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- Combating Sovereign Investment: Reverse Morals Clauses and Deep Pockets Theory
In 1976, the Saudis wanted American television. A Saudi Conglomerate almost purchased the Corporate Communications of America, (CCA), the parent of the television news network, UBS. What stopped the deal? Telegrams. With the help of an UBS news anchor by the name of Howard Beale, Americans displayed their moral outcry by sending 6 million telegrams to the White House stopping the deal. Well, at least it was true in the 4-time Oscar-winning film, "The Network." Howard was America’s mad prophet. He claimed to see the face of God and had borne witness to the moral light of ultimate clarity. He could see right from wrong, whereas everyone else only saw a moral gray. After stopping the deal, Howard was summoned by the CEO of CCA, Arthur Jetsen, into a conference room called Valhalla (The Fallen). Howard’s moral principles were no match for Mr. Jetsen who declared, “There are no Nations,” “the world is a college of corporations,” and “there is only the international system of currency.” Howard’s moral principles were ineffective against Jensen’s corporate view. How can you argue about what’s good or bad for America when your opponent denies America itself? In 2023, the Saudis want sports. The Saudi Public Investment Fund will be the sole sponsor of the PGA Tour and the Qatar Investment Authority bought 5% in the parent, Monumental Sports & Entertainment, which owns the Washington Wizards, Capitals, and Mystics. Except for some angry golfers, Americans have not marched in the streets nor have they called the White House 6 million times. How do you challenge sovereign foreign investment? Depends on the sports organization. The first solution is adding reverse morals clauses to the collective bargaining agreements such as the NBA, NFL, MLB, NHL, and MLS. A morals clause is a common contract provision in an athlete’s sponsorship contract where the contract can be suspended or terminated based on an athlete’s conduct disrupting the party’s reputation or image. A reverse morals clause is a rare provision where an athlete has the power to suspend or terminate the contract based on the party’s conduct disrupting the athlete’s reputation or image. Reversal morals clauses are nothing new to sports. See Cari Grieb’s 2015 article[1] on reverse morals clauses and Donald Sterling and the law firm, Miller Canfield, 2017 article on athletes using reciprocal morals clauses in their endorsement deals.[2] Future players of the Wizards, Capitals, and Mystics should negotiate for these clauses in their new player deals given Qatar’s 5% investment into their teams. A reverse morals clause would protect an athlete’s brand in the event that Qatar’s conduct damages their image. Who would use a reverse morals clause? Two NBA candidates may be Kyle Kuzma and Jordan Poole. Since Kyle Kuzma signed his 4-year $102 million dollar contract on June 30, 8 days after Qatar bought a 5% stake on June 22nd, it’s unlikely that Mr. Kuzma could argue that Qatar’s investment harmed his brand. However, Jordan Poole originally signed his contract with the Golden State Warriors and was traded to the Wizards on the same day as the Qatar deal closed on June 22nd. If Mr. Poole had a reverse morals clause and believed that Qatar’s involvement with the team disrupted his reputation, then Mr. Poole could exercise his right to suspend the contract temporarily until he is traded to a different team. Sports organizations without a CBA like the PGA Tour require a different solution. The PGA Tour is a non-profit organization where the players are independent contractors without a union. As a result, reverse morals clauses could not be utilized. Furthermore, the PGA’s bylaws grant the Commissioner broad powers to enter into contracts without player approval. This problem dates back to 1983 when Jack Nicklaus, Arnold Palmer, and Tom Watson failed to defeat their PGA Commissioner, Dean Beman, over player rights and marketing strategies analogous to Phil Mickelson’s current complaints about the PGA.[3] Other than changing the PGA’s bylaws to limit the commissioner’s powers and creating a union, the best available solution is the deep pocket theory. In tort law, the deep pocket theory states that a defendant must pay even without causing harm when (a) the victim is truly innocent and highly sympathetic, (b) the injuries are severe; (c) the true wrongdoer is unavailable, and (d) the risk of harm was arguably foreseeable to the defendant.[4] This theory can be adapted to contracts where the party with the deeper pockets must overpay. PIF has not caused direct harm to Rory McElroy and other loyal PGA players, however, they have caused harm to American groups. Since the loyal PGA players are highly sympathetic parties, the PGA should dig deep into PIF’s pockets to make the sports washing so thorough that it becomes almost punitive. The PGA would be smart to require the following of PIF: - Pay money to the estate of Jamal Khashoggi including funding journalism scholarships in his name at Saudi and American Universities, - Pay money to families impacted by 9/11, - Consistently fund LGBTQ+ organizations in America and women’s rights and education organizations in Saudi Arabia, and - Sizable contributions to the LGPA Tour if their players approve. In this way, the loyal PGA players would have stayed as true to their moral principles given their options. John Camacho is a graduate of South Texas College of Law where he earned a J.D. and a graduate of the University of Missouri, St. Louis where he received a M.A. in Philosophy. He is also a Co-Founder of The Moral Questions of Sports. He can be reached via Instagram, @themoralquestionsofsports. Sources: [1] Cari Grieb, “A ‘Sterling’ need for reverse morals clauses in sports contracts,” Mar 9, 2015, https://www.millercanfield.com/resources-Should-Athletes-Demand-Morals-Clauses-in-Contracts.html. [2] Miller Canfield, “Is it Time for Athletes to Demand Reciprocal Morals Clauses in Their Endorsement Deals?” Feb. 17, 2017, https://www.millercanfield.com/resources-Should-Athletes-Demand-Morals-Clauses-in-Contracts.html. [3] Shane Ryan, “The 1983 Rebellion: Our latest podcast revisits pro golf’s original crisis” Golf Digest, https://www.golfdigest.com/story/1983-rebellion [4] Victor E. Schwartz, Phil Goldberg, and Christopher E. Appel, “Deep Pocket Jurisprudence: Where Tort Law Should Draw the Line” (2018) Oklahoma Law Review Vol. 70 Number 2, page 404, https://digitalcommons.law.ou.edu/cgi/viewcontent.cgi?article=1319&context=olr.
