Yesterday, legendary New Orleans Saints' coach Sean Payton and his wife, Skylene Montgomery, were sued in the United States District Court for the Northern District of Florida. The plaintiffs, Hanford Farrell III and Brett Finkelstein, allege Payton and Montgomery agreed to sell them their Alys Beach, FL property for $7,200,000 in June of 2021. Payton had received the property, on which he built a three-story, 3200 square foot vacation home, earlier in 2013 as part of a divorce settlement. The closing date for the sale of the property was set to be August 13, 2021. According to the complaint, however, Payton changed his mind and refused to proceed with the closing. On August 4, 2021, Payton sent plaintiffs a notice purporting to terminate the contract. Plaintiffs say Payton reasoned that he was unable to complete a 1031 exchange with a property he planned to buy in Idaho, and thus was no longer looking to sell his Florida home. The plaintiffs are not satisfied with that reasoning. They say the parties' purchase and sale agreement contained no contingency on completing the Idaho deal. Plaintiffs filed a demand for arbitration against Payton, as required by the purchase and sale agreement. A final hearing was scheduled for February 28, 2022; however, on January 12, 2022, Defendant Payton’s counsel moved to continue the Final Hearing on the grounds that he was having an elective medical procedure that would require physical therapy. Thus, on January 15, 2022, the arbitrator stayed the case until at least March 31, 2022. Shortly thereafter, on January 25, 2022, Sean Payton announced his retirement as the head coach of the Saints. Plaintiffs claim that this was all orchestrated to change the status quo of the Florida property to a homestead. To qualify for homestead exemption, homeowners must occupy their property as their permanent residence. Plaintiffs claim such change in the status of the property from non-homestead to homestead would impact and create a significant obstacle to their ability to obtain specific performance of the sale agreement with Payton. Did Sean Payton retire as head coach of the New Orleans Saints in order to keep his property?? In the complaint, plaintiffs say, "upon information and belief, Defendants Payton and Montgomery have actively taken steps to establish the Property as their new homestead by, inter alia, moving in, directing their mail to, and other setting up a permanent residence at the Property, with the intent to hinder, delay and avoid Plaintiffs’ legal rights and interests therein." Payton's primary residence was previously located in New Orleans, Louisiana, where he coached the Saints. In order the achieve the homestead status, Payton would need to show occupation of the Florida property as his permanent residence. Thus, coaching the Saints wouldn't be feasible. Would Payton really step away from a city and team that he inspired and loved for 15 years just for a house? Plaintiffs seek declaratory relief for specific performance of the sale of the property and injunctive relief to thwart defendants from changing the status quo of the property or re-deeding the property into their names. Jason Morrin is a third-year law student at Hofstra Law School in New York. He is the President of Hofstra’s Sports and Entertainment Law Society. Additionally, he is a Law Clerk at Geragos & Geragos. He can be found on Twitter @Jason_Morrin.

On March 3, Los Angeles Dodgers pitcher Trevor Bauer announced on Twitter that he filed a defamation lawsuit in federal court against the sports news website Deadspin. In his legal complaint, Bauer alleges that Deadspin published an article covering his sexual assault allegation and that the article included false statements that were defamatory in nature. In May of 2021, a woman accused Bauer of sexually assaulting her after the two met up several times a month before. In response to these accusations, the Dodgers Pitcher was placed on administrative leave in July of 2021. Bauer later agreed to extend his administrative leave through the remainder of the season. Around this time, Major League Baseball initiated an investigation into this matter, which is currently ongoing. Later last summer, his accuser filed a temporary ex parte restraining order, which she requested to be made permanent. This order was denied by a Los Angeles County Superior Court Judge and the ex parte restraining order was dissolved. As for the criminal investigation into the alleged unlawful conduct, prosecutors last month decided not to bring charges against Bauer for this incident. Bauer claims that Deadspin published an article on July 6, 2021, titled “Trevor Bauer should never pitch again” and in this article claimed that his accuser suffered a fractured skull by the pitcher. He alleges that this article is part of a malicious campaign against him by Deadspin. For a plaintiff to prove defamation, they must show the defendant made a false statement, that the statement was published to a third party, the defendant exhibits fault, and the plaintiff suffered some harm. Bauer and his attorney are likely to succeed on proving that Deadspin made a false statement, that the statement was published to a third party, and that he suffered some harm from the publication. If his legal complaint is accurate, the complainant’s medical records do not show that she suffered a skull fracture and that there was no initial CT scan that showed a skull fracture. Thus, Deadspin’s statement that she suffered a skull fracture was a false statement. This statement was published in an article on Deadspin’s website and links to the article were shared on Twitter and Facebook. Bauer claims that the publication of these statements has caused harm to his reputation, anguish, humiliation, embarrassment, and financial loss. As for the fault element of defamation, a public official, such as Bauer, must prove the defendant had actual malice in publishing a defamatory statement. Actual malice may be proven by showing the defendant published the statement when they knew it was false or the defendant acted with reckless disregard for the statement’s truth or falsity. Courts generally examine defamatory statements in light of the entire publication and not just the alleged defamatory statement. Bauer’s attorney might have a difficult time proving that Deadspin published the July 6 article knowing the statement about the skull fracture was false. At that time, it might not have been readily apparent that his accuser did not suffer from a skull fracture because of Bauer’s conduct. His complaint argues that since other sports news sites, such as ESPN and The Athletic, issued corrections explaining they mistakenly reported there was a skull fracture before July 6, that Deadspin must have known that the statements were false. Bauer also alleges that there was actual malice because this article was one of numerous articles that constitute a malicious campaign against him. However, proving actual malice does not require the defendant to have acted intentionally, they must have acted with knowledge that the statements were false or with reckless disregard for their truth. Deadspin might raise the defense of retraction, which shields a defendant who made a defamatory statement from being liable so long as they issue a retraction of the allegedly defamatory statement. According to a USA Today article, Deadspin issued a statement explaining that a CT scan found no skull fracture. If Bauer can somehow overcome this defense and prove Deadspin initially knew the statement about a skull fracture was false, he is likely to win in court. Andrew Wise is a third-year law student at the George Washington University Law School in Washington, D.C. He is passionate about baseball, especially minor league baseball, and college football. You can follow Andrew on Twitter and/or on LinkedIn. Image via The New York Times (Katelyn Mulcahy/Getty Images)

