ContractsProf Blog

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Valparaiso Univ. Law School

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Friday, February 24, 2012

Did Fabio Capello Breach His Contract by Criticizing the Football Association?

Fabio-CapelloAccording to The Guardian, Fabio Capello (pictured), manager of England’s national football team could be in breach of contract after publicly challenging the Football Association’s (FA) decision to strip John Terry, England’s national football team captain, of his captaincy.  The Guardian reports that the FA made this decision after John Terry allegedly racially abused English footballer, Anton Ferdinand.  Capello was upset that this decision was taken without consulting him.  Capello said that he felt “undermined by the FA decision to notify him after the decision had  been made.

Capello also objects to the substance of the decision, finding it premature.  Preferring civil justice to sports justice, Capello believes that Terry should remain captain until the courts decide whether he committed the crime. 

While the details of Capello’s contract are unknown, People Management reports the contract likely gives the FA final say regarding squad selection, but does that also relate to choosing the team captain?   People Management also suspects that the contract contains some sort of gag provision and notes that in the UK, senior executive contracts often contain a provision preventing the employee from bringing the company into disrepute or making a public statement that is in direct conflict with a statement made by the employer.  If Capello’s contract contained this provision, he may be in breach for making his views, opposing the FA’s decision, public.  Whether such a remedy entitles the FA to treat Capello’s conduct as a repudiation of the agreement or can serve as grounds for dismissal will turn on the precise contractual language.

As the Guardian reports here, Capello resigned as Manager on February 8th, and the parties agreed to a £1.5 million settlement.  Capello's annucal salary was £6 million.  A confidentiality agreement means we will never get to explore the issues of breach in more detail. 

[JT & Janelle Thompson]

February 24, 2012 in Celebrity Contracts, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, February 23, 2012

Law and Social Norms: The Jumbotron Kiss

481px-El_Beso_(Pinacoteca_de_Brera,_Milán,_1859)It is common at sporting events to have a segment during time-outs at which the camera focuses on couples (always heterosexual, natch) and, as the crowd looks at their images on the Jumbotron, the couples almost invariably kiss.  This practice is known as the Kiss-Cam.

This week's installment of This American Life includes a short introductory segment in which tv producer Bill Langworthy recounts how he was induced by the Kiss-Cam to kiss his ex-girlfriend's best friend, a woman whom, according to Bill, he would not otherwise kiss for any amount of money. 

This American Life's host, Ira Glass, points out that Bill "did not have to kiss her; there would be no penalty; there was no contract; no money had changed hands. . . . "  Bill explains that he felt that, with everyone watching, and with a producer looking at him, expecting him to act, he felt compelled to kiss his ex-girlfriend's best friend.  This is a nice little gloss on the view that we often comply with our obligations (or even our perceived obligations) whether or not we are legally obligated to do so for reasons apart from contractual obligation.  And so, a surprisingly high percentage of commercial obligations -- even among sophisticated parties who could lawyer the relationship to death if they so choose -- arise informally. 

But we offer a different perspective on what is going on here.  Bill explains that he attended the ball game with two friends, a married couple.  Someone who coordinates the Kiss-Cam segment came around and asked the married couple if they would mind kissing for the Jumbotron.  They agreed.  This was already a revelation, since the parties often look as though they are taken by surprise when the Kiss-Cam seizes upon them.  Who knew it was all a set-up?  In any case, according to Bill, a few beer runs later, the parties had switched seats, so when the Kiss-Cam alighted, it hit him and his ex-girlfriend's best friend, instead of their married neighbors. 

Since Bill is himself a producer, it seems reasonable to assume that he understood how things like the Kiss-Cam operate.  Having identified its prey, the Kiss-Cam was going to focus on a particular seat, rather than on, for example, the tall guy wearing a baseball cap and the home team's jersey., since that latter description lacks specificity in the context of a sporting event. 

Come on Bill, maybe you really wanted to kiss her and were just waiting for the Jumbotron to permit you to break the taboo?

[JT]

February 23, 2012 in Commentary, Sports, True Contracts | Permalink | Comments (0) | TrackBack (0)

Friday, February 17, 2012

Will M.I.A.'s Next Hit Appear on an SSRN Top Ten List?

MIA_front_faceIn a little-noticed incident, since most people were watching Downton Abbey that night, a British rapper, M.I.A. (pictured left) performing during this year’s NFL Super Bowl halftime show, looked into the camera, uttered an expletive, and flipped the bird to millions of viewers around the world.  As a result, in addition to millions of people knowing of her existence, she may be in breach of contract with the NFL. 