- The Most Unique Stadium in Europe: Estádio Municipal de Braga
The Municipal Stadium of Braga is one of the most unique soccer stadiums in Europe. Located in the northwest region of Portugal in the Minho District, and finished construction in 2003. What makes the stadium unique is that it was built within a limestone quarry and designed to highlight the contrast between nature and the surrounding city of Braga. The Stadium itself and its lead architect, Eduardo Souto de Moura, have won several awards for the stadium’s beauty. In 2005, the IPPAR (Instituto Português do Património Arquitetónico) declared the stadium a national patrimony due to its significant beauty. Souto de Moura won the Secil Prize in 2005, Pritzker Architect Prize in 2011, and the Wolf Prize in Arts in 2013, all for the incredible design of Braga’s Stadium. With such a unique and beautiful stadium, how did Souto de Moura get his idea into reality within the legal framework of Portuguese building laws? Portuguese law has specific regulations when it comes to public or private projects. In 2013, they passed a decree which established submitting an environment impact assessment (“EIA”) for any project that will likely have a significant impact on the environment. This is to ensure that any project does not negatively impact the environment or destroy the natural beauty of the land. This was enacted after the building of the stadium but when renovations are conducted on the stadium, it will more than likely have to pass the environment impact assessment. But, due to Souto De Moura's emphasis on not taking away the natural beauty of the area to build the stadium, I believe that, if the decree was in effect when construction occurred, they would have been approved. If the stadium was built today it would have had to submit an environmental impact assessment because most of the construction on the project was digging into the limestone quarry. They repurposed the limestone extracted to build the two foundations for the stadium seats. The environmental impact assessment decree also specifically mentions mining as one of the types of actions where one is required to submit an EIA and this project would have certainly needed one. Compared to other major stadiums in Europe, where they have large stands on all four sides of the stadium, the Municipal Stadium of Braga does not. This was to ensure the natural landscape was preserved and the quarry was not completely destroyed. The Municipal Stadium of Braga is one of the most unique stadiums in Europe and breaks the tradition of what a normal large-scale soccer stadium looks like. This was only possible because of architect Souto de Moura's commitment to making a stadium naturally blend into the surrounding landscape and will more than likely fit the relatively recent strict environmental regulations of Portugal. Evan Lautato, Rising 2L at St. John’s University of Law School, 1L Representative for the Entertainment and Sports Law Society, www.linkedin.com/in/evan-lautato-a4bb14178 Links: https://www.nssmag.com/en/sports/32310/braga-estadio-municipal https://www.portugalvisitor.com/portugal-travel/portugal-stadiums/braga-stadium https://uk.practicallaw.thomsonreuters.com/3-500-2889?transitionType=Default&contextData=(sc.Default)&firstPage=true#co_anchor_a930770
- Shadiness in the Swamp: An Analysis of Jalen Kitna’s “Plea” Deal
As reported yesterday by Outkick, former Florida Gators QB Jalen Kitna entered into a plea. He pled to two counts of disorderly conduct with adjudication withheld meaning that Mr. Kitna wasn’t convicted of those offenses. He was sentenced to six months of probation. It is a quite stunning change of events as back in December Mr. Kitna was arrested on five counts of child pornography. Two of the child pornography charges were 2nd-degree felonies punishable by up to 15 years in prison and three charges were third-degree felonies punishable by up to 5 years in prison. Disorderly conduct, however, is a 2nd-degree misdemeanor punishable by up to 60 days in jail. In previous articles, I have spoken extensively about my experiences as a former felony prosecutor and my current experiences as a criminal defense attorney. In my experiences, I have NEVER heard of a child pornography case being amended to disorderly conduct. That is because child pornography cases carry with them high exposure (meaning Judges routinely give significant prison sentences). How is that plea deal possible and why? Here are some possible reasons. Speedy Trial Issues We hear often in the practice of law about speedy trial. However, what is speedy trial in Florida? In the State of Florida, a misdemeanor case must be formally filed and brought to trial within 90 days of an arrest, and a felony case must be filed and brought to trial within 175 days of an arrest. That means the State Attorney’s Office must formally charge a defendant with a felony via indictment (if it is a 1st-degree murder charge) or Information (every other felony charge) within 175 days of the cuffs being put on a defendant. It appears that Jalen Kitna was arrested on December 1, 2022, as evidenced on the Alachua County Clerk’s Website. He was brought to First Appearances shortly thereafter (you have the right in Florida to be brought in front of a Judge within 24 hours of your arrest). As such, an information would need to be filed within 175 days of December 1, 2022. 