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Where the Regulation of Violence in Sports Will Inevitably Extend: The Stands & Outside the Stadium/Arena

The University of Kentucky fans "celebrate" the Wildcats' Final Four win over Louisville to gain a spot in the National Title game.

The professional and college sports industries have without question reached milestones with respect to revenue generation over the past decade.  Both the National Football League and the National Basketball Association experienced pre-season lockouts and subsequent consuming negotiation sessions with their respective players’ unions concerning profit sharing.  In 2010, the NCAA signed a monumental $10.8 billion contract with CBS Corporation and Time Warner Inc.’s Turner Broadcasting for the media rights to its beloved Men’s Division I College Basketball Tournament, known by most as March Madness.

It goes without saying that fans are the impetus behind such revenue growth.  Whether a country and its citizens are facing a recession—even bankruptcy—or marvelous economic times, avid followers and fans of professional and college sports teams will pay hard-earned money for the pleasure drawn from watching talented athletes perform for up to three hours on the field, court or ice.  Fans will do so by attending such events, watching them at bars/restaurants, or through the purchase of oversized, flat-screen televisions for home.  David Levy, the President of Turner Sports, acknowledged in signing the March Madness media contract with the NCAA that “the tournament’s popularity and success [had outgrown] the ability for one network to provide all the coverage fans are looking for.”  Similarly, CBS News and Sports President Sean McManus recognized, “the opportunity for viewers to watch whatever game they want to on up to four different networks has to result in more eyeballs, more gross rating points and more exposure for the tournament, thereby creating much more value for the advertisers.”

I think it’s awesome that fans of professional and college sports teams continue to use this source of entertainment as an escape from the struggles facing the lives of individuals on a daily basis in many countries around the globe, including financial turmoil, disease, death and general unhappiness.  However, over the same decade that the sports industry has experienced rapid revenue growth and increased popularity, the fan experience at and following sporting events has become more violent, tragic and unpleasant.  A problem clearly exists that neither the professional leagues, the NCAA Directors nor the athletes have sufficiently addressed, or are even equipped to address.

Indeed, the European professional soccer leagues have essentially condoned fan violence since their creation.  The Philadelphia Eagles’ late Veterans Stadium maintained holding cells to accommodate unruly fans.  These facts represent proof that the sports industry has accepted violence as part of the overall fan experience for quite some time.  For instance, in 2004, Lakers forward Ron Artest—or as legal documents now refer to him, Metta World Peace—climbed into the stands as an Indiana Pacer at The Palace of Auburn hills to exchange punches with a few rambunctious fans. In 2010, I attended a New York Jets game in New York as an Atlanta Falcons fan and was threatened by four Jets fans following the Falcons’ last minute defeat of the Jets.  Fortunately, violence never ensued, though not as a result of action taken by stadium security.  In 2011, a San Francisco Giants fan experienced the wrath of Dodger Stadium when several Dodger fans beat him almost to the point of death.  And just a few weeks ago, University of Kentucky basketball fans nearly burned down and destroyed Lexington, KY, following the Wildcats’ Final Four win over state rival Louisville to gain a spot in the National Title game.

However, what has either been condoned or overlooked by these leagues and the NCAA will inevitably draw a divide between fans, compelling those who are visiting the home stadium or establishment (e.g., sports bar) of an opposing team to discontinue their participation.  This decreased fan participation and interest will inevitably compel revenue to decline for the professional sports leagues, the NCAA, media outlets and corporate partners and sponsors.  Should violence and unpleasant behavior by fans persist at or following sporting events, how could it not have a domino impact on the sports industry?

