Category Archives: NFL

Jerry Jones’ 1995 Risk Allows The Dallas Cowboys To Become Leaders In The Growing Women’s Sports Apparel Market

Risk taking is necessary for a business to grow.  For Dallas Cowboys owner Jerry Jones, a risk that he took in 1995 has had a significant payoff in his team’s ability to enter into the growing business of women’s sports apparel.

Seven years before Jones became the Cowboys’ owner, NFL owners voted to create the NFL Trust.  This resulted in each team transferring the exclusive right to use its club marks for commercial purposes to the NFL Trust.  The NFL Trust then entered into license agreements with NFL Properties to provide NFL Properties the exclusive right to license the trust’s property.  The motivation behind creating the NFL Trust was the thought that when placed into the market together, the value of all NFL team marks would be higher than if teams attempted to negotiate licensing deals on their own.

In 1993, NFL owners began capitalizing upon their decision to create the NFL Trust.  That year, Coca-Cola signed a five-year contract worth a reported $250 million to become the official soft-drink of the NFL.  In 1995, Visa USA would sign the then second-largest partnership agreement with the NFL, a five-year deal worth $50 million, to become the NFL’s exclusive payment card sponsor.

In the background of these deals, though, was Jones.  Not a team owner when NFL owners voted to create the NFL Trust, Jones realized that he and the Cowboys were in a situation unique from most other NFL teams:  The Cowboys didn’t need a stable of teams to secure lucrative endorsement deals.

With the business savvy cured from his education, which includes a Master’s degree in business, and successfully running his own Jones Oil and Land Lease, Jones set out to capitalize upon the brand recognized as “America’s Team.”  The owner of not only the Dallas Cowboys, but also their stadium, Texas Stadium Corporation, Jones entered into multi-million dollar sponsorship agreements with American Express, Pepsi and Nike through Texas Stadium Corporation.

While arguably not directly contravening the terms of the NFL Trust, since only teams and not stadiums were part of the trust, Jones nonetheless secured the ire of the NFL.  At an owners meeting in Atlanta in 1995, Jones was served with a $300 million lawsuit filed by NFL Properties.  The lawsuit raised claims including violations of the Lanham Act, breach of contract, breach of the implied covenant of good faith, unjust enrichment and tortious interference with contractual rights.

In response to the lawsuit, Jones and the Cowboys filed a motion to dismiss.  This motion was granted in part.  Then, Jones took a big risk:  He filed a $750 million antitrust lawsuit against the league.  It was this legal maneuver that put the Cowboys on the ground to becoming the most valuable NFL franchise.  In 2013, Forbes valued the team at a league-wide high of $2,300 million.

With portions of its lawsuit dismissed, Jones’ antitrust lawsuit motivated the NFL to do one thing:  Settle.  The settlement agreement Jones reached with the NFL allowed Texas Stadium Corporation to maintain its contracts with American Express, Pepsi and Nike.  It also provided every other NFL team the opportunity to sign their own stadium sponsorship agreements.  Arguably, though, Jones was the big winner of the settlement agreement, as he also retained the right for the Cowboys to enter into their own licensing agreements.  It is this right that allows the Cowboys to create merchandise apart from the NFL’s licensing agreements.

Today, the Dallas Cowboys are using the footing they gained through the contentious litigation to further build the value of their brand.  With the NFL identifying 44-percent of its fans as being female, in recent years, the league has taken a proactive approach to providing women with apparel choices that better suit their fashion sense.  Leading the league in this effort, are the Dallas Cowboys.

In recent years, the Cowboys have utilized their licensing capabilities to enter into team-exclusive partnership agreements with women’s apparel designers, including PINK by Victoria’s Secret and Peace Love World.  The partnership with PINK was born six years ago. According to Cowboys executive vice president and chief brand officer, Charlotte Jones Anderson, “Sales of PINK merchandise in our pro shops was so successful, that PINK wanted to create a stand-alone store in our stadium.  We are the only team to have our own stand-alone store and the first team to enter into a licensing agreement with PINK to produce Cowboys-only apparel.”

Seeing how female fans flocked to the team’s PINK merchandise, Jones Anderson set out to find other licensees to partner with to create Cowboys women’s apparel lines.  ”Seeing how successful our PINK line was really inspired us to go out again and find another partner to do something similar,” Jones Anderson said.  Earlier this year, the Cowboys partnered with Peace Love World to create a line of women’s apparel featuring tops, tanks, hoodies and pants with phrases including, “I Love Sundays” and “I am Dallas.”

For Peace Love World founder Alina Villasante, the growing trend of teams and leagues investing in women’s apparel opportunities has been good for business.  Launched in 2007, Peace Love World was born as a brand focused upon “spreading peace and love all over the world,” according to Villasante.  In wasn’t until 2013 when that the spreading of that message reached the sports space.

During the Miami Heat’s 2013 NBA Finals run, Villasante, a Miami resident, was contacted by Heat executives to begin producing women’s apparel for fans.  Through promotion solely on social media streams, Villasante’s creations, featuring phrases like, “I am Champion” and “I am Miami,” sold out in seven minutes.  ”The clothes got to the AmericanAirlines Arena and within seven minutes, they were sold out.  The team called me and told me to take the pictures of the items off of Instagram, because they had already sold out.  It was a great introduction for what I was going to be facing in the future in partnering with sports teams,” Villasante recalled.

The taste of success in the sports marketplace that Peace Love World experienced during the NBA Finals allowed Villasante to recognize that sports could provide a unique opportunity for her company to grow.  ”Women have been hungry to show up to games looking like we are ready to go out with our friends and to be very fashionable.  I wanted to provide women with clothing that gives them the feelings of femininity and loyalty, while also looking like a sports fan,” Villasante said.