As the weeks turn and we head towards another self-imposed deadline by the MLB to strike a deal prior to cancelling more of the MLB season, I think many are hopeful (at least some headlines are) that, in some sort of short term, the MLB lockout will end. It’s natural to feel this way, human beings for the most part are optimists. It’s easy to hope that the two sides will eventually feel the pressure to start the season, check their egos at the door, and slap the table on a common-sense deal that pays both sides and allows us to get back to our hot dogs, apple pie, Budweiser and Saturday matinees that we love as Americans. I think the more we read the tea leaves, however, the more we see that may be misguided. Based on how determined both sides appear to get what they want, this labor negotiation may have us headed towards a large portion of the season, or longer, without baseball being played. By all accounts, both sides of this negotiation have seen this stalemate coming for the past couple years. The MLB owners admitted (according to media reports) that they are fully prepared to miss at least the first month of games. Assuming they aren’t showing all their cards, it probably means that they are fully prepared to miss significantly more of the season, possibly the entire season. From a business perspective, that’s certainly understandable. The owners would have been smart enough to insulate themselves, to some extent, from a protracted labor battle completely crippling their businesses and killing their negotiating power. Licensing deals, gambling promotions, restaurant investments: all of these would have likely been structured to provide some soft padding in the even the players decided to hold out for a larger portion of the pie. Further, I think part of the reason we haven’t seen the owners move substantially off their current negotiating positions, despite public pressure, is that they don’t feel they have to. The MLB owners surely know by now that they have been vilified by the national media for their reluctance to negotiate. But the dirty little secret here may be that they don’t really have to care. They know that the second they strike a deal, fans will begrudgingly return, sportsbooks will line up at their doors for partnership deals, and TV broadcast rights will continue to exponentially grow. So, while most of the public believes that they are under extreme pressure to play baseball, I don’t think they actually feel that. This may be partially because they pay Rob Manfred to be their meat shield and field the tough questions they don’t want to answer, but it’s also part of the reason that we have gotten to this point. There’s at least a significant portion of the ownership that does not have the romantic attachment to the sport that fans do. They see dollars and cents, and they are determined to squeeze every last cent out of the players in this negotiation. Simultaneously, I think the players are more determined, united, and prepared than ever before to turn this into a protracted legal battle. I think that the overwhelming public support for their positions will embolden them to continue the fight to get what they want, even if it takes most of the season, or beyond, to do it. Rob Dibble indicated, and based on the solidarity of the players I would say his instincts are accurate (along with the fact that they have the excess funds to pay for stadium workers’ salaries), that the MLBPA has a sizeable amount of money prepared to float the salaries of the less financially secure members for an extended period of time. They know the owners have carefully crafted their businesses to shield a significant portion of the revenue generated by their play from ever being part of these negotiations, and are determined to change the slice of the pie they receive and the way that teams operate with regards to competitiveness. I think for the players, however, the rift with the owners cuts a little deeper to them as people, as Rob Dibble articulated. Players want to be viewed as partners in this business, being that they are the product, not just the people that make the product. I personally don’t believe that the owners will ever accept that, and that mistrust is the real issue at the heart of this negotiation, beyond all the dollars and cents. That’s not exactly revolutionary to say, as it’s the case with every sports labor negotiation, but here it seems that divide is as great as it’s ever been. Unfortunately, I think that will ultimately make each side more determined to get what they want, and that will drag this battle out well beyond the dog days of summer when we should be lining up who’s contending for a World Series title. Michael DiLiello is an Army Officer transitioning to the Sports Law field and will enroll as a 1L in the Fall of 2022. His opinions are purely his own and do not reflect the opinions of the United States Army, the Department of Defense, or any other external agency. Twitter: @Mike_DiLiello LinkedIn: http://linkedin.com/in/michael-diliello-1057b439 Image via The New York Times

There is an old adage that, every time you go to a ballgame, you have the chance to see something that you’ve never seen before. For sports and historical observers alike, something is happening in London that nobody has ever seen before. Yesterday, the UK government announced sweeping sanctions against several Russian oligarchs, as part of “efforts to isolate [Vladimir] Putin and those around him.” One of those sanctioned was Roman Abramovich, longtime Putin associate, one of the richest people in the world, and—at least for now—the owner of Chelsea Football Club, currently one of the best soccer teams in the world. The unprecedented government sanctions freeze Abramovich’s assets and prevent him from entering the UK. Abramovich likely saw the writing on the wall, announcing last week that he was putting Chelsea up for sale and placing the club under the “stewardship” of Chelsea’s charitable foundation. Since taking control of Chelsea almost 20 years ago, Abramovich’s spending turned the club from Premier League also-rans to a global powerhouse—the Blues are defending champions of Europe and perennial title contenders in England. Now, if the club is sold, it looks like that money will go somewhere else. According to Nadine Dorries, UK Secretary of State for Digital, Culture, Media, and Sport: “If the club is sold, Abramovich