175 days from that December date would have been May 25, 2023. A search of the clerk’s website turned up that no information was ever filed until today July 5, 2023, and that was for disorderly conduct. “NO ACTION” is the description on the clerk’s website meaning that the child pornography case was never formally filed. An arrest is not sufficient to bring the case to trial. A formal charging document (usually an information) must also be filed. As such, the State was arguably barred from formally charging Jalen Kitna with child pornography. I also see that there was a “Waiver of Speedy Trial” on February 27, 2023. Why would you waive speedy trial when there hasn’t even been an information filed? That doesn’t make much sense. Constitutional Grounds I also considered the fact that there were potential issues with the chain of evidence (how the police came to acquire the evidence against Kitna) opening up the possibility of a motion to suppress. However, no motions were ever filed. There wasn’t even a case management, which is common practice after an arrest. An information was just filed yesterday on the date of the plea and that was to only misdemeanors. Again, that doesn’t make sense either. Common Practice in Alachua County Finally, I considered that not filing the information until right before the plea was just common practice in Alachua County. However, I found another Defendant by the name of Jantzen Lee Weaver who was recently formally charged with child pornography. His case was formally filed on after only 15 days. The case number is 2023CF1549. Additionally, unlike Kitna, that Defendant is still in custody. Also, the clerk’s website has that case labeled as “Filed”. My question is: How does someone with child pornography charges exceptionally get less than a slap on the wrist while similar defendants are facing lengthy prison sentences with formal charges? Why weren’t the child pornography charges ever filed in Jalen Kitna’s case? My opinion is that there was an under-the-table agreement in this case. The Defendant keeps his nose clean, and the State Attorney’s Office won’t formally file these charges. He can plead to misdemeanors. Additionally, he didn’t even plead as charged. Why do you think he didn’t? Even if he got a Withhold, he wouldn’t be able to seal his Florida as child pornography charges as ones that you cannot seal. Darryl Lloyd, Chief Investigator of the State Attorney’s Office stated to the Gainesville Sun, “It’s not abnormal for a 19-year-old to look at images of a 16-year-old or a 15-year-old.” Mr. Weaver, like Mr. Kitna, is also relatively young (Mr. Weaver just turned 22). However, Mr. Weaver is very likely looking at a very lengthy prison sentence while Mr. Kitna wasn't even convicted on two misdemeanors. The final question is why? How is all this possible? This kind of plea deal isn’t a thing. The case doesn’t appear to have suppression grounds. He pled to charges that aren’t even lesser included offenses. My opinion is that he was given that kind of plea deal because he is a Florida Gator, and his father is a former NFL Quarterback. If that is true, as a criminal defense attorney who represents countless indigent clients, I am truly disgusted. That should not be our criminal justice system. Matthew F. Tympanick, Esq. is the Founder/Principal of Tympanick Law, P.A., located in Sarasota, Florida where he focuses his practice on Criminal Defense, Personal Injury Law, and Sports Law. Arrested or Injured? Don’t Panic…Call Tympanick! 1(888)NOPANIC. He is a graduate of the University of Massachusetts School of Law where he served as a Public Interest Fellow and a Staff Editor on the UMass Law Review. He has appeared nationally on television, radio, and podcasts discussing criminal cases specifically sports criminal cases. He was previously a felony prosecutor where he prosecuted thousands of misdemeanor and felony criminal cases. He also has tried over 40 jury and non-jury cases. You can follow him on Twitter, Instagram, and Facebook @TympanickLaw.
