Thursday, August 2, 2012
Over at Concurring Opinions, David Hoffman has called our attention to a "bizarre" consideration issue at the Olympics. Professor Hoffman liniks to this story in The USA Today, according to which the performers at the Olympics halftime show -- whoops, make that opening ceremonies -- including Paul McCartney, donated their time. According to The USA Today, the performers received a mere one pound for their performances, and that one pound was paid in order to make the performers' agreements with the Olympics binding.
Professor Hoffman comments as follows:
If true, I take it that British law takes the position that nominal consideration can bind obligees, but that “false” nominal consideration can’t. Thus, the organizers had to both promise to pay McCartney a pound and actually pay it before the ex-Beatle was bound to perform.
To my mind, this is the least good resolution of the consideration problem possible. Look: either consideration should mean something – bargained for exchange motivating actual counter-promising – or parties should be free to dispose of the requirement of consideration entirely. In the United States, only Pennsylvania has taken that sensible latter position. The rest generally tend to require actual bargained for exchange, excepting only charitable subscriptions, which the Olympics are not. The Brits, who handed us this mess in the first instance, have apparently now embraced the unfortunate, mumbo-jumbo, hybrid, which reduces the sensible formality of consideration to a bit of a magical contract theatre. Does anyone think that that pound of consideration actually motivated McCartney’s promise to perform?
Interesting comments follow, including those of Patrick O'Donnell, to whom we tip our virtual hats for having directed us to the Concurring Opinions post.
Unfortuantely, we have at present nothing substantive to add to the learned discussion of at Concurring Opinions. However, we would like to observe that perhaps Sir Paul is happy to work for nominal consideration given that just a few weeks ago, as reported by the BBC, concert organizers pulled the plug on him and Bruce Springsteen because they performed past a curfew in Hyde Park.
Band member and erstwhile proprieter of "Da Bing," Steven Van Zandt, tweeted rhetorically "When did England become a police state?"
Wednesday, July 4, 2012
For those of you who do not follow track and field sports or the Olympics, there was an interesting development in the women's 100 meter final at the U.S. Olympic trials. There was a tie for third. It's actually kind of a nice story. Allyson Felix and Jeneba Tarmoh share a coach and train together. They are friends. Even a photo finish could not determine who came in third.
Unfortunately, a lot rides on the difference between third and fourth. A country can send no more than three competitors for each event. So, nothing's worse than fourth. Both runners have contracts with Nike and those contracts, according to the New York Times, likely include significant bonuses if the runners make it to the Olympics. The situation is apparently unprecedented. There is no official tie-breaking mechanism, and for a time it seemed that the two women would run against one another to determine who goes to London.
But Tarmoh is now re-enacting a Seinfeld episode (see the animated version below), although nobody is claiming she got a head start. Earlier this week, as reported in the New York Times, she announced in an e-mail that she would not run and was conceding her place on the U.S. 100 meter team to Felix.
Tarmoh was initially declared the third place finisher, but that finding was quickly reversed. According to the Times, Tarmoh is refusing to run again because she believes she already won the race, although she did not make use of the available protest mechanisms. Her high school track coach explains that Tarmoh is mentally and physically exhausted due to the stress brought on by the tie. Tarmoh will likely be a part of the U.S. 100 meter relay team, so she should still get a chance to run at the Olympics.
Meanwhile, the sprinters in the Tour de France went at it for the fourth consecutive day. Today's sprint finish was won by Andre Greipel after the favored Mark Cavendish took a nasty spill in the build-up to the sprint finish. Cavendish won the intermediate sprint during the nearly 160 kilometer stage. Despite getting knocked off his bike at speeds likely in excess of 35 mph, I suspect Mark Cavendish will be in the hunt for a stage win tomorrow. He's also supposed to ride for his country in the Olympics about two weeks after completing the 2000-mile, three-week Tour de France.
Monday, June 18, 2012
According to this article on tmz.com, Terrell Owens (pictured) has given the Indoor Football League Allen Wranglers an ultimatum—issue a public apology and pay him the $160,000 that he claims they owe him (for four games) plus his 50% share of merchandise, tickest and concessions from his time with the team.
