Archive | November 23, 2013

Owning a Player: Fantex and the Arian Foster IPO

November 23, 2013

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By Kevin Robertson – Thompson Rivers University 3L JD Student

A vast number of people grow up dreaming about becoming professional athletes but few ever reach that level.Instead they are relegated to playing sports recreationally, cheering on their team, and participating in a fantasy league.In a fantasy league a person acts as a combination of owner, general manager, and coach in an effort to run their team better then their opponent.While pride may be one the line, oftentimes there is also money up for grabs.

In American football, due to the constant injuries and changing focus of teams (say from running to passing, or vice versa) it is often necessary for a person to add or drop players based on how a person believes they will perform in future games.In a sense, a person is stating their belief over how the player will perform in the future.Simply put, if a person believes that a player will do well then they will play them.Alternatively, if the person believes that the player will not do well then they will not use them. 

In this way, a fantasy football league is similar to how a person plays the stock market.Buy the stocks that you think are going to perform well and sell the stocks that you believe are going to do poorly.When you consider the dedication that people put into researching their choices the parallels become even more apparent.

However, things are about to change.Fantex is launching a new program whereby for $10 a person can buy a percentage of a player’s future earnings. The first player to sign on with Fantex for this program is NFL Texans running back Arian Foster.In exchange for giving Fantex a 20% share of his future football earnings he will receive $10 million USD.Fantex will then take the 20% share and divide it into one million shares, which will then be sold to investors through an Initial Public Offering (IPO).

As with all things of this nature, someone is going to lose money.It’s possible that Foster will go on to have a healthy career and thus earn those who own his stock a healthy profit but it is also possible that he gets injured in his next game and never plays again.

What is fascinating and will be a huge point of contention in the future is that the contract does not only include his NFL salary but also includes any related fields.In defining related fields the prospectus for the stock gives a few examples such as broadcasting and coaching.That being said, there are a lot of things that could fall into the grey area and possibly result in disputes.If Foster opened a sports bar, which was named after him, could that be considered a related field?What about if he was selling autographs?

As well, there are a couple of other things that could pose problems in the future.The contract does not expire so Foster will be giving 20% of football related income to Fantex for the rest of his life.While the freedom of people to enter into contracts on their own volition is well established, the shear length of the contract will likely bring up concerns.One issues is that Foster has in effect “sold his soul to the devil” for a one time monetary payment.The contract only ends if he pays back the full amount plus a penalty.He cannot get out of the contract without Fantex’s agreement.In this way, if he retires within 2 years of signing the contract for any reason other than injury, illness or medical condition Fantex can unilaterally cancel the contract and demand repayment of $10.5 million USD.

In Foster’s case his contract might only be for 20% of his future income but what would happen if it were for more?Say 50% or 100%?There is something morally wrong for a society that has moved past slavery to then allow a person to become indebted to another for life.

It is unclear whether college players will sign up with Fantex.While the NCAA has been adamant that they are not interested in paying the players for their services, it would be hard for a lot of the players to turn down a lump sum payment even if the terms were not favorable in the long run.

In fact, it would be possible for a college player to game the system in a certain situation.Taking Foster’s contract as an example, a college athlete could get a lump sum payment and then pay it back (along with the penalty) with a signing bonus if they make it into the league and get a large contract.A strategy such as this would be very smart if the player knew that they had an even larger endorsement deal coming in the near future.Once again, legally this would be a grey area in that Fantex is registering each player under the Securities and Exchange Commission, which has strict rules governing insider trading.As well, with college players there may be issues due to them being minors.

Like many things in sports, the IPO into Arian Foster will garner a lot of money for some people, even if it isn’t in the best interest of the game or society.

The prospectus for the IPO is available to read here and contains some very interesting information not only on his health but also his contracts with both the NFL and endorsement deals. 

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The Right to Compete: Transgender Athletes

November 23, 2013

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By James Gill – Thompson Rivers University 3L JD Student

Issues regarding transgender students have recently been an area of significant discussion and debate. Early in 2013, California became the first American state to formally protect the rights of transgender students attending elementary and secondary schools in a number of ways. Specifically, Bill 1266 addresses a number of issues faced by transgender students during their schooling years including their ability to choose which restroom or locker room they use and, perhaps more relevantly, whether they compete in boys or girls sports .