As reported by Yahoo.com Sports, NFL spokesman, Greg Aiello, maintains that when the league hires the entertainment for the show, the artists are required to sign an agreement containing safeguards concerning artists’ conduct.  TMZ.com reports that the agreement between M.I.A. and the NFL contained a clause indemnifying the NFL against any fines that may be imposed by the Federal Communications Commission (FCC) as a result of her behavior during the halftime show.  TMZ also reported that the NFL agreed to indemnify NBC against any such fines, because the NFL is responsible for the halftime show’s content.  M.I.A. thus may be contractually obligated to pay any fines that the FCC chooses to impose on NBC and the NFL.   The news reports do not make clear what other remedies the NFL might have against M.I.A., since the indemnification clause would seem to cover any harms the NFL could suffer as a result of M.I.A.’s conduct.

The FCC sets out the relevant regulatory scheme as follows:

Obscene material is not protected by the First Amendment and cannot be broadcast at any time. To be obscene, the material must have all of the following three characteristics:

  • an average person, applying contemporary community standards, must find that the material, as a whole, appeals to the prurient interest;
  • the material must depict or describe, in a patently offensive way, sexual conduct specifically defined by applicable law; and
  • the material, taken as a whole, must lack serious literary, artistic, political, or scientific value.

Indecent material is protected by the First Amendment, so its broadcast cannot constitutionally be prohibited at all times.  However, the courts have upheld Congress' prohibition of the broadcast of indecent material during times of the day in which there is a reasonable risk that children may be in the audience, which the Commission has determined to be between the hours of 6 a.m. and 10 p.m.  Indecent programming is defined as “language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities.”  Broadcasts that fall within this definition and are aired between 6 a.m. and 10 p.m. may be subject to enforcement action by the FCC. 

Profane material also is protected by the First Amendment, so its broadcast cannot be outlawed entirely. The Commission has defined such program matter to include language that is both “so grossly offensive to members of the public who actually hear it as to amount to a nuisance” and is sexual or excretory in nature or derived from such terms.   Such material may be the subject of possible Commission enforcement action if it is broadcast within the same time period applicable to indecent programming: between 6 a.m. and 10 p.m.

So, FCC fines may result if the FCC determines that M.I.A.'s conduct was either obscene, indecent or profane, as the halftime show aired before 10 PM.

[JT and Christina Phillips]

 

February 17, 2012 in Celebrity Contracts, In the News, Sports, Television | Permalink | Comments (0) | TrackBack (0)

Monday, December 5, 2011

More fallout from the nasty McCourt divorce

Frank McCourt may be in the process of suing his former lawyers, Bingham McCutchen, LLP, according to this article in the Wall Street Journal. As you've probably heard, Frank McCourt had a nasty divorce from his wife, Jamie, not too long ago - although it seems like this morning. I tried not to pay too much attention to it (not easy to do when you live in SoCal) until I realized that a major issue in the divorce concerned the marital agreement between the couple which would determine who owned the Dodgers. Apparently there was some confusion about attachments to the original marital agreement, with only some naming Frank McCourt as the sole owner. A drafting error - or was it? Jamie McCourt's attorneys argued that the various copies indicated there was no meeting of the minds. The judge agreed and threw out the agreement. Frank McCourt wasn't happy about that and has filed claims against Bingham that could be worth "hundreds of millions of dollars."

[Nancy Kim]

December 5, 2011 in Celebrity Contracts, Miscellaneous, Sports, True Contracts | Permalink | Comments (0) | TrackBack (0)

Thursday, December 1, 2011

All I Want for Christmas Is a Chinese Opt-Out Clause


NuggetsWhen NBA owners and players tentatively agreed to end the lockout and begin the NBA season on Christmas Day, their agreement resolved many contractual issues, such as the maximum number of years permitted in a player's contract. One issue left unresolved involves the fate of three players who played for the NBA's Denver Nuggets last year--Kenyon Martin, J.R. Smith, and Wilson Chandler (Martin and Chandler pictured here). The three Nuggets signed contracts to play for teams in the Chinese Basketball Association. Unlike the international contracts signed by dozens of other NBA players, the Nuggets' contracts reportedly contained no "opt-out" clause that would permit the players to return to the NBA if and when the lockout ended. Some commentators initally suggested that the players could return to the NBA anyway. After all, there is no specific performance available for breach of contract. The problem with that approach, however, is that the NBA, as a member of the International Basketball Federation, requires its teams to recognize international contracts. This relationship presumably would bar any NBA team from contracting with the three former Nuggets due to their Chinese contracts. All three players reportedly have been doing quite well on the court (averaging 15, 22 and 32 points per game, respectively) and even enjoy some decent off-court perks, such as a driver and personal chef. Although they likely won't make it home for Christmas, all three players' contracts end in March, well before the NBA playoffs.  

