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Sports Law Scoreboard

An Inside Look Into The Legal and Business Side of Sports

Kluwe Kicks Dispute In Exchange For Charitable Donations

Posted in Sports Business and the Law

Ex-Vikings Punter Supports Same-Sex Marriage

Last week, former NFL punter Chris Kluwe and the Minnesota Vikings reached a settlement of Kluwe’s dispute with the team over what he characterized as the organization’s homophobic environment and release from the team due to his activism on behalf of marriage equality.

Kluwe’s revelation of serious homophobic behavior and an institutional attempt to freeze him out of the team and, ultimately, his release created a firestorm of media coverage and an investigation into the behavior by special-teams coordinator Mike Priefer.  Kluwe went public in his allegation on January 2nd and made specific allegations about the comments and behaviors of several Minnesota Vikings coaches and front office personnel. The settlement, which includes an initial $100,000.00 contribution to charities supporting the lesbian, gay, bisexual, and transgender communities, puts aside Kluwe’s demand for the full disclosure of an independent investigation into his release and the impact his political activities had on his job. The settlement also appears to include Kluwe’s waiver of any other liability he may seek against the Vikings in the form of a threatened wrongful termination suit.

After Kluwe’s allegations to Deadspin, the Vikings launched an independent investigation to determine the veracity of his comments and ultimately released a small portion (29 pages) of the report in July. The truncated report appeared to give some credence to Kluwe’s allegations, but also demonstrated that Kluwe’s May 2013 release from the team was motivated by performance, rather than his political beliefs and efforts. Kluwe made a public demand for the full-release of the report, citing a promise made to him by the Vikings, however, after reviewing the full-report with counsel, Kluwe and the Vikings restarted settlement negotiations.

Though the terms are reported to be confidential, Kluwe commented that his main concern was to see whether there was a “systematic problem in the Vikings organization” and having reviewed the report, he accepts that wasn’t the case. In addition to the financial and charitable aspect of the settlement, the Vikings also plan to enhance sensitivity training in the organization. Kluwe confirmed he will not receive any money from the Vikings. Separately, the Vikings had previously announced a three-game suspension of coach Mike Priefer and a week of sensitivity training, though that suspension can be shorted to two-games if the team finds it appropriate.

This settlement eliminates what would have been an intriguing legal issue for professional sports: termination (release) due to political activities. Kluwe had made comments about suing the Vikings for religious discrimination, sexual orientation discrimination, defamation, and tortious interference of contract.  Tortious interference of contract, a legal concept by which a third party intentionally induces a contracting party to break the contract, would have been particularly interesting in the context of professional sports where any number of reasons could result in a player’s release.

Kluwe’s threat of a lawsuit on those grounds created very little leverage, if any. Even if the report did not reveal performance issues or an allegation of Kluwe’s own embarrassing behavior, settlement was likely a foregone conclusion in this case.

The reality is that the likelihood of success of any lawsuit Kluwe would have filed would have been low. NFL teams and the NFL Players Association have a collective bargaining agreement and procedure for bringing grievances, including those over the release of a player. Kluwe never filed a grievance with his union over his release and it is unlikely that the union could stop a team from releasing a player due to political activities, speech, or religious beliefs (or lack thereof).

In the final analysis, Kluwe’s allegations and settlement reached by the Vikings will prove to have an overall positive effect. Charities benefit from the contributions made by the Vikings and the punishment of a coach which will hopefully deter players and coaches from engaging in such behavior in the future (though Michael Sam making the Rams roster will probably go further than any mandatory sensitivity training).

 

Trademark Battles Are For The Birds

Posted in Sports Business and the Law, Sports History

On August 11, 2014, the ownership group for the Toronto Blue Jays, Rogers Blue Jays Partnership, filed a Notice of Opposition with the Trademark Trial and Appeal Board of the United States Patent and Trademark Office, opposing the registration of Creighton University’s redesigned Bluejay logo.