Although California is among the first states to legislate on these issues, the rights of transgender athletes has long received much attention.For example, the 1977 case of Richards v United States Tennis Associationinvolved a transgender tennis player seeking an injunction against the United States Tennis Association which would prevent the Association from requiring the athlete to take a sex determination test before allowing her to compete as a woman.

In finding in favour of the athlete, the court found that such a requirement was grossly unfair, discriminatory, inequitable, and a violation of her human rights under the relevant state’s human rights laws. More recently, in 2013, a mixed martial arts athlete, Fallon Fox admitted to having undergone male-to-female gender reassignment surgery a number of years prior to competing professionally. Naturally, this sparked a series of heated statements, debates, and opinions regarding the use of hormones for hormone therapy, competitive advantages, and so forth. In this instance, however, the issue had been decided before it became public; the Florida State Boxing Commission licensed Fox, allowing her to compete in its jurisdiction, despite the non-existence of a codified transgender policy.

Prior to the Fox incident, the Association of Boxing Commission’s medical advisory board recommended the creation of a transgender policy as a pre-emptive attempt to address the increasing number of transgender athletes in sports. Indeed, the Association is among a number of governing bodies actively addressing the topic. The International Olympic Committee (IOC), National Collegiate Athletic Association (NCAA) and Canadian Collegiate Athletic Association (CCAA) have all adopted policies designed to address the participation of transgender athletes in sport, with the NCAA’s and CCAA’s approaches, arguably, being more moderate than the IOC’s.

With that said, in Canada, there has yet to be legislation introduced similar to that in California. In fact, even some of the basic provincial human rights codes have yet to include such progressive terms. For example, one simply needs to look at the Ontario Human Rights Codefor a leading example of inclusivity. Section 1 reads: “Every person has a right to equal treatment with respect to services, goods and facilities, without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability.”

In contrast, the analogous provision in the British Columbia Human Rights Codefails to formally recognize gender identity, gender expression, or anything to that effect, other than ‘sex’: “A person must not, without a bona fide and reasonable justification, (a) deny to a person or class of persons any accommodation, service or facility customarily available to the public, or (b) discriminate against a person or class of persons regarding any accommodation, service or facility customarily available to the public because of the race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or class of persons.”

The above illustration does not seek to suggest that transgender athletes are unable to freely compete (consider Cory Oskam, a transgender high school student who was widely supported in undergoing a gender reassignment surgery and subsequently competing in a boys hockey league). Rather, it seeks to highlight some differences and suggest that perhaps the time has come for Canadians to follow some of the examples set by our southern neighbours, namely to formally recognize and protect the right of transgender athletes to compete freely.

Bill 1266 comes into effect in January 2014. Thus, in a matter of months, the sporting community will be able to assess how well the law is received and how effectively it is implemented. Regardless, it ought to be seen as a forward thinking example of the recognition of the right of transgender athletes to compete freely.

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A Cruel Race – The Risks of Dog Sledding

November 23, 2013

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By Miranda Schmold – Thompson Rivers University 3L JD Student

It is generally accepted that participation in most, if not all sports and activities, involves some aspect of risk and the possibility of injury. From some of the most low-key sports, such as bowling and golf, right up to extreme sports like motocross and hel-skiing and whitewater rafting, all carry with them some degree of risk and danger. Most reasonable athletes, professional, non-professional, recreational and the like, take responsibility for their actions, even when those actions result in their injury or death.

In pursuit of their sport or chosen leisure interest, people voluntarily assume the risks and acknowledge the risks they undertake along with the possibility of harm that may befall them should they participate in said activity or sport. Oftentimes it is the inherent risk and danger that makes many sports and activities alluring and exciting. From soaring through the air on a BMX bike, dangling from a cliff face attached to a single rope, tearing down a ski hill at top speeds, to slamming up against your opponent in a gridiron football game, these are just some of the elements that not only make these sports risky but also tempting and fun. As consenting and reasonable participants we are able to choose what activities and sports we participate in and the risks we are willing to accept in enjoying these pursuits.

