The Soccer World Cup 2006 in Germany: A possible corruption scandal unfolding nearly a decade later

By Samantha Sayn-Wittgenstein – Thompson Rivers University JD Candidate

The soccer world cup is one of the biggest events in the world. It takes place every four years, has over 750 million viewers and is broadcasted to more than 200 countries. Germany gained international respect, reinvented patriotism and boosted the economy as hosts of the 2006 world cup. The so called “summer fairy tale” was a glowing success. In recent months, the memories of the fairy tale have turned into a nightmare made up of corruption, bribery and embezzlement allegations.

On October 16th 2015, a major news agency published reports of payments in the sum of 6.7 million Euros (9.5 million CAD) made by the DFB (German Football Association) to FIFA during the bidding for the 2006 World Cup. Shortly thereafter, the Germans admitted to inconsistencies in payments surrounding the bidding. Allegations about bribery center around Franz Beckenbauer, one of Germany’s most popular soccer players and the driving force behind Germany’s bid.

In 2000, FIFA’s executive committee, composed of 24 members from all over the world, was faced with the question, whether Germany or South Africa will be hosting the 2006 World Cup. At that time, there were seven European members, implying that Germany needed to sway at least five non-European members to vote in their favour. In the end, Germany prevailed with 12 votes over South Africa’s eleven. Committee member Charles Dempsey of New Zealand abstained from voting. Following the vote, Dempsey complained about pressure from influential European interest groups, however, vehemently rejected corruption allegations. Subsequently the question remains: What were the 6.7 million Euros for, if not to bribe FIFA officials?

Lawyer Christian Schertz, hired by the DFB, stated the millions were paid by former Adidas CEO Robert Louis-Dreyfus to fund a cultural project during the World Cup. The obvious problem is that this project never happened, which leaves the DFB to explain why the millions have never been repaid to Louis-Dreyfus or even appeared in FIFA or DFB accounts until 2005?

The main evidence presented in the news article is a handwritten note by Wolfgang Niersbach, Vice president in 2005, describing the payment of 6.7 million Euros as well as a borrower’s note signed by Beckenbauer. This was sufficient for the prosecution to announce that a so called “initial suspicion” as well as a “monitoring process” relating to fraud, embezzlement and corruption have been initialized, even though the DFB produced a handwriting expert, who publicly raised doubt about the signature on the document actually being Niersbach’s.

On November 3rd, multiple raids of the homes of DFB officials were carried out, seizing documents and hard drives. Just days later, Niersbach resigned as current president of the DFB and Beckenbauer continuously rejected any claims of payments to former FIFA vice president Jack Warner, who has been banned for life by FIFA on grounds of extensive corruption. Yet, on November 11th, a signed contract surfaced, which promises Warner’s confederation “miscellaneous benefits” and is dated just four days prior to the vote for the 2006 winning bid. Beckenbauer told a newspaper that he had no recollection of this document, but reassured that the benefits were of no monetary value and came in form of support with ticket sales.

If the payments are legally explainable, why did the DFB not open their accounts the day the allegations were made public and did so? Maybe because the burden of proof lies with the prosecutors and the DFB is relying on former officials claims of a clean slate. Or because the legal background of the published story seems rather fragile at this point in time. Most of what has been presented is simply a chain of indications. In an interview the author of the original report, Jens Weinreich, admits to not verifying each and every aspect of his article. Further, some of the mentioned offences fall under the five-year statute of limitations, except the allegation of serious embezzlement according to section 263 of the German Criminal Code, which carries a ten-year statute of limitations. Additionally, various corruption related offences have a 15-year statute of limitations in Switzerland, where FIFA has its headquarters, which potentially would allow for prosecution there. For what it is worth, FIFA’s Ethics Commission vowed to investigate the case as well amongst their own wave of corruption allegations.

Whatever will be revealed during these investigations, the DFB will suffer a significant loss of respect and a massive damage to their image, while the corruption allegations in the world of soccer just do not seem to end.