will not benefit.” Yesterday's sanctions effectively put Chelsea under government control. The club is now being run pursuant to a special license, with strict limits on spending. Chelsea is allowed to pay players and staff and play matches; at the time of writing, the men’s team are taking on Norwich in the Premier League, while the women’s team faces West Ham in the Women’s Super League. Season ticket holders and those who purchased single-game tickets before yesterday are allowed to attend games. But the club is not allowed to sell new tickets or merchandise. As of this morning, Chelsea’s shirt sponsor, telecommunications company Three, suspended its deal with the club, citing the government sanctions. Other sponsors presumably will follow suit. The government’s action raises a host of other practical, legal, and contractual issues to monitor. For instance, Chelsea is prohibited from signing new players, extending the contracts of current ones, or transferring players under contract to other teams. The transfer market value of Chelsea’s global superstars could be skewed should the club get into (deeper) financial trouble). CFC is allowed to fulfill contractual obligations by paying the players, but there will soon be much less money coming in. As it stands, Chelsea is only allowed to spend a fraction of what it would likely take to travel to and host upcoming Champions League and Premier League matches. The decision will also likely involve a trickle-down effect for those who rely on club-related income, like vendors and other business partners. A quick sale would seem to benefit all parties, which gives rise to interesting deal-making dynamics: does the situation lead to a quick below-market sale, given the club’s possible lack of leverage; or does it spark a bidding war for the chance to take control of one of world football’s premier institutions. Time will tell, but expect sports owners and wealthy concerns from all over the world to kick the tires on a potential deal. One thing is certain: Chelsea Football Club is entering a new era. Blues fans, who have asked to be involved in any sale of the club, will be hoping the club remains Champions League regulars, rather than the mid-table side of the 1990s and early-2000s. The UK government and neutral observers alike will be hoping for a quick resolution to Abramovich’s mercurial tenure in the Premier League. Ben Shrader is a partner at Hart McLaughlin & Eldridge in Chicago, where he serves as Chair of the Chicago Bar Association Sports Law Committee. You can reach Ben at [email protected], connect with him on LinkedIn, or find him on Twitter @BenShrader.

Prior to Thursday night’s game between the Brooklyn Nets and Philadelphia 76ers, reports surfaced that former Sixer Ben Simmons is expected to file a grievance against the organization. Simmons and his representatives are seeking to utilize his return as a member of the Brooklyn Nets to support his claim. Specifically, in his grievance, Simmons will argue that the negative publicity and targeting from fans and the organization furthered his mental health issues. Simmons’s Stint with the Sixers The Sixers selected Simmons with the number one pick in the 2016 NBA Draft after Simmons averaged 19.2 points, 11.8 rebounds, and 4.8 assists per game at Louisiana State University. Unfortunately for Simmons and the Sixers, Simmons was injured prior to the 2016-2017 season, forcing him to sit out the year. Simmons bounced back in the 2017-2018 season and won the Rookie of the Year Award. For the following three seasons, Simmons was named an All-Star. After the Sixers were bounced from the playoffs last season, fans and coaches questioned whether Simmons could lead them to the Sixers’ ultimate goal of an NBA Championship. The negative publicity and decreasing faith in Simmons’s abilities led to Simmons demanding a trade from the Sixers. With the Sixers unable to find a trade partner, Simmons sat out most of the season citing mental health issues. Due to Simmons sitting out until he was traded on February 10, 2022, Simmons accumulated around $20 million in fines from the Sixers. Even though the Sixers traded Simmons, he has yet to suit up for the Nets, and reports are that he will not take the floor on Thursday versus the Sixers. Issues Surrounding Simmons’s Grievance The Sixers have never questioned the legitimacy of Simmons’s mental health claims. The issue is that Simmons refused to visit the team doctors regarding his mental health. Reports have stated that Simmons visited professionals through the National Basketball Players Association (NBPA). However, the Sixers have not received any information regarding his mental health nor a plan to get Simmons back on the court. The Collective Bargaining Agreement between the league and the NBPA requires each player and team to sign the uniform player contract attached as Exhibit A to the CBA. Section 5(c) of the contract states: For any violation of Team rules, any breach of any provision of this Contract, or for any conduct impairing the faithful and thorough discharge of the duties incumbent upon the Player, the Team may reasonably impose fines and/or suspensions on the Player in accordance with the terms of the CBA. Therefore, if Simmons were to breach his contract with the Sixers, the team may reasonably impose fines. Section 7 covers the Physical Condition of the player, including the following provisions under subsections e and h: (e) Should the Player suffer an injury, illness, or medical condition, he will submit himself to a medical examination, appropriate medical treatment by a physician designated by the Team, and such rehabilitation activities as such physician may specify. (h) A player who consults or is treated by a physician (including a psychiatrist) . . . shall give notice of such consultation or treatment to the Team and shall provide the Team with all information it may request concerning any condition that in the judgment of the Team’s physician may affect the Player’s ability to play skilled basketball. Due to Simmons failing to see a team-designated physician and failing to provide the team with information from any visitations to outside physicians, the Sixers take the position that Simmons breached the contract, and the Sixers may impose fines. In this case, the Sixers fined Simmons $360,000 for each missed game. Without knowing the exact basis of Simmons’s claim, there could be another issue with the timing of Simmons’s grievance. Per Article XXXI, Section 2(a), Simmons must initiate a grievance within thirty (30) days from the date of the occurrence upon which the grievance is based. If the basis of the grievance is the Sixers fining Simmons for sitting out, the Sixers could argue that Simmons’s claims are time-barred due to the initial occurrence being at the beginning of the season. For Simmons and his representatives, there could be value in taking a shot and trying to claw back some of the money. Even so, due to the contract between Simmons and the Sixers, it appears that Simmons has an uphill battle ahead. Originally Published on offthecourtdocket.com 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.

