NFL’s current agreement figure to remain intact, a few key games are expected to change hands, even including America’s most popular program. Nothing is set in stone, but rumors are that ABC and ESPN will be added to the Super Bowl rotation and ESPN will receive more flexibility in its Monday Night Football (MNF) slate to ensure the best-possible matchups. Perhaps more intriguing, the NFL is reportedly considering offering ABC, ESPN, CBS, and Fox two Super Bowl broadcasts each, and auctioning off the final two at a later date. The new broadcasting agreement will likely witness one of Amazon, ESPN+, Peacock or Apple take over the Sunday Ticket package given that DirecTV seems poorly-positioned to continue the deal. Also, Amazon may become the exclusive provider of Thursday Night Football with Fox reportedly looking to move on from the package. NBCUniversal is focusing on retaining the most-watched prime-time TV show for the last nine years in Sunday Night Football. Finally, a few notes on current pricing and revenue: rates for Sunday afternoon games have been $1 billion annually, but may jump to $2 billion; ESPN has paid $2 billion for MNF, but may need $3 billion to retain the package; Sunday Ticket is priced at roughly $1.5 billion annually, but will likely be subject to a bidding war which will drive up the cost; the NFL’s annual revenue from its media rights is currently around $7.5 billion and could double to almost $15 billion. In any event, the NFL’s much-anticipated TV deal will be something to look out for as it will undoubtedly shape the broadcasting market for the next decade.

XFL game-planning for 2022
Among all the losses experienced due to the pandemic, it’s hard to argue that any sports entity suffered more than the XFL, whose debut began with a very promising start in February, only to be stopped short the next month and later, subjected to bankruptcy. Thanks to careful planning, significant funding, and an impressive marketing effort, the XFL seemed well-positioned to erase the doubts stemming from its 2001 failure and establish itself as a legitimate and profitable “minor league” to the NFL. Early returns on the XFL proved as much: the league averaged 1.9 million viewers and was projected to hit $46 million in gross revenue for the unfinished 10-game season, exceeding internal expectations. Of course – consistent with the theme – the pandemic plunged the XFL and its investors into financial ruin, forcing CEO of WWE, Vince McMahon, to sell the team to actor and businessman Dwayne “The Rock” Johnson for just $15 million. Citing the needs to restructure the organization and have fans back in seats, the XFL has no plans for a 2021 season, however expects to return in spring 2022. Accordingly, many expect Johnson, alongside business partners Dany Garcia and Gerry Cardinale, to be active in securing investments to position the XFL for a strong – and permanent – revival next year.

Sportradar on the move
In a year that witnessed the continued growth and popularity of sports betting, Sportradar, unbeknownst to most, finds itself poised for a major move. Sportradar is an international, Switzerland-based company that collects and analyzes sports data, providing it to bookmakers, sports federations, and media companies, including the MLB, NBA, NFL, NHL, William Hill, Bet365, and many more. The company employs more than 2,000 people over 30 locations across the globe and boasts Michael Jordan and Mark Cuban among its list of investors. So, why is Sportradar making the news now? Well, after receiving a B+ credit rating from Fitch Ratings, it was revealed that the sports betting powerhouse has been raising $505 million to finance a potential acquisition, reportedly with a specific M&A entity in mind. Though the identity of this target remains unknown, some have speculated that it could pursue another sports betting platform, while others predict Sportradar may look for a casino platform. In any event, most seem to agree that at some point this year Sportradar will look to go public, however disagree whether it will do so through a traditional IPO or a SPAC, the latter of which would allow the company to reach the public roughly two-to-four months faster than using the former. Regardless, it is clear that Sportradar has big ambitions for 2021. The company just appointed a former CEO of Fiserv Inc., Jeff Yabuki, to chairman of the firm’s board of directors and while its plans are still in the dark, many expect Sportradar to make lots of noise early on in 2021.

