Archives: Sports Business and the Law

Income tax
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When I took Federal Income Tax in law school, the professor got up in front of the class and for his opening line started out by saying, “The Federal Income Tax Code is a Social Policy Document.” And indeed it is. Taxpayers receive breaks for a variety of reasons, from owning a house and paying for child care to raising race horses.

How about Olympic medals? I bet you didn’t know that they are taxed. That’s right. An Olympic gold winner is awarded a $25,000 cash bonus per medal by the Olympic committee, and is taxed roughly $9,900.  Silver and bronze winners receive smaller cash bonuses ($15,000 and $10,000, respectively) and pay accordingly. Most states tax the recipient as well.

For someone who has carried the flag for his or her country, is this just? I draw a distinction between a Michael Phelps, who may or may not live on Wheaties, and an archery winner, who may be living in his parents’ garage. Just a thought, but it would seem to me that if you gross under $50,000 a year, the medal should be tax-free. Indeed, the U.S. Senate recently passed a bill to exclude Olympians’ and Paralympians’ winnings from their gross income. The House has yet to vote on a similar bill.

I once tried a police brutality case where the Highway Patrol (aka CHIPs) stopped a woman who had five children, not her own, in the car. We obtained her medical records and found out that she had suicidal ideation right before she got in the car with the kids. There went the plaintiff’s case. Half the jury thought that the cops had not hurt her, and the other half felt that SHE had a duty to warn the parents of the children that she was considering killing herself with five young ones in the car. Defense verdict.

Zika virus
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The duty to warn in California has a long history, but got expanded dramatically by the Tarasoff case. That involved a psychiatrist who had a patient that was allegedly threatening harm to a third party. The Court held that the psychiatrist had a duty to warn the intended victim if the threat as it was defined and the possible victim was certain.

Now let’s go to the upcoming Rio Olympics. A number of athletes have declined to attend on the premise that they are concerned about the Zika virus. Others have suggested that a number of golfers have bailed because there is no money to be had there. Do the team doctors have a duty to tell participating athletes about the threat? Is there a threat?

I would argue that

  1. The threat is minimal,
  2. Unlike Tarasoff, there is plenty of public information out there and
  3. Anyone going assumes the risk given public knowledge. It is a little like the abortive suit against the Oakland As for someone getting hit by a ball. You go, the risk is on you.

A district court judge in Texas sentenced a former St. Louis Cardinals scouting director to 46 months in jail for hacking into the Houston Astros computers. Wow. Yes, it is a crime and there were five counts against him, each of which could carry a 5-year sentence. The defendant did plead guilty and this was a plea bargain.

Scales of justice
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Contrast that with former L.A. County Sheriff Lee Baca, who was charged with overseeing brutality in the L.A. County jails, lying to federal investigators and moving around an informant so that the FBI could not get access to him. The proposal from the prosecution was for a six-month sentence, where physical violence against prisoners was involved. The federal judge refused to accept the plea, but we are talking six months here!

The two cases highlight the fact that in federal court, cases are generally assigned to a given judge for handling from start to finish. If you are unlucky enough to be a defendant, your fate lies in his or her hands. Criminal defense lawyers (and prosecutors) need to judge the bona fides and track record of the judge in cutting a deal. The judge’s obligation is to “do justice “and that supersedes the desires of the lawyers on the case.

Chewing Tobacco
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Tony Gwynn has been one of the great players in baseball during my lifetime. He also was a lifelong user of smokeless tobacco. He is also dead. Now his family is suing the tobacco industry, alleging negligence and product liability.

What makes this different from other tobacco cases is that Tony G was given the product as a free sample made available to athletes when he was in college. Go back to old footage of games and you will see many athletes chewing and spitting. Was the company negligent? Was he? In California, where the case is filed, the jury will be asked to assign relative responsibility to the company and the decedent. Tough to predict results, but the corny old adage re narcotics – “the first one is free, kid“ – appears to be literally applicable here. Then the argument will migrate to more familiar territory, that the product was addictive. I think we are long past the point where a tobacco company can argue to the contrary.

Fame and celebrity
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A celebrity is by and large someone who has always viewed themselves as one…even before they obtain fame. Look at any number of people who knew they were superstars before the world knew. A friend of mine had Obama as a law professor. Obama started a hypothetical “Assume that I was president of the United States…..” The class laughed and Obama retorted, “What is so funny about that?”

You may not need talent, but you need to be unique. You also need the ability to accept rejection and come back for more. I believe it was Dumas who received hundreds of rejection letters. It took David Seidler, the writer of “The King’s Speech,” decades for his project to come to screen.

Baseball once had a role player who was never used in a game. His moniker was, “Bench me or trade me.” Football once had a punt returner who became famous as “White Shoes Johnson.” Yes, he was talented, but above all, he was colorful. Sports careers last a finite period of time.

Good athletes work with their sports lawyers to cultivate an image that will work for them throughout their working lives. Lawyers work with athletes to see to it that fame transcends their career on the field.

Soccer
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Women soccer players have complained that they are not paid the same as their counterparts on the U.S. Men’s National Team. How would this play in the courts? California passed amendments to Labor Code section 1197.5 through the California Fair Pay Act, which mandates equal pay for substantially equivalent work. It passed without controversy and with the approval of the California Chamber of Commerce.  Yesenia Gallegos and I gave a webinar on the act recently.

What does it mean? Is a chemical engineer’s work substantially equivalent to that of an electrical engineer?  Women tennis players have argued successfully that their show is as good as (or better than) that of the men. Is the women’s soccer game substantially equivalent? Perhaps the courts will decide.

Copyright:  / 123RF Stock Photo
Copyright: / 123RF Stock Photo

Three women’s basketball coaches are under investigation for alleged mistreatment of their players, the coaches at Duke, Nebraska and Loyola of Chicago. Each is considered a great coach, but they have had an inordinate number of transfers. Other programs have allegations of racial prejudice and over-involvement in personal lives. Big-time pressures and big-time worries come to big-time women’s sports. Keep in mind that the boundaries on intentional infliction of emotional distress vary from state to state, but sooner or later, a lawsuit is more likely than not.

Not too soon to invoke Spider-Man, “With great power comes great responsibility.. “

Copyright:  / 123RF Stock Photo
Copyright: / 123RF Stock Photo

Take a look at his highlight reel. Looks good. Great backstory (from war-torn Sudan). And wants to play pro ball. He is 19 and is at one of those finishing schools back east. Essentially a 5th year of high school. The NBA says you have to be 19 and graduate high school to be in the draft.

It was Dickens who said “the law is a ass, a idiot.” (sic) I think the rule of reason should apply here. If you are the commish, why make him go to China for a year? In this case it serves no educational or commercial purpose.