I was quite wrong, almost comically wrong as the players and owners got a deal done the day after this piece was posted. Based on the reported agreement, this appears to be close to the middle ground of the initial starting points of the owners and players ($230 million, escalating to $244 million CBT; $700k, escalating to $780k minimum salary; and a $50 million pre-arbitration bonus pool). What the terms indicate, at least after an initial glance, is that the owners appeared to be much more motivated to make a deal happen than I assumed. Throughout the negotiation, it seemed the owners, through their arbitrary deadlines and lowball offers, were negotiating with the ultimate goal of creating an impasse, which would give them the ability to re-instate the pre-lockout terms and force the pressure back on the players to continue the work stoppage. That assumption now seems misguided, and may indicate that the owners had much more to lose, and much less financially security, than I originally anticipated. All in all, this deal feels like progress for the players, as they gained plenty of concessions that will discourage teams from manipulating player service time and discourage outright abysmal tanking. For the fans, it means we’ll get the full 162 game season (despite the MLB initially implying otherwise), along with our hot dogs and Budweisers, and for that I’ll happily accept that I was completely incorrect. My original piece follows. Dig In: We Could be Headed for a Long Labor Fight Between MLB’s Owners and Players By Michael DiLiello 3/9/22 As the weeks turn and we head towards another self-imposed deadline by the MLB to strike a deal prior to cancelling more of the MLB season, I think many are hopeful (at least some headlines are) that, in some sort of short term, the MLB lockout will end. It’s natural to feel this way, human beings for the most part are optimists. It’s easy to hope that the two sides will eventually feel the pressure to start the season, check their egos at the door, and slap the table on a common-sense deal that pays both sides and allows us to get back to our hot dogs, apple pie, Budweiser and Saturday matinees that we love as Americans. I think the more we read the tea leaves, however, the more we see that may be misguided. Based on how determined both sides appear to get what they want, this labor negotiation may have us headed towards a large portion of the season, or longer, without baseball being played. By all accounts, both sides of this negotiation have seen this stalemate coming for the past couple years. The MLB owners admitted (according to media reports) that they are fully prepared to miss at least the first month of games. Assuming they aren’t showing all their cards, it probably means that they are fully prepared to miss significantly more of the season, possibly the entire season. From a business perspective, that’s certainly understandable. The owners would have been smart enough to insulate themselves, to some extent, from a protracted labor battle completely crippling their businesses and killing their negotiating power. Licensing deals, gambling promotions, restaurant investments: all of these would have likely been structured to provide some soft padding in the even the players decided to hold out for a larger portion of the pie. Further, I think part of the reason we haven’t seen the owners move substantially off their current negotiating positions, despite public pressure, is that they don’t feel they have to. The MLB owners surely know by now that they have been vilified by the national media for their reluctance to negotiate. But the dirty little secret here may be that they don’t really have to care. They know that the second they strike a deal, fans will begrudgingly return, sportsbooks will line up at their doors for partnership deals, and TV broadcast rights will continue to exponentially grow. So, while most of the public believes that they are under extreme pressure to play baseball, I don’t think they actually feel that. This may be partially because they pay Rob Manfred to be their meat shield and field the tough questions they don’t want to answer, but it’s also part of the reason that we have gotten to this point. There’s at least a significant portion of the ownership that does not have the romantic attachment to the sport that fans do. They see dollars and cents, and they are determined to squeeze every last cent out of the players in this negotiation. Simultaneously, I think the players are more determined, united, and prepared than ever before to turn this into a protracted legal battle. I think that the overwhelming public support for their positions will embolden them to continue the fight to get what they want, even if it takes most of the season, or beyond, to do it. Rob Dibble indicated, and based on the solidarity of the players I would say his instincts are accurate (along with the fact that they have the excess funds to pay for stadium workers’ salaries), that the MLBPA has a sizeable amount of money prepared to float the salaries of the less financially secure members for an extended period of time. They know the owners have carefully crafted their businesses to shield a significant portion of the revenue generated by their play from ever being part of these negotiations, and are determined to change the slice of the pie they receive and the way that teams operate with regards to competitiveness. I think for the players, however, the rift with the owners cuts a little deeper to them as people, as Rob Dibble articulated. Players want to be viewed as partners in this business, being that they are the product, not just the people that make the product. I personally don’t believe that the owners will ever accept that, and that mistrust is the real issue at the heart of this negotiation, beyond all the dollars and cents. That’s not exactly revolutionary to say, as it’s the case with every sports labor negotiation, but here it seems that divide is as great as it’s ever been. Unfortunately, I think that will ultimately make each side more determined to get what they want, and that will drag this battle out well beyond the dog days of summer when we should be lining up who’s contending for a World Series title. Michael DiLiello is an Army Officer transitioning to the Sports Law field and will enroll as a 1L in the Fall of 2022. His opinions are purely his own and do not reflect the opinions of the United States Army, the Department of Defense, or any other external agency. Twitter: @Mike_DiLiello LinkedIn: http://linkedin.com/in/michael-diliello-1057b439 Image via The New York Times

