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Do NBA cheerleaders deserve to be paid?

November 22, 2015


By Afras Khattak – Thompson Rivers University 2L JD Student

The Milwaukee Bucks of the National Basketball Association (NBA) are purported to have been engaged in unlawful pay practices for their cheerleaders for allegedly failing to comply with the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”). I posit that the Bucks will likely follow the recent stream of NFL cheerleader pay practices case law, and settle out of court even if they can establish an exemption under the FLSA.

This case materialized when Lauren Herington, former cheerleader of the NBA’s Milwaukee Bucks, filed a lawsuit alleging that the team failed to pay her in accordance with federal and state minimum wage laws. Ms. Herington contends that the team required its cheerleaders to spend upwards of thirty hours per week in mandatory practice and workout sessions, in addition to their game-day duties. Because these workout sessions (as well as mandatory salon visits) were unpaid, the complaint was brought forward to substantiate Ms. Herington’s claim that the Milwaukee Bucks not only failed to pay their cheerleaders the minimum wage, but often neglected to pay them overtime as well.

The Bucks could argue that the team is exempt from at least the federal minimum wage and overtime requirements under s. 213(a)(3) of the FLSA, a statutory provision covering seasonal amusement and recreational establishments. Under this exception any amusement or recreational establishment may pay its employees a sub-minimum wage (without overtime) so long as one of the following two conditions are met: either (A) the establishment does not operate for more than seven months in any calendar year, or (B) the establishment’s revenue in its six lowest revenue months in the previous year was no more than 33 1/3% of its revenue received in its six highest revenue months.
One major factor that could bolster this argument is that because the Bucks were eliminated in the first round of the NBA playoffs this past season, the team’s