25 Jan 20218 Feb 2021

Oliver GreenLeave a comment

Sports Law Interview with Colin Kaepernick’s Attorney Ben Meiselas

As a board member for NYU Law’s Sports Law Association, I had the pleasure this past week to interview Ben Meiselas, the attorney who represented Colin Kaepernick in his lawsuit against the National Football League. Ben is a partner at Geragos & Geragos and heads the firm’s transactional and civil rights practice, however he is best known for representing former quarterback and civil rights activist, Colin Kaepernick. On top of being a full-time lawyer, Ben has also been the General Counsel for the Big3 Basketball League, currently serves as General Counsel for Colin Kaepernick’s “Know your Rights Camp,” and earlier last-year co-founded “Meidas Touch,” a progressive SuperPac which produces political ads to energize and engage voters. Ben was awarded the 2019 Variety Impact Lawyer of the Year for his legal achievements. He graduated law school from Georgetown in 2010. In this interview, we touch on Kaepernick’s role in the racial justice movement, the power of a law degree, working for P Diddy and Senator Hillary Clinton, advice for law school students, and much more.

Video interview shortcuts:
2:35 – 2020 in review, 7:13 – Working for P Diddy and Senator Hillary Clinton, 11:53 – Power of a law degree, 14:10 – Do you consider yourself a sports lawyer?, 19:05 – Colin Kaepernick’s role in 2021, 23:00 – Litigation vs. corporate work, and doing both, 28:14 – Combining passions in your career

3 Jan 202126 Jan 2021

Oliver GreenLeave a comment

Kawhi Leonard Loses “The Klaw” Logo Lawsuit v. Nike

Klaw-pyright Infringement

Despite his wild success over the last year, Kawhi Leonard took a tough “L” recently when he ran into a pick set by Nike last month. Oregon District Court Judge Michael W. Mosman granted Nike’s motion to dismiss the NBA star’s claim that he rightfully owned the “The Klaw” logo. In fact, in the complaint, Leonard’s legal team referred to the popularly-known logo as the “Leonard Logo” instead, in an attempt to establish even more of a link between the design and player. Yet, despite the undeniable connection the “KL” outstretched hand has with Leonard’s likeness, the judge’s ruling indicates that the logo and all adjoining rights to its use indeed belong to Nike.

Size Matters

The concept of “The Klaw” was allegedly birthed when Leonard was still a second or third year player on the San Antonio Spurs. Coming out of college, Leonard boasted hands measuring 9.8 inches long and 11.3 inches wide. While those figures alone may not mean much, it should be noted that Leonard not only had the longest hands in the 2011 NBA draft, but slides in at no. 9 all-time in biggest “NBA hands” (sandwiched between Michael Jordan and Wilt Chamberlain ⁠— if you’ve ever heard of them). Thus, from his remarkably large hands, “The Klaw” stuck to Leonard as a nickname and a potentially lucrative branding opportunity.

Interestingly, the nickname’s origin story has been called “a myth amongst the Spurs [2014] roster” as to who first conceived it or when the trend even caught fire. Leonard insists that he invented the logo while still at San Diego State University, though it could not have been created in connection to “The Klaw” moniker. In any event, Leonard’s credit for the initial sketch has not been disputed, but his protection over the foundational design was, for which he is now paying the price.

“Board Man Gets Played”

What makes this case so important is that this issue of intellectual property protection is only becoming more crucial for young athletes, as collegiate stars will be able to brand and profit off their likeness through endorsement agreements starting as soon as next year.

To Leonard’s credit, he had the foresight to begin building his brand in college, and conceptualized the following illustration. However, as a rookie with the San Antonio Spurs, the two-time champion recalls sharing a preliminary sketch of his logo idea with Nike, with whom he signed an endorsement deal. Below is a picture of Leonard’s version against Nike’s official design.

It is here where a few disagreements arise. The first is a matter of uniqueness and though the designs are generally similar in concept, the judge stated that he found Nike’s rendition of the logo to be “new and significantly different from [Leonard’s] design.”

Second, Leonard himself did not deny that the logo was created in connection with the endorsement contract, however argued that Nike’s design was a derivative of his work, disqualifying it from copyright protection. Again, the judge supported Nike’s claim that its version was “obviously distinct.”