[Heidi R. Anderson, h/t SB Nation and WSJ Online]

December 1, 2011 in Celebrity Contracts, Sports | Permalink | TrackBack (0)

Friday, September 16, 2011

Josh Hamilton's Grand Slam as a Fun Pre-Midterm Review

Josh%20Hamilton Texas Rangers outfielder Josh Hamilton previously has earned media attention in some rather depressing ways, including via his own battle with drug addiction and his attempt to throw a ball to a fan that led to the fan's death.  This time, he is in the news for something that makes others--including Contracts professors--very happy.  A Texas flooring retailer recently ran a promotion promising a refund on their flooring purchase if Hamilton hit a grand slam during September.  And he did!  Click here for the story, the actual ad "as seen on TV," and some written commentary.  I think the clip serves as a fun way to review some contracts issues just prior to midterms.  My students saw partial parallels to Lefkowitz, Leonard, and even Carbolic Smoke Ball and I'm sure there are others.  Go Rangers!

[HR Anderson w/ hat tip to student Matthew Lynn]

September 16, 2011 in Current Affairs, Sports, Teaching | Permalink | Comments (0) | TrackBack (0)

Monday, August 22, 2011

Local News: Fight Over A School Board's Decision to Buy a Scoreboard

Valpo Vikings

This is the sort of mess that local governments deal with all the time, but this one hits home for those of us in the Valparaiso Community School District.  As reported in the Northwest Indiana Times, the Valparaiso Community School Board held a special meeting on August 4th to approve a contract to erect a $250,000 scoreboard at the high school in time for the start of the football season.  As public expenditures go, this one seems a no-brainer, as the Board apparently believed on August 4th that it could cover the cost of the new scoreboard with advertising revenues within five years.

Some Valparaisans were outraged, however, by the lack of public discussion and by the deficient notice prior to the special meeting held on August 4th.  At a subsequent Board meeting on August 16th, public outrage was exacerbated by the revelation that the school had in fact secured only $54,000 in advertising revenues and there are divergent accounts of what information about advertising commitments was supplied to the Board at the time it approved the contract.    

But here's where it gets interesting.  The Board defended its hasty action on the ground that the $250,000 contract had already been entered into by unnamed "individuals who thought they had the authority" to enter into such a contract.  This revelation by the Board was met with a smattering of laughter at the public meeting.  Why were the outraged Valparaisans laughing?  Because they know that, under agency law, thinking you have the authority to enter into a $250,000 contract is not the same thing as having such authority.  And if residents find it laughable that some employee of the high school would claim to have such authority, the other party to the contract knew or should have known that such contracts require Board approval to be binding.  In short, there was no need for the Board to rush to approve the contract, because the contract was never binding in the first place.  

In addition, there is the separate, disputed issue of whether such a contract must be awarded only after a solicitation of competitive bids, which did not occur in this case.

Whether or not the contract was enforceable at the time it was signed, the Board has now adopted it, so it has become binding.  That does not mean that it could not be challenged of course.  Angry Valparaisans could run to court and seek to enjoin any further measures to install the new scoreboard.  But doing so would cost taxpayers more money, and so citizens who would like to hold the allegdly unaccountable Board to account while also preventing improper expenditures of public funds are faced with a Hobson's choice.

[JT]

August 22, 2011 in Government Contracting, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Friday, July 22, 2011

Designer Leaves NASCAR for Formula One, Brings Contract Dispute Along for the Ride

Ricky bobby Michael Waltrip of NASCAR fame (fame earned both as a driver and now as a team owner) has filed a complaint against auto designer Mike Coughlan.  The suit claims that Coughlan breached the contract by leaving his position with Waltrip's race team prior to the end of his employment contract term.  And, to make it worse, Coughlan reportedly left Waltrip's team to design cars for the Formula One team, Williams.  Given NASCAR’s reported inferiority complex with respect to the older and allegedly more complex F1 racing (i.e., a kind of racing that requires one to do more than just turn left), this departure "across the pond" was especially vexing to Waltrip.  The particular contractual terms cited include a “loyalty clause” and the duty of good faith and fair dealing.  If the contractual fight takes any dramatic turns, perhaps Sascha Baron-Cohen will reprise his role as a Formula One turned NASCAR driver in the movie version of this dispute. 