So, where should we as fans and professionals in the industry place blame and seek assistance in preventing this evolving problem?  First and foremost, responsibility should be placed on the individuals who are involved in such inappropriate behavior.  Fans have progressively turned their allegiance to sports teams into something personal.  However, sustaining a loss through a favorite team is not analogous to losing a love one.  Fans must realize that their personal lives will continue unscathed, so long as they categorize sporting events as entertainment and nothing more.  This point allows me to transition to my second and final position.  The professional sports leagues, the NCAA, the athletes, the media outlets and the corporate partners and sponsors must take on the responsibility of reminding fans of this fact.  Indeed, most professional sporting venues stop serving alcohol at a certain point during team play.  College venues refuse to serve alcohol altogether.  Great, by taking alcohol out of the picture, these entities and individuals have indirectly implied to the fans that they should behave responsibly.  However, I’m asking—maybe even pleading to—these same entities and individuals to make a direct and blatant statement to the fans: “Stop the violence and inappropriate behavior!”  The NFL has already done so much to prevent violence on the field in an effort to protect its brand and revenue stream.  Take the next step and prevent it from occurring in the stands and outside the stadium.

Hey guys, it’s your money, not mine, that’s being placed on the line.

Friday Morning Workout – August 19, 2011

After a week hiatus, we’re happy to bring back this week’s Friday Morning Workout.  Plenty of things to get your sports mind going on one of the last Summer Friday’s.

Former NFL QB Jim McMahon is part of a group of former players suing the NFL over concussion related injuries

Terrelle Pryor will be allowed to participate in next week’s NFL Supplemental Draft, but will be suspended for five games. Sounds like Roger Goodell wants to be commish of the NFL and the NCAA.

Proof that the only way to spur the economy is more sports. Forbes examines how Boston is growing because of sports.

I’m only linking NASCAR here because of the Michigan ties.  Apparently Pure Michigan is sponsoring a race, and its paying off for them.

The Wilpons will be in court today, trying to get at least part of the $1 billion lawsuit against them dismissed.  After this week’s earlier ruling by the 2nd Circuit, it doesn’t look promising.

The New Meadowlands Stadium, home of the New York Giants and New York Jets, is going to be known as MetLife Stadium.  MetLife was already a cornerstone sponsor for the stadium, paying about $7M a year. The naming rights deal will cost them somewhere in the neighborhood of $20M a year.

For the doctors and Padres fans out there, a sad story of a star prospect forced into early retirement.

It’s probably not a good idea to invest in sports in Denver.  Apparently they can’t even support the franchises they have.

Fox and the UFC reached a groundbreaking deal to put UFC on network TV.  F/X will have the cable rights.  Boxing better get its act together, because MMA is clearly in the driver’s seat right now.

NBA players looking to go to Europe may have hit a roadblock.  Apparently the insurance is very expensive.

And in case you were under a rock, make sure to read this incredible story about the rampant NCAA rule breaking occuring at the University of Miami since 2002.

Friday Morning Workout

Former UGA football coach Jim Donnan accused of making millions via a Ponzi scheme.

Mendenhall Sues Champion based on his terminated endorsement deal.

15 Popular Athletes who squandered their millions—many of whom you’d never guess.

Odds are good that Clemens will face another trial despite his argument regarding double jeopardy.

USC’s Kiffin suspends senior starting running back Marc Tyler for making inappropriate comments to TMZ.

Lance Armstrong fights back against prosecuting attorneys, claiming they leaked inappropriate grand jury investigation information to the media.

Laker’s Odom was a passenger in a vehicle that struck and seriously injured a motorcyclist and killed a young pedestrian in New York.

Bengals’ Cedric Benson jailed on assault for the second consecutive off-season.

Deron William and Zaza Pachulia officially sign contracts to play in Turkey contingent upon the NBA work stoppage continuing through the start of the season.

LA Lakers longtime trainer Gary Vitti recounts the days leading up to and after Magic’s announcement to the world that he had contracted HIV.

Once the NFL season commences, replay officials will automatically review every scoring play during NFL games, likely lengthening games considerably.

Insurance costs could hinder NBA player participation in the London 2012 Olympic games.  Stern and FIBA are scheduled to meet this coming Tuesday to discuss.

The Women’s World Cup final set the record for tweets per second.

Tiger Woods abruptly fires caddie Steve Williams after a 12-year relationship in which Tiger won 72 times and 13 major tournaments.