- District Court Denies The Brandr Group’s Motion For Temporary Restraining Order
Last Friday, United States District Judge Haywood Gilliam denied The Brandr Group, LLC’s (TBG) Motion for Temporary Restraining Order. The order serves as a major victory for EA Sports and paints a bleak path forward for TBG. TBG is a marketing and licensing agency that has entered into collaboration agreements with over 50 Division I schools, including the University of North Carolina at Chapel Hill, North Carolina State University, and The Ohio State University. According to TBG, as a part of the collaboration agreements, partner schools grant TBG the exclusive right to “develop, implement, and manage the Group Licensing Program” for the school’s athletes. As a part of the program, TBG contracts directly with the athletes, assigning TBG the right to use the athlete’s name, image, and likeness (NIL) in group licensing deals (deals involving three or more athletes). Rather than utilize TBG for licensing with its schools and athletes, EA Sports has partnered with OneTeam partners to facilitate licensing deals directly with athletes and universities. TBG’s temporary restraining order aims to halt EA Sports’ licensing activities. To grant a temporary restraining order, TBG was required to prove, among other elements, (1) irreparable harm and (2) a likelihood of success. As Judge Gilliam asserted in his order, TBG did neither. Judge Gilliam dispensed with TBG’s arguments regarding irreparable harm. As a basis for irreparable harm, TBG must prove that there is an immediate threatened injury. Judge Gilliam found that any injury lacked immediacy as EA Sports will not release the videogame until 2024. Similarly, Judge Gilliam found that any injury can be monetarily compensated. Thus, Judge Gilliam found that TBG cannot prove irreparable harm. Despite finding that TBG failed to prove irreparable harm, Judge Gilliam went on to forecast TBG’s likelihood of success. Specifically, Judge Gilliam pointed to the agreements themselves, which dictate TBG’s group licensing program as co-branding an athlete’s NIL with a university’s intellectual property. Here, Judge Gilliam could not foresee a likelihood of success for TBG because EA Sports is contracting with EA Sports and individual athletes separately. Thus, EA Sports is not obtaining co-branding licenses. Judge Gilliam’s ruling is a setback for TBG, painting a different picture than TBG’s Complaint. At the end of the day, EA Sports avoids pushing back the release date for the new video game. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
- Federal Appeals Court for the D.C. Circuit Paves the Way for Florida Sports Betting Revival
On the final day of June, the U.S. Court of Appeals for the D.C. Circuit released its opinion on the future of Florida sports betting. The opinion is a reversal of the Circuit Court which invalidated the compact between Florida and the Seminole Tribe (“Tribe”). To fully understand this case, it helps to understand some of the history surrounding the main crux of the case: the Indian Gaming Regulatory Act (“IGRA”). IGRA was enacted in 1988 and provided a statutory base for the regulation of tribal gaming. One of the main goals of IGRA was to “promote tribal economic development, tribal self-sufficiency, and strong tribal government”. IGRA also permits states and tribes to enter into contracts for Class III gaming. Class III gaming includes slot machines, house-banked table games like blackjack, and most importantly sports betting. This is where the issues surrounding Florida sports betting grew. Back in 2021, the state of Florida entered into a gaming compact with the Seminole Tribe giving them complete control over the sports betting regime within the state. The compact came into effect after the Secretary of the Interior failed to disapprove the compact within the 45-day deadline. This led casinos and other tribes within the state to bring a lawsuit against the Secretary claiming the allowance of the compact violated IGRA by permitting gaming outside of Indian lands. The appeals court saw this differently. The court stated that IGRA does not prohibit compacts covering areas outside Indian land. Thus, to be sure, an IGRA gaming compact can legally authorize a tribe to conduct gaming only on its own lands. But at the same time, IGRA does not prohibit a gaming compact—which is, at bottom, an agreement between a tribe and a state—from discussing other topics, including those governing activities “outside Indian lands[.]” This stance is different than others that have previously been set by other federal circuits. The opinion goes on to state that the District Court erred in its interpretation of the compact. The District Court erred by reading into the Compact a legal effect it does not (and cannot) have, namely, independently authorizing betting by patrons located outside of the Tribe’s lands. Rather, the Compact itself authorizes only the betting that occurs on the Tribe’s lands; in this respect it satisfied IGRA. Following the release of this opinion, the D.C. court must enter a final administrative mandate of the decision. Essentially this mandate will make the appellate court’s decision final. This will be entered unless the plaintiffs file a timely petition for an en banc hearing. The importance of this decision is emphasized when you look at the history of the Appeals Court for the D.C. Circuit and issuing en banc review. According to Conduct Detrimental’s own Daniel Wallach, the court only accepts about one out of every 500 petitions for en banc review. This means that any petition will be a long shot. Following any denial, the plaintiff may try to take it all the way to the Supreme Court which could delay the re-launch of Florida sports betting by years. Given the stance the D.C. court took in interpreting IGRA, circuits now differ in their opinions which could force the Supreme Court to resolve these differences. So what now? Well, it seems that Florida should be hopeful about sports betting but realistic about the timetable for the actual launch of mobile betting. I would think that, given the number of legal avenues the plaintiffs have for appeals following this decision, Florida will miss yet another year of possible NFL betting revenue. As the filings for review come in, we will be covering those here on Conduct Detrimental. Justin Mader is a licensed Illinois Attorney who focuses on sports and gaming law. He is a graduate of the University of New Hampshire Franklin Pierce School of Law where he earned a J.D. and a Sports and Entertainment Law Certificate. He serves as one of Conduct Detrimental's Producers and Editors. He can be reached via Twitter: @maderlaw.