[H.R. Anderson]

July 22, 2011 in Celebrity Contracts, Current Affairs, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 15, 2011

Madden Coder Sues Electronic Arts for Breach of Contract


John_Madden Developer Robin Antonick, the man who originally coded the John Madden (pictured at left) football game for Sega Genesis, has brought a suit against Electronic Arts (EA) claiming a breach of contract stemming from EA's failure to pay royalties for use of his work.  According to Gamasutra, Antonick alleges that "all subsequent versions of the series are derivative works based on technologies he developed, specifically his football player behavior AI, the pseudo 'three-dimensional projection' of the field, the original game's instant replay feature, and the concept of a 'positional camera.'" In the suit, Antonick seeks payment for the use of these innovations.

According to this lengthy report in Bright Side of News, under the original contract, which has been amended since its creation in 1986, Antonick was entitled to royalties of 15% on all sales and 5% for derivative works.  Since Madden football was started it has brought EA approximately $4 billion in profits.  Antonick alleges that his work was used by EA in their other games including their NHL game.  Antonick is seeking the past royalties plus interest.  

Gamasutra reports that earlier this month, EA filed a motion to dismiss, claiming that no breach of contract has occurred because the features at issue are non-copyrightable and thus not covered by the contract.  In addition, EA claims that the statute of limitations has already run.  In addition, in response to Antonick's original demand for royalties, EA provided Antonick with the source code for its version of the game to prove that his code was not used.  EA also has submitted five declarations saying the new version of the game was developed without using any of Antonick’s work. 

Gamasutra concludes that, "[i]n order for Antonick to have a case, he will have to convince the court that his work amounted to original expression, rather than computer algorithms, which would make it copyright-protectable work."

[JT and Jared Vasiliauskas]  

 

 

June 15, 2011 in Games, Recent Cases, Sports | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 24, 2011

Bobby Bonilla's Contract

Mets Fascinating!  As reported here in the Wall Street Journal blog, the Mets are about to start paying Bobby Bonilla for doing nothing!  They are obligated to do so under the terms of their agreement with Bonilla from 2000 when they bought out the final year of his contract.  Beginning July 1st and continuing for another 25 years, the Mets will pay Mr. Bonilla $1.2 million/year.  

Although Bonilla had been a highly productive player for much of his career, he never lived up to the tough New York standards, and neither party seemed happy with the relationship.  In his last season with the Mets, Bonilla hit .160 in 60 games.  He then notoriously showed his disdain for the team and its prospects by playing cards with Rickey Henderson during the National League championship series.  The Mets thus agreed to defer his $5.9 million salary for the last season just in order to be rid of him.  

The deal was not unprecedented and seemed to be in the best interest of both parties at the time.  The Mets freed up enough room under the salary cap to lure some good players and become contenders in 2000.  However, long-term the deferred salary is a drain on the Mets' resources.  Because of the agreed-upon 8% interest, Bonilla will eventually collect $30 million from the Mets. Still, Adam Meshell of NJ.com provides an intelligent defense of the agreement here.  

All hail the power of contracts!

[JT]

May 24, 2011 in Celebrity Contracts, Sports, True Contracts | Permalink | Comments (2) | TrackBack (0)

Friday, April 8, 2011

Fan Sues NFL and Cleveland Browns

Cleveland Browns fan Ken Lanci has brought suit against the Cleveland Browns for allegedly violating his contractual right to buy tickets under his personal seat license due to the current NFL lockout, about which we have previously posted.  You can find a copy of Mr. Lanci's complaint here.  According to Wikipedia, a personal seat license:

gives the holder the right to buy season tickets for a certain seat in a stadium. This holder can sell the seat license to someone else if they no longer wish to purchase season tickets. However, if the seat license holder chooses not to sell the seat licenses and does not renew the season tickets, the holder forfeits the license back to the team. Most seat licenses are valid for as long as the team plays in the current venue.