Rick Reilly’s suggestions to Tiger concerning how he can revamp his image and his game.

SEC Commissioner Slive opened the Southeastern Conference media day on Wednesday by pushing the NCAA to make extreme changes, including toughening academic requirements for student-athletes and broadening recruitment rules.  Interestingly, Slive chose to push for these changes in a year when more than one of his schools faces sanctions or an investigation by the NCAA.

Continuing to ride the comeback wave, Vick snags additional endorsement deals.

75 Ex-players sue the NFL and Helmet maker Riddell, claiming defendants intentionally withheld from players their knowledge about the long-term, adverse impact of multiple concussions on the brain.

Former NFL GM Vinny Cerrato offers five rules that the 32 NFL teams should follow when tackling this year’s abnormally short free agency period.  Can these teams feasibly sign hundreds of players in a number of days?

Ivy League football decreases full contact practices from five to two a week to limit the risk of concussions.

The NCAA strikes again, sanctioning the LSU football team after an assistant coach improperly provided a JUCO player transportation and housing.

A generation with a strong sense of self-entitlement is rewarded for pouting.

Chad Ocho Cinco, allergic to the sun?!?

 

Friday Morning Workout

Friday Morning Workout

Welcome to your Friday Morning Workout, THIRDandFOUR’s new weekly post for those of you who missed the week’s news concerning sports law, sports business, sports media, or sports public relations.  Dig in and make sure you break a sweat!

Selig fully supports David Einhorn’s purchase of one-third of the Mets from principal owners Fred Wilpon and family, notwithstanding the $1-billion plus lawsuit that has been brought against the Wilpons by Trustee Irving Pickard on behalf of victims of Bernard Madoff’s ponzi scheme.  The Court recently granted the Wilpons’ motion to move the case from the bankruptcy court to a federal district court, where Judge Rakoff likely will limit the plaintiffs’ recovery based on a theory that the Wilpons’ failure to investigate Madoff’s investments did not constitute “willful blindness” or culpable intent.  Read more.

Erin Andrews opens up about her stalker.  Read more.

The assistant to Canadian sports doctor Anthony Galea claims that though the doctor treated Tiger Woods after his 2009 knee surgery, he did not inject Woods with any illegal substances.  Read more.

Shaquille O’Neal decides to join TNT’s NBA Coverage. Read more.

Former Cowboy’s wide receiver and sports commentator Michael Irvin appears shirtless on the cover of the gay men’s magazine Out, where he explains that his passion for marriage equality is a direct result of his relationship with his gay brother who died from cancer in 2006.  Read more.

ESPN Now Making Candy Bars too?  Read more.

The NFL and the NFL Players Association project that they will ratify a new CBA by July 21, 2011 in order to save the entire NFL pre-season.   The most complex issues yet to be resolved through negotiations are veteran free agency and the rookie wage system. Read more.

See how sports figures use Twitter. Read more.

The NFL salary cap will undoubtedly be lower than before once a CBA is adopted.  With a hypothetical $120 million cap, the following six teams already exceed it: (1) the Dallas Cowboys; (2) the Oakland Raiders; (3) the New York Giants; (4) the Pittsburg Steelers; (5) the Minnesota Vikings; and (6) the Indianapolis Colts. Read more.

CNBC’s SportsBiz expert Darren Rovell provides 100 rules for using Twitter. Read more.

Pursuant to the 1999 NBA collective bargaining agreement, the NBA withholds 8% of player salaries and places it into escrow each season to ensure that these salaries do not exceed 57% of league revenues.  Unlike every other season, the NBA will soon return this year’s money to the players due to increased revenue throughout the 2010-11 season—a welcome surprise for certain players and fuel to the players’ argument that the League does not need to overhaul the current financial system.  Read more.

Julie Roe Lach, the NCAA’s Vice President of Enforcement, has made it clear that the NCAA is not done investigating Auburn with respect to its dealings with Cam Newton.  Read more.

ESPN initiates suit against Ohio State University, accusing the school of violating the state’s public records law by denying requests for information concerning the NCAA’s investigation of Tressel and Pryor.  Read more.