 

Get Out of the Way or Forever Hold Your Peace: Revisiting the Baseball Rule

By Or Regev – Thompson Rivers University JD Candidate

“It is absolutely clear that there will be changes…” These words uttered by the Commissioner of Major League Baseball (MLB), Robert Manfred, did not fall on deaf ears. At the November 19th news conference, Manfred was referring to changes to fan safety in ballparks, an increasingly urgent matter that has taken centre stage in his relatively young tenure as Commissioner. According to a Bloomberg News report roughly 1,750 spectators get hurt each year by batted balls, most of which are foul balls. The issue of batted balls injuring fans is not a new phenomenon. Despite this, the MLB has done little in the way of improving fan safety, choosing to rely on the defense of the “Baseball Rule” instead. The Baseball Rule holds that where a proprietor of a ball park erects a net or screen behind home plate, and it is sufficient to provide adequate protection, the proprietor has fulfilled his duty and cannot be liable in negligence. In light of increasing injuries, it is time to revisit the Baseball Rule, which undermines the legitimacy of these types of fan injuries.

On the Docket

It appears that the timing of Manfred’s address to improve fan safety may have been prompted by a lawsuit currently waiting to be tried in the U.S. District Court for the Northern District of California. On July 13th, 2015, a group of MLB ticket holders filed a class-action lawsuit against Rob Manfred and the Commissioner’s office, alleging that Manfred has failed to uphold his duties to enact sufficient safety measures for fans. The claim argues that Manfred has engaged in a widespread pattern of negligence, misrepresentations and omissions toward baseball fans at games. While the outcome of this case remains to be seen, some fans may want to consider alternate measures.

Stephanie Taubin is one of these people. In August 2015, Taubin filed a lawsuit claiming negligence, but this suit was against the Boston Red Sox principal owner, John Henry, not the MLB. Taubin was sitting in an area above home plate where protective glass had been removed for renovations. She was struck by a foul ball and suffered facial fractures and neurological damage, costing her money in medical expenses, lost wages and diminished earning capacity. Whether Taubin’s cause will be fruitful also remains to be seen, but if the Massachusetts court draws on any parallels from a 2013 NHL settlement, her case may be successful.

Cross-State Analogizing?

In April 2002, Elizabeth Hahn sued the NHL, Chicago Blackhawks, and the United Center after being hit by a hockey puck and requiring emergency brain surgery. In the suit, Hahn claimed that the Blackhawks, NHL and United Center officials knew for years that flying pucks were dangerous, but chose not to increase safety measures. Hahn was successful in reaching a settlement, which was the first case ever to establish a link between the NHL and fans injured at individual team-owned facilities. Following this settlement – as well as the unfortunate death of a 13-year-old Columbus fan who got struck in the temple by a flying puck – the NHL required all its rinks to install protective nets for the subsequent season.

The MLB’s Past and Future for Fan Safety

Frankly, MLB team owners should count their blessings. The NHL instated protective nets almost 13 years ago in response to a few injuries and a tragic death. For clarity, let’s not confuse the fact that the MLB already has netting. The fact of the matter is, the NHL had ten feet tall glass prior to installing nets. The MLB had nothing. The netting that some MLB fans are advocating for now are in addition to the existing nets; the idea is to extend them to each foul pole or a point nearby. As an MLB team owner I would be pressuring Rob Manfred to increase fan safety now, and I would have pressured Bud Selig to increase fan safety thirteen years ago after Elizabeth Hahn successfully settled with the Chicago Blackhawks. It is a miracle that teams around the MLB haven’t ceded to lawsuit after lawsuit, but perhaps this is why the pressure on Bud Selig wasn’t so overwhelming. It is time to stop hiding behind the exclusion of liability prose on the back of MLB admission tickets and start effecting meaningful changes to enhance fan safety.

Have the St. Louis Rams Already Left?

By Alexander Paterson – Thompson Rivers University JD Candidate

On January 5th 2015, a development group that included a company controlled by Stan Kroenke, owner of the St. Louis Rams of the National Football League (“NFL”), announced plans to build a new 80,000-seat stadium in Inglewood, California, a suburb of Los Angeles. At the time of the announcement, negotiations between the city of St. Louis and the Rams over funding for a new stadium had not been going well. Consequently, the announcement seemed like an implied threat to the city of St. Louis that the team would relocate if they did not agree to the Ram’s desired terms for stadium funding. Despite the reaction to the announcement, the NFL has been steadfast in their assurance that no team will move to Los Angeles without the NFL owners’ approval. However, the by-laws relied on by the NFL, requiring that three fourths of the owners support any relocation request, will likely be little re-assurance to St. Louis Ram’s fans based on past decisions of the courts regarding the relocation of NFL teams. As noted by Dallas Cowboys owner Jerry Jones, in the past “…teams have moved without the permission of the league…” because “…there are just certain things that clubs can do.”