On September 18, 2013, Creighton filed a trademark application with the USPTO for the new logo, described as a “stylized capital C with the head of a bird placed over top of the letter C,” to appear on shirts, pants, jackets, footwear, hats and caps, and athletic uniforms. As depicted in the logo evolution below prepared by Creighton fan site, White and Blue Review, the new logo is quite a departure from 1972 iteration, which resembles a surly, hand-drawn Peanuts character:

 Jays

Toronto apparently believes that the new Creighton logo hits too close to home, with its “thick, clean lines and outline with no gradient or shading,” which “results in a bold, two-dimensional mark” that is substantially similar in design to the Toronto Blue Jays recently-refreshed logo:

Twin Jays

This isn’t the first time Toronto has sought to protect its trademark against a college/university.  In 2001 and 2002, Toronto opposed (or threatened to oppose) an attempt by my alma mater, Elizabethtown College, to register its flying jay and fighting jay marks, depicted below in all their black and white, pixelated glory:

Etown

(Elizabethtown has since adopted a much cooler and far-more aggressive representation of the otherwise harmless acorn-eating Corvidae.)

In fact, Toronto has filed or threatened approximately a dozen trademark oppositions since 2000, including a joint effort with the Tampa Bay Rays baseball club in 2010 to prevent a Virginia-based entertainment vendor known as “Ray Jay’s” from using this iconic mark for the following highly-specialized and succinctly-stated business purpose:

Amusement arcades; Arranging and conducting nightclub entertainment events; Arranging and conducting special events for social entertainment purposes; Arranging, organizing, conducting, and hosting social entertainment events; Booking of entertainment halls; Bowling alleys; Children’s entertainment and amusement centers, namely, interactive play areas; Entertainment in the nature of a bicycle park; Entertainment in the nature of baseball games; Entertainment in the nature of basketball games; Entertainment in the nature of hockey games; Entertainment in the nature of laser shows; Entertainment in the nature of light shows; Entertainment in the nature of roller skating competitions; Entertainment services in the nature of providing outdoor facilities for playing paintball; Entertainment services, namely, a video arcade housed in a mobile trailer; Entertainment services, namely, conducting contests; Entertainment services, namely, conducting parties; Ice skating instruction; Leasing of figure skating equipment; Movie theaters; Organisation and provision of sports installations for figure and speed skating championships; Organising and holding figure and speed skating championships and competitions; Organizing and conducting a bowling event the proceeds of which are donated to charity; Providing bowling alleys; Providing children’s party centers for the purpose of entertaining children and celebrating birthdays; Providing facilities for movies, shows, plays, music or educational training; Providing facilities for playing paintball games; Providing skating rinks; Rental of roller skates; Rental of skates; Roller skating instruction; Roller skating rinks; Video arcade services

Ray Jay’s abandoned the ship approximately two years after filing its application.

Travolta Pulp: Can Contract Trump Freedom of Speech?

Posted in Sports Business and the Law

778262-travolta-plane

We previously took a brief look at this question.  Travolta’s attorney is trying to stop publication of a purported tell-all book based largely on a contractual provision.  No dice, says the Court of Appeals.

Is anyone really surprised?  Public figures have a hard time keeping any private life.  I have had better luck arguing for the privacy interest of relatives or even in one case, the rights of an unborn child.  While the sisters Kardashian have no claim absent malice, arguably their distant cousins are just simple folk like you and me.

This is a rote occurance:  Earlier this week, the NY Times ran an expose article on Neon Deon’s school in Texas that is arguably simply a football and  basketball factory.  While truth is a defense, the Times may have had a harder time if it had taken oonon some lanky kid athlete.

Wang Sued For Allegedly Backing Out Of Deal To Sell Islanders

Posted in Sports Business and the Law, Sports History

Yashin

The NHL’s illustrious New York Islanders:  winners of four consecutive Stanley Cups in the early 1980s.   Coached by the immortal Al Arbour and propelled by five future Hockey Hall of Famers, the Isles and their fans in Nassau and Suffolk Counties enjoyed one of the greatest runs in hockey history.  The names still resonate:  Bossy, Gillies, Potvin, Smith, and Trottier.

In 2000, businessman Charles Wang purchased a stake in the team.  Wang co-founded Computer Associates International, Inc. (now known as CA Technologies), and was integral in dictating the company’s direction until his sudden departure in 2002 under intense scrutiny.  In 2004, Wang obtained majority interest of the Islanders in a buy-out of his partner and convicted fraudster, Sanjay Kumar.

