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Legal Issue Could Change The Face Of Sports

from Lester Munson of ESPN,

Fast forward to a high-definition picture of sports late in 2010. Here is the news of the day, scrawling across the bottom of your TV screen or mobile Web device:

• A young Detroit Red Wings fan who has saved his pennies for months shells out $300 to buy a replica sweater that would have cost him $80 in 2009.

• Lockouts and strikes loom large in all four major team sports as an era of relative peace on the sports labor front ends and owners begin to exercise their new power over player unions.

Unlikely?

Discouraging?

It could happen.

All of those scenarios, in fact, could become realities if the NFL triumphs in a case now under consideration in the U.S. Supreme Court. Experts agree that the case known as American Needle vs. NFL could easily be the most significant legal turning point in the history of American sports.

read on & thanks to a KK member for the pointer…

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Comments

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I disagree with the writer’s belief that “Fans will pay more for tickets, television”
I think just the opposite. League expenses will be much less so ticket prices may drop. To win fans over and make the owners look like the good guys they may drop ticket prices and say see it wasn’t us greedy owners that made you pay high prices but those greedy players. It won’t be good for players and agents but until the dust settles how it works out for the fans isn’t certain.

Posted by Bo from FL. on 07/20/09 at 09:54 AM ET

John's avatar

Bo, that is fantastically naive.  The owners of these teams didn’t get to where they are in life by making decisions that cost them significant sums of money.  It always amazes me when people put faith in big businesses and big businessmen to do the right thing…because it never happens.

The market doesn’t provide an incentive for kindness, manners, or good feelings.  It provides an incentive for profit, and the very fact that the NFL has taken this request to the Supreme Court means that they intend to take advantage of a favorable opinion.  These lawyers they have hired make millions of dollars because of their legal expertise.  The NFL and the unions aren’t blowing all of this money for a fun thought exercise.

A favorable opinion for the NFL would have varying impacts across the leagues because the labor markets are very different from league to league.  I think the NFL would have a much greater ability to be heavy handed with their players because there is no other professional football league in the world, aside from the CFL.  If players want to play pro-football, they pretty much have to play for the NFL—the league enjoys a monopoly in the labor market.  The NHL, on the other hand, gets a lot of competition for talent from all over the world.  This latest dust-up with Jiri Hudler is one in a long line of examples where talented NHL players get offered lucrative contracts from overseas teams.  While I could see the league stepping in to set-up a salary scale of some sort, I do not see them applying an oppressively small salary structure for either players or coaches because of the competition that exists in the labor market.

This will be an interesting case, but if it ends with a favorable decision for the leagues, there will be additional lawsuits from the unions and probably from some owners who don’t like the fact that they will have been reduced from outright owners of a pro-sports team to minority owners in a sports league.

Posted by John from Pittsburgh, PA (Wings fan for life!) on 07/20/09 at 10:11 AM ET

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The legal doctrine at the center of the case is known as “single entity.” If the NFL manages to persuade the Supreme Court that the league is a single entity competing with other providers of entertainment rather than a group of 32 separate businesses competing with each other, the landscape of the sports industry will be transformed…

Hasn’t Lil’ Gary already establish that this exists in the NHL? Last year they demanded that the Rangers stop using their own Web presence and start using the NHL-based Web system…and they won. That sure seems like a perfect example of a “single entity” structure to me.

Posted by OlderThanChelios from Grand Rapids on 07/20/09 at 10:25 AM ET

Primis's avatar

Hasn’t Lil’ Gary already establish that this exists in the NHL? Last year they demanded that the Rangers stop using their own Web presence and start using the NHL-based Web system…and they won. That sure seems like a perfect example of a “single entity” structure to me.

OTC,

We don’t know what’s written into league bylaws at this point.  For all we know, that is a specific requirement of teams in order to be an NHL member franchise.  It maybe is not a specific bylaw to web, but to media or something.  And if that’s the case, the “single-entity” argument wouldn’t really matter.  It’s hard to point to one team trying to bypass member bylaws or something and then say that it smells of single-entity.  A league is, and always has been, allowed to have its own terms and laws in order to be a member, and also to enforce them.

Revenue-sharing, on the other hand, smells like “single entity” to me.  And that’s where this whole thing gets sticky…

Posted by Primis on 07/20/09 at 10:42 AM ET

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It seems if the NFL wins the fans loose in this one (all fans). The Roberts right-wing court dosen’t care about the boardroom and how it treats its workers. It only cares about who’s in the bedroom of those workers. The NFL has its players by the .(JavaScript must be enabled to view this email address) NFLPA is too weak and this is going to have ramifications across the 4 major sports. The NFL is turning it’s league into some sort of authoritarian state.
In a broader sense this is more of the “middle class squeeze”.  Which should be called the “blue collar working class squeeze. I know it’s just Billioniares fighting Mollioniares, but like I said it WILL effect the fans

I’m sorry about the political opinions, I know this isn’t the forum for that (2nd time I’ve done this),but I couldn’t help myself.