Historically, (US) antitrust considerations for professional sports were first considered in the context of baseball, where, in Federal Baseball Clubs, Inc. v National League of Professional Baseball Clubs (1922), the US supreme court held that baseball activities were not inter-state commerce, and thus were not subject to federal antitrust laws (i.e. The Sherman Act). This decision was revisited in Flood v Kuhn (1972), where the Supreme Court declared that the antitrust exemption given to baseball was an exception, not the rule, and did not extend to other professional sports leagues. As a result, the stage was set for an antitrust challenge of Rule 4.3 of Article IV in the NFL constitution, which stated: “no NFL member club can relocate without the approval of three-fourths of existing league member clubs.”

Such a challenge commenced in 1980 with L.A. Memorial Coliseum Commission v NFL (“Raiders I”), where the Oakland Raiders and Los Angeles Coliseum alleged a breach of antitrust law following a 22-0 vote by NFL owners against allowing the Raiders to move to Los Angeles. Raiders I was decided on the basis of the Sherman Act, which prohibited “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among several states or with foreign nations.” To determine whether the NFL had engaged in such prohibited activity, the Court conducted a “rule of reason” analysis. The analysis required the court to determine unreasonableness based on (1) the nature or character of the contracts, or (2) on surrounding circumstances giving rise to the interference or presumption that they were intended to restrain trade and enhance prices.

Under that analysis, the key to determining if there had been a restraint of trade was the relevant market in question. In this case the relevant market accepted by the jury was Southern California, not the entire US, and it was concluded that no alternative forms of entertainment could adequately substitute for an NFL game. Consequently, the NFL was found in breach of antitrust law, and hugely onerous “treble damages” (triple times the allotted damages) were initially assessed against the NFL to the tune of over $50 million. Not surprisingly, NFL owners have subsequently been extremely hesitant to expose themselves to treble damages once again through attempts to prevent franchises from relocating.

The current situation involving the Rams, like Raiders I, involves a team owner wishing to move his team to Los Angeles because their current host city was unreceptive to their desires for a publically funded new stadium. Due to the striking parallels between Raiders I and the Rams’ current predicament, a legal battle between the NFL and Stan Kroenke seems likely to have the same result. So while the NFL continues to assert their control over any potential franchise relocations, Jerry Jones and St. Louis Rams fans know that, barring a sudden reversal of judicial opinion, it is powerless to stop the Rams from leaving St. Louis if Stan Kroenke truly wishes to. Which leaves the city of St. Louis with two distasteful options: agree to publically fund a new stadium the city probably can’t afford, or watch a team they have loyally supported for the last 20 years walk away for a better offer.

Un-fouled Balls: The MLB’s Attempt to Prevent its own “Deflategate”

By Cole Rodocker – Thompson Rivers University JD Candidate

Baseball is not a sport unaccustomed to controversy. In the wake of the early 2000’s steroid scandals and congressional tongue lashings, Baseball seemingly wised up and, at least partially by dint of keeping out of the more scandalous headlines, has seen a resurgence in popularity. While doping and player enhancing substances are the current topic de jour, “Deflategate” has increased the scrutiny surrounding equipment violations. Corked baseball bats (whose supposed benefits may be entirely psychological) have long since gone the way of the dodo; this brings us inevitably to the ball itself. An examination of the eponymous baseball shows just how thorough the MLB is, and must continue to be, in order to avoid a challenge to the legitimacy of their sport.

Given the nature of a baseball, it would seem that there is little that could be done to modify it. This, however, could not be further from the truth. Unbeknownst to many, baseballs are “rubbed up” with a special mud in order to remove the gloss from the ball and give the pitcher more control over a ball with a now slightly grainier texture. This process is even enshrined as rule 3.01c in the MLB rule book. This was largely a response to a player being killed by an errant pitch in the 1920’s, the first and only recorded incident of a player being killed by a pitch. Baseballs are fastidiously checked by umpires upon being struck, as the scuffs and dings that the ball may have suffered can lead to an unfair advantage to the pitcher who can gain more control over the ball by virtue of the damage.

Pine tar, emery boards, nail files, chewing tobacco and many other items have been used to try and modify the characteristic of the balls during play. As a result of Deflategate, the MLB has put new supervisory practices into place with which to monitor and protect the balls before they even enter a pitcher’s glove. Not only are MLB representatives accompanying balls from the back rooms to the back stop, they have also supplanted the roles of ball girls and ball boys who formerly fetched more balls for the umpire upon running out in order to prevent any tampering in transit. This monitoring helps to avoid legal issues surrounding agency, as, if a case were ever brought before a court, it would no doubt be a quagmire of half truths and outright lies in trying to frame a players cheating as being directly guided by the management on its behalf such that the corporate veil might be pierced and a lawsuit levied directly against the heads of an MLB team. Less dramatically, it also makes teams and players less likely to be subject to fines, the perennial black eyes dished out by every major sporting league.