This year’s Men’s and Women’s Division I Basketball Tournaments, also known as “March Madness,” marks the first time in tournament history that college athletes will be able to cash in on name, image and likeness (NIL) deals since NCAA rule changes and state laws went into effect that allow college athletes to monetize their NIL. Drew Timme, the Gonzaga University basketball star who broke the internet with his signature handlebar mustache in last year’s March Madness tournament, has signed a NIL deal with Dollar Shave Club. Dollar Shave Club is calling Timme the first and only “Chin-fluencer,” a reference to the smooth chin he had because of the handlebar mustache. The sponsorship with Timme is part of the brand’s “Noticeably Smooth” marketing campaign, which will also include a television commercial that will broadcast nationally during the March Madness games. The campaign also includes a chance to win tickets to this year’s Men’s Final Four for participants who share a photo entry (a “chin-try”) on Instagram or Twitter of their smooth chins, tagging the brand and using the hashtag #chintry. Timme’s NIL deal with Dollar Shave Club represents a new era of athlete marketability during March Madness. Other brands and college basketball players have also entered into NIL deals prior to the start of March Madness. Yahoo Sports recently announced that it signed Timme’s Gonzaga teammate Chet Holmgren and Duke University’s Paolo Banchero, both predicted to be top picks in this year’s NBA draft, to NIL deals to supports its Yahoo Sports Tourney Pick’em bracket game for March Madness. Outback Steakhouse launched a campaign with both men’s and women’s college basketball players, where the restaurant chain is promoting their favorite menu items. Candy Digital is rolling out its “Candy Sweet Futures Basketball” NFT collection from March 7 – 21 for eight college basketball players just in time for March Madness. The NCAA brought in $1.15 billion of revenue for 2021, most of which was generated by the Men’s Division I Basketball Tournament. The NCAA’s rules, however, prohibit college athletes from receiving any payments, directly or indirectly, from the March Madness revenue for their athletic participation. The new NIL rules, however, now give college basketball players, like Timme, an opportunity to have a piece of the March Madness pie by allowing them to profit from NIL deals during March Madness. This is March, let the NIL madness begin. Ryan Whelpley is an Associate at Morse in Waltham, Massachusetts, where he is a member of the firm’s Corporate Practice Group and focuses on venture capital financings, M&A transactions, and general corporate work for startup and emerging growth companies. He is a graduate of Albany Law School (2019) and Union College (2016). At Union, Ryan was a member and three-year captain of the Men’s Basketball Team. You can connect with him via LinkedIn.

I. Introduction/History of the Collective Bargaining Tax Major League Baseball (MLB) came to an agreement with the players association (PA) last week, ending a 99 day lockout implemented by MLB. One of the biggest sticking points in the current negotiation was the owners’ unwillingness to budge on the parameters of the competitive balance tax (CBT).[1] The CBT serves the purpose of the MLB’s unofficial salary cap. Essentially, teams are penalized if the average annual value of their player contracts exceeds the given tax threshold. The fine becomes even greater the more a team exceeds the threshold, and there is the possibility of losing draft capital. The CBT has been relatively successful acting as a pseudo salary cap. Throughout the CBT’s history, only six franchises have ever exceeded the CBT multiple times, and just three of those teams have done it more than twice.[2] A common trend amongst teams that have violated the threshold has been to quickly get below it every few years, resetting the penalties and avoiding additional penalties for repeat offenders. Even though the CBT has played its role as a “soft cap,” it is clear that was not enough for owners. The owners’ goal was clear: alter the CBT to serve as a hard cap that teams cannot exceed without facing serious ramifications. Throughout the CBA negotiations, owners were pushing for stiffer penalties while maintaining the thresholds from the previous CBT. Although the two sides moved closer on the threshold number on Monday, March 7, the discrepancy between the two sides remained large. This gap comes from the two sides’ differing ideologies on what the CBT is doing for the sport. II. The Parties’ Positions The owners believe the CBT is promoting competitive balance, while the players believe it is suppressing their salaries. It is challenging to determine which side is correct in their position. There is no hard data that proves the CBT helps maintain competitive balance by keeping teams to spending roughly around the same amounts. Comparing the 2021 Tampa Bay Rays to the 2021 Los Angeles Angels exemplifies this. The Tampa Bay Rays had a total payroll of $60,388,600 in 2021, while the Los Angeles Angels had a payroll of $177,353,000 in 2021.[3] The Rays were 100 game winners and AL East champions, while the Angels won a measly 77 games and came in fourth in the AL West. There is no guarantee the soft salary cap function of the CBT will maintain competitive balance within the sport. There is a finite amount of money in baseball, contrary to what the players and the media portray. The owners were unwilling to raise the CBT because they already made concessions by raising the minimum salary by $130,000 and creating a bonus pool to pay the top 30 young players for their achievements. From their perspective, these implementations will help young players be compensated for their worth without raising the CBT, which in turn will help maintain competitive balance. The reality of the CBT is that it cannot force teams to spend, nor can it force teams to stay under its threshold. There is also no hard data proving the CBT is suppressing player salaries. It is true teams have a certain amount they can spend on players before being penalized, but raising the threshold does not guarantee that teams will spend more. As mentioned earlier, there have only ever been six teams to exceed the CBT multiple times. The rest of the league does not scratch the surface of the threshold year over year. Yes, raising the threshold may allow the big spenders to spend more, but it does not mean mid-small market teams will spend more. The players are firm in their position that a higher CBT threshold will lead a majority of teams to spend more, ultimately raising player salaries. Over time, owners make more money while the CBT deters spending. The players believe even if raising the threshold cannot force teams to spend, it will produce more bidders for a player’s services in the free agent market. III. Conclusion Both positions hold merit, but neither position guarantees what it claims. The reason the CBT was the centerpiece of this negotiation is because both sides were stuck in their positions regarding what they believe it is doing for the sport. Both sides raise valid points when defending their positions, but there is only a finite amount of money for the sides to negotiate over. Something the players need to realize is if more money is going toward minimum salaries and a bonus pool for the top 30 young players, the less money there will be for veterans to increase their salaries and in turn raise the CBT threshold. Both sides nearly lost some of finite amount of money baseball has due to this labor dispute, and a big reason for this was the differing views on the CBT threshold. The players made an effort to move the needle by agreeing to reduce the time to implement rule changes. This means that the 2023 season will likely have a pitch clock, ban on shifts, and enlarged bases. These changes would speed up the game and create more action. This could be something the league accepts in return for conceding on some economic issues. The question remained, will they concede on the CBT threshold, or are they going to remain dug in on moving baseball closer and closer to a hard salary cap? Ultimately, the sides agreed to a $230 million CBT threshold in 2022 that increases by $2 million each year until it hits $244 million in 2026. This was a strong compromise between the two sides since MLB initially did not want to raise it from $220 million and the players wanted it to start at $238 million and get to $263 million in 2026. Now that the threshold is set, only time will tell whether the system acts more in favor of competitive balance or suppressing player salaries. Sources: [1] https://www.cbssports.com/mlb/news/how-mlbs-luxury-tax-became-a-lockout-sticking-point-and-why-owners-proposal-would-lead-to-drastic-changes/ [2] Id. [3] http://www.stevetheump.com/Payrolls.htm Michael Perlo is a J.D. Candidate at the University of Buffalo School of Law.