Cleveland_Browns_helmet According to this story in the Miami Herald the suit is seeking $25,000 in damages from the Browns on theories of breach of contract and bad faith.  Lanci has named the NFL and its other teams in the suit as well, alleging tortious nterference with his personal seat license. He is seeking over $25,000 in damages plus additional unspecified damages.  Lanci claims that the violation stemmed from the conspiracy of the NFL to lock out the players which violated his personal seat license. In response to this claim, NFL spokesman Greg Aiello told the Herald that he understands that the fans are frustrated and that the league has refund policies in place for fans in the event that games are lost.  

Mr Lanci characterizes the lockout as a product of a dispute between millionaires and billionaires and notes that people have no sympathy for multi-millionaires.  Given that Mr. Lanci is himself a multi-millionaire, this would seem to be a case that only a lawyer could love.  The website, Cleveland Frowns, provides a critical commentary on the suit here, noting among other things, that Mr. Lanci's personal suit license agreement specifically contemplates the possibility of a lockout.  Here's the relevant language:

STRIKES, DAMAGES, DESTRUCTION, ETC.  In the event of: (a) any strike or other labor disturbance which results in the cancellation of any Browns Games at the Stadium, … the License/Ticket Fee payable under the Agreement shall … be abated during the period of time that the Club Seats are unusable. Any such abatement of the License/Ticket Fee shall be computed for each NFL Season by dividing the number of Browns Games for which the Club Seats were unusable by the total number of Browns Games that would have been played in the Stadium during the applicable NFL Season were it not for such strike, labor disturbance, damage or destruction.”

If games are lost it is possible that the NFL could find itself in breach of their other contractual obligations with entities such as sponsors, and television stations that broadcast league games. Stay tuned.

[Jared Vasiliauskas & JT]

April 8, 2011 in In the News, Recent Cases, Sports | Permalink | Comments (0) | TrackBack (0)

Friday, April 1, 2011

Blockbuster Trade Makes Cubs a Lock in 2011

Wrigley_field As those driving around Chicago have probably already noticed, there are new billboards advertising some of the team's latest acquisitions, including Derek Jeter and Albert Pujols.  The New York Times calls the billboards a stumble, but they misunderestimate the savvy of the Cubs' leadership.  Fans looking for those lovable losers this season will be disappointed by the new starting line-up.  

Here it is:

1. Ichiro Suzuki, RF
2. Derek Jeter, SS
3. Marlon Byrd, CF
4. Albert Pujols, IB
5. Aramis Ramirez, 3B
6. Joe Mauer, C
7. Chase Utley, 2B
8. Alfonso Soriano, LF 
9. Cliff Lee 

Barry Bonds has announced that he will come out of retirement to pinch hit on occasion, in keeping with his down-to-earth low-key style.

[JT]

April 1, 2011 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, March 24, 2011

The NFL Lock-Out, Part I

NFL The NFL’s owners entered into a collective bargaining agreement with the players after the 2008 season.  The agreement expired on March 4th of this year.  As ESPN.com reports, after several delays and a 16-day federal mediation, the owners locked the players out.  A lock-out means that the players can have no contact with teams or their personnel, do not get paid, and also cannot negotiate new contracts with their respective teams or any other teams. This is the NFL's first work stoppage since 1987.  

The players union has now dissolved itself, enabling individual players to bring a class-action antitrust suit in federal court.  The matter is scheduled to be heard by a federal judge on April 6.  The Washington Post reports that the owners have asked the judge to allow the lockout to continue until the National Labor Relations Board has ruled on its claim that the union's decertification was an unfair labor practice.  

As the New York Times reports, the main issue dividing the parties is revenue sharing.  Under the old deal, the players received nearly 60% of the league revenue from 2006 to 2009 after the owners took $1 billion off the top.  The owners are currently proposing a 50/50 split after the owners take $2 billion off the top.  The owners need the added money to cover the cost of building new stadiums, and the players should still make at least as much in absolute terms because the new deal would prolong the season to 18 games, thus leading to more revenue -- largely from television deals.

Sporting News provides this run-down of the two sides' positions on the other issues, including the proposed rookie pay scale, benefits for retired players, and the level of the salary cap.  The two sides' positions started off $1 billion apart.  They negotiated down to around $185 million apart, but then talks broke down when the owners refused the players' request for financial information about the various NFL franchises.

The final major dispute between the two sides is level of the salary cap.  The players have said the owners’ current offer is based on unrealistically low revenue proposals.  According to ESPN.com the owners’ have offered an increase in the salary cap from $131 million to $141 million for next season in their most recent proposal.  The players reportedly seek a cap of $151 million.  