Despite Prince Fielder’s displayed adoration for his sons during the MLB All-Star festivities this week (a true image booster), he has no intentions of rebuilding the torn relationship between him and his father, former all-star first baseman Cecil Fielder.  Read more.

Sports Illustrated’s List of 100 people in Sports To Follow on Twitter.  Read more.

Adam Pacman Jones may have, for once, been profiled and improperly targeted leading up to his July 10th arrest.  Read more.

The NCAA nabs its next victim: Georgia Tech over a mere $312. Read more.

The NCAA: Big brother or Modern Day Crook?

Over the past few years, the National Collegiate Athletic Association (the “NCAA” or the “Association”) has flexed some serious muscle with respect to its enforcement arm in Division I College Football.  The Association has investigated and/or sanctioned a number of elite programs and former or current student athletes, including my alma mater the University of Southern California (USC) and former USC running back Reggie Bush.[1]  The NCAA has therefore been perceived by many as the guardian of college football: an organization willing to take extreme measures to clean up the sport and prevent agents, boosters, and similar individuals from exploiting the student-athlete.  Unfortunately, a thorough review of the NCAA Compliance Rules and records exposes the Association as a fraud; while declaring that its number one priority is education and ensuring that student-athletes experience college in a manner no different than the general student body, the NCAA is an organization that makes annually hundreds of millions of dollars off of the same student-athletes it supposedly protects from similar professional and commercial “exploitation.”

The NCAA is a body or organization consisting of semi-volunteers who govern collegiate athletic programs.  The Association is funded by revenue generated from, among other things, (i) regular and post-season play; (ii) television and marketing rights; (iii) sponsorships[2]; and (iv) sales related to its 1,281 institutions, conferences, and organizations (among three divisions). According to its website, the NCAA returns more than 90 percent of its revenue to its member conferences and institutions in the form of direct distributions or services.  Therefore, individual institutions benefit from the success of the Association.  Though it maintains a non-profit status, the NCAA upholds many of the qualities of a private, profit-generating company.  In particular, the Association is driven by its ability to generate revenue.  Indeed, in 2009, the NCAA doled out $6 million to compensate fourteen of its highest-ranking executives.  The Association has its own marketing and licensing arm.  Moreover, its total operating revenue for 2010-11 amounted to $757 million.[3]

The Association therefore has structured and designed its Compliance Rules to sustain the revenue it has grown accustomed to realizing.  After spending two weeks delving into the NCAA’s 2010-11 Division I Manual—consisting of the Constitution, Operating Bylaws, and Administrative Bylaws governing Division I institutions and student-athletes—I liken the Manual to a screen play consisting of three Acts, where the audience doesn’t realize until the last 15 minutes of the Third Act that the apparent hero (i.e., the NCAA) is actually the villain.  While the NCAA governs nearly twenty different collegiate sports, the focus of this article is the relationship between the NCAA Compliance Rules and the “big two” revenue making machines—college football and college basketball.

ACT I

In Act I of the NCAA’s 2010-11 Division I Manual (the “NCAA Manual”), the Association is the guardian of the student-athlete—an innocent young adult who has chosen to participate in college sports on a “recreational” basis as a hobby.  The Association’s primary goal is to ensure that the student-athlete assimilates with the general student body, excels in academics, and is protected from exploitation by the professional and commercial villains.

For example, Constitution, Article I of the NCAA Manual asserts that “[t]he purposes of this Association are to initiate, stimulate and improve intercollegiate athletics programs for student-athletes and to promote and develop educational leadership, physical fitness, athletics excellence and athletics participation as a recreational pursuit…  A basic purpose of this Association is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.”

Similarly, Constitution, Article II of the NCAA Manual states, “[i]ntercollegiate athletics programs shall be conducted in a manner designed to protect and enhance the physical and educational well-being of student athletes…  Student-athletes shall be amateurs in an intercollegiate sport, and their participation should be motivated primarily by education and by the physical, mental and social benefits to be derived.  Student participation in intercollegiate athletics is an avocation [i.e., hobby], and student-athletes should be protected from exploitation by professional and commercial enterprises.”

