By: Edward H. Schauder
Miracle on Ice! The 1980 Olympic Hockey Team. Where were you on February 22, 1980? Most hockey fans remember the answer to that question. Do you believe in Miracles? For the players and coaches that comprised the 1980 Olympic Hockey Team, the answer will always be a resounding YES! One morning they were 20 college kids coached by one of the greatest motivators of all-time, and the next…they beat the Russians! For the players and their fans, it was, and will remain, the most memorable sporting event of their lifetime.
In 1999, Sports Illustrated selected the “Miracle on Ice” as the top sports moment of the 20th century. During one incredible weekend in February of 1980, chants of “USA! USA! USA!,” and Al Michael’s incredulous question “Do You believe in Miracles?,” gave a discouraged America, a country besieged by high prime-lending rates and double digit inflation, unnerved by the Soviet invasion of Afghanistan, and frustrated by the plight of 52 hostages held by Iran, something really to cheer about.
After winning the gold medal at Lake Placid, President Jimmy Carter honored the team at a White House ceremony. Then? Team Captain Mike Eruzione, who scored the game winning goal against the Russians, was quoted as saying: “You win a gold medal, you accomplish everything you set out to accomplish….It’s the greatest moment of your life as an athlete! And its over, it ended too quickly…. I woke up Tuesday morning…. What, what happened? Is it a dream?”
Ed Charles was the oldest member of the 1969 Miracle Mets. The Mets, the “Lovable Losers” and an expansion team in 1962 , in an era before free agency, went from next-to last place in 1968 to overtake Leo Durocher’s 1969 Cubs and not only win the National League pennant but also the World Series, four games to one, over the mighty Baltimore Orioles. At a time when the country and New York city were reeling over the War in Vietnam, racial tension, a blackout and the assassinations of Robert Kennedy and Dr. Martin Luther King, Jr., the New York Mets gave baseball fans everywhere something to feel good about and memories that would last a life-time.
“I can’t believe that it’s more than 40 years later and people still want to talk about the 1969 Mets,” said Charles, who was the part-time third baseman on the 1969 Mets. “There’s not a day that goes by that somewhere in my travels somebody doesn’t want to talk about the 1969 Mets,” said Art Shamsky, an outfielder on those 1969 Mets. Shamsky, a Missouri native, has made New York his permanent home after his baseball career primarily to leverage his affiliation with the 1969 World Champion Mets.
So what do these two championship teams–two of the most fabled and iconic championship teams in sports history– have in common? As in the case of most championship teams, after the victory parades, the thrill of victory and the cheering have subsided, the years pass and members of the team are scattered across the country. While the members of these teams will forever be linked together by their collective accomplishment, geography and continuing on with their lives and new careers preclude them from dictating their destinies and commercially exploiting their historic accomplishment as a team. Aside from an occasional reunion here and there, the players seldom have an opportunity to collective interact as a cohesive unit with each other and their fans.
When players are active in professional sports, they are represented by their respective players association that negotiates licensing arrangements on their behalf. Their representative negotiates endorsement, appearance, memorabilia, sponsorship and other opportunities on their behalf. With respect to the 1980 Olympic Hockey Team, after they stunned the hockey world, virtually the whole team was represented by super agent Art Kaminsky. However, once players retire, they are no longer represented by their respective active player associations. As time passes, the typical athlete (mega-stars excluded) do not get the same level of attention from their representatives who, no longer receiving a percentage of the player’s contract, turn their focus on representing today’s current talent and stars.
In the 1990s I conceived and implemented a unique concept in sports marketing. By forming incorporated entities or unincorporated associations made up of members of championship sports teams or professional athletes linked together by similar accomplishments, I created and developed programs to protect and market their intellectual property. From initial contact with the athletes to obtaining licensing rights, corporate sponsorships, endorsements, autograph memorabilia deals and appearances, I represented and negotiated the contracts for some of sports history’s most beloved and storied teams, including the 1969 Mets, 1977 Yankees, 1972 Miami Dolphins, 1980 United States Olympic Hockey Team, and the 1986 Giants. I also co-founded the Negro League Baseball Players Association on a pro bono basis to represent the great men of color that played baseball before Jackie Robinson became the first African American to play Major League Baseball. These programs not only generated multiple revenue streams for the players but I’m very proud to say generated over a million dollars for many worthy charities as well. Through carefully coordinated efforts with the applicable leagues, governing bodies and holders of any other intellectual property rights that were necessary for the success of the program, we created a win-win scenario for all involved.