Seeing the success that Villasante and Peace Love World achieved in their partnership with the Miami Heat, the Cowboys contacted her to build a line for the team.  Throughout the season, Peace Love World merchandise has been promoted not only in the Cowboys’ team store and online storefront, but in pop-up shops and at an NFL style lounge event.  For someone whose business plan did not initially include entering the sports marketplace, Villasante calls her sports partnerships with the Heat and Cowboys “the best thing that’s happened to me in the four-and-a-half years since I’ve launched Peace Love World.”

Jones Anderson credits the Cowboys’ capabilities to license their own merchandise for providing the team with an opportunity to take risks in the women’s apparel arena.  ”We are the only team that can produce, license and sell our own merchandise as a complete business,” Jones Anderson noted.  This ability has allowed the Cowboys to test the marketplace in ways that other teams are unable to.  ”For the longest time, people in retail believed that jerseys, hats and plain t-shirts were driving sales in the industry.  Taking a step into a market that is more luxury-oriented, like women’s apparel, was thought to have more risk behind it.  People didn’t have the cojones to jump in and try something if it wasn’t going to work,” Jones Anderson said.

With their own merchandising entity, Dallas Cowboys Merchandising, Ltd., the Cowboys had the flexibility to take risks when entering the women’s apparel marketplace.  ”For us, since we are able to do it just for us, we can run a test to see if there’s real traction in the brand.  It’s been incredible.  Our fans have been very receptive and they love that we are thinking of them differently,” Jones Anderson said.

Like business, success in fashion involves taking risks.  With the NFL finding that its women’s apparel sales have tripled in recent years, taking risks to meet the wants of fashion-forward female sports fans is likely to pay off for teams like the Cowboys and women’s sports apparel creators like Peace Love World.

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Inside The Legal Fight To Change The Washington Redskins’ Name

A battle of public opinion is being waged with respect to whether the Washington Redskins should change their name.  Members of the Oneida Indian Nation are airing ads in strategic NFL markets asking that the Redskins abandon their team name, which the group and other Native American groups alleges amounts to a racist slur.  In a halftime monologue during the October 13 Sunday Night Football broadcast, Bob Costas referred to the team’s name as “an insult, a slur.”  Perhaps the biggest name to raise a stake in the battle, is President Barack Obama, who recently opined, “If I were the owner of the team and I knew that the name of my team, even if they’ve had a storied history, that was offending a sizable group of people, I’d think about changing it.”

The problem, though, for Obama and those on his side of the debate, is that the owner of the Redskins, Daniel Snyder, is emphatic that he is not changing the name of his team.  Snyder arguably summed up his point best when he told USA Today earlier this year, “We will never change the name of the team.”  Snyder’s rationale for this lies in a myriad of factors.  Snyder and those who oppose the name change base their opposition largely on the history of the team’s name.  They point to this history as a sign of honor–and not disparagement–of Native Americans and the courageous nature that demarcates their history as a people.  From their perspective, it is notable that in 1933, when the Boston Braves were renamed the Redskins, the team’s head coach was a Native American.

While the trial of the court of public opinion will likely continue to play out over television as the NFL season continues, a quieter case is taking place within the legal system.  It is the outcome of this case which may play the biggest role in whether Snyder changes his team’s name.

Snyder purchased the Washington Redskins in 1999.  For a man who said he would never change the team’s name, an event that took place that same year could have caused enough of an economic burden to twist his hand into doing so.  In 1999, the Trademark Trial and Appeal Board cancelled six trademark registrations held by the Redskins.  This decision meant that the rights and benefits associated with owning these trademark were no longer afforded to the team.  From a monetary perspective, this legal decision could have cost the Redskins potentially hundreds of millions of dollars.  Losing a trademark in place for over thirty years signals the loss of the goodwill developed since the trademarks’ creation in 1967, the subsequent loss of licensing deals created around those trademarks and finally, a loss of stature in the marketplace.  At the end of the day, those factors ultimately equate to the Redskins not only losing trademark protection, but losing money.  Big money.

What caused the Redskins’ trademarks to be canceled in 1999?  The cause was a case filed by a group of Native Americans, Harjo v. Pro Football, Inc.  That case argued that the trademarks held by the Redskins were disparaging, and as such, violated Section 2 of the Lanham Act (the body of law governing trademark protection in the United States).  The plaintiffs’ arguments in theHarjo case were largely similar to the arguments being raised today in the court of public opinion:  the use of the word “Redskin” in a team name amounts to using a racial slur as a team name.

Realizing the ramifications of losing trademark protection, the Redskins appealed the Trademark Trial and Appeal Board’s decision in the Harjo case.  Through a series of appeals, a federal district court overturned the Trademark Trial and Appeal Board’s decision.  The federal district court’s basis for doing this, was based in part upon a finding that the doctrine of laches barred the plaintiffs from bringing their claim.  Further appeals were made.  Ultimately, the Supreme Court denied to hear the case.  As such, at the end of the Harjocase, the Redskins maintained their trademark protection.  The Native Americans offended by the team’s use of a word that is one of the most disparaging used against their culture faced a new uphill legal battle to change that name.

Currently, a claim similar to that raised in the Harjo case is pending before the Trademark Trial and Appeal Board.  This case, Blackhorse v. Pro-Football, Inc., has been pending since before the conclusion of the Harjo case.  Like theHarjo case, it argues that six of the Redskins’ trademarks should be cancelled, because they are disparaging.  This case was built utilizing strategy gleaned from the outcome of the Harjo case.  Yet, that strategy does not mean that theBlackhorse legal team faces a clear and easy path to successfully arguing for the cancellation of the Redskins’ trademarks.

The uphill battle faced by Native Americans wishing for the Redskins to change their team name was paved by the federal district court who overturned the Trademark Trial and Appeal Board’s decision in Harjo.  First, the Harjodistrict court’s reliance upon the doctrine of laches arguably presents difficulties for the group.  Laches is an equitable legal defense, under which claims can be barred if a person waits too long to bring them.  In the Harjolitigation, the district court found that the plaintiffs’ claims were barred using laches, because the Redskins were awarded their first trademark in 1967.  TheHarjo plaintiffs, however, didn’t bring their case until 1992–some 25 years after the Redskins’ first trademark was approved.