The New Yorker's James Surowiecki is most eloquent on the reasons why "in a contest between millionaire athletes and billionaire socialists it’s the guys on the field who deserve to win."

[Jared Vasiliauskas & JT]

March 24, 2011 in In the News, Labor Contracts, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, March 17, 2011

Gottfried Gottfired Because Ducks Shouldn't Tweet


Gottfried Gilbert Gottfried, pictured at left, is a comedian, but he is probably best known for providing the voice of that delightful duck in those Aflac commercials.  Who knew insurance companies could be so charming?!?  On the right, we have a picture of a duck, but this duck is not the actual Aflac duck, as far was we know.

Duck The New York Times reported this week that Aflac has fired its spokesduck -- or at least its voice -- on the ground that Mr. Gottfried posted some insensitive jokes on his Twitter account about the earthquake and tsunami that have had devastating effects in Japan.  Aflac did not find Mr. Gottfried's jokes funny -- his jokes rarely are -- but the company found these particular jokes especially unfunny, given that Aflac derives 75% of its revenue from the Japanese market, according to the Times.  Friends of the blog will not be surprised to learn that, in canning Gottried effective immediately, Aflac invoked a morals clause, according to the Times.  These clauses raise no end of interesting issues.  I mean, is it really credible for Aflac to claim that it is shocked, shocked to learn that Gottfried posted tasteless jokes on his Twitter page?  What else does Gottfried post?

Interestingly enough, the same week, Cappie Pondexter, a member of the WNBA's New York Liberty team, made a series of posts on her Twitter page reasonably construed to indicate that Pondexter believed that the Japanese deserve whatever happened to them.  As reported in the New York Times as well, the Liberty and the WNBA seem to have elected not to discipline Pondexter for her tweets.  Pondexter has apologized and both the league and her team seem to think the apology suffices.  Safe to say that Japan does not account for 75% of the WNBA's market.  

[JT]

 

March 17, 2011 in Celebrity Contracts, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Monday, March 7, 2011

Will Sabathia Opt Out of the Bronx?

CC_Sabathia_2009 As Spring Training keeps moving on towards opening day, an interesting option looms for the Yankees' star pitcher CC Sabathia.  Sabathia has a clause built into his current contract with the team that allows him to opt out of his contract at the end of the 2011 season and become a free agent.  According to ESPN, by opting out, Sabathia would walk away from approximately $90 million in guaranteed salary.  However, Sabathia has hinted at the idea after seeing Cliff Lee (age 32) sign a five- year, $120 million contract with the Phillies this past off season.  Sabathia would be 31 at the end of the season and still able to command top dollar.  However, if he waited until the end of his current contract, he would be 35 years old and may no longer have the bargaining leverage necessary to secure a long-term, high-salary contract.

If Sabathia decides to opt out of his contract at the end of the season, the decision could impact the rest of Major League Baseball and perhaps the entire sports industry.  Prominent players may decide to ask for opt-out clauses in their contracts similar to Sabathia’s.  Such clauses would enable star players to leave their teams if they were not happy with the atmosphere or the direction the team was going.  It would also mean that players with opt-out clauses could choose to test the market if they think they could receive a higher salary on the free agent market after several years of solid performance.  From the player’s perspective, such a clause is a win-win.  The player has the option to stay with a guaranteed, long-term agreement or to seek a still richer payoff elsewhere.

If the opt-out clause becomes de rigueur among star players, the owners could respond by refusing to enter into long term contracts.  If that were to happen, players would obviously be the big losers, as guaranteed, long-term contracts are an insurance policy against injury or Milton Bradley-like underperformance.  In the alternative, the owners could demand a reciprocal opt-out option.  Such an option could provide, for example, that if the player has not played a certain percentage of games during the first part of his contract due to injury, the team could opt out or could renegotiate the salary.  It could also provide that if a player did not average certain statistical numbers over the first part of the contract, the team could opt out of the contract.  This would get us closer to the pay for performance that this blog has explored in the past.

[Jared Vasiliauskas & JT]

March 7, 2011 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, March 3, 2011

Should the Mets Leave the Concession Stands at CitiField to an “Even Higher Authority”?

Mets_hat The owners of the Mets have a $300 million Madoff problem, but that hasn’t distracted them from attempting to ban a kosher concession stand from selling food at CitiField during the Sabbath. 

Kosher Sports has a 10-year contract to sell hot dogs at the stadium and it sued the Mets last summer after being told it could not operate on Friday nights and Saturdays.  In August, Judge Jack Weinstein ordered the Mets to stop banning the company’s sale of food during the Sabbath.  At the time, he said with a smile, “I cannot get involved in (a dispute) over rabbinical law.”