- Acquisition of Premier Hockey Federation Leaves A Bright but Uncertain Future for Women’s Hockey
The world of professional women’s hockey has been segmented since 2019. On one side, you had the Premier Hockey Federation (formerly NWHL), a professional league founded in 2015, providing an opportunity to play. On the other, you had the Professional Women's Hockey Players Association (PWHPA), formed in 2019 as players were dissatisfied with the operations of the NWHL. On June 30, 2023, it was announced that the PHF will cease all operations as it was purchased by the Mark Walter Group and Billie Jean King Enterprises. The Mark Walter Group has spent the past 14 months working with the PWHPA in a bid to launch its own league. With the purchase of the PHF the Mark Walter Group will be launching a professional women’s hockey league starting in January 2024. But what exactly does this unification mean? While it may not be the messy LIV Golf/PGA saga, this acquisition for unification may not be as clear-cut as it first appears. First, in December 2022, the PHF announced they were doubling the salary cap for the 2023-24 season going from $750,000 to $1.5 million. An amazing announcement that was met with praise, and a seeming step in the right direction. Under the new salary cap, many players signed new contracts this offseason, with some being worth as much as $150,000. Now with the purchase of the PHF, the players are released from these contracts and those deals will not be paid out in full. Instead, players will receive severance and a period of continued health benefits. The PHF severance program pays players 1/12th of their contracted 2023-2024 season salary or $5,000, whichever is greater. The biggest problem is, as everyone knows, that these types of sales do not happen overnight, and the first serious conversations about this purchase started 6 months ago. So, the PHF got to receive the praise of a large salary increase, while being at least aware that the league’s future was uncertain. Second, in the spring the PWHPA was certified as a union and is already in the late stages of CBA negotiations. In the coming days, the players of the PWHPA will be voting on whether to ratify the CBA, and the expectation is that it will be ratified. PHF players who just had their contracts voided will not be participating in the vote on the CBA. Ultimately, the new league will include players from the PHF, PWHPA, NCAA, and international players. Due to this, some players from the PHWPA and PHF will not be on rosters come January 2024. To paint a unification years in the making as merely bad or good is an incorrect notion. So, let’s make it clear that there is good in all this as well. The NHL commissioner has consistently withheld NHL support because he and team owners did not want to get involved in a dispute between “leagues.” But they were open to the possibility of support once there was one league formed. Now that it is the reality of women’s hockey, NHL commissioner Gary Bettman has confirmed they have initiated discussions with the group on ways to work together to grow the game. The PWHPA was born out of concern about pay, benefits, and league viability of the then NWHL. This is why the PWHPA has spent the past months working so hard to negotiate a CBA. The CBA they are voting to ratify includes salaries potentially in the range of $35,000 to $80,000, housing stipends, relocation fees, medical benefits, dental benefits, retirement plans, and maternity/parental leave. PHF players may not be voting on its ratification but would be a part of the union if they play in the new league. The CBA is largely expected to be ratified in the coming days, and, ideally, having a CBA in place protecting players means we will never have to see similar segmentation again. Even more importantly, if this happens it would be the first professional women’s sports league in the United States to have a CBA in place before the start of its first season. The WNBA saw its first CBA 2 years after its first season, and the NWSL did not see its first CBA until 10 years into the league’s existence. The CBA and implementation of a union will put the new league ahead of the PHF in creating a viable league infrastructure while fully treating the athletes as professionals. Ultimately, this unification and this new league is the culmination of four years of PWHPA players standing strong and holding out in their careers. It is also the culmination of four years of PHF players putting themselves and their bodies on the line and playing tremendous games to showcase how exciting women’s hockey games are. It is important to remember the sacrifices of both groups, because, without either group, this bright future for women’s hockey isn’t a reality. Emlyn Goodman is an NCAA compliance professional and women’s sports fan. She can be found on Twitter @emlyngoodman and on LinkedIn at https://www.linkedin.com/in/emlyn-goodman-j-d-b46113113/.
- Mathis' Mantle: Sports Card Trimming and Securities Law Disclosures
Sports card buying, selling, trading, and collecting is simply a pastime for most of those involved in “the Hobby.” But for a select few, it is big business. One of the biggest players in the space, both literally and figuratively, is former First-Team All-Conference offensive lineman and Super Bowl champion, Evan Mathis. Mathis spent over a decade in the National Football League during which time he beefed up his childhood sports card collection, centered around Bo Jackson and Frank Thomas, to include some of the most sought-after and expensive cards in the industry. Likely his crowning achievement in the Hobby came in 2020 when Mathis cosigned and sold his 1953 Topps Mickey Mantle card graded as a PSA Gem Mint 10—the highest grade possible from the most well-respected and valued grading company in the space—on a cite called Collectable. Collectable “connects [their] customers to opportunity”[1] by providing a platform for investors to purchase fractional shares of sports cards, memorabilia, and other historically significant collectibles. If this sounds like a slam-dunk security offering, that’s because it is, and Collectable agrees. The company routinely files offering circulars regarding each of its “Series” offerings with the Securities and Exchange Commission (SEC) that list valuations, number of fractional units or shares per piece, underwriting discounts, and proceeds for the issuer and seller/cosigner. Mathis’s Mantle card was one of only two that had achieved a perfect grade of 10 at the time of the sale and was valued at just over $2.3 million. The legal intrigue comes, over two years later, on April 27, 2023, when Mathis posts a viral TikTok video providing