The time clock for the doctrine of laches begins ticking when a plaintiff reaches the age of majority.  In the Harjo case, the youngest plaintiff was only one-year-old in 1967, when the Redskins obtained their first trademark.  However, on remand, the district court found that even this plaintiff’s case violated the doctrine of laches, since he waited eight years after reaching the age of majority to bring his case.

Seeing how the Harjo court ruled when it came to laches, the biggest difference between the the Harjo case and the Blackhorse case, is the age of the plaintiffs.  The plaintiffs in the Blackhorse case were between the ages of 18-and-24 when the case was filed.  It is expected that their attorneys will argue that the case this time around is not barred by laches, since the plaintiffs brought their case within six years of reaching the age of majority.

The question, though, is whether this legal maneuver is enough to make a court find in favor of the Blackhorse plaintiffs and cancel the Redskins’ trademarks?  Looking at the Harjo case, it does not appear so.  Rather, it is only the beginning of the battle.

The biggest legal hurdle that the Blackhorse plaintiffs face, is not their age.  Rather, it is showing that the Redskins’ trademarks are disparaging.  This hurdle will not be overcome by anything leaders of the Oneida Indian Nation, famous broadcasters or even the President of the United States says in 2013.  That is because the plaintiffs must prove that the trademarks were disparaging when they were granted; not whether they are considered disparaging today.

When it comes to showing that a trademark is disparaging,the plaintiffs must meet a two-part test:  (1) the likely meaning of the mark and (2) if that meaning refers to an identifiable group, that the meaning is disparaging to a substantial composite of that group.  Meeting the first part of this test is relatively simple from an evidence producing standpoint, as the the Trademark Trial and Appeal Board can only decipher the “likely meaning” of a trademark from dictionaries, encyclopedias and other reference materials.  Thus, the Blackhorse plaintiffs will point to materials of this type from when each of the trademarks was granted to argue prong one of the two-part test.

Proving the second part of the two-part test, however, may prove to be more difficult for the Blackhorse plaintiffs.  The reason this is difficult, is that the plaintiffs must show that a substantial composite of Native Americans–not in 2013, but from 1967-1990 when the trademarks were granted–found the trademarks disparaging.  The question becomes, then, how do the plaintiffs go back in time and show that a sizable enough number (although not a majority) of the Native American population felt this way?

It is unclear whether the Blackhorse plaintiffs have the substantial evidence necessary to meet the burden of proving that the Redskins’ trademarks are disparaging.  This should come as no surprise, as the district court in the Harjocase found that those plaintiffs did not have enough substantial evidence to show that then that the Redskins’ trademarks were disparaging.  Unless the attorneys for the Blackhorse plaintiffs have unearthed new evidence demonstrating that the Redskins’ trademarks were considered disparaging when they were granted, it is unlikely that the plaintiffs will succeed in this regard.

The discussion above details the tough legal fight the Blackhorse plaintiffs face in removing a word they believe to be a slur from the name of an NFL team.  Given that, one may wonder why the Blackhorse plaintiffs nonetheless choose to go forward with their cause of action.  Perhaps it is because, even if they do not win in a court of law, they will slowly but surely win their case in the court of public opinion.

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Why The Raiders May Hold The Keys To The A’s Leaving Oakland

Earlier today, the NFL sent out a press release notifying members of the media that the October 6 San Diego Chargers versus Oakland Raiders game would be postponed by seven hours and begin at 11:35 p.m. ET.  Other than the obvious–that this move may make this week five match-up the latest game in NFL history–other implications possibly arise from this move by the NFL.

As the press release continued, the reason for the game delay was made known.  The NFL wrote, “The move was made in response to today’s announcement by Major League Baseball of its ALDS schedule which has the Oakland A’s hosting a game on Saturday, October 5 at 6:07 PM (PT).  The Raiders share the Coliseum with the A’s and the Coliseum requires time to convert back into a football stadium in order to host the game.”

What the NFL didn’t note in its release, is that the Raiders and the A’s are the only NFL and MLB teams respectively that share the same coliseum on a full-time basis.  What the release also didn’t note is the looming issue facing Oakland:  That one or both of its franchises may be hitting the road for new homes.

The Raiders’ current lease agreement is set to expire after the 2013 season.  To date, the Raiders have not announced where they will play beginning in 2014.  However, reports indicate that the team has expressed interest in building a new stadium on the current stadium’s site.  While this proposal is attractive to the city of Oakland, as it keeps the Raiders in town, it is problematic, as construction of a new coliseum could push the A’s out.

Like the Raiders, the A’s are in the last year of their lease with the coliseum.  It is no secret that the A’s wish to leave Oakland and relocate to San Jose.  However, territorial rights that the team previously ceded to the San Francisco Giants have prevented MLB from approving this move.  This, in turn, has resulted in litigation against MLB from parties including the city of San Jose.  Needless to say, from a legal and team perspective alike, the A’s way to San Jose is not clearly paved.

It is perhaps of no surprise that the Raiders desire to build a new stadium.  Originally opened in 1966 and most recently renovated over a decade ago in 1996, the Raiders and A’s have both recently raised concerns over the current state of the Oakland Coliseum.  The concerns were punctuated this season by sewage overflows the stadium’s visitor dugout and coaches’ bathroom.  Perhaps, though, the current state of the stadium was best described by current MLB commissioner, Bud Selig, when he referred to it as “a pit.”