Since 2000, the Islanders have seen a dismal run of 431 wins in 1032 regular season games, five playoff appearances, and eight playoff wins.  The Islanders have watched numerous superstars come and go in deals that turned out to be complete laughers.  See, e.g., Bryan McCabe, Todd Bertuzzi, and a third round selection (Jarko Ruutu) for Trevor Linden; Zdeno Chara, Bill Muckalt, and a first round selection (Jason Spezza) for Alexei Yashin; Olli Jokinen and Roberto Luongo for Mark Parrish and Oleg Kvasha.  From a fan relationship standpoint, Wang’s ownership of the team has been troubled to say the least.  (To be fair, the 1990s were not exactly kind to the Islanders.)

Enter Andrew Barroway, a successful Philadelphia securities lawyer and co-founder of Merion Investment Management, LP.  Mr. Barroway has been linked to a purchase of the Islanders for months.  On August 11, 2014, Barroway’s entity, NY ICE, LLC, sued Wang and his various holding entities in the Supreme Court of New York, New York County (Manhattan), alleging that Wang reneged on a partially-consummated contract to sell the team to NY Ice for $420 million.

The lawsuit alleges that, after nine months of negotiations, Barroway and Wang memorialized their agreement in a 70-page Securities Purchase Agreement (the “SPA”).  The deal purportedly included a $100 million up-front payment, an $83 million promissory note, and assumption of $125 million in debt owed to Bank of America.  Wang’s ownership entities would, in turn, receive a 25% ownership interest in NY ICE.

Wang purportedly committed verbally and in writing to the deal, and the parties began the process of fulfilling the conditions of closing, including (a) seeking approval of the deal from the NHL, and (b) securing a $125 million credit facility to satisfy the Bank of America debt.

In June 2014, the parties met in New York City, at which time Wang allegedly pulled Barroway into a side room and expressed that he could command a much higher price for the team following Steve Ballmer’s $2 billion bid for the Los Angeles Clippers.  The parties met again in July, at which time Wang allegedly “blindsided” Barroway with a new $548 million demand.  Two days later, Wang announced his intention to sell the team to another investment group.

The seven-count Complaint sets forth claims for breach of contract (numerous grounds), promissory estoppel, and a permanent injunction.  The Complaint is aimed at compelling the sale of the franchise to NY Ice.  The lead count seeks specific performance in the form an order compelling a sale on the terms set forth in the SPA.  Further, the claim for injunction seeks to bar a sale to any other party.  In the alternative, NY Ice seeks liquidated damages under the SPA in the amount of $10 million, which it dubs a “break-up fee.”

Lost in the coverage of this dispute is the fact that Forbes recently valued the Islanders at $195 million.  Wang, who was purportedly to receive $183 million in cash for the team under the SPA, thinks the enterprise value of the New York Islanders is just shy of the NHL record $575 million paid by Molson for the iconic Montreal Canadiens in a 2009 leveraged buyout.  Putting all of this into perspective, Red Sox minority shareholder Jeffrey Vinik purchased the Tampa Bay Lightning in 2010 for $93 million – less than the up-front cash Barroway agreed to pay under the SPA.

 

Anti-Trust and College Athletics: Round One Goes To The Student-Athletes

Posted in Sports Business and the Law

obannon

 

As we dig through the 99-page opinion in O’Bannon v. NCAA here at the Sports Law Scoreboard, we’re keeping in mind that this is only the trial court opinion of one judge.  Next stop will be the Ninth Circuit, which is likely to be sensitive to the students’ claims as well.  Final stop (if settlement is not achieved, of course) is the U.S. Supreme Court.  Anyone want to lay bets in favor of the individual athlete v. the corporate NCAA?  That’s what we thought.

Average Joe Turns Up The Heat On Cristiano Ronaldo In Trademark Brawl

Posted in Sports Business and the Law, Uncategorized

Cristiano-Ronaldo8

Not many people know ”fitness enthusiast” Christopher Renzi.  In 2008, the Rhode Islander registered the “CR7″ trademark with the United States Patent and Trademark Office for use in his fashion line of jeans and t-shirts.  Mr. Renzi’s inspiration for the name allegedly comes from his initials and the date of his birth.  Unfortunately, Mr. Renzi has the same initials as larger-than-life Portugese international footballer, 2014 Ballon d’Or winner, and Real Madrid legend, Cristiano Ronaldo.  Ronaldo’s jersey number is 7, and he has built a brand identity using the same CR7 mark.