instructions and recommendations on vintage card “trimming” (a massive no-no in the Hobby). He even shows himself doctoring a 1965 Gary Bell baseball card. Vintage sports cards were traditionally hand-cut by someone somewhere in a Topps factory often creating uneven borders and frayed edges. As card centering and edge condition are two of the four major factors that grading companies use in making final grade decisions, card “trimmers” can ensure higher grades and greater returns upon resale should their alterations make it past the grading company’s watchful eye. The post threw the Hobby into a frenzy. Following the TikTok, Hobby pundits grabbed their microphones, and each took turns offering up disdain for the disgraceful actions of Mathis and others like him who condone such things. To his credit, Mathis did accept an offer to join the Ringer Podcast Network’s Sports Cards Nonsense show to defend his position. He waxed poetic about how if this is the evil Hobby-ists want to rage against in the world, then that is their prerogative, and that he saw no harm in trimming or otherwise doctoring vintage cards. A large part of the SEC’s mission is to protect the retail investor from fraudsters. The SEC promulgated Rule 10b-5 to combat the employment of manipulative and deceptive devices regarding the offering of securities. The Rule makes it unlawful to make “any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not misleading”[2] (emphasis added). The “materiality” of such information is contingent on whether there is “substantial likelihood that the disclosure…would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of the information made available.”[3] Traditionally, the fact that a sports card has been trimmed or altered in some way is annotated on the grading company’s encased label. The grading companies do this to put potential buyers on notice that the value of a card is diminished, if not wiped out completely. If Mathis or Collectable had known that the Mantle card included in the fractional offering had been trimmed and failed to disclose that information, it would not be difficult to prove that the omission was material to the reasonable sports card investor and a violation of securities laws. However, Rule 10b-5 does require that the government prove scienter, or knowledge, of the infraction which would be an uphill battle for the prosecution at this point in the story. Since the trimming TikTok was released, both Mathis and Collectable have come out and stated that the Mantle card that was sold off in parts during the securities offering in 2020 was not altered in any way. Following an “investigation,” Collectable again emphasized that the Mantle card had already been graded and hermetically sealed when Mathis purchased it years prior, providing some credibility and legal protection for the platform. But the integrity and legality of fractional sales, specifically of vintage sports cards, will continue to be called into question. There is no apparent upside or financial benefit for Mathis following his decision to upset nearly the entire Hobby. My conclusion echoes the wise words of Alfred Pennyworth, “some men just want to watch the world burn.” [1] https://collectable.com/ [2] 17 CFR §240.10b-5 [3] TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976) Nate Otto is a rising 3L at the University of Florida Levin College of Law and the Executive Articles Editor for the Florida Entertainment and Sports Law Review. Sadly, he is Twitter-less.
- Retiring Goodison Park and The Challenges Everton Face Building Their New Stadium
Everton is one of England’s oldest club teams and was founded in 1878. The Merseyside team built Goodison Park in 1888 and, at the time, it was the largest soccer stadium in England. Goodison Park is a historic soccer stadium and has been the location for more top-flight soccer games than any other stadium in the country. But now, the over 100 year-old stadium is finally being decommissioned, and a new stadium is being built. The new Everton Stadium is set to open for the 2024-2025 season. With the new stadium being built, the club may face many challenges to meet the requirements of a qualified Premier League stadium. All English top-flight teams must meet the criteria laid out in the annually released Premier League handbook, which lays out the standards each team must meet with respect to the team's roster, salary, jerseys, stadiums, and much more. As each new portion of Everton Stadium is built, they must have it approved by the Premier League Board prior to construction beginning. This article will discuss the recent renovations of the new stadium and how they meet Premier League Standards. Everton has made a website giving fans updates on the construction being done. On June 2, 2023, the team uploaded aerial drone footage of the stadium, as well as showing the progress of the dressing rooms and media interview booths. As per the 2022-23 Premier League Handbook, there must be dressing rooms for both teams and separate dressing rooms for the officiating crew. The dressing room must include showers, bathrooms, and changing facilities in a room larger than 30m². Each Stadium must also have a designated space for media personnel. As per the handbook, this space must be a working area for the use of accredited representatives of the media and Broadcasters, and this area must be located in the same stand as the Players’ dressing rooms. It must comprise a room of a minimum 50m² and must be supplied with 25 individual or linked workstations, each of which shall have its own desk, chair, electricity supply, and internet connectivity as set out in Rule K.45. These are just the specific guidelines for the two aspects of the stadium being mentioned in Everton's June 2nd update. Each portion of Everton Stadium must be approved by the League Board prior to construction, and the club, fortunately, appears to be meeting each requirement. Everton is taking the steps to retire one of the most historic soccer stadiums in England and is on pace to give their fans a brand new, updated stadium (meeting the requirements of the league) for the 2024-25 Premier League Season. Evan Lautato, Rising 2L at St. John’s University of Law School, 1L Representative for the Entertainment and Sports Law Society, www.linkedin.com/in/evan-lautato-a4bb14178 Citations: https://resources.premierleague.com/premierleague/document/2023/05/25/33ed7ee2-691b-4689-87a6-a895bf31581c/PL_Handbook_2022-23_DIGITAL_23.05.23.pdf https://www.evertonfc.com/stadium https://www.evertonstadium.com/ https://premierskillsenglish.britishcouncil.org/clubs/everton#:~:text=Everton%20Football%20Club%20was%20founded,brand%20new%20ground%20at%20Anfield.