However, what may be most telling is Leonard’s admission in a 2014 interview in which he speaks on the logo and his excitement in partnering with Nike. He states, “I came up with the idea of incorporating my initials in this logo. I drew up the rough draft, sent it over and they [Jordan Brand] made it perfect. I give the Jordan Brand team all the credit because I’m no artist at all. They refined it and made it look better than I thought it would ever be, and I’m extremely happy with the final version.”

Love & Basketball…and Intellectual Property

Much like the ugly breakup with the San Antonio Spurs and eventual marriage with the Los Angeles Clippers, the NBA star’s relationship with Nike unfolded similarly, with New Balance serving as Leonard’s “rebound,” if you will. Though given an opportunity to resign with Nike, once the contract between the sports apparel giant and the literal giant in Leonard expired in 2018, Leonard opted to take his talents to New Balance, signing an endorsement deal.

Though Nike, as mentioned, retains all rights to “The Klaw” logo, it is theoretically possible that New Balance could buy or license its utility in the future. Given the unlikelihood that Nike would agree to this (barring an absurdly Nike-friendly deal), there are few other options—if any—available to Leonard and New Balance to use the design other than appealing the judgment and receiving a remand.

Of course, because neither New Balance nor Leonard are able to utilize the logo, the pair has had to pivot in their endorsement efforts. While New Balance’s site is still bare bones as far as Kawhi-specific apparel, the Boston-based company unveiled a design earlier this year for Leonard’s first signature shoe. If you check out the logo on the shoe’s tongue, you’ll notice that it’s remarkably different, and more…ordinary than the disputed design owned by Nike, which honestly may align better with Leonard’s well-known, even-keeled personality.

However, if Leonard truly seeks to reclaim his logo through an appeal for his branding, the shot clock is ticking. The shoe will not officially be made available for purchase until the fall, but the odds that the case against Nike is appealed, remanded, and reversed—all before the shoe is released? Well, let’s just say Leonard would have a better chance of hitting “The Shot” again.

20 May 202020 May 2020

Oliver GreenLeave a comment

Dueling Lawsuits Between Zion Williamson and His Former Agent May Implicate Duke, Krzyzewski, Nike

Boxed-Out

Despite the pandemic, the world of sports law continues to run the headlines and claimed former Duke star Zion Williamson as its latest victim this week. In new information obtained by The Athletic, it was found that Williamson’s ex-marketing agent filed a lawsuit against last year’s #1 overall pick claiming over $200 million in potential damages.

After declaring for the NBA draft, Williamson signed a five-year contract with Prime Sports Marketing on April 20, 2019. The contract language stated that Gina Ford, the PSM president, would represent Williamson and handle all endorsement negotiations. However, Williamson later broke this contract, electing to sign with Creative Artists Agency (CAA), and sued both Prime Sports as well as Ford. His team asserted that the contract was never enforceable because the agency did not follow North Carolina’s agent guidelines nor warn Williamson about potential eligibility issues.

The following week Ford and Prime Sports countersued on the grounds that Williamson “willfully and knowingly” breached the contract and that the North Carolina Uniform Athlete Agent Act does not apply because he had already declared for the NBA draft with no intention of returning to Duke.

Full Court Press

Despite the fact that these lawsuits were filed more than a year ago, the contents of some documents were just recently made public and could have some highly damaging ramifications for both Williamson and Duke basketball coach Mike Krzyzewski. Ford’s attorneys put forth a Request For Admission, asking that Williamson admit to certain claims made by Ford and her team. The full set of interrogatories can be found here, but the major implication is that Williamson received improper benefits while at Duke and potentially entangles Krzyzewski and CAA in what could start to look like another recruiting scandal.

While Williamson is not required to answer these allegations, the procedure sets up depositions which will undoubtedly include at least the former Blue Devil and could involve the likes of Krzyzewski as well as representatives from CAA, Nike, Adidas and potentially others.