A five-star high school recruit in the Class of 2023 has reportedly signed a name, image and likeness (NIL) deal with a school’s collective that could pay him more than $8 million by the end of his junior year of college, according to The Athletic. According to the report, this unnamed high school athlete will be paid $350,000 immediately and then receive a monthly payment that will increase to more than $2 million per year once he starts his college career. The compensation is in exchange for the athlete making public appearances and “taking part in social media promotions and other NIL activities ‘on behalf of (the collective) or a third party.’” Collectives are third party groups, which typically consists of alumni and boosters, whose goal is to pool funds from boosters and businesses to help facilitate NIL opportunities to student athletes. The collectives must remain a third party with no affiliation to the university due to NCAA rules and state laws. The deal is believed to be the largest NIL deal signed by a non-professional athlete. The contract presents two notable legal issues. First, whether the contract is an inducement to attend a particular school in violation of the NCAA’s rules and its interim NIL policy. Second, the contract contains an exclusivity clause, which grants the collective exclusive rights to use the high school athlete’s NIL. Is this Inducement by the Collective? According to the NCAA’s Q&As on its interim NIL policy, “NIL opportunities may not be used as recruiting inducement or as a substitute for pay-for-play.” In addition, the NCAA’s Q&As explicitly state that NIL compensation contingent upon enrollment at a particular school is in violation of the NCAA’s interim NIL policy. The Athletic reports that the high school athlete has not signed a letter of intent with the school yet and is not bound by the contract to do so despite the multi-million deal. “There’s an element of trust there,” said the attorney who represented the high school athlete, referring to the fact there is no written agreement the high school athlete will sign with the collective’s school. In accordance with NCAA rules, the contract reportedly states, “nothing in this Agreement constitutes any form of inducement for (the athlete) to enroll at any school and/or join any athletic team.” The contract does not mention a specific school, only that the high school athlete be “enrolled at an NCAA member institution and a member of the football team at such institution.” Although the term “inducement” is not a defined term in the NCAA’s Division I Manual, this NIL contract poses several questions with respect to the NCAA’s inducement rules: Does the contract constitute inducement in violation of the NCAA’s rules and interim NCAA policy? Can the contract require the athlete to enroll at a NCAA member institution and/or play a particular sport? Does a contract potentially worth more than $8 million “induce,” or in other words persuade or influence, the athlete to sign with the collective’s school? Will the NCAA investigate this NIL deal as a violation of its interim NIL policy? Should the NCAA member institution that the high school athlete eventually commits to permit the athlete to attend its school and participate on its football team? The questions above are the types of questions the NCAA and its member institutions will be confronted with by this type of NIL deal. Exclusivity of NIL Rights An exclusivity clause is generally a clause in a contract that requires a party to solicit, negotiate and/or buy/sell products or services exclusively from the other party for a limited time or under certain conditions. According to The Athletic, the contract states that the high school athlete granted the collective exclusive rights for the use of his NIL in exchange for the lucrative compensation. The Athletic does not expand on the parameters, if any, of the collective’s exclusivity rights, such as the time period of exclusivity or the conditions of exclusivity, nor any termination events. Assuming there are no restrictions, the exclusivity clause means the collective has the sole right to manage the athlete’s NIL for the entirety of his college career. By holding exclusivity rights over the athlete’s use of his NIL, the collective will presumably influence all NIL deals the athlete solicits, negotiates and enters into with third parties during his college career. The NIL era has granted student-athletes more freedom to own and maintain their NIL, but the exclusivity aspect of this contract certainly restricts that freedom. Also, as The Athletic points out, this exclusivity clause could dissuade the student-athlete from transferring to another school as he would likely not be compensated for paid appearances at another school, especially if the next school is a rival. For example, if the high school athlete hypothetically lives in California (which permits high school athletes to profit off their NIL) and commits to play football at USC then later transferred to play at in-state rival UCLA, would the USC collective pay the now UCLA athlete? The answer is likely not. Ryan Whelpley is an Associate at Morse in Waltham, Massachusetts, where he is a member of the firm’s Corporate Practice Group and focuses on venture capital financings, M&A transactions, and general corporate work for startup and emerging growth companies. He is a graduate of Albany Law School (2019) and Union College (2016). At Union, Ryan was a member and three-year captain of the Men’s Basketball Team. You can connect with him via LinkedIn.