The surprise, though, arguably lies in the Raiders’ willingness to rebuild on the current coliseum’s location.  In making the desire to move to San Jose known, the A’s have continuously lamented over the fact that the Oakland Coliseum is not surrounded by a vibrant downtown community.  The argument, from the A’s perspective, is that if the team played in a stadium surrounded by a downtown, ticket sales would increase, as fans would be more easily able to pop into the ballpark.

That argument aside, with the Giants’ territorial rights holding up a move to San Jose, reports indicate that the A’s have begun negotiating a new lease agreement with the Oakland Coliseum.  While some may see this move as the A’s waiving the white flag and succumbing to life in Oakland, the Raiders may slowly riding in as the A’s knight in shining armor.  The shield that the Raiders hold in this case, is that team’s desire to build a new facility on the current coliseum site.

The A’s have made it clear that they have no desire to rebuild or build a new stadium on the current coliseum site.  Thus, if the Raiders’ new stadium plan is approved the possibility exists that the A’s will be left without a place to play when construction is ongoing.  Thus, if this situation arises, might MLB be more inclined to allow the team to move to San Jose?

Who knew that the postponement of an NFL game could be the first move in a potential chain of events that may pave the way for an A’s move to San Jose?

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Filed under Arenas, Civil Lawsuits, Contracts, MLB, NFL

How The NFL Built A 25 Million Person Hispanic Fan Base

When it comes to assessing market trends and identifying growing contingencies of potential fans, the NFL is on top of its game.  From September 15 through October 15, the NFL will recognize Hispanic Heritage Month by engaging in league-wide and team-sponsored initiatives focused upon the Hispanic community.

The month-long celebration comes in the wake of significant research depicting the fast and significant growth of the Hispanic population–and associated spending power–in the United States.  According to 2010 Census data, between 2000 and 2010, the United States’ Hispanic population increased by 15.2 million.  This number represents over half of the United States’ total population growth during the decade.  The 2010 Census found that 50.5 million of the 308.7 million people living in the United States on April 1, 2010 were of Hispanic or Latino origin.

Internal research likewise demonstrated to the NFL the growing presence of the Hispanic population.  However, for the NFL, the realization of the role the Hispanic community could play in expanding its fan base began years before the 2010 Census data confirmed the growing importance of the Hispanic population in the American economy.

In 2002, former NFL commissioner Paul Tagliabue launched an internal task force for the NFL to begin researching and learning about the Hispanic fan base.  By 2005, that group’s efforts culminated in the NFL hosting a game in Mexico City.  “The 2005 game in Mexico City was a galvanizing moment.  It was a great springboard for bringing the commitment to the Hispanic population across the league.  From there, it really started to institutionalize the notion of designating a time period in our  year to celebrate Hispanic fans and in a consistent way that is really visible,” said the NFL’s vice president of fan strategy and marketing, Peter O’Reilly.

The NFL’s efforts to attract the Hispanic population to its product have not gone unnoticed.  A 2012 ESPN Sports Poll found that 25 million Hispanics in the United States identify themselves as NFL fans.  The popularity of the league amongst the Hispanic population allowed Super Bowls XLVI and XLVII to become the most-watched TV programs (English or Spanish) on record among U.S. Hispanics.  The growth of the NFL’s Hispanic fan base has yet to plateau.  This is demonstrated in part by a Nielsen Media 2012 NFL Season Reach study, which found that 2012 was the most-viewed NFL regular season on record among U.S. Hispanics.

Today, as the NFL continues to work to grow its Hispanic fan base, it has created an internal steering committee.  That committee serves as a conduit for the league and teams to share research on attracting the Hispanic fan base.  “We have regular calls and meetings where we share what is working and what is resonating,” O’Reilly explained.

What then, is resonating amongst Hispanic NFL fans?  What is driving the growth of the NFL’s Hispanic fan base?

As it turns out, the biggest factor driving growth of the NFL’s Hispanic fan base is the media access the NFL gives to its Hispanic fans.  “We have spent a lot of time really working with and asking Hispanic fans how they want to consume the NFL.  For us, it is about making sure that we are delivering the game in customized and unique ways to serve the Hispanic population’s needs,” O’Reilly noted.

One thing unique about the NFL’s distribution of its games to its Hispanic fan base, is that the NFL is the only major league in the United States to televise all of its games in Spanish.  That the number of games it hosts each season pales in comparison to the other three leagues in the United States, gives the NFL a leg up in winning over the Hispanic market.  It is much more financially feasible to televise a 16-game regular season in Spanish, than it is to say, televise an 82-game regular season.  “There is a media piece that’s bringing the NFL to places it hasn’t been.  Some of this is tied to the number of games the NFL has each season, as we are the only sports league that delivers all of its games in Spanish,” O’Reilly pointed out.

In addition to televising all of its games in Spanish, the NFL has utilized other innovative media endeavors across a wide variety of channels to send the message about its product to the Hispanic population.  These endeavors include programming with ESPN Deportes, Telemundo, Univision, and the NFL Network.  Additionally, the NFL has utilized its own website to attract Hispanic fans.  “A lot of what we continue to do, is make sure we can teach the basics of the game in fun and accessible ways in Spanish.  There is a section of our website that allows fans to go in and get answers to basic questions about the game in Spanish.  We recognize that for some, understanding the game is a barrier to enjoying it,” O’Reilly said.

NFL teams have fallen in step behind the league’s efforts to attract a wider Hispanic fan base.  One team leading the charge is the Chicago Bears, who recently spent over two years researching Hispanic consumers in Chicago before launching the team’s “Vamos Bears” engagement platform.  Realizing that ticket sales would not be the team’s priority when it came to attracting a Hispanic fan base, as Bears tickets have been sold out for 28 seasons, the team looked to building a wider Spanish media presence.

