By Jarett Warner
Typically, in this writer’s opinion, one of the most exciting parts of the annual Sports Lawyers Association Conference is the Saturday morning General Counsel’s and Executive Director’s Forums. This year did not disappoint.
Donald Fehr, the Executive Director and General Counsel of MLBPA took the opportunity to respond to comments made by Jerry Reinsdorf, Chairman of the Chicago White Sox. A large portion of Mr. Reinsdorf’s luncheon speech the day before was focused on criticizing MLBPA and Mr. Fehr. First, Fehr responded to Reinsdorf’s comments that the union was much too interested in protecting the civil liberties of its members. Fehr noted that this is a good thing and how this issue arises in relation to, among other things, MLB’s search for player’s involvement with drugs. Fehr also recounted a story about the union protecting Fergie Jenkins with regard to questioning by MLB concerning a drug charge for possession of marijuana. Fehr also responded to Reinsdorf’s claim that MLBPA was only concerned with maximizing player salaries rather than the good of the game. Fehr stated that he did not comprehend what exactly the term “good of the game” meant and that the union’s job was to maximize its members’ conditions, including salary. Fehr noted that it was not the job of the union to follow management’s lead and that if he did so he would probably be fired. Although Reinsdorf commented that MLBPA blocked drug testing in 1985 (specifically MLB was concerned with Cocaine use), Fehr responded that MLB’s proposed policy violated the collective bargaining agreement and the National Labor Relations Act and that an arbitrator determined that MLB’s acts were unlawful. Fehr maintained that if the union does not do what the players want, Fehr would be fired and that the players are involved in the decisions to all issues.
The other star to the Saturday morning forum, was DeMaurice F. Smith, the newly elected Executed Director of the NFLPA. Mr. Smith first had a moment of silence for his predecessor, Gene Upshaw, who recently passed away and noted that “we lost a leader. I could never fill his shoes.” Mr. Smith advised the audience that he came from a long line of Baptist preachers and proved that he could easily follow in the footsteps of that long line, delivering a powerful speech about the future of the NFLPA. Smith noted that the owners opted out of the last year of the collective bargaining agreement, which would have guaranteed the owners $8 billion. Smith stated that this opt out will push the league into an uncapped salary cap year and recognized the threat of a lock out if a deal is not completed. Smith also stated that the players understand that there may be a war on the forefront, but stated that the NFL and NFLPA “as partners . . . will find a way.”
The Executive Director’s Forum was rounded out by Paul Kelly, Executive Director of NHLPA and Hal Biagas, Deputy Counsel for NBPA, who was filling in for Billy Hunter (Executive Director of NBPA), who had a family emergency.
Kelly noted that the league’s revenue had increased year after year and although he recognized that there were a few struggling franchises, he focused on the strong franchises doing well (i.e., Chicago, Boston, Washington). With regard to the recent bankruptcy filing of the Phoenix Coyotes, he stated that the union was not taking sides but wanted the issue to be resolved as soon as possible as the involved Coyotes’ players were uncertain as to their future. Kelly urged that the television production of the NHL in the United States needed much improvement. Although he stated that the Versus channel is a great partner, it has problems as it does not have highlight shows like ESPN. He stated that people “don’t want to tune into Versus unless you like turtle wrestling.” Kelly urged NBC to do more, noting that the hockey season began earlier than January and that NBC does not put hockey on television during sweeps week.
Biagas reported on increased television ratings, a predicted 1-2% increase in revenue for this season and advised that under the current collective bargaining agreement, the players get 57% of the revenues. Biagas stated that the current CBA has 2 years left, that he does not believe that the NBA will exercise its third year option and thus the current agreement will expire in June, 2011. Biagas commented that when the CBA was entered into, all sides believed that it was fair for the players to receive 57% of the revenues. Now that the revenue has dropped, the owners are attempting to make up for the lost revenue. Finally, Biagas called Reinsdorf’s comment that unions only care about salaries offensive.
The General Counsel’s Forum included presentations by Thomas J. Ostertag, Senior Vice-President and General Counsel of MLB, Dennis Curran, Senior Vice President/Labor Litigation and Policy of NFL, William Daly, Deputy Commissioner of NHL and Daniel S. Rube, Senior Vice President and Deputy General Counsel of NBA.
Ostertag (MLB) spoke about the fraudulent actions of some foreign players with regard to their actual identity and age (using the Smiley Gonzalez case as an example) and noted that there has not been a lot of litigation recently. He also briefly discussed that MLB has an antitrust exemption, which has not had any attacks in the past year.
Curran (NFL) noted that the owners had elected to take two years off the collective bargaining agreement, which now expires after the 2010 season. Negotiations for a new agreement will begin in the next month or so. He noted that the recession has affected the NFL, as among other things, over 100 positions had been cut by the NFL and that the NFL’s teams had laid off 200 people. Despite the layoffs, the salary cap had increased to $123 million. Curran discussed some of the ongoing litigation, including the Vikings case involving the suspension of certain players for the use of diuretics, which is scheduled for trial in June. He also discussed the Plaxico Burress case, where the Court has held that the fact that Burress shot himself in the leg does not mean he forfeited his contract, because it was not willful.
Daly (NHL) was extremely optimistic about the state of the NHL. He noted that it was the fourth straight year of growth in the NHL, which set a new attendance record of 21 million league-wide and an average of 17,500 people per game. He stated that television ratings have increased with a lot of new sponsorship. Daly admitted that in United States currency, the growth in revenue this year would be approximately 1%. The NHLPA has given notice it that would not re-open the CBA this year and thus it will run through at least the 2010-2011 season. Daly also discussed that the NHL’s antitrust litigation with Madison Square Garden had been settled. MSG had challenged the NHL’s ability to control the New York Rangers’ website as part of the NHL. However, the Court held that the Rangers had released its ability to control its website. Finally, Daly discussed the bankruptcy filing of the Phoenix Coyotes, commenting that the filing was done just to break the existing lease to accommodate a relocation to Ontario.
Rube (NBA) stated that the state of the NBA was extremely strong and that it had a more up tempo style. He noted that the Game 6 playoff game between the Rockets and Lakers was the highest viewed NBA game on ESPN ever. Attendance was up this past season a shy less than 1%, the third highest in NBA history. Rube also commented that NBA’s international presence continues to expand, with strong partnerships from U.S. and China based companies. The NBA and NBPA is completing the fourth year of a six year agreement, which will take them through the end of the 2010-2011 season, with a league option for the 2011-2012 season. The players are guaranteed a 57% payment of revenues.
Jarett L. Warner is an associate at Havkins Rosenfeld Ritzert & Varriale, LLP in New York, New York. He specializes in the defense of professional and minor league sports teams in personal injury actions and litigations arising out of stadium construction. He has also counseled risk managers, venue owners and operators, general counsels and clients with self-insured retentions to minimize liability and to develop successful litigation strategies. He can be reached at Jarett.Warner@hrrvlaw.com or (646) 747-5104.