In addition, the MLB recently sent out a communique to all 30 teams informing them of how they must store their baseballs prior to game time. This comes in the wake of the Colorado Rockies long used technique of storing balls in a humidor in order to combat the effects of Colorado’s natural air quality and elevation which, if untreated, will see more balls turned into homeruns based on the simple physics of the ball becoming more dense and thus, springing off the bat in a more lively fashion. Were one team to find another attempting to gain a concrete advantage in this day and age, the legal options available to it may be limited, as even if they were to sue for tortuous interference with business, the proceeding embarrassment to the league would do irreparable damage to all teams, not just the ones involved. There is no doubt that Robert Manfred, the current commissioner of the MLB, is not interested in participating in the kind of legal wrangling that Roger Goodell partook of, given that the dispute resolution mechanisms in baseball are not terribly dissimilar from those used by the NFL.

Ultimately, all of these issues speak to both the desire to have a level playing field, as well as to have fair play while on it. Only the most naïve would think that players will not continue to gain a competitive advantage. Baseball even seemingly allows some forms of cheating such as sign stealing and analysis as a kind of necessary conceit. Teams and players agree to have a uniform set of rules and code of ethics based on rules that have remained largely unchanged for a century. Attempting to circumvent these rules not only hurts the integrity of the game, but may bring up legal questions that should not be dealt with by a multi-billion dollar empire trying to stay above the fray.

Should Collegiate Athletes be Compensated?

By Brian Howarth – Thompson Rivers University JD Candidate

The National Collegiate Athletic Association (NCAA) is the governing body of university/college sports in the United States, and Canadian Interuniversity Sport (CIS) is their Canadian equivalent. Both of these organizations do not compensate their athletes in a monetary fashion, yet many elite Canadian athletes still flock to the United States to compete in their sporting system. Approximately 3,500 Canadian athletes are enrolled in U.S. NCAA programs, which includes roughly 2,000 athletes that could be in comparable programs offered within the CIS. One of the most notable illustrations of this trend can be seen in women’s hockey, where 460 Canadian players were playing at U.S. universities in 2012.

The compensation issue dwells down to the classification of these athletes. They are classified as students and amateur athletes; therefore their education is their compensation. David Church, head of the Canadian seniors women’s national hockey team and the York University Lions commented on the situation, stating that the CIS might be more alluring with better financial support, but that the current scholarship model being tied to academics is important. Church is quoted saying, “I believe strongly in the CIS model, in that we’re student athletes first”.

Where this issue really comes to light is within the NCAA. The United States court system has recently provided jurisprudence on this matter, namely in the case of Edward C O’Bannon, Jr. O’Bannon challenged the provisions within the NCAA that do not allow for student-athletes to be paid for the use of their names, images, and likeness, as being contrary to section 1 of the Sherman Antitrust Act of 1890, 15 U.S.C. § 1, [which] prohibits “[e]very contract, combination …, or conspiracy, in restraint of trade or commerce”. Unfortunately, after an appeal, the court vacated the injunction to pay $5,000 of deferred payments per year to athletes. They did, however, uphold the ability for an increase in the “grant-in-aid”, which allows for the coverage of full costs of student attendance. Additionally, though the National Labour Relations Board ruled against such unionization, the Northwestern University football team attempted to create a union, on the basis of being school employees rather than student-athletes, all in a plight to more fairly compensated.

The major factor here, that seems to be in the background, is the sheer economic power the NCAA wields. The NCAA generated $989 million dollars in its 2014 fiscal year. In 2010 it signed a 14 year $10.8 billion contract with CBS and Turner Broadcasting to televise its men’s basketball tournament and in 2012 signed a 12 year $5.64 billion contract with ESPN to broadcast football playoff and bowl games.

Although, much of this money is distributed to schools, athletes aren’t seeing any of it. Schools are also paying coaches an exorbitant amount of money. Consider Nick Soban, currently the highest paid coach in the NCAA, coach of the Alabama Crimson Tide football team, makes over $7 million a year, with a bonus structure to reflect strong performance of the team. USA Today reports that over 100 coaches in the NCAA make over $500,000 annually.