In 2012, the Bears partnered with Chicago Spanish radio station, La Ley 107.9, to air the team’s games in Spanish on the radio for the first time.  Initially a one-year test deal, the team quickly realized that partnering with a well-respected Spanish station could not only increase their reach amongst Hispanic fans, but could also help the team gain insight into the Hispanic community.  “We saw that La Ley was a group living and breathing in the Hispanic community.  We rely upon them not only as our radio partner, but as our community guide,” said the Chicago Bears’ vice president of sales and marketing, Chris Hibbs.

Going forward, the Bears plan to expand into other media markets to grow the team’s Hispanic fan base.  “We are working right now on digital content.  What should our web presence be for Vamos Bears?  How much of that presence is in Spanish and how much is in English?” Hibbs remarked.

For teams, spending money on research and campaigns to engage Hispanic fans is a smart business strategy.  “On our side, it’s a vehicle to drive advertising revenue. Brands are looking for ways to engage this very important demographic of Hispanic consumers,” Hibbs noted.

Yet, for all that teams gain monetarily by attracting a wider Hispanic fan base, they are also quick to note that they have a responsibility to serve the demographic.  “We had two to three business meetings with the NFL to talk about future development and growth where we were hearing a ton about Hispanic consumers and seeing lots of great data and trends about the predominance of this consumer in the country and how thirsty they were for sports.  We had to listen.  There was an opportunity for us to really engage this consumer.  We’ve under-served them.  The Bears have been around for 93 years, and we have done very little with this community,” Hibbs explained.

Likewise, while the NFL is focused upon growing fans of its product, it is cognizant of the role that its product plays in building the future of American culture.  “Without overstating our role, there is a role the NFL can serve in terms of being a bridge to American culture.  The NFL is such a strong American passion and a badge of our culture.  In a lot of American communities, football is a glue.  Hispanic fans tell us it’s a connection point.  It’s certainly about making sure our fan base grows, but beyond that, we believe that given the unifying nature of the NFL, there’s a role we can play beyond that,” the NFL’s O’Reilly remarked.

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Why Was Ndamukong Suh’s Contract Restructured? A Legal Look At His Fine Appeal

Since 2010, Ndamukong Suh has been building a reputation for his brand of football in the NFL.  Unfortunately, it’s a reputation that has proven costly to Suh.  Most recently, Suh was fined $100,000 by the NFL for an illegal block on Minnesota Vikings center John Sullivan in the Detroit Lions’ regular season opener.  The fine marks the highest fine imposed by the NFL against any player that did not involve a suspension.

Shortly after the fine was announced, Suh stated that he would appeal the fine with the assistance of his agents.  What does the appeals process look like?

The basis for the fine against Suh and Suh’s subsequent appeal comes from the NFL’s collective bargaining agreement.  Article 46, section 1 (b) of the collective bargaining agreement provides the league with the authority to levy fines or suspensions against players for unnecessary roughness on the field with respect to an opposing player.

In order to levy a fine or suspension for unnecessary roughness, the NFL must send written notice of the action to the player and NFLPA.  In this instance, the fine was announced a mere two days after Suh’s block of Sullivan.  Notably, prior to enforcing a fine exceeding $50,000, the NFL must meet with the NFLPA’s executive director.  Given the size of Suh’s fine, what that means, is that in this case, DeMaurice Smith knew that the fine was coming before Suh did.

After the written notice is provided to the player and the NFLPA, the player or the NFLPA has three business days to file a written appeal of the fine or suspension, should they object to it.  In this case, Suh filed an appeal.

What kind of arguments can Suh raise on appeal?  Again, the collective bargaining agreement outlines the appeals process.

One argument that Suh and his team may raise as a basis to reduce the fine, is that the fine is excessive.  However, to make this argument, Suh must assert that the fine is excessive when compared to his potential earnings for the season.  Suh is currently signed to a five-year, $68 million contract.  While that is definitely a hefty amount of change–and probably limits his ability to successfully argue that the fine is excessive–an off-season move by Suh may improve his case.

In March 2013, Suh restructured his contract with the Lions to free up salary cap space for the team.  Under the new terms of his contract, Suh will earn $630,000 in base salary this season.  This is compared to the $12.15 million in base salary he was set to earn prior to his contract being restructured.  Suh will still earn the $11.52 million difference in base salary, however, it will be spread out over three years in the form of a signing bonus.  Thus, one has to wonder if the restructuring of Suh’s contract was done not only to lessen his load on the Lions’ salary cap, but to also provide his agents and legal team with a more plausible argument that fines against Suh are excessive.

Given Suh’s history on the field, it will be interesting to see what the NFL does with respect to his appeal.  Will the league make a statement that contrary to what Suh has said on the record, he needs to change his style of play?  Or, will the league reduce his fine?

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Ben Utecht’s Arbitration Hearing And Its Impact On NFL Concussion Litigation

By:  Jared Berman, Ruling Sports Intern (Twitter:  @RealSportsNLaw)

Last month, I interviewed attorney Paul Anderson about the lawsuit against the NFL by players who suffered concussions on the field. However, one issue which did not come up, was the liability of individual NFL franchises to players for concussions. As time has told, however, it looks as if they are under fire as well.

Ben Utecht, a former tight end of the Cincinnati Bengals, recently won an arbitration hearing against the Bengals for his 2009 salary after suffering a concussion during training camp and later being released. The team released a statement on ESPN claiming, “This is simply a CBA and contract case.” Is it though? The NFL is pushing the thought that these concussion lawsuits come down to the boilerplate contracts, likely because it takes the emotion out of the picture. However, Utecht’s attorney, Tim English, states that the arbitrator’s recent decision in his case, “upholds our players’ rights to continued salary payments while injured.” Thus, while teams and the NFL are focusing in a sense upon taking emotion out of the issue, lawyers like English are focusing on a different issue:  workman’s compensation.