- Team Mexico Fans' Slurs Leave CONCACAF Seeking Enforcement Mechanisms
While many Team USA fans will be pleased with their 2-0 CONCACAF Nations League victory over Canada on Father’s Day, the biggest story of the Nations League revolves around fan behavior in the semi-final rather than any performance on the pitch. During a month meant to celebrate the LGBTQ+ community and to emphasize inclusion and belonging, Team USA’s match against Team Mexico was stopped under the league anti-discrimination protocol after anti-gay slurs were chanted by Team Mexico fans at American keeper Matt Turner. Despite a warning to the fans prior to the resumption of play, the slurs continued until the match was ultimately abandoned early in extra time under league anti-discrimination protocol. These slurs are not a new phenomenon from Team Mexico fans and have been chanted for years while soccer officials have struggled with creating new ways to manage fan behavior. For many, enough is enough, and according to Cyd Zeigler of Outsports.com, US Soccer indicated that they would enact policy 521-2, which would prevent a team from competing in the United States if their fans chant discriminatory slurs. Despite announcing a hard-line stance prior to the match US Soccer has made no indication that any such ban may be forthcoming. The tension arises from the governing organizations' few options of enforcement that won’t interfere with the outcome of the underlying game. The ending of the game with 8 minutes remaining in stoppage time is the closest CONCACAF has come to any such impact. Nonetheless, with 8 minutes remaining and a three-goal deficit, few fans were left wondering what might have been if the remaining time had been played out. If leagues are unwilling to ban teams from competitions due to the behavior of the fans, the best solution may ultimately be the least attractive. Tickets to sporting events are revocable licenses and subsequently may be revoked when the spectator behaves in a manner that is unacceptable within the venue. CONCACAF should provide extra funding to venues to secure the hiring of additional security staff tasked specifically with the ejection of fans who chant slurs at games immediately. Should the slurs get out of control, a stoppage would be called that will allow staff sufficient time to eject the infringing fans serving as a message to other fans who may consider joining in. Finally, CONCACAF should further insist that host venues pledge a substantial bond prior to hosting an event that is forfeited if the venue is unable to curb the slurs from fans. If a match has to be terminated for failure to stop the slurs, the bond will be automatically forfeited by the host venue to fund additional security staff at future events. Empty words and policies have gone on too long without sufficient action or enforcement. If CONCACAF wants to take a serious step in stopping Team Mexico fans’ use of slurs, they need to put their money where their mouth is and implement a new policy. Chase Youngman is a graduate of Penn State Law where he was the president of the Penn State Law Sports Entertainment Law Society. You can also find him on Twitter as @c3youngman.
- MASN Agrees To Pay Nationals
Earlier this week, Mid-Atlantic Sports Network (MASN), which is owned by the Baltimore Orioles and Washington Nationals, agreed to pay the Nationals nearly $100 million to resolve the fees the network owes the team from 2012-2016. One item remains, the network and team must resolve the fees owed from 2017-2021. When Major League Baseball, which owned the Montreal Expos, proposed moving the team to Washington in 2004, Orioles owner Peter Angelos raised concerns over sharing territory with the Nationals. Thus, Major League Baseball reached an agreement with the Orioles to form MASN, giving the Orioles an initial 90 percent stake in the network and the Nationals a 10 percent stake. After two years, the Nationals’ stake would increase by 1 percent each season until the Nationals’ stake reached 33 percent. Initially, the teams would be paid the same rights fees by MASN, which the parties could revisit every five years. In 2012, the first year the Nationals could renegotiate rights fees, the team argued that they were not paid fair market value from MASN for their rights. After failing to come to an agreement, the Nationals took the issue to arbitration. The first arbitration in front of Major League Baseball’s Revenue Sharing Definitions Committee (RSDC) failed due to a New York trial court vacating the award due to the RSDC’s failure to address evident partiality. At the time, the law firm representing the Nationals was currently or previously representing Major League Baseball and the teams employing the members of the RSDC. The Orioles requested that the RSDC preclude the firm from the proceedings, but the RSDC declined, and the proceeding continued. In 2019, a second RSDC panel awarded $105 million to the Nationals. MASN appealed the award to the New York appellate court, arguing that the panel was not impartial and that the dispute required a new forum. In April, a New York appellate court upheld the $105 million arbitration award, finding that by replacing the panel members, the first proceedings did not taint the second RSDC panel. To resolve the award, the network has agreed to pay nearly $100 million to the Nationals. Now, MASN and the team must determine the fees owed to the Nationals from 2017-2021. Once finished, the Lerner family may move forward with selling the team. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
- Former Scouts File Lawsuit Alleging Age Discrimination Against MLB
Over the last several years, it’s undeniable that front offices across Major League Baseball have become more analytically driven. As a result, many that cover and follow the sport have wondered about scouts and their place in the modern game. While Moneyball and the success of organizations like the Houston Astros have certainly validated the concept of valuing analytics, the common sentiment you’ll hear is that a blend of the subjective evaluations and the objective data is the best approach to building a winning baseball team. However, that has not stopped every club from downsizing their “old school” scouting departments in favor of the “new school” analytics. In fact, a group of 17 former scouts filed a class action lawsuit against MLB this week alleging age discrimination, understandably upset about the ongoing trend. The lawsuit was filed in US District Court in Denver, asserting that “older scouts” have been “blacklisted” for re-employment in MLB and contending that the league used analytics as an “ongoing pretext for coordinated and systematic discrimination based on age.” It’s worth noting that the plaintiffs range from age 55 to 71, and most held scouting positions in the game for at least 30 years. Some important context to introduce is that many of these scouts were let go in 2020 amid COVID-19, when MLB and its clubs obviously lost significant revenues. The suit alleges that MLB used the pandemic as an opportunity to terminate an entire class of older employees more susceptible, on the basis of age, to the COVID-19 virus.” With the 2020 season wiping out all ticket revenue and significant television revenue, scouts may have been the first cuts in MLB front offices looking to reduce expenses. Rick Ingalls, a scout for nearly four decades, told the Los Angeles Times that “we believe the commissioner and the owners colluded to eliminate veteran personnel because of salaries.” The lead attorney representing the plaintiffs, Robert Goodman, also told the Los Angeles Times that the scouts gained their “inspiration” from MLB’s settlement with minor league players who sued over wage-law violations earlier this spring. The suit also contains other interesting allegations that MLB terminated the use of the “scouting wire” platform that allowed scouts to get hired and that clubs relied on a false stereotype that only younger scouts held a strong understanding of analytics. MLB quickly released a statement responding to the lawsuit, reading as follows: “We do not comment on pending litigation, however, we look forward to refuting these claims in court.” While they settled with the minor leaguers, that statement reads that the league might not take the same approach in this case. The class action complaint claims that “it is estimated that there are over 100 Older Scouts within all such classes” that could potentially join and that upwards of $100 million in damages is on the table. There has certainly been no shortage of legal news in baseball recently. The minor league wage violations and ensuing CBA, the potential challenge to baseball’s antitrust exemption, and the Diamond Sports bankruptcy saga are just a few examples of the intersection of baseball and the law. As always, stay tuned to both the Conduct Detrimental podcast and website for the latest coverage of all things sports law. Brendan Bell can be found on Twitter @_bbell5.