In Canada, data from 2012-2013 reveals Canadian universities provide nearly $15 million in scholarships to athletes within the CIS. However, only “40% of all CIS student-athlete receive an athletic scholarship which, on average, covers 51% of their tuition and compulsory fees.” Although this can be coupled with academic scholarships as 23% of athletes maintained an academic average above 80%, it is simply not enough.

The CIS is just not in the same league as the NCAA, economically or financially, but the principles remain the same. These athletes are putting the future sporting careers on the line to participate in these programs. Gone are the times when collegiate athletes were in the shadow of professional sports. With such a large influence over these programs and incredible revenue stemming from their popularity, athletes should be given a means of compensation. It should be an issue revisited on both sides of the border, because if one organization implements compensation protocols, one can be sure that the athletes will congregate to participate there.

Fantasy Sports, Reality’s Problems

By Harmandeep Toor – Thompson Rivers University JD Candidate

Fantasy sports have become a multi billion-dollar industry generating between $40-70 billion dollars of revenue per year. Due to the money flowing through fantasy sports, numerous parties have tried to break into the industry and have attempted to offer different products to capture market share. These unique perspectives on fantasy sports have not been more evident than through the influx of daily fantasy leagues. These leagues allow individuals to create a team, wager money and play against thousands with the hopes of large cash payouts. The two largest players that have arisen through this influx have been DraftKings and FanDuel.

As these leagues gained more prominence so did the voice of detractors. Many have claimed the games are rigged, with an October insider trading scandal leading credence to this theory. However, while these detractions have done little to damage the growth of daily fantasy leagues, a major setback arose on November 10th, when the New York state attorney general ordered DraftKings and FanDuel to stop accepting bets. The state attorney stated daily fantasy leagues constituted illegal gambling under state law. This begs the question as to whether the illegality of daily fantasy in one of the world’s largest market is its final curtain call or just another minor road bump.

On November 10th, the New York state attorney banned DraftKings and FanDuel from taking bets in New York City. Attorney General, Eric T. Schneiderman stated that these two parties were the leaders in a multibillion dollar industry intended to evade the law and fleece sports fans across the country. This decision is expected to have major ramifications for DraftKings and FanDuel in other states as Schneiderman has had a long history of being a consumer-protection advocate.

Fantasy sport companies have consistently stated that their games require more skill than luck thus it should not be considered gambling. This point was affirmed when in 2006 a federal law sanctioned fantasy sports and exempted them from a prohibition against processing online financial wagering. Both companies have stated that they tend to challenge this decision in court and it is up to the state to prove that chance or luck is a material factor in fantasy sports, and thus would make it gambling.

The legal ramifications if found in favour of the state could be wide reaching. However, many have argued that while New York is a major market with over 500,000 daily fantasy players according to a spokeswoman for DraftKings, this decision is unlikely to be a fatal blow for these two companies and daily fantasy as a whole. As previously stated fantasy sports were sanctioned by a federal law in 2006. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) created an exception for fantasy sports, stating it was not to be considered betting or wagering. For fantasy sports to fall under this exemption it has to be shown that winning outcome is reflected in the skill of participants.

While the implementation of this law is left up the states, only New York has constituted fantasy sports as gambling. Thus, if the decision of the state attorney is upheld, other states will not be obligated to follow the ruling. But, if they do decide to go down a similar route as New York, there will be precedent in their favour. However, Schneiderman’s argument that the majority of winnings is concentrated within 1 percent of players accidentally opposes his point that fantasy sports is luck based and may lead to his decision being overturned.

On November 25th 2015, the first hearing was held to determine the legality of daily fantasy sports. Prior to the decision being rendered, the New York State Attorney is seeking an injunction to prevent FanDuel and DraftKings from continuing to operate. At the same time, FanDuel and DraftKings are both seeking court orders that would allow them to continue to operate while a decision is being rendered without facing additional liability.

While as previously stated a decision in favour of the state attorney will have little implications for other states, it does open the discussion as to whether fantasy sports is operating in a legal grey area. With the mounting controversy surrounding fantasy sports including the revelation that individuals were using insider information to not only gain an edge but to win, regulations similar to those of traditional gambling may need to be put in place or the exception granted to fantasy sports may need to be revoked in whole.