Workman’s compensation is a type of insurance policy providing wage replacement and medical benefits to employees injured in the course of employment. In determining whether an employee can receive workman’s compensation benefits, issues, such as, whether the employee was making a frolic or detour when the injury occurred, are considered.  Essentially, questions like these, beg the question of whether the employee was actually working while injured, as opposed to taking a lunch break, or just playing hooky.  Utilizing these questions when looking at the NFL concussion litigation, it is clear that the players’ concussions all occurred during the course of their NFL employment–whether it was during practice, the off-season, or an actual game. Thus, one would think these types of cases are a shoe-in for the injured party.

While on their face, these cases appear to be easy to win by players, the NFL is brutal. In its approach to concussion litigation, one could argue that the NFL is not concerned with the players’ right to a trial.  Instead, one could assert that the NFL’s litigation approach is focused on its own pockets.  This is demonstrated by the league and its teams’ push for arbitration and Utecht’s four-year wait to receive his salary.

After the arbitrator found for Utecht, the NFL neither apologized nor admitting its wrongdoing, but rather, praised the process of arbitration.  Remember, that arbitration is what the NFL is pushing for in the 4,000 person-plaintiff case against the NFL, while the players’ want their day in court.  In fact, NFL spokesman Greg Aiello told that the Utecht decision is proof that arbitration works.

Luckily, there is a silver lining in this story. First, the NFL is being called out for not financially supporting its injured players. Second, the rulings are favoring the players. And finally, Utecht is now a “professional” singer and is releasing a book and album at the end of the year.

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A Look At The NFL Concussion Litigation: Q&A With Paul Anderson – Part 2

By:  Jared Berman, Ruling Sports Intern (Twitter:  @RealSportsNLaw)

4.  Assuming a player has suffered a concussion-type injury, how can it be determined that the injury occurred during the NFL? Rather than peewee, high school, or college football?

The issue of causation will certainly be at the heart of the players’ case. Proving that the NFL’s wrongful conduct actually and proximately caused the players’ injuries will be difficult, but perhaps not impossible.

First, the causation chain will be driven by medical-causation experts — guided by experienced trial attorneys. If they can convince the jury that the NFL’s wrongful conduct at least contributed to the players’ injuries, then there is a likelihood of success.

Second, the plaintiffs’ lawyers will seek to apply the “multiple-causation theory.” Remember your 1L Torts class and Summers v. Tice or Landers v. E Tex. Water Disposal? This legal theory has been repeatedly and successfully applied in asbestos and other toxic torts cases.

Basically, the short-circuited, conflated, argument will be: Yes, former players were exposed to head trauma prior to entering the NFL, and perhaps other prior industries were negligent in failing to warn. But, nonetheless, the NFL is the defendant currently being sued, and it has been the “purveyor” of all things football since the inception of the game. As the industry leader, it is appropriate for the NFL to be held jointly and severally liable for substantially contributing to the players’ injuries.

No doubt, it is a legal stretch, which will be vigorously opposed by the NFL, but it’s a viable theory that may open the door to the construction of new case law.

2.     Given the NCAA and NFL’s close ties and the fact that many players’ head injuries may have been caused during their college years, should the NCAA be hailed as a co-defendant?

I think some would argue that the NCAA should also be named as a defendant in the NFL Concussion Litigation. (Applying the legal theory above may overcome this purported defect.) But, I think adding the NCAA would simply muddy the waters.

Here, the plaintiffs’ theory hinges on the NFL’s conduct as the “guardian of football.” In this role, the NFL allegedly had the capacity to force incremental change through its historical conduct. Instead of driving change, the NFL allegedly turned a blind eye and “sensationalized” big hits. The plaintiffs would rather place the sole blame on the NFL, which has a $9.5 billion purse, as opposed to confusing the issues by adding the NCAA.

Notwithstanding, the NCAA has its own issues regarding its lackadaisical attitude of head injuries in sports, which I’ll save for another day. It should be noted that the NCAA is currently fighting its own class action concussion battle in the Northern District of Illinois.

3.     If the judge rules in the players’ favor how will that impact the future of the NFL?

Since 2010, the NFL has arguably taken appropriate steps to try to make the game safer. The operative word there is “try.” Unfortunately, the game of football is inherently violent, and I don’t think this game can ever be completely safe. Rule changes can only go so far, and the NFL may have already reached its limit. Of course, you can always increase the season to 18 games because that will obviously make the game safer!

Whether the lawsuit is successful or not, I think the former players have already won. They have opened our eyes to the serious risks of head injuries and we, as a society, have benefited. Millions of dollars are now being poured into research and awareness campaigns relating to head injuries in sports. Although there is a lot more that needs to be done, I think the former players have laid the groundwork.

Even if the players win a significant monetary judgment against the NFL, I think the NFL will continue to thrive. The NFL’s biggest impediment will be the role parents’ play in the decision of whether this game has become too dangerous for the kids to play. If this occurs in a dramatic fashion, I think that would lead to the demise of the NFL, as opposed to litigation being the downfall.

7.     The judge is expected rule on July 22nd, what are your expectations?

I think the players will be successful, and Judge Brody will deny the NFL’s Motion to Dismiss, at least in part. Of course, the NFL will immediately appeal to the 3rd Circuit. But, Judge Brody will likely allow discovery to proceed.

The NFL has, I’m sure, already made a decision on whether it should continue to fight this battle in court, or if it is time to discuss a global settlement in earnest.

If the NFL decides it wants to fight this thing out, I’d expect the litigation to go on for several more years. On the other hand, if a global settlement is reached, I think the cost of a medical monitoring regime would be north of $2 billion dollars. Only time will tell in this high-stakes game of NFL complex litigation.

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A Look At The NFL Concussion Litigation: Q&A With Paul Anderson – Part 1

By:  Jared Berman, Ruling Sports Intern (Twitter:  RealSportsNLaw)

There have been a lot of changes to the NFL over the past few years regarding players’ safety. No longer can a team overload a formation to block a field goal or extra point, the kickoff was moved up five yards to the thirty-five yard line, and most recently the crown-of-helmet rule was enacted, which prohibits ball carriers from using the crown of their helmets outside the tackle box. These rule changes are part of a growing trend to make an inherently dangerous game safer. Unfortunately, the NFL’s efforts are long overdue.