That the members of the 1969 Mets and the 1980 Olympic Hockey Team each took the initiative to organize themselves into a single-minded, revenue generating and fan-friendly entity years after their momentous accomplishment (and in the process benefited many worthy charities) is another thing that these two historic teams have in common!
The balance of this article will focus briefly on 8 practical considerations in organizing nostalgic athletes into revenue generating enterprises.
1. Team Marketing Programs Protect the Intellectual Property of its Members
One advantage of nostalgic players organizing is that it affords them an opportunity to protect their publicity rights and control their collective destiny when it comes to licensing, sponsorship and endorsements. For example, the members and coaches of the 1969 Mets were organized into Miracle of 1969 Enterprises and the members of the 1980 Olympic Hockey Team were organized into Miracle on Ice Enterprises. Once organized, these entities, controlled and governed by the rules adopted by its members, assumed the role of the applicable players association or super agent, as the case may be, for its members.
The 9th Circuit Court of Appeals recently issued a ruling on May 2, 2011 on whether EA Sports and the NCAA owe former Nebraska Quarterback Sam Keller and former college football players royalties for portraying their image and likeness in the popular EA Sports NCAA Football game franchise. This ruling may have a major impact on Hollywood’s and other industries’ ability to depict public figures going forward. The court granted EA’s motion to dismiss Plaintiff’s claims for failure to state a claim. The court found that the Plaintiffs had failed to adequately allege in its claims “(1) that EA participated in a price-fixing conspiracy with use of their images, likenesses and names; and (2) that EA participated in a ‘group boycott refusal of the deal’ conspiracy for us of their images, likenesses and names.” The court granted the Plaintiffs leave to amend to plead facts that would show that EA agreed to participate in the alleged conspiracies.
I encountered a similar legal issue in 1994 while representing the 1969 Mets. There were many companies that were commercially capitalizing on the players’ images on t-shirts, plaques, trading cards and other products. The players had never received any compensation. “Without a doubt the 1969 Mets were one of the most exploited teams in baseball history,” said Art Shamsky. Since the players were scattered all across the country, there was very little they could do about it at the time. By organizing themselves, all of that changed.
Once such company was Garan Industries. For years Garan had produced a very popular t-shirt with a picture of the 1969 Mets on the front of the shirt and the names of the players on the sleeves. Right to Privacy laws in many states (including New York Civil Rights Law Section 50) prohibits the use of an individual’s likeness for commercial purposes without consent. Under my direction, twenty members of the 1969 Mets, including Art Shamsky, Bud Harrelson, Tommie Agee and Tug McGraw, sued Garan. Garan had claimed that the picture celebrated “team identity” thereby not entitling individual players to any compensation. However, Justice Martin Schoenfeld ruled in Shamsky v. Garan Inc. that “these players have the right to commercial exploitation of their individual identities, even if collectively these identities may be somewhat less valuable than the identity of a greater, more memorable, whole.” The case was eventually settled for a six figure cash settlement. Shamsky v. Garan remains an often quoted right of publicity case.
2. What Legal Structure Should be Employed in Structuring These Programs?
There are many potential legal structures that may be utilized in organizing nostalgic athletes including forming a corporation or a limited liability company with each player holding stock or membership units, as the case may be, or forming a special purpose management/licensing entity to serve as the collective group’s representative with each player conveying to such entity the requisite rights to represent such player for licensing, appearances, sponsorship, merchandising and other desirable deals. The exact legal structure for a particular team will need to take into account many variables including certain tax implications, federal and state securities laws, existing exclusive agreements that certain members of the teams (or their estates) may have entered into over the years and the comfort and trust level that the particular former teammates have with each other so many years later.
Part II of this article, and six additional considerations, will appear in the next issue of the Alert. The author is a Partner and the Chairman of the Sports and Entertainment Practice Group at Davidoff Malito & Hutcher LLP in New York. The author is one of the foremost experts in organizing groups of athletes (either for players or team alumni associations) that are designed to generate revenue generating opportunities that currently do not exist and to create a win-win situation for all parties involved. For further information, please contact the author at (212) 557-7200 or at ehs@dmlegal.com.