In late 2013, Ronaldo partnered with Danish clothing manufacturer, JBS Textile Group, to release a line of “fashion briefs“ under the CR7 brand.  In May 2014, JBS’s stateside counsel, Dykema Gossett PLLC, sent Mr. Renzi a scathing letter accusing him of violating Section 2 of the Lanham Act.  Dykema alleged that Mr. Renzi registered the CR7 name with full knowledge of Ronaldo’s fame, reputation, and the significant commercial value of the CR7 mark, and that Mr. Renzi’s use of the mark falsely implies that his product line is endorsed by, affiliated with, or sponsored by Ronaldo.

As proof of its absolute dominion over the CR7 brand identity, Dykema cited Ronaldo’s 81,000,000 Facebook followers.  (Mr. Renzi, it appears, does not have a Facebook account, placing him approximately 81,000,000 Facebook followers behind Ronaldo.)

JBS filed a Petition to Cancel with the USPTO and demanded that Renzi voluntarily transfer all rights to and in the CR7 mark.  Dykema followed up with an email on June 10, 2014 offering an undisclosed sum to Mr. Renzi or the local sports club of his choice in exchange for an assignment of the CR7 mark and written assurances from Mr. Renzi that he would no longer use the mark.  On July 3, 2014, Dykema threatened a “more aggressive” legal course, prompting Mr. Renzi to file a single-count-complaint in the United States District Court for the District of Rhode Island.

In his Complaint, Mr. Renzi seeks relief under the Declaratory Judgment Act, which permits federal courts in the event of “an actual controversy” to “declare the rights and other legal relations of any interested party.”  See 28 U.S. Code § 2201.  Mr. Renzi asks the Court to declare, fully and finally, that (a) Mr. Renzi has not infringed upon any trademark right held by Ronaldo and JBS, and/or (b) that Mr. Renzi has not violated Rhode Island law by using the CR7 mark.

Fortunately, the chances of Ronaldo being deposed in the matter fall somewhere short of the USMNT’s chances of winning the 2014 World Cup.  The last time he was in the hot seat fielding questions in English, things didn’t go so well.

Mr. Renzi now “controls” the litigation, having filed in the court of his choosing, in his backyard, and with his counsel of choice.  According to its website, Dykema does not have any attorneys licensed to practice in Rhode Island, meaning local counsel and a pro hac motion will be required.  It is almost always better to go on the offensive than find yourself playing defense.

 

Celebrity Defamation and Breach of Contract: McGwire and Travolta Voice Their Unhappiness

Posted in Sports Business and the Law

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Mark McGwire, present day hitting coach for the Dodgers, former Bash Brother with Jose Conseco and present non-member of the Hall of Fame says it is “too late” to make peace with Mr. C., as headlined on ESPN.  Meanwhile, John Travolta is trying to stop publication of a book by his former pilot, who claims they had a “special” relationship.  Travolta’s counsel claims the
pilot signed a “no tell” contract.

These are very rich gumbos and we will try to sort them out; they encompass public figure status, defamation, truth as a defense and a possible end-around for breach of contract. For the time being, suffice it to say that reasonable lawyers can differ and none of these folks are in a kumbaya mood.  To be continued, and soon.

Stiffed on the Bill — A-Rod Gets Sued By His Lawyers

Posted in Sports Business and the Law

Alex Rodriguez

 

For a litigator and lifelong sports fan, nothing could be more exciting than the confluence of baseball and the law.  Even something as mundane as a simple collections matter takes on new meaning when it’s baseball’s erstwhile mega-star and youngest player to 500 home runs, Alex Rodriguez, refusing to pay a $380,000 tab.

In August 2013, Major League Baseball suspended Rodriguez for a total of 211 regular-season games for violating the league’s performance-enhancing drug policy.  Rodriguez retained sports lawyer, David Cornwell, and his firm, Gordon Rees Scully Mansukhani, LLP – commonly known as Gordon & Rees – to represent him in his appeal of the suspension.  Mr. Cornwell is known as the “go to” lawyer for athletes in trouble, having obtained a successful result for Ryan Braun of the Milwaukee Brewers in an arbitration involving elevated testosterone levels.