On July 22nd, U.S. District Judge Anita Brody will rule on whether former players can sue the National Football League for concussion-related injuries. The NFL does not deny the allegations, but argues the complaints must be handled in arbitration in accordance with the collective bargaining agreement.

Recently, Paul Anderson, founder of took the time to discuss some of the pressing questions regarding the NFL concussion litigation.

1.     How did you get involved in sports law and more specifically, this lawsuit?

Shortly after the first concussion-related class action was filed I came across a legal blog that discussed the filing of the lawsuit. I decided I’d write a law review note on the litigation since the lawsuit was the perfect combination of sports law, complex litigation and torts.

As my research progressed more lawsuits were filed, and I figured this had the potential to become a very hot topic.   So, in January 2012, I launched my website with the hopes of trying to break into the sports law arena, while also providing a legitimate source to stay up-to-date on the litigation.

Ever since then, concussion litigation has become my passion, and it is quickly becoming an emerging area of the law. As you know, concussion litigation is not limited to the professional level. It has far-reaching implications, and society as a whole is being impacted by the litigation. The NCAA is currently facing a similar class action, Arrington v. NCAA, and there are several lawsuits pending at the high school level.

2.     Most believe that football head trauma was the catalyst for Junior Seau’s suicide. What type of an influence do you think that loss had on this lawsuit?

Although prior to May 2012 the NFL Concussion Litigation was picking up steam in both the media and the Court of Public Opinion, it wasn’t until Seau’s death that a spotlight was placed on the litigation. Seau’s death struck a cord with a lot of former and current players. Seau was never “officially diagnosed” with a concussion, yet he had CTE, which may have contributed to his suicide.

Seau’s death, as well as other suicides by former players, created a sense of fear and desperation for some former players. Accordingly, there was a strong influx of former players that joined the concussion lawsuit with hopes of being able to combat the fear of neurological disorders with the putative remedy of medical monitoring.

3.     The NFL has been around since the 1920’s, why are concussion-type injuries being brought today?

I think it has been driven by a few overriding forces. First, and undoubtedly, within the past two decades the science has evolved rapidly. What was once seen as a “benign injury,” is now considered an injury that can cause permanent damage if not treated properly.

In addition, the reality of CTE, and the damage from repetitive head trauma, is becoming clearer. Despite some “doubt casters,” multiple groups, including Boston University and the National Institutes of Health, have identified CTE as a neurological disease caused by repetitive head trauma. And, of course, football is an inherently violent game where an essential ingredient involves repetitive head trauma.

Second, the plight of former players and the staggering statistics related to the increased risk of neurological disorders set off the alarm bells. Plus, the high-profile suicides and bizarre deaths of dozens of former players in the past 20 years, led Congress to question the NFL’s sincerity regarding head injuries in sports.

Through political pressure – and now litigation – the NFL had no other option but to accept and embrace the reality that head injuries can no longer be ignored.

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John McCain Seeks To Eradicate The NFL’s Blackout Rule

By:  Jared Berman, Ruling Sports intern (Twitter:  @RealSportsNLaw)

Last month, Senator John McCain introduced the Television Consumer Freedom Act of 2013, which would thwart the NFL’s infamous blackout rule. The blackout rule, which dates back to the 1950’s, stringently requires a game be at least 85% sold out on non-premium seats (i.e. box suites) 72 hours before kickoff; otherwise the game is not televised in the teams’ local market. Last season, the rule effectively blacked out fans for fifteen games, the brunt of which was felt by Tampa Bay Buccaneers’ fans that were denied six games, including their season opener. The NFL justifies the rule, insisting that it promotes ticket sales and the overall stadium experience.[1] However, McCain, like many NFL fans, fails to see the connection.

In fact, McCain’s bill is not the first attempt to reform sports blackouts. On February 13, 2012, five U.S. senators (Blumenthal, Harkin, Stabenow, Brown, and Lautenberg) petitioned the FCC asserting the league’s blackout rules harm the fans. The senators pointed out that the blackout rule makes little sense, in light of our country’s struggling economy weighed against the rising prices of tickets, because for many fans, attending a football game is an “unaffordable luxury.”[2] Surely, it is not difficult to imagine a scenario where a father spends his week working hard to provide for his family, in hopes of watching his favorite NFL team on Sunday with his son­­­­–the same football team he used to watch with his father, only to discover the game is blacked out.

In a plea for the fans, McCain’s bill asks for the removal of the blackout rule for any team whose stadium was funded with taxpayer money. “When the venue in which these sporting events take place has been the beneficiary of taxpayer funding, it is unconscionable to deny those taxpayers who paid for it the ability to watch the games on television when they would otherwise be available,” he said, via the Los Angeles Times.

McCain’s argument is a compelling one, regardless of ones’ political allegiance because it does not affect privately financed stadiums. However, the bill addresses much more than the NFL blackout rule and therefore, its implementation by the House and Senate may rest on the reception of its core (which will be influenced by NFL lobbyists).

The NFL receives a cut of the profit from each ticket that a team sells for its games.  As such, the NFL uses the blackout rule as a tool to promote ticket sales and increase its revenue. Often it works, because the local station that plans on televising that game will buy-out the remaining tickets to ensure the broadcast, and ultimately help its ratings.  In addition, it is in the NFL’s best interest to broadcast games with the roar of a sold-out crowd, because it makes for more entertaining television.