The Brooklyn Nets were fined $50,000 because Kyrie Irving entered the Nets locker room following their 110-107 win over the New York Knicks on Sunday afternoon. He was allowed to enter the Barclays Center as a fan, but he was not allowed to enter the Nets locker room as a player. Meanwhile, he will be permitted to enter the locker room tonight when the Nets visit the Orlando Magic. Seems silly doesn’t it? The NBA is essentially hamstrung in regards to Kyrie’s home status based upon NYC’s vaccine mandates. The result, a hefty fine and an evolving public joke for the NBA. Kyrie Irving Overview Kyrie Irving has been one of the best players in the NBA since he entered the league as the first overall pick for the Cleveland Cavaliers in the 2011 NBA Draft. He has arguably some of the best ball-handling skills the league has ever seen, and his ability to finish at the rim amongst taller defenders is unmatched. Kyrie has also shown that he is a major three-point threat, shooting just under 40% from three-point range since the start of his career. With career averages of 22 points, 5 assists, and 3 rebounds, it’s hard to argue against the fact that he's a dominant point guard in the NBA. The 29-year-old out of Duke University is a 7-time all-star, an NBA champion, and a future member of the hall-of-fame. He deserves to showcase his skills on his home court for the Brooklyn Nets. COVID-19 Rules New York had a workplace vaccine mandate when the season first started, although it was lifted effective March 7th, 2022. However, it remains that in-person workers must still show proof of at least one vaccine dose. Kyrie Irving has been outspoken in terms of his decision not to get the vaccine, and I applaud him for doing so despite the negative effects it has had both on his career and in the media. However, the COVID-19 rules still in effect have ridiculous and nonsensical results. As a result of Kyrie Irving being a player for the Brooklyn Nets, a team governed by New York law, he is unable to play in home games. However, opposing players who play at the Barclays Center, with the same vaccine status as Kyrie Irving, are allowed to play in games. Secondly, and quite possibly even more ridiculous, the rules permit Kyrie Irving to attend the games as a fan but not celebrate with his team in the locker room following a close win. Adrian Wojnarowski pointed out on Twitter that the locker room is part of the “workplace environment” for the Brooklyn Nets. His presence in the locker room as an unvaccinated player is seen as a violation of the health and safety protocols, and ultimately, the Brooklyn Nets were fined $50,000. Since the start of COVID-19, the world has changed in many ways that make it difficult to get used to. These rules just seem to have no real purpose, as the result of enforcing them leads to nonsensical outcomes. Here’s to hoping COVID-19 rules change, and we can see the enigma that is Kyrie Irving back in the Barclays Center playing basketball soon.

The Jacksonville Jaguars have sued their insurer, Axis Surplus Insurance Company, alleging that Axis failed to provide coverage for the Jaguars’ claim for revenue lost during the pandemic. The Jaguars are the latest in a line of teams from the NFL and other leagues, including the NHL and MLB, to sue their insurers over the loss in revenue. Looking at litigation in Cook County and the Seventh Circuit, the Jaguars may be charting a new path. Background The Jaguars policy covers the Jaguars for “business income losses and expenses incurred by ‘direct physical loss of or damage’ to [the Jaguars’] covered property,” which is common in many policies. In the litigation, the Jaguars claim that the pandemic and presence of COVID-19 at TIAA Bank Field caused a “direct physical loss of or damage to” TIAA Bank Field. While not discussed below, the Jaguars note that “[t]he insurance industry, including Axis, has long known that viruses and communicable diseases can cause physical damage to property.” In support, the Jaguars allege that the insurers, including Axis, created broad “virus exclusions” to avoid covering damage to physical property caused by viruses and other communicable decisions. A virus exclusion was not included in the Jaguars’ policy. The Jaguars utilize scientific support to demonstrate that the presence of COVID-19 causes physical damage or alterations to the property. “When viral spike proteins bind with property surfaces through physical and chemical adsorption, those surfaces change physically in several ways.” Among other changes, the Jaguars note that the chemical composition of the surface changes, the roughness increases, and the surface becomes more likely to repel water. Lastly, the Jaguars allege that routine cleaning cannot prevent or restore property from the damage caused by COVID-19. “Cleaning of surfaces along is insufficient, as touched surfaces will be recontaminated.” In sum: The coronavirus damages properties by physically altering their condition such that they are no longer fit for occupancy or use without extensive physical alterations, protocols, and testing to reduce the risk of further physical damages and prevent complete shutdowns. Notably, in October 2020, Florida Governor Ron DeSantis allowed sports venues to operate at full capacity beginning that month, including TIAA Bank Field. Even though they were able to operate at full capacity, the Jaguars allege that the damage and alterations caused by COVID-19 forced the Jaguars to operate at a reduced capacity and caused the Jaguars to incur extra expenses to address the physical damage and alterations. Analyzing Recent Opinions The Jaguars have done their research on decisions regarding COVID-19 business interruption that judges have rendered in the United States Court of Appeals for the Seventh Circuit, which encompasses Illinois, and decisions in the Circuit Court of Cook County, where the Jaguars filed this case. Even so, the Jaguars face an uphill battle. An estimate of over 90% of federal cases and over 70% of state court cases have been dismissed. In August 2021, Circuit Court of Cook County Judge Moshe Jacobius ruled in favor of the insurer, Society Insurance, in 17 different lawsuits, finding that the policies provided no coverage for the income the business lost or extra expenses incurred due to contamination and product spoliation during lockdown orders. Judge Jacobius agreed with Society’s argument that the business could still be used for carryout and delivery. “Under the policy in question, a physical loss is a sine qua non of coverage. A loss of use without physical loss doesn’t count.” While the Jaguars’ case is in state court, the Jaguars can look to the federal court for persuasive authority. On the federal side, the United States Court of Appeals for the Seventh Circuit interpreted “direct physical loss” under Illinois state law in Sandy Point Dental, P.C. v. The Cincinnati Insurance Company. The Court utilized the Illinois Supreme Court’s holding in Travelers Insurance Co. v. Eljer Manufacturing, Inc., which defined “physical injury” as “an alteration in appearance, shape, color or in other material dimension.” Ultimately, the Court found that none of the claims sufficiently alleged a loss of income due to the physical alteration of the property. Based on the above opinions, many plaintiffs have had a difficult time alleging alterations in appearance, shape, color or other material dimension. However, the Jaguars’ approach utilizing scientific reasoning and studies to support their allegations could create a new wave of litigation. In light of Judge Jacobius’s opinion, it will be interesting to watch whether Governor DeSantis’s October 2020 removal of restrictions, which allowed sports venues to operate at full capacity, will impact the decision in this case. Courts have dismissed most COVID-19 business interruption cases. In the wake of their dismissal, judges have left a trail of decisions that the Jaguars will use to carve their own path. If the Jaguars survive a motion to dismiss, we could see many others follow their path. Originally Published on offthecourtdocket.com Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via Twitter @LandisBarber, LinkedIn, or his blog offthecourtdocket.com.