- Taking the Top off the Tyreek Hill Battery Allegations
It was reported Tuesday evening that Dolphins’ star WR Tyreek Hill was under investigation for assault/battery in Miami for an alleged physical altercation that occurred at the Miami Beach Marina. Mr. Hill allegedly hit a marina employee during a “disagreement” that took place on Sunday, June 18th. According to Andy Slater, the allegations were that Hill slapped the employee on the back of the head but that the employee has declined to press charges at this time. Yesterday, June 21, 2023, Slater followed up this scoop with another that law enforcement sources told him that they were declining to press charges. Case closed, right? Wrong. According to Miami PD, “The investigation into the alleged battery by Tyreek Hill continues. Any reports saying it is over are not accurate.” So where is this case, currently? As far as I can tell, it is still under investigation. Additionally, @IanMargolWPLG included a redacted copy of the police report on Twitter. As reported in the police report, “The alleged victim observed two unknown females on one of the fishing charter boats without permission. He was told by the boat captain to advise the females to get off the boat. A verbal altercation broke out between the Kelly Fishing Fleet and the females on the boat and their male companions that turned physical when Tyreek Hill allegedly slapped the alleged victim on the back of the neck with an open hand.” It should also be noted that the subject (i.e. Hill) was being pushed away from the altercation. Law enforcement observed no visible injuries, but this alleged altercation was captured by video surveillance cameras. What does this all mean? I have previously stated on Twitter that likely nothing would ultimately come of this. By that I mean, Tyreek Hill isn’t likely going to be convicted of this alleged battery. That is because this alleged battery is non-domestic in nature. Though hitting a random stranger is legally a battery, law enforcement and State Attorney’s Offices often shy away from filing said cases. That is because with battery cases law enforcement is trying to prevent domestic battery (ones with romantic relationships: girlfriend/boyfriend, husband/wife, etc.) Additionally, it was also noted in the police report that no injuries were observed. Even with alleged video surveillance of this incident, with no injuries, what jury is going to care? In my experience as a former felony prosecutor, I would decline to file formal charges if I were the prosecutor. That is because it sounds like a tussle where nobody was injured. Additionally, it was noted in the police report that Tyreek Hill was touched first and as such would have the right to defend himself if he felt threatened. Could Hill be charged? It is possible, yes. They sound like they now have a cooperative victim and video surveillance of this incident. Could they charge Hill with trespass? Sure, if this alleged altercation occurred on this boat and Hill jumped onto the boat. Could they charge Hill with a lesser included offense of disorderly conduct? Yes, however, no matter the charge the analysis is the same. Why would any jury care? Would a jury care if he jumped onto the boat to defend the females he was with? No. I have tried 40+ jury and non-jury civil and criminal trials ranging from low-level crimes to 1st-degree felonies, and I can promise you this, juries cannot stand having their time wasted. This is what this case looks like. Unless egregious facts come to light that haven’t previously been reported, this case will unlikely end with a battery conviction for Tyreek Hill. Matthew F. Tympanick, Esq. is the Founder/Principal of Tympanick Law, P.A., located in Sarasota, Florida where he focuses his practice on Criminal Defense, Personal Injury Law, and Sports Law. Arrested or Injured? Don’t Panic…Call Tympanick! 1(888)NOPANIC. He is a graduate of the University of Massachusetts School of Law where he served as a Public Interest Fellow and a Staff Editor on the UMass Law Review. He has appeared nationally on television, radio, and podcasts discussing criminal cases specifically sports criminal cases. He was previously a felony prosecutor where he prosecuted thousands of misdemeanor and felony criminal cases. He also has tried over 40 jury and non-jury cases. You can follow him on Twitter, Instagram, and Facebook @TympanickLaw.