According to the twelve-page, five-count civil complaint filed by Gordon & Rees against Rodriguez in United States District Court for the Southern District of New York, Rodriguez entered into a fee agreement with Gordon & Rees in which he agreed to pay a standard hourly rate of $400 for partners, and $225-$375 for associates.  Gordon & Rees alleges that this is a “fraction” of the rates charged by other lawyers retained by Rodriguez in connection with his suspension.

Cornwell hit the ground running, staking out an aggressive and controversial position for his client.  Over the next eight months, Gordon & Rees purportedly spent thousands of attorney and staff hours on what it dubs “one of the most high-stakes sports litigations in history.”  The Complaint further alleges that, despite numerous oral and written promises from Rodriguez and his representatives that all legal accounts would be paid, Rodriguez failed to pay more than $380,000 in legal fees.  The services are purportedly detailed in “painstaking detail” in 128 pages of invoices provided to Rodriguez.  (The invoices are not, however, attached to the Complaint.)

The Complaint alleges that Rodriguez received instructions from his adviser, Desiree Perez of Roc Nation LLC, “not to pay the invoices, and to make Gordon & Rees sue” him.  Roc Nation is an entertainment company founded in 2008 by hip hop artist Jay-Z with a boutique sports division representing CC Sabathia, Robinson Cano, and Kevin Durant, among others.  Sports fans and followers of the Rodriguez saga may recognize Perez as an influential figure in Rodriguez’s decision to fight the suspension.

The Complaint asserts five counts against Rodriguez for breach of contract, quantum meruit, unjust enrichment, promissory estoppel, account stated, and specific performance.  Gordon & Rees seeks damages in the amount of $380,058.91, together with pre-judgment interest, costs, and attorneys’ fees.  Assuming the matter is not settled prior to trial, the final verdict or award could end up being substantially more expensive for A-Rod than anticipated.

 

Are Hot Dogs A Part Of Baseball?: Missouri Supremes Limit Mascot Actions

Posted in Sports Business and the Law

slugger

Recently, the Missouri Supreme Court asked a simple question:  What should you expect when you go to a baseball game?

How did this come about?  The story is stranger than you think.  The scene:  The Kansas City Royals’ Kauffman Stadium.  The culprit:  The Royals’ erstwhile mascot, “Sluggerrr.”  Among Sluggerrr’s many duties is the manning of a high-pressure hot dog-launching gun (seen above), which he uses to shoot mystery-meat wieners to about 20 to 30 lucky fans each game.

However, one such fan, John Coomer, was not so lucky.  Sluggerrr, either out of boredom or hubris, decided to execute a behind-the-back shot.  The dog flew into the air and headed right for Mr. Coomer’s face, resulting in a severe eye injury that required multiple surgeries.  Coomer sued.

In their defense, the Royals put forth a simple assertion:  Mr. Coomer assumed the risk of being hit with a hot dog by dint of attending a professional baseball game.  After all, it’s well established that spectators assume the risk of being hit with balls and bats, so why not comestibles as well?

The Missouri Supremes disagreed, writing that being hit with a hot dog by a mascot is not an “inherent risk” of watching a baseball game.  “Millions of fans have watched the Royals (and its forebears in professional baseball) play the National Pastime for the better part of a century before Sluggerrr began tossing hotdogs, and millions more people watch professional baseball every year in stadiums all across the country without the benefit of such antics.”

This seems a bit short-sighted.  While mascots throwing things into crowds is certainly a newer invention, there is no question that nowadays it is ubiquitous, and, dare I say it, expected, by many folks who head out to the ballpark these days.  Indeed, between video screens, inter-inning foot races, blaring music, and everything else going on, sometimes you’d be hard-pressed to know there was baseball being played at all.

The court’s dream of a back-to-basics baseball game experience – with maybe a little bit of organ music thrown in – isn’t a bad idea.  But it doesn’t mean they got this one right.

Taking The Bite Out Of Soccer; Should Suarez Be Suspended?

Posted in Sports Business and the Law

suarez-vampire

Well, he has been.

In law, there used to be a “one free bite” rule for dogs. One bite, no liability, next, you are on the hook as an owner. We would humbly suggest such a rule for international football. It is not just unseemly, it is downright dangerous, a bad example for kids, and no way to run a sport.

This Mr. S’s second offense and we would think that something more than a multi-game ban and an apology are needed. He should be fined and suspended for at least a year. Third strike, he would be out.