But what about when the very sport or adventure activity being engaged in requires the use of non-human athletes? What about sports and activities where it is impossible to get the consent of the non-human participants? This is the case with dog sled racing and dog sled tours. Of course it is possible for the person controlling the dog sled in a dog sled race to acknowledge and accept the risk they undertake when participating in the sport, and it is possible for those engaged in a dog sled tour to accept the risk of participating in this outdoor activity, but there is no way to discern whether or not the dogs accept these risks or even wish to participate in the race or tour.

While the person controlling the dog sled is no doubt at risk for injury or even death, dog sled racing carries with it innumerable risks and dangers, mainly to those without which the sport would not happen, the dogs. The Iditarod is one such notorious dog sled race where the non-human athletes are put in tremendous danger. The Iditarod takes place each year in Alaska starting on the first Saturday in March. These sled dogs are forced to run over 1,600 kilometers in some of the most punishing and arduous terrain. The dogs race from Anchorage to Nome, which would be like running from Vancouver to Saskatoon, and they must do it in 8 to 16 days!

Since 1973 approximately 142 Iditarod sled dogs have died, although this only accounts for reported deaths during the race and does not include dogs that have perished while training. Sled dogs in the Iditarod are at risk of death, paralysis, penile frostbite, bleeding ulcers, bloody diarrhea, lung damage, pneumonia, ruptured discs, viral diseases, broken bones, torn muscles and tendons, vomiting, hypothermia, sprains, fur loss, broken teeth, torn footpads, anemia, strangulation in towlines, internal hemorrhaging, liver injury, heart failure and pneumonia.

About 53% of dogs that start the race do not cross the finish line. Additionally, many handlers are extremely cruel to these integral members of their sled dog team. For example, whipping, kicking, beating and starving dogs have all been witnessed as regular practices in the sled dog racing industry.

This situation is not unique just to the sport of racing sled dogs, but also occurs in the adventure tourism experience of sled dog tours. British Columbia is no stranger to the controversy surrounding sled dog tours. In 2010 the province was rocked by tragedy with the culling of 43 sled dogs by Robert Fawcett, former owner of Howling Dog Tours Whistler Inc. With the collapse of the sled dog industry in Whistler after the 2010 Vancouver Winter Olympics, Fawcett admitted to slaughtering 43 of his sled dogs and burying them in a mass grave on his property in April 2010. After pleading guilty to causing unnecessary suffering, Fawcett faced a maximum sentence of 5 years in jail and up to $75,000 in fines as set out in the Prevention of Cruelty to Animals Act and the Criminal Code s. 447(2).

On November 22, 2012 Judge Merrick of the Provincial Court handed down Fawcett’s sentence as three years probation, 200 hours of community service, a $1,500 fine, a 10-year firearms ban and a 3-year ban on commercial involvement with animals. While this left Vancouver’s SPCA and animal welfare advocates reeling, the positive aspect that came out Fawcett’s trial and sentence was the development of Canada’s first Sled Dog Code of Practice and Standards of Care by the Province, the sled dog industry, veterinarians and the BC SPCA.

Unfortunately, the code of practice may not be holding up to all it was meant to be. In July 2013 yet another Whistler sled dog operation has closed its operations. Whistler Sled Dog Company was created shortly after the Fawcett scandal and even received many of his dogs. They hoped to run an ethical dog sledding company, but after operating for two seasons found they could not sustain their sled dog tours because of Whistler’s short 4-month season. Now the fate of 71 difficult-to-rehome sled dogs hangs in the balance.

The sport of sled dog racing has many inherent risks, mainly for the sled dogs themselves, of which they cannot consent to. It is up to the mushers and handlers of these dogs to keep their health and safety in mind when competing in this sport, however, history tells us that their best interests have not been a priority come race day. Many dogs that have competed in the infamous Iditarod have either perished while racing or suffered extreme or life threating injuries, not to mention the horrific conditions they live in and treatment they receive when not being raced. In contrast, the risks to the human athletes seem inconsequential. The risks involved with sled dog tours are equally as serious, with the main risk being that sled dog operations close after a short winter season, with no choice but to cull or euthanize a large number of challenging-to-rehome sled dogs.