The team claimed that Owens was cut on May 29, 2012 for not intending to play in two upcoming road games with playoff implications and for missing a team event at a local children’s hospital. He is asking the Allen Wranglers for a public retraction of the statement that he intentionally missed the visit. As reported by Yahoo!sports, Owens claims his contract stated he did not have to play in away games and that the team privately acknowledged that an Allen Wranglers publicist gave him the wrong date concerning the hospital visit.
TMZ.com had earlier reported that Owens was not only cut, he was evicted from the house provided for him by the team, was ordered to turn over the keys to the 2012 Jeep Chrokee that the team had loaned him, and he was given $50 in payment for his stake in the team. According to TMZ.com's latest report on the subject, the Allen Wranglers are standing firm, reportedly telling Owens, "You ain't getting a penny."
[JT and Christina Phillips]
Thursday, April 26, 2012
Sorry, this story is a bit stale, but we've been occupied with the semester. Last month, the New York Times reported that the head coach for the New Orleans Saints, Sean Payton (pictured) would be suspended without pay for one year "for his role in a bounty program that promised money to players if they injured opponents and knocked them out of games."
Upon learning this news, the Saints' quarterback, Drew Brees tweeted as follows: “I am speechless. Sean Payton is a great man, coach, and mentor. The best there is. I need to hear an explanation for this punishment.”
Well, we are not likely the source that Drew Brees looks to for explanations of such things, but is it not obvious that we are talking about serious crime here and is it not equally obvious that, if the bounty program is as described above, the appropriate penalty is not a one-year suspension for Coach Payton but a criminal investigation that could lead to significant jail time and a lifetime ban from the sport for Payton and all other members of the staff or the team who conspired to commit these crimes? We are talking about offering players money for attempting to intentionally injure other players. How is that not simply felonious conduct? And it's not as if the perpetrators in this case can claim, as Michael Vick more plausibly could do, that their criminal conduct is the product of some sub-culture in which outrageous, inhumane behavior is considered normal. Payton and his staff are NFL insiders who rub shoulders with the very people who are disciplining them for their conduct.
If the suspension is upheld, Payton will be deprived of $7 million in salary. Perhaps the Saints can contribute that money to a fund for NFL players and their families who are suffering from the long-term effects of the brain injuries they suffered while playing.
Monday, March 26, 2012
The Austin American Statesman recently ran a report on the contracts the University of Texas enters into with the coaches of the school's sports teams. The report is unusual in breaking down the incentives paid to coaches. For example, the report notes that Texas's men's basketball coach earned a $125,000 bonus because the team won a spot in the NCAA tournament, despite the fact that the team lost its first game in that tournament. The bonus comes on top of a $3.48 million contract. The women's team also made the tournament and also lost in the first round. Its placement earned the team's coach $10,000 on top of her annual contract of $1.09 million.
UT's senior associate athletic director noted that all coaches' salaries, including bonuses, are paid out of athletic department revenues. He stresses that "no taxpayerr money of other university funding" is used for such purposes. If one is inclined in such a direction, one might object that regardless of the source, the expenditure of that kind of money on sports -- the very fact that the University of Texas feels the need to have a senior associate athletic director -- makes one wonder about the priorities of our educational institutions and allocation of resources.
Friday, February 24, 2012
According 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]
Thursday, February 23, 2012
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?
Friday, February 17, 2012
In 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]
Monday, December 5, 2011
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."
Thursday, December 1, 2011
When 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]
Friday, September 16, 2011
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]
Monday, August 22, 2011
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.
Friday, July 22, 2011
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.
Wednesday, June 15, 2011
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]
Tuesday, May 24, 2011
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!
Friday, April 8, 2011
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.
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]
Friday, April 1, 2011
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.
Thursday, March 24, 2011
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]
Thursday, March 17, 2011
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.
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.
Monday, March 7, 2011
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]