On the other hand, it is time that the NFL refocuses its efforts on television contracts and not put such a heavy emphasis on ticket sales. Make no mistake, ticket sales are vital to an NFL team’s economic success, but not at the price of blacking out the game and losing revenue from commercial sponsors. In today’s sports world the fans watching the Buffalo Bills are not limited to the northeast region, but also reside in California, Texas, and even Alaska. Indeed, many fans are only watching as “fantasy fans,” who watch every NFL game to keep track of their fantasy football team’s players’ statistics. These fans will never be influenced by the NFL’s blackout rule, because attending the game is geographically undesirable and arguably, economically impossible.

It will only be a matter of time until McCain’s bill, or one like it, will pass and destroy the blackout rule once and for all. The issue is really gaining momentum and public opinion undoubtedly supports the rule’s destruction. Perhaps this is one time where Republicans and Democrats can come together, since McCain is leading the charge and President Obama notoriously enjoys sports.

[1] Assael, Shaun. “NFL Fans Blacked Out, Riled up.” Disney, 18 Sept. 2012.

[2] United States Senate. (2012, February 12). Letter to FCC for reformation of blackout rule.

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How NFL Draft Picks Affect An NFL Team’s Salary Cap

As the names of young men are called from the podium on the Radio City Music Hall stage tonight, draft experts and team’s front offices will consider how their picks will impact their team’s salary cap.  The 2013 NFL salary cap is set at $123 million.  The rookies a team drafts and subsequently signs to a contract will have salaries that will be counted under their respective team’s salary cap.  Given this, an understanding of the salary cap and the role rookies’ contracts play in it is important going into the NFL Draft.

First, one must consider how the NFL arrives at its salary cap.  The salary cap is a collectively bargained amount that is a percentage of what the NFL calls “all revenues.”  Article 12 of the NFL collective bargaining agreement defines what is considered “all revenues.”  Essentially, “all revenues” equals gate receipts + copyright royalties + concession revenues + parking revenues + local advertisement and sponsor revenues + internet operations and program sale revenues + novelty revenues + NFL Ventures revenues + barter income + equity instruments + revenues related to stadium releases based on non-NFL activities + recoveries under business interruption insurance policies + expense reimbursements from government entities + proceeds from rights to receive.

After accountants determine the “all revenue” number, that amount is subdivided into three categories to calculate something called the “player cost amount.”  We’ll discuss the “player cost amount” in greater detail below, but it is one factor used in calculating the NFL’s salary cap.  The three sub-categories that “all revenue” is divided into are:  league media, NFL Ventures/postseason and local all revenue.  Specific revenues that make up “all revenue,” as calculated above, are put into each of the three buckets.

Once “all revenue” is subdivided into the three buckets, “player cost amount” is calculated.  “Player cost amount” equals 55% of league media all revenue + 45% of NFL Ventures/postseason all revenue and 40% of local all revenue.

Accountants also calculate the amount of benefits teams pay to players.  These benefits include:  pensions, insurance, injury protection, workers’ compensation, preseason per diem accounts, travel expenses for offseason workouts, rookie orientation program expenses, postseason pay, medical costs, moving and travel expenses, severance pay, annuity programs, tuition assistance, minimum salary benefits, performance based pools, health reimbursement accounts, payments to players suffering from dementia, legacy benefits and the neuro-cognitive disability benefit.

The salary cap can be calculated once the values described above are determined.  The salary cap amount equals the “player cost amount” for the year – the projected benefits for the year divided by the number of teams in the league for the given year.

Once the salary cap is determined, teams must begin working to comply with the salary cap.  The collective bargaining agreement defines salary as “the compensation in money, property, investments, loans or anything else of value to which an NFL player. . . is entitled to. . . but not including benefits.”  Teams must comply with the salary cap on the first day of the league year.  No team can exceed the amount of the salary cap.  Additionally, the new collective bargaining requirement requires each individual team to spend at least 89 percent of the salary cap’s limit.

While a team must comply with the terms of the salary cap, there is a sub-category of the salary cap that relates especially to rookies.  Teams must not only be under the NFL salary cap, but they cannot spend an amount greater than the “rookie compensation pool.”  The rookie compensation pool was a term negotiated during the course of the most recent collective bargaining negotiations, which essentially limits the amount of money all NFL rookies can earn during the course of their first four seasons in the NFL.  Each year, the NFL designates an amount for the total rookie compensation pool and teams are told, based on their draft slots, how much money they get from the pool.  Teams are given enough from the pool to pay players at least the NFL minimum salary ($405,000 in 2013) plus, if applicable, bonuses based on a sliding scale depending upon a player’s draft spot.  Thus, teams must work to comply not only with the salary cap, but to ensure that the contracts they offer rookies are within the limits of the rookie compensation pool is applicable to their team.

Upon drafting a rookie, a team is charged with that rookie’s salary under its cap space immediately.  The amount charged to the team is the minimum active list salary.  This year, that amount is $405,000.  For each rookie a team signs, this amount will count against its cap space until the player, the team waives the player or the player remains unsigned through the tenth week of the regular season.  If the player is signed, the amount of cap space taken by the rookie could increase, as bonuses or incentives may be included in the player’s contract.  If the player is waived or unsigned, the $405,000 will not count against the team’s cap space.

The fact that only the minimum active list salary counts against a team’s salary cap space upon drafting a rookie is notable.  There are a handful of teams that have very limited salary cap space presently available.  Thus, if these teams had to add in bonuses they plan on paying rookies at this point, they would be over the salary cap.  Furthermore, it is also of note that only the salaries of a team’s top-51 paid players count against the team’s salary cap during the off-season.  Thus, teams have a fair amount of time to cut players, renegotiate contracts or make trades to get under the salary cap before all players’ salaries count against the cap when the NFL season begins.  It is for this reason that although drafted by a team, most rookies do not sign contracts until later in the summer or after training camp.

While the NFL salary cap is a complicated topic which takes years of training to understand, the basis of it and how it impacts a team’s rookies is relatively simple.  Given this, it will be interesting to watch and see when teams actually sign their rookies and the amount of bonuses they receive.

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