General Counsel for Pro Teams Must Scrutinize Sponsorship and Stadium Agreements
Looking for a growth industry in the sports law field. It might be the general counsel’s office in the pro sports franchise. More and more responsibilities are being heaped on these attorneys.
Witness a recent panel discussion at the Forum on the Entertainment and Sports Industry 2006 Annual Meeting in Los Angeles
Kathie Pointer of the San Diego Padres focused on the “subservient provision to the rules of Major League Baseball. For the most part, your local sponsors will adhere to it. The exception may be those who are purchasing rights, hoping for national exposure. It is imperative to know who those people are and be upfront with them, while negotiating. They need to know that if you are fortunate enough to be in the playoffs, that MLB may have sponsorship deals that replace their deal.
Exclusivity is another vexing issue for GCs..
“The goal for the club is not to provide exclusivity to sponsors, unless the economics dictate otherwise. But if you have to, then narrowly define it.
Another challenge is that when a sponsor purchases signage, “they may expect that signage year-around. As an attorney, you must protect the club’s right to market the ballpark.”
The problem may arise when “you want to rent out the ballpark for a concert, such as the Rolling Stones, and they already have their own sponsors. It is important to carve our protections for your sponsors. Most of time, you can satisfy your sponsors by not covering everything up, or compensating them in other areas.”
In the post 9-11 era, everyone who has oversight over stadium security is aware of the legal challenges around suspicionless searches.
Ed Goines, former in-house counsel for the San Francisco 49ers, offered the following tip when searching patrons entering the stadium for a game:
“Don’t do it for crime control. Don’t tell them you are searching them because you are concerned about fights. Tell them you are searching them for fan or venue safety.
“Crime control must be done by the police.
As general counsel for the Los Angeles Dodgers, Sam Fernandez said that one of the key tenets of this job is to make allowance for “what happens when things go wrong. What happens, for example, if you are giving away Dodger blankets and the blankets don’t show up, or are defective? That is a pr disaster and, at best, a make good situation.”
He also expressed concern over liability issues that emerge when a marketing idea is a contributing factor. “We worry about foul balls,” he said. “What may seem like a great idea, such as a T-shirt cannon, can create legal issues.”
Companies Are Measuring Returns of Corporate Sponsorships
Jeff Gewirtz elaborated on the corporate sponsorship climate in professional sports during one of the sessions at the ABA conference. Gewirtz should know all about such subjects.
Before becoming General Counsel & Managing Director of Legal Affairs for the United States Olympic Committee this summer, he was legal counsel at Coca-Cola.
“The days when major corporations pay astronomical prices for professional sports are pretty much gone,” Gewirtz said. “These deals used to get done because the CEO of the corporation was friends with a league official. Today, corporations look at these deals with a return on investment in mind.
“That’s why the fees that corporations are willing to pay are flattening out. The exception to this is FIFA (World Cup) and the NFL, which continue to show 10 to 15 percent year-to-year growth.”
Gewirtz said one of the challenges with determining the ROI of a deal is that it is an “inexact science” when it comes to gauging the benefits. “If you have a spike in sales, you don’t know whether it is attributable to a sponsorship or another marketing initiative.”
He offered another observation around local sponsorships.
“Today’s luxury suites have gotten so plush that it almost makes a local sponsorship worthwhile by itself,” Gewirtz said, noting that it can be the ideal perk for a company’s best customer.
The Legal Challenges around Doping Allegations
A panel at the ABA conference scheduled to talk about legal issues in the Olympic sports promptly move to the subject of doping and stayed there.
Panelist John Ruger noted that a challenge of representing those accused of doping is that the job’s knowledge requirement is “25 percent legal and 75 percent medical”
Panelist Howard Jacobs, who has or is representing Floyd Landis and Marion Jones discussed some of his preferences before embarking on such a defense.
“You hope you get the call before they test the ‘B’ sample,” said Jacobs. He added that the reason is because he would want an expert present for the testing. “With EPO, for example, the testing process is very finicky. The expert selection is such instances really depend on what is being tested.”
Cheating, i.e. doping, is easy if you know how to do it.
The panelists lamented the fact that human growth hormone remains virtually undetectable.
In addition, athletes can avoid testing positive for EPO by carrying a small amount of laundry detergent into the testing room, dipping your finger in the laundry detergent and then peeing on your finger. It will “eat away at the EPO.”
If an athlete tests positive, the first thing the attorney must do is determine if “they ran the test properly. One of the challenges with this is that the testing manual can be 300 pages or more. You have to make sure you own the operating procedures.
“If they did run the test properly, the next question may be did they properly apply positivity theory on the case.”
All long, according to Jacobs, there is “a presumption that they did the test right. Only the athlete can prove otherwise.”