The NCAA depicts itself as being the guardian and facilitator of the student-athlete’s attainment of an education via the lifestyle of the stereotypical college student.  However, if this isn’t deception by the Association, I don’t know what is.  Let’s be real.  The vast majority of student-athletes who have scholarships to play either college football or college basketball are treating the institution as a stepping-stone to “the League,” and the NCAA knows this.  These young adults understand that if they put in enough time with the right coach, perform in front of the proper media channels, and stay away from considerable off-the-field trouble, they stand a good chance of getting drafted into their respective professional leagues.  For these student-athletes, education is a far second on the priority scale below athletics, and with respect to their motivation of assimilating with the general student body, the only student bodies they intend on seeing are those that visit after the clock strikes twelve.

ACT II

In Act II of the NCAA Manual, the Association, via its “hard-earned” revenue, provides the student-athlete valuable opportunities through athletic competition and an abundance of education.

Indeed, Constitution, Article II of the NCAA Manual elaborates on the NCAA’s role as the provider: “Intercollegiate athletics programs shall be administered in keeping with prudent management and fiscal practices to assure the financial stability necessary for providing student-athletes with adequate opportunities for athletics competition as an integral part of a quality educational experience.”

Here, the NCAA continues to portray itself as a hero.  Based on a quick read of Section 2.16, one would think that the NCAA disburses most of its revenue in order to create for student-athletes the aforementioned rosy college experience.  However, though the NCAA returns more than 90 percent of its revenue to its member conferences and institutions, the student-athlete rarely reaps much of the reward.  Remember, in 2009 alone, the Association doled out $6 million merely to compensate its own executives.  As I will further explain below, at most, the student-athlete receives aid from its institution for the cost of attendance and benefits constituting meals, lodging, travel, apparel, supplies, and transportation tied to competition.  This fact leaves me, and probably you, wondering where does all of the money go (i.e., $757 million in 2010-11)?  That’s a tough question to answer, but considering that the NCAA is a non-profit organization consisting of more than 430,000 student-athletes, each athlete conceivably earned, but did not receive, approximately $1,760 of revenue.

ACT III

In Act III of the NCAA Manual, the Association finally reveals that the character it portrayed throughout Acts I and II constituted nothing more than a ruse.  The NCAA fully adopts the role of the villain here.  Particularly, In Constitution, Article II of the NCAA Manual the Association limits and controls the student-athlete where it matters the most—financial aid.

Section 2.13 states, “[a] student athlete may receive athletically related financial aid administered by the institution without violating the principle of amateurism, provided the amount does not exceed the cost of education…  Any other financial assistance, except that received from one upon whom the student-athlete is naturally or legally dependent, shall be prohibited unless specifically authorized by the Association.”[4]

Bylaw, Articles 12, 15, and 16 of the NCAA Manual further describe the restraints surrounding financial aid received by student-athletes.  Article 12 emphasizes that a student athlete loses his amateur status by receiving improper pay, aid, expenses, awards or benefits.  In particular, “[improper pay] is the receipt of funds, awards or benefits,” constituting “more than actual and necessary expenses for participation on the team.”  Thus, a student-athlete may receive benefits and remain an amateur only where (i) the benefits constitute meals, lodging, apparel, supplies, transportation and similar benefits directly tied to competition; or (ii) “it is demonstrated that the same benefit[s] [are] generally available to the institution’s students…or to a particular segment of the student body (e.g., international students, minority students) determined on a basis unrelated to athletics ability.”  Amateur status is lost where the student-athlete receives “any direct or indirect salary, gratuity or comparable compensation,” any abnormal “educational expenses,” or “preferential treatment, benefits or services because of the individual’s athletics reputation or skill or pay-back potential as a professional athlete.”