Perhaps that is why the case ended up before Magistrate Judge Andrew Carter.  But, he recused himself earlier this week because a Kosher Sports lawyer spotted him wearing a Mets hat outside the courthouse.

I imagine that this is a dispute about what the word “kosher” means in the 10-year contract.  The Mets say the food isn’t “kosher” if the stand operates during the Sabbath.  Kosher Sports begs to differ, and (likely) adds that the contract does not expressly restrict Sabbath sales.  What’s the answer?  What’s “kosher”?  Apparently, whether a purveyor can sell food on the Sabbath and retain kashrut status is very complicated under Jewish Law.  Some won’t allow it at all; some will allow it with particular conventions followed (conventions which are difficult to follow in a stadium on a Saturday because they require proper supervision and the qualified supervisors are prevented from stopping by on the Sabbath).

No wonder Judge Weinstein did not want to get involved, there’s an even higher authority involved in this dispute:

Certainly, this could be handled with more precise contract drafting in the future.  Though, the inability to operate a concession stand on Friday nights and Saturdays (when, I imagine, the stadium has the highest turnout for games), could make it a losing proposition.  Which, in the end, could mean no kosher option at all (whatever that means).

[Meredith R. Miller]

March 3, 2011 in In the News, Religion, Sports | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 1, 2011

Pujols' Future in Doubt: It Is the Duty of Every Citizen to Remain Calm

Albert_PujolsThe deadline set by Albert Pujols to negotiate a contract extension with the St. Louis Cardinals passed at noon et on Wednesday February 16, and his future with the team remains uncertain.  According to mlbtraderumors.com, Pujols declined multiple offers from the Cardinals, the last one reported to be for 9 years and over $200 million.  According to ESPN.com, Pujols is looking for an extension of 10 years that would make him one of the highest paid players in the Major Leagues.  It is likely that he is looking for a contract comparable to Alex Rodriguez at 10 years for about $28 million a season.  We have pondered the imponderables of such contracts in the past here and in passing here and here.

The passage of the deadline does not automatically means that Pujols is destined to become a free agent.  MLBtraderumors.com explains that the Cardinals will have a five day exclusive window to negotiate with him at the end of the upcoming season.  If the two sides are unable to reach an agreement in that window of time then he would become a free agent and able to sign with any team he wanted including St. Louis. 

Mlbtraderumors.com explains that the Cardinals may have trouble financially signing their star because of money that they have committed to other players.  This means that the team may have to get creative in order to keep their star.  This could mean that the team could ask other players to defer some of their contract salary in order to allow the team to sign their star.  Cardinals All- Star Matt Holliday has hinted that he would be willing to defer some of his large contract in order to allow Pujols to sign.   The team may also have to explore the option of trading some other players with large salaries in order to free up money under their budget. 

Another interesting option that the two sides may be able to explore is having Pujols himself sign a contract in which he is paid considerably more per year near the end of the contract than the beginning.  Since baseball contracts are guaranteed, this is an option that both sides may consider.  That is, Pujols could potentially be paid tens of millions of dollars to sit on the bench if he is incapacitated by what everyone knows to be a career-ending injury.   

[Jared Vasiliauskas & JT] 

March 1, 2011 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 16, 2011

What's the Harm in a Missed Super Bowl?

As reported here earlier, there was "a bit of a kerfuffle" at the Super Bowl this year.  Now, the National Football League is trying to figure out what it can do to address the harm to the fans who were sold tickets to effectively non-existent seats.   Of the 1260 fans effected, about 2/3 were sent to alternative seating in the stadium,  The remaining 400 had to view the game on video monitors or from standing-room only spots. As reported here on Slate.com, the 400 have the following options.