While risk is inherent in most every sport and activity, we should endeavor to weigh the risks with the rewards. In the case of sled dog racing and sled dog tours we need to ask ourselves, is the manner in which we risk man’s best friend worth the reward of a few moments of animal entertainment?

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Contractual Difficulties – Why isn’t there blood testing in the NBA or NFL?

November 23, 2013

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By Charlie Livermore – Thompson Rivers University 2L JD Student

Earlier this year, just a day after it was announced that no new players would be selected for the Baseball Hall of Fame, Major League Baseball (MLB) announced that they were going to begin using in-season blood testing to detect human growth hormone. The Commissioner of the National Basketball Association (NBA) stated he “expected” blood testing to be phased into professional basketball this season. National Football League (NFL) commissioner Roger Goodell soon after announced he likewise thought blood testing would take place this season.

It appears neither the NBA or the NFL will test anyone for HGH this year.

Despite the optimism of the Commissioners, recent reports suggest a deal between the respective players unions and their league counterparts is still far away. The NFL is inching closer, with agreements in principle reached, but talks have stalled over the internal appeals process. The NBA Players Association seems ready to postpone the fight over blood testing for seasons to come, with a deal nowhere near ready.

Two facts help to put this dispute into context. Human Growth Hormone is undetectable in urine tests and players in both sports are recovering from injuries faster than they ever have.

I asked Travis Tygart, the CEO of the US Anti-Doping Agency, why the NFL doesn’t have blood testing yet. He said that the players union, in their ongoing labour negotiations, sees blood testing as a detriment which they are willing to accept, but would need something in exchange. Blood testing is a bargaining chip, just like off-season practices, concussion protocols, or any of the other (relatively) small things a billion-dollar employer negotiates with its labour force.

I’m sure this is all true. But it seems there might be more to the story. As with steroids or other performance enhancers, part of the issue surrounding enforcing the ban on HGH is its perception by players. But in some ways HGH doubles down on the conceptual justifications made by players and sports commenters towards Performance Enhancing Drugs.

HGH is a naturally according hormone, key in stimulating muscle growth. It is prescribed for a variety of medical issues. In a sporting context, HGH is thought to increase speed of recovery from injuries, even though this claim isn’t totally confirmed by science.

For some, HGH isn’t really cheating. Numerous commentators have wondered why we don’t let athletes use HGH to recover from injuries. When a running back tears their ACL on a cut, or a linebacker rips their bicep attempting a tackle, they are looking to get back on the field as fast as they can. A substance which helps recovery could be perceived by athletes not as performance enhancing, but performance allowing – they can get back to what they do, faster.

Conceptually, using HGH for injury recovery might not be thought by athletes as making someone more than they are, but as returning them to who they were. Tommy John surgery, European genetic knee therapies, and other recovery techniques that seem “unnatural” are routinely employed by athletes looking to get back in the game, without violating any rules.

What do these possible justifications have to do with a contractual dispute between the players union and the league? The reason players in the NBA and the NFL are pushing back so aggressively against blood testing may simultaneously be more simple, and more complicated, than we thought.

Put simply, more players are probably taking HGH than most people realize, and testing would expose its widespread use as a recovery aid.

But there is likely a more complex aspect. Players, and their representatives, may not perceive testing for Human Growth Hormone as a valid or worthwhile endeavor. Many probably see HGH as tool used to compete in an increasingly difficult field, a field where injuries end careers, and everyone is just trying to keep up. Is an unjust law a law at all? St. Augustine didn’t think so, and the NFLPA probably thinks likewise, even if not explicitly.

The job of players unions is to make sure employed athletes aren’t contractually obligated to do anything more than they have to, and the forced removal of a vial of blood from a few hundred oversized men every other Sunday is probably an obligation worth protecting against.

But in two leagues where no one can agree on what cheating actually is, where entire cities depend on the knees of their quarterbacks, and where the public pressure to recover form injuries is obsessive, it seems like something else might be going on here. As far as management and labour disagreements go, this one might be more complicated.

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