Show Me The Money

So how exactly did Ford and her team arrive at the $200 million + figure that has been reported? Well, as mentioned, the contract signed by Williamson was for five years and awarded Ford a 15% commission on endorsement deals. Therefore, the number cited in the lawsuit represents 15% of the total amount Ford estimates she would have negotiated for Williamson over the life of the deal — $1.3 billion.

As crazy as that number may seem, it’s certainly not impossible to imagine. In the one month alone that Ford represented Williamson, she negotiated deals with Mercedes-Benz, EA Sports, 2K Sports, Burger King, Puma amongst many more. Though no deals were struck at that time, the impressive list of potential clients speaks to the extensive interest major brands had in partnering with this generational talent. Of course in turn, it speaks to the vast amount of money that Ford could have earned through commission.

However, those deals and the subsequent money instead went to CAA which negotiated the largest rookie sneaker deal with Nike’s Jordan Brand for seven years, $75 million. The agency also sealed deals with Gatorade, Mountain Dew, Panini, and 2K Sports though the terms of those agreements are not public.

Location, Location, Location

Though the basics of this case are fairly straightforward, the way in which it will play out is anything but. Beyond just the coronavirus courtroom complications, the largest wrench in these proceedings is the location in which both competing lawsuits were filed.

Team Zion

For Williamson, his biggest advantage resides in the fact that he sued Ford first, and in North Carolina. In such, Williamson’s attorneys kept the ball in their court by controlling the state and consequently the legal system under which the case will be ruled.

This locational aspect of the legal battle is crucial because each state operates under its own Athlete Agent Act (AAA). The language and interpretation of the AAA is essentially what the argument that Williamson breached the contract rests upon. North Carolina’s version has very strict definitions for what constitutes an athlete, agent, an agency contract, etc. This framework is what Williamson’s team is working within to establish that the contract he initially signed is unenforceable.

The argument is that Williamson was unethically manipulated into signing a contract with Ford on account that she met with Williamson’s parents while he was still in college. If true, this would constitute “indirect contact,” which, under North Carolina’s AAA, would nullify the terms of the agreed-upon contract, thereby exonerating Williamson.

Team Ford

As for Ford’s lawsuit, her team took the liberty of filing in Florida which operates under a very different AAA. It is undeniable that Williamson breached the contract, however the legitimacy of the contract’s initial signing is up for debate, which Florida’s AAA will determine. While this location benefits Ford’s attorneys, timing has not been on their side. Williamson’s team appealed the lawsuit and the closure of the courtrooms due to coronavirus have impeded any progress her side had hoped to achieve by this point.

Moreover, given that Williamson filed first, Ford is at a disadvantage in that her team must wait until the conclusion of that lawsuit before appealing in the event that her team loses. She also maintains that Williamson was never “manipulated”, rather that he signed both willingly and voluntarily. One of Ford’s attorneys wrote, “Williamson is an adult male of high intelligence with exceptional business acumen. He is acutely cognizant of his value as a basketball superstar and of his branding, marketability and earning potential.”

Postgame Analysis

Because both sides unsuccessfully attempted to have the other’s case thrown out, each lawsuit will proceed in its respective state. In a vacuum, the way the contract should have been written would have included an arbitration clause, in which case, this information would have likely been kept private. However, the potential endings for this dispute include everything from a quick settlement to a full-scale trial.

The language of each state’s AAA contains enough ambiguity that effective litigation will play a crucial role in hashing out the interpretation of the above issues. It is likely that when the North Carolina-based lawsuit does eventually play out it will favor Williamson given the state’s AAA structure. However, it is equally as likely that Ford’s lawsuit in Florida’s system will yield a positive result for her and her team.

Given the complexity of this case and the wide-ranging possibilities of its conclusion, a “fight-to the death,” so to speak, would probably be a zero-sum game. Beyond just lawyer’s fees, which will quickly run up the expenses on both sides, it is hard to imagine Williamson, Duke, Nike and whomever else may be involved allowing this story to drag out in the headlines. Expect this case, like many other litigations, to end in a quiet, albeit Zion Williamson-size settlement.

13 May 202020 Jan 2021

Oliver GreenLeave a comment