Similarly, the student-athlete may not receive “[c]ash or the equivalent thereof…, as an award for participation in competition at any time, even if  such an award is permitted under the rules governing an amateur, non-collegiate event in which the individual is participating.”

Moreover, should the student-athlete garner a job or establish his own business, he may not use his “name, photograph, appearance or athletics reputation…to promote the business.”  With respect to a job, he may be compensated solely “for work actually performed…at a rate commensurate with the going rate in that locality for similar services.”  The student-athlete may not accept compensation for advertising, recommending, or promoting a commercial product or service.

Wow!  That’s a lot to digest, I know.   But basically, the student-athlete is entitled to very little from the NCAA or his institution, outside the cost of his education and the essentials for participating and competing in his sport.  Additionally, the student-athlete cannot use his status as a college athlete to garner income.

Let me be clear, I do understand the NCAA’s justification for prohibiting the student-athlete’s receipt of aid, benefits, and gifts from agents, boosters, commercial entities, and professional organizations, because the financial opportunities provided to the student athlete should not be vastly different from those opportunities provided to the general student body.  Moreover, if the aforementioned individuals are legally permitted to infiltrate college sports, you risk dirtying the water with student-athletes who are conflicted and incapable of fairly performing on the field or court.  I also realize that it would be similarly risky to permit a student-athlete to promote or market a product or business based on his status as a collegiate athlete.

That being said, the NCAA conceivably could, and really should, provide student-athletes reasonable compensation for the time they spend practicing and competing away from the classroom, the library, and their friends and family.   For instance, as a full tuition Trustee Scholar at USC, I worked at the school library and was fairly compensated by the University for the work I completed.  Certainly, participation as a student-athlete on a college team for any of the Division I or Division II member institutions similarly constitutes work.

As further justification for the argument that the NCAA and member institutions should reasonably compensate student-athletes, merely observe the manner in which these parties exploit for revenue the name and image of their student-athletes, while prohibiting everyone else under the sun—including the student-athletes—from doing so.

Bylaw, Article 12 of the NCAA Manual states that “[t]he NCAA [or a third party acting on behalf of the NCAA (e.g., host institution, conference, local organizing committee)] may use the name or picture of an enrolled student-athlete to generally promote NCAA championships or other NCAA events, activities or programs.”  Member institutions may exploit the student-athlete in the following additional ways: (i) to support its charitable or educational activities; (ii) “to promote generally its fundraising activities at the location of a commercial establishment”; (iii) to “distribute…player/trading cards that bear a student-athlete’s name or picture”; and (iv) to advertise an institution’s wallet-size playing schedule that includes the name or picture of a student-athlete.

You ask: what does the student-athlete get in return for his participation in these activities?  Naturally, he receives “actual and necessary expenses…related to participation in such activity” (i.e., meals, transportation, lodging, etc.).

CONCLUSION

In sum, through a simple review of the NCAA Compliance Rules, one can glean that the Association is an absolute farce.  Acting as both a hypocrite and a fraud, the Association has structured the NCAA Manual in such a way that it benefits from exactly what it prohibits—the use of student-athletes as income generators during the rising popularity of college football and basketball.


[1] The NCAA has also recently investigated and/or sanctioned the Ohio State University (OSU), former OSU quarterback Terrelle Pryor, Auburn University, former Auburn University quarterback Cam Newton, the University of North Carolina Chapel Hill, Florida State University, and the University of Alabama Tuscaloosa.

[2] The NCAA has or recently had sponsorship contracts with AT&T, Coca-Cola, CapitalOne, Nissan (Infiniti), Hershey’s (Reese’s), LG, Lowe’s, Kraft (Planters), Unilever, and UPS.

[3] In 2010-11, the NCAA generated $680 million in revenue as a result of its “Television and Marketing Rights Fees,” $67.8 million in revenue through its “Championship Revenue,” and $9.2 million in revenue via “Sales, Fees and Services.”

[4] As an exception to the general rule, a student-athlete may receive aid from a source other than his institution or an individual upon whom the student-athlete is a dependent, where the aid is primarily received for reasons other than athletic ability.

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