Posted by Lindas1st on 07/20/09 at 10:46 AM ET

madhatter's avatar

If the NFL were to win this case, from an NHL standpoint this would bring the owners back to their pre-players’ union heyday of absolute control over wages and player movement. It would be like 1950 all over again. The prices to fans would not fall, but player and personnel salaries certainly would. Such an outcome would serve only to expand the value of the member clubs. The owners know what they’re doing here, and it’s for the benefit of the owners.

Posted by madhatter on 07/20/09 at 10:49 AM ET

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I didn’t want to put that link (balls) in my comments. I don’t know how it got there either. I’m not very computer literate, so please forgive me. Anyone know what happened? How it got there?

Posted by Lindas1st on 07/20/09 at 10:57 AM ET

YzermanZetterberg's avatar

Lindas1st—

Looks like you may have accidentally hit “@” instead of “a.” Not sure if this is strictly a Microsoft-related issue, but I have had a lot of similar instances with Microsoft products where—in their infinite wisdom and helpfulness (NOT!)—Microsoft programmers assume they know what I want better than I do and therefore automatically create a hyperlink unless I make the effort to specifically go back and remove it. This, notwithstanding all of Bill Gates’ charitable endeavors, is just one of the many reasons I believe that Microsoft (and not money or even the love of money) is the root of all evil.

Posted by YzermanZetterberg on 07/20/09 at 11:42 AM ET

Avatar

Looks like you may have accidentally hit “@” instead of “a.” Not sure if this is strictly a Microsoft-related issue, but I have had a lot of similar instances with Microsoft products where—in their infinite wisdom and helpfulness (NOT!)—Microsoft programmers assume they know what I want better than I do and therefore automatically create a hyperlink unless I make the effort to specifically go back and remove it. This, notwithstanding all of Bill Gates’ charitable endeavors, is just one of the many reasons I believe that Microsoft (and not money or even the love of money) is the root of all evil.

I’ve has the same problem with automatic hyperlinks and also with autocorrect when I am trying to type something.  I have it disabled on my personal computer, but if I am using another sometimes it still creeps in.

I wish computers wouldn’t try to think for people.  They pretty much stink at it.

Posted by Baroque from Michigan on 07/20/09 at 12:25 PM ET

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I did want hit the @ key. Trying te be ceative by hiding the “a” but at the same time showing the “a”.

Anyway, thanx guys.

Posted by Lindas1st on 07/20/09 at 12:47 PM ET

J.J. from Kansas's avatar

If a league becomes known as a “single entity”, then the entire premise of their sport is sacrificed.  The results of their championship games are no more valid than the results of any Wrestlemania. 

This will forever end the “is it a sport or a business?” argument. 

I would go as far as to say that professional athletes of leagues that are deemed “single entities” should be automatically disqualified from Olympic competition, owing to the fact that they’re taking their salaries from the league, which has only economic interests in who wins their championship rather than from an owner who (ideally) should be concerned with keeping to the values of the sport. 

Hell, I’d go even farther and say that the NHL should forfeit “ownership” of the Stanely Cup, as a single-entity league works against the spirit of the cup in the first place.

Posted by J.J. from Kansas on 07/20/09 at 12:50 PM ET

Avatar

Very interesting reading. The characteristics that sports leagues generally exhibit make this whole thing quite the conundrum. In some contexts, a league seems more aptly described as a single entity. For instance, they have a contract with a single union. TV contracts are negotiated as a single entity and they all share a vital economic interest in collectively promoting NFL football. But they also act like a joint venture between independently owned teams as each team negotiates its contracts with players, stadium vendors, and team sponsorships.

What I don’t understand is that I thought that the antitrust laws weren’t case laws but statutory laws, meaning that Congress, if it chooses to do so, can change or even undo the Court’s decision. If so, the author might be just making a big deal out of an ant hill. Maybe a lawyer amongst us could clarify.

Posted by UMFan from Colorado on 07/20/09 at 01:34 PM ET

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Hell, I’d go even farther and say that the NHL should forfeit “ownership” of the Stanely Cup, as a single-entity league works against the spirit of the cup in the first place.

Posted by J.J. from Kansas on 07/20/09 at 01:50 PM ET

They wouldn’t have to forfeit anything if the Hall of Fame yanked it back out of the league’s sphere of influence, maybe.  I’d love to see that happen.

At least it would make it easier on all the sports leagues because they wouldn’t have to fret over unattractive (aka unprofitable) playoff matchups.  The most profitable teams would always make it because that would be best for business!  Players would not be permitted to go somewhere which would limit their marketing potential, even if a Toronto boy might actually prefer to stay in Columbus.

Hell, if it’s all about “efficiency” then why stop at sports?  Make everyone an indentured servant instead of an employee.  Just think of the profits that would roll in if labor costs were cut down to the bone and then some.

Posted by Baroque from Michigan on 07/20/09 at 01:38 PM ET

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