First, the NFL offered the 400 $2400/ticket, three times the face value of the tickets, plus a ticket to next year’s Super Bowl which they could keep or resell.  In the alternative, the NFL offered the 400 a nontransferable ticket to the future Super Bowl of their choice plus accommodations and airfare but they would not receive the $2400.  The third option would be to join a class action lawsuit in the Dallas District Court filed against the NFL, the Dallas Cowboys, and Cowboys owner Jerry Jones.  A fourth option is that the 400 could make an epic movie based on the graphic novel that tells the story of how 400 outraged football fans held their position at the narrow passageway through which a throng of enemies tried to invade their homeland.  The screenplay is still in the works, but you can get a sense of what it will look like from this prequel:

Those not willing to become action heroes may be inclined to join the class action lawsuit.  Attorney Tom Goldstein explains that fans electing this route will likely not get anything more than the NFL is already offering.  According to Goldstein, this is due to the fact that in order to succeed the class action would need to demonstrate that the NFL knew that the portable seats were not going to be ready for patrons by game time and therefore failed to inform them of this.  Goldstein predicts that the class action would likely settle out of court for something very similar to the offers that the NFL has already made.  On the other hand, the attorney representing the class action, Michael Avenatti, says that the compensation offered by the NFL would not cover the full expenses of the patrons and therefore at this time there is not enough information to settle.    He claims that based on pricing of the tickets the day of the game, and other expenses of the displaced patrons the average displaced patron lost almost $4,000, meaning that the NFL offer would not fully compensate them.  Regarding the second option, Avenatti explains that there has been no information provided to the fans as to where their seats for the future Super Bowl will be located, what the airfare will include, and what other accommodations they will receive. 

The class action may enhance the negotiating power of the aggrieved 400, but it also may make it more difficult and more expensive for the NFL to settle the claims.  Are lawyers a good thing or a bad thing?

Payton The NFL has also acknowledged that in addition to the 400, and the 860 fans who were assigned "nosebleed" seats when their assigned seats turned out to be unusable, 1,140 fans were delayed entry to stadium because of the problem.  The NFL has apparently now offered fans in the latter two categories either face value for their tickets or a ticket to any upcoming Super Bowl.  

 As Slate's Jeremy Stahl explains, the best option for the fans depends on the nature of their harm and the nature of their animus.  One reasonable Chicago Bears fan might be happy to have watched the Bears' 46-10 trouncing of the New England Patriots in Super Bowl XX from the comforts of home, thus saving something like $4000.  Another Chicago Bears fan might place the value of being there to see Walter Payton winning his Super Bowl ring at $10,000.  And what would have been the value to hypothetical fans of the New England Patriots if they were displaced and thus forced to miss the humiliation they would have experienced had they witnessed the Bears' 46-10 demolition of their Patiots in Super Bowl XX?

[JT and Jared Vasiliauskas]

February 16, 2011 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Sunday, February 6, 2011

Bumped at the Superbowl

Looks like there was a bit of a kerfuffle over seating at the Superbowl (the game is on as I blog).  According to YahooNews:

Approximately 850 fans with tickets in temporary seating sections were relocated to similar or better seats. Four hundred fans who were not accommodated with seats inside the stadium will each receive a refund of $2,700 – triple the cost of the face value of their ticket.

According to the article, which is citing these angry ticket holders, "stuff blocking the seats" was the reason given for the unceremonious bump. 

Perhaps a good contracts hypo for determining damages - as one member of the crowd yelled, "what about our travel and hotel expenses?"

[Miriam Cherry]

February 6, 2011 in Sports | Permalink | TrackBack (0)

Friday, February 4, 2011

Are Baseball Players Suckers for Oddball Incentive Clauses?

Baseball money With the Superbowl coming up this Sunday, many sports fans currently are focused on football (or at least on the commercials to air during the football telecast).  However, a recent story collecting oddball terms in professional baseball players' contracts recently grabbed my attention.  Most of the terms detailed are incentive clauses of the "do "this thing, get this much more money" variety.  What makes these incentive clauses particularly interesting, however, is that many of the triggering actions appear impossible or near impossible to achieve.  For example, some players that have World Series MVP incentives play for teams that stand little chance of winning games let alone the World Series (sorry, Pittsburgh).  In another perplexing example, a player who is a designated hitter (meaning that he does not play in the field--ever) has a clause promising to pay him extra money if he wins a Gold Glove, an award given to the best fielding player at a particular position.  Ultimately, the article raises an interesting question that some of our readers may be able to address...why?  Why are these clauses, many of which sound downright silly, in these contracts at all?  Is it because the agent copied and pasted the terms from another player contract?  Is it because the player is delusional?  Or, is it because these incentives somehow help the contracts satisfy rules that apply solely to professional sports contracts (such as terms insisted upon by the players' union)?  If anyone has an idea, please post in the comments.  And enjoy the Superbowl!

[H.R.A. w/ hat tip to student Ron Angerer]

February 4, 2011 in Celebrity Contracts, Current Affairs, Sports | Permalink | Comments (0) | TrackBack (0)