But currently, unless numerous changes are made at a state and federal level, this decision will do little to hurt daily fantasy sports and in particular, DraftKings and FanDuel. Fantasy sports will continue to grow, flourish and individuals will continue to partake, whether those individuals include the inhabitants of New York State or not.

 

 

Match-Fixing: a Crime Worthy of a Life Sentence?

By Vivian Wilson – Thompson Rivers University JD Student

In Nepal, five soccer players have been charged with treason over allegedly participating in match-fixing several soccer games, including the 2011 World Cup qualifiers. The accused players include Nepal team captain, Sagar Thapa, goalkeeper, Ritesh Thapa, along with Sandip Rai, Bikash Singh, and coach Anjan K.C.. A sixth accused, the team’s physiotherapist, who was not arrested is now deemed to be a fugitive. They are accused of taking money from bookmakers in Singapore and Malaysia in exchange for losing games. The players were found with large sums of money in their bank accounts, which authorities believe was provided by these bookmakers. The police have seized the players’ financial information as evidence.

The Nepal Government is seeking to impose a life sentence on the athletes as punishment under a 1989 act that states that anyone “unlawfully jeopardizing Nepal’s sovereignty, integrity, or national unity, shall be liable for life imprisonment.”

Is match-fixing a sufficiently serious offence as to warrant sentencing the accused to life in prison? In lieu of specific match-fixing laws, Nepal is dealing with this issue under the charge of treason. The magnitude of the offense in Nepal is striking when compared with North American countries, some of which also lack laws that explicitly deal with match-fixing.

According to an International Olympic Committee study, Canada does not have specific match-fixing laws, but match-fixing is most likely to be dealt with under the Criminal Code s. 380 fraud, or s. 209 cheating at play. The International Olympic Committee (IOC) and United Nations Office on Drugs and Crime (UNODC) suggest, in their 2013 comparative study on the applicability of criminal law provisions concerning match-fixing and illegal betting, that these criminal provisions carry quite low sanctions, as s. 380 of the Criminal Code imposes a term of imprisonment not more than fourteen years where the value of the subject matter of the offense exceeds five thousand dollars.

Match-fixing may also fall under s. 209 of the Criminal Code, Cheating at play. This offense covers people involved in defrauding others through cheating while playing a game, or holding the stakes for a game. This offense carries a sanction of imprisonment for a term not exceeding two years. Therefore, even though Canada does not have any offences specifically covering match-fixing, it will likely fall under Canadian criminal law. The sanctions however are very low compared to the life term sought by Nepali prosecutors.

The United States, however, does have specific offences for match-fixing. There are federal offense of Bribery in Sporting Contest, 18 U.S.C § 224, for which the sanctions are fine and/or imprisonment of not more than five years. There are also state offenses, such as Sports Bribing, and Sports Bribe Receiving under New York State’s Penal Law. The punishments for these state offenses are fine or imprisonment of not more than seven years, and imprisonment not more than four years, respectively.

Compared to the IOC and UNODC’s suggested most likely treatment of match-fixing under Canadian law and United States law, under which the highest sanction possible is fourteen years under Canada’s fraud provision, the Nepali life sentence for treason seems extreme. The North American countries’ laws suggest that match-fixing is not seen as sufficiently serious to warrant harsh punishments, suggesting a difference in the way North American and Nepali people perceive sports, and the disparate local perception of the seriousness of the impact of corruption in sport on the country’s sovereignty, integrity and national unity.

The NFL: True Stand Against Domestic Violence or a Quick Attempt to Save Face?

By Talina Handel – Thompson Rivers University JD Student

On February 15, 2014 the prized running back for the Baltimore Ravens, Ray Rice, was arrested for assaulting his wife, Janay Palmer, at a casino in Atlantic City. Four days later video footage surfaced of Rice dragging his wife’s unconscious body from an elevator at the casino. During this time the NFL declined to comment on what, if any, sanctions they would place on Rice.

On March 27, 2014 Rice’s charges were increased to aggravated assault, which carries a maximum sentence of five years in prison. In an arguably delayed response to the now very severe domestic violence charges, the NFL imposed a two game suspension on Rice in July 2014, four months after Rice was criminally charged. In August 2014 the NFL showed its first of what would be many inconsistencies in the months to come, and publicly stated that they “didn’t get it right” with the two game suspension. They then proceeded to issue a domestic violence policy for the entire NFL league.