Recruiting has always been extremely important in college football. It’s no secret that in order to win on Saturdays in the Fall, you need to win on the recruiting trail. However, in today’s landscape with NIL and the transfer portal, building and maintaining relationships with high school prospects and college transfers has never been more imperative. While there is certainly no shortage of football coaches who are tremendous when it comes to building a game plan and scheming up great plays, there is no substitute for having good players. National championship winning coach Kirby Smart said as much last season when he declared “If you don't recruit, there's no coach out there that can out-coach recruiting.” “I don't care who you are, the best coach to ever play the game better be a good recruiter because no coaching is going to out-coach players. With that being said, more and more emphasis is being placed on recruiting when it comes to hiring/firing decisions in big time college football. Dan Mullen, who is highly regarded as one of the best offensive minds in the game, was fired at Florida primarily because the Gators 2022 recruiting class was far below the program’s standards. Clay Helton was perpetually criticized for his failure to keep the best Southern California talent home throughout his tenure at USC. On the flip side, more programs are hiring coaches that might lack head coaching experience, but are known for their exceptional recruiting ability/connections with high school coaches. South Carolina’s Shane Beamer had never been a head coach before taking over in Columbia last year, but his dynamic personality has helped him bring in top prospects throughout his coaching career. In this past year’s cycle, Texas Tech hired Joey McGuire, who was a high school coach in Texas for over a decade. His knowledge and connections of the recruiting scene in the Lone Star State has already paid off as the Red Raiders currently have the second ranked class for 2023 according to 247 Sports. With more schools placing an increased emphasis on recruiting when it comes to hiring head coaches, you’d think that all coaches who are top-notch recruiters would be in play for landing jobs at the FBS level, right? Wrong. Each year, 247 Sports publishes a ranking of the best recruiters in the country. While their rankings might not be 100% spot on coach for coach, they do give a general overview of which coaches help bring the best talent to their respective schools. There are some head coaches who are on these lists, but oftentimes it is assistant coaches who carry the load on the recruiting trail. Of the 30 best ranked recruiters on 247’s 2022 list, 22 were black. In addition, of the 34 5-star recruits in the class of 2022, 23 of them had a black coach who was listed as their “primary recruiter.” In looking at previous years, the statistics are strikingly similar, which makes it clear that many black assistant coaches in college football are responsible for bringing in some of the best players we watch compete each Saturday. With dozens of black assistant coaches holding “ace recruiter” status, you’d think that many of them would be in line for an opportunity to lead a program as a head coach. However, despite a nearly unprecedented amount of head coaching turnover this past season, we didn’t see many of these stud recruiters get head coaching jobs. Of the 28 new coaches hired, only 3 were black (Notre Dame’s Marcus Freeman, Virginia’s Tony Elliott, and Temple’s Stan Drayton). A few weeks ago, one of the biggest stories in the sports world was Brian Flores’ lawsuit against the NFL regarding discriminatory hiring practices pertaining to race. Whether or not those allegations were true or not, the lack of black coaches and executives spoke for themselves. Unfortunately, college football has a similar problem when it comes to the amount of black head coaches. Of the 130 head coaches at the FBS level, only 14 are black. Additionally, there are no black head coaches in two power five conferences (SEC, Big 12). Nearly half of the players on NCAA football rosters are black, but just a tad more than ten percent of the men chosen to lead these programs are black. This is a troubling stat that needs to change, especially since there are many brilliant black coaches who are qualified to do the job. As described earlier, some of these men are among the best recruiters in the country. Now, it’s worth mentioning that many of the coaches who do a lot of the heavy work on the recruiting trail are position coaches who might not be ready to be the head man of a program just yet. Oftentimes, coaches need to work as a position coach for several years before becoming a coordinator. Then, if they excel as a coordinator, they can be in position to become a head coach. However, if this is true, throughout the next decade we should see more progress in terms of the amount of black head coaches in college football. Schools can’t have it both ways. You can’t claim that recruiting is “one of the most important factors” when it comes to winning, and then ignore the best recruiters in hiring decisions. We live in a world where diversity, equity, and inclusion is more emphasized than ever before and this should extend to college football head coaches. Just like there are countless great white football coaches out there, there are countless qualified black coaches too. Hopefully, schools will give more consideration to them in the future.