Curiously, eleven days after the NFL issued their new domestic violence policy the full video footage of the incident between Rice and his wife went public and the brutal reality of what actually transpired in the elevator that evening was on display for the world to see: Rice punched his wife directly in the face causing her to fall to the ground unconscious. On the same day this video was released the Baltimore Ravens announced they were releasing Rice from his contract and the NFL subsequently announced that Rice would be suspended from the league indefinitely, a major shift from the initial two game suspension imposed on Rice.

The precarious conduct of the NFL draws the league’s motives into question. Was the domestic violence policy and Rice’s indefinite suspension issued as a true stand against domestic violence and an assertion that the Rice incident was both “violent and horrifying”? Or, was it an attempt to save face in the public eye? This begs the more specific question: did they really not see the video until the public saw it? Or did they in fact see the video, bank on the hope that it would never be released to the public and issued their new domestic violence policy in a meek attempt to cover their bases in the event that the video was leaked?

The possibility that Rice would be playing in the NFL today had the full video not been made public is a very real one. The timing of the NFL’s decision to implement a domestic violence policy is questionable. The policy was an arguably delayed response to the event which triggered it, coming six months after Rice’s arrest but curiously, only eight days before the full video was made public. Rumors swirled that the NFL had in fact seen the full video, with an unnamed law official reporting to the Associated Press that he had a twelve second voicemail from an NFL office number confirming that they had received the full video, a report that the NFL has vehemently denied.

It is highly probable that the NFL likely saw the video before the public did. They were in full cooperation with the police throughout the incident, a fact they asserted in the first six months of Rice’s investigation and then recanted when the video went public. They likely suspended Rice indefinitely simply because they had to. The public was already critical of the weak two game suspension and not imposing a stricter sentence in light of what the video depicted was simply not an option. The NFL needed to save face. And in their attempt at doing so they muddled the waters even more around their stance against domestic violence. Eyebrows were raised in response to the league’s inconsistent conduct and whispers of the NFL’s fumbling are still present today, almost two years after Rice’s arrest.

 

Is there a Place in the Octagon for Antitrust Laws?

By Leah Seneviratne – Thompson Rivers University JD Student

If consumers are receiving the best product, is an alleged monopoly still harmful? American antitrust laws are in place to prohibit agreements that restrain trade and result in a monopoly. The intended result is the promotion of a competitive marketplace and protection of consumer welfare. However, monopolies in professional sports are rarely portrayed as harming consumer welfare. Rather, they have come to be expected of the most popular American sports leagues, evidenced in the domination enjoyed by the NBA, MLB and NFL. As a result, we are left with the question of whether antitrust laws should still have a place in professional sports businesses, if they still manage to produce the best possible product for consumers.

In a recent court decision, the Ultimate Fighting Championship’s parent company, Zuffa LLC, failed in their application to dismiss a class action lawsuit filed by various current and former fighters for allegedly anticompetitive business practices. The plaintiffs have brought their action under section 2 of The Sherman Act, and claim that Zuffa’s scheme has resulted in fighters being paid a fraction of what they would earn in a competitive Mixed Martial Arts market. As Dana White, the president of Zuffa, once stated, “There is no competition. We’re the NFL. There is no other guy”.

The alleged scheme of Zuffa was to directly acquire potential rival companies who were unable to compete profitably, as well as to impair competition by locking their professional MMA Fighters into lifetime exclusive contracts that bar them from working with up and coming MMA promotion companies. The scheme also included refusing to contract with any sponsor who agreed to work with an actual or potential MMA promotion rival, and requiring major physical venues to supply their services exclusively to the UFC. This greatly impedes the ability of potential UFC rivals to attract enough viewers and money to be profitable and avoid acquisition. The plaintiffs also allege that professional MMA fighters are deprived of an opportunity to make a comparable salary to those of boxers, or even NFL players, who at least have the benefit of multiple teams competing to acquire them.

What is noteworthy is that despite being part of one of the fastest growing professional sports, the latest Forbes’ list of the, “Top 100 Highest- Paid Athletes in the World” revealed a complete lack of professional MMA fighters, while boxers and soccer players dominated the list. Forbes Magazine reports the annual revenue of the UFC to be from $350-450 million, while they estimate the median fight payout for a fighter to be between $17,000 and $23,000.

So to answer the question, should the same antitrust laws be applied when it comes to the area of professional sports, where Zuffa is allegedly taking actions that result in a monopoly? In the end, the answer lies in the nature of the business practices. Section 2 of the Sherman Act is violated where there is monopolization, an attempt to monopolize, or combination or conspiracy with another person to monopolize a part of trade or commerce. It is behaviour that amounts to an exclusion of an actual or potential rival that is prohibited by The Sherman Act. If the allegations of the plaintiffs are correct, then we have a market in which a company with massive power and resources willfully obstructs competition. This type of exclusionary behaviour has allegedly resulted in a substantially increased difficulty of survival for competitors, as well as reduced bargaining power for professional fighters in contract negotiations. If the legislation clearly values competition and preventing the restriction of business transactions, then antitrust laws need to be taken seriously in the area of professional sports, in order to prevent the anticompetitive tactics that undermine them. The allegations facing Zuffa emphasize the necessity of antitrust laws in professional sports, which include preventing harm to both the competitor and the player.

 

Fantasy Sports: A socio-legal look at Fantasy Sports

By Reetika Aggarwal – Thompson Rivers University JD Student

Fantasy sports have been around for decades but not until recently has it come under increasing scrutiny from state and federal law-enforcement agencies. Fantasy sports do not qualify as online gambling due to a loophole in the Unlawful Internet Gaming Enforcement Act (UIGEA). The Act allows pay-to-play fantasy sports to operate under federal law, but state regulations can forbid it. Arizona, Iowa, Louisiana, Montana, and Washington already prohibit fantasy-sports games. Fantasy sports sites, such as FanDuel and DraftKings argue that fantasy sports are not games of chance – like poker, slot machines, or roulette – but one of skill.

Skill really can be a factor but the average player is up against an elite few who use elaborate statistical models to assemble rosters engineered to win. Nevada regulators ruled this autumn that daily fantasy sports should be considered gambling and ordered fantasy companies to suspend operations until they secured gaming licenses. Daily fantasy sports operator DraftKings is under investigation from the Department of Justice and the FBI as the government questions the legality of its business model.

But no matter how the law sees it, it is almost impossible in my view to identify daily fantasy as anything but a way to bet on sporting events. The New York Attorney Ggeneral’s office said daily fantasy sports “appears to be creating the same public health and economic problems associated with gambling. The ads on the two sites seriously mislead New York citizens about their prospects of winning.” State investigations found that to date, “the top 1 percent of DraftKings winners receive the vast majority of the winnings.” The National Council on Problem Gambling says it has received reports of “severe gambling problems” in some people who play daily fantasy sports. Arnie Wexler who runs a national gambling help hotline, says fantasy sports are a “gateway drug” to serious problems and lure you into more gambling.

Dr. Timothy Fong, associate clinical professor at the UCLA Gambling Studies Program, is one of America’s leading researchers on the effects of fantasy sports. He is quick to attack the notion that fantasy football is a skill-based game and exempt from gambling concerns. “Very simply, it’s gambling. It’s putting money on an event with a certain outcome in the hopes of winning more money. To call it anything else is really not accurate,” says Dr. Fong.

But that link has not been made by the players and the public that what they are doing is no different than betting at casinos. Dr. Fong describes the four phases: winning, losing, desperation, and hopelessness. He explains that “as the disorder progresses, there is not only an increase in amounts wagered and time devoted to gambling, but an increase in feelings of shame, guilt, helplessness, and depression. Some gamblers will turn to illegal activities and do things that were previously thought inconceivable; twenty percent will attempt suicide.

There may be the development or exacerbation of other mental disorders, notably anxiety and depressive disorders and other addictive disorders. Stress-related physical illnesses are also common.” The line between recreation and addiction is clear: if playing fantasy sports improves the quality of your life, it’s a fine hobby. If playing involves lying, stealing, and disassociating from loved ones, well, you have a problem. Dr. Fong states, “you’re putting money up on an event of uncertain outcome in expectation or hope of winning a larger reward. That is the definition of gambling.” He has seen patients lose $50,000 in one season. While screening patients, he finds they struggle with the game’s residual effects. Dr. Fong explains, “[It’s the] same kind of flavor, same kind of addictive process… Same sense of thrill, the same dopamine rush.”

You cannot ignore the element of chance in fantasy football. Gambling can be defined as wagering money on an uncertain outcome, such as a last-minute fumble that wins a player more than a million dollars. Advanced research will not predict random injuries of a player or if secretive coaches will abruptly bench a player a week after he scored four touchdowns. At the same time, some skill can be found in almost every form of gambling, as long as there is decision that can be made. There is a lot of variance in daily fantasy results and no guarantee that skill trumps chance. Perception of skill is a big factor in the development of addiction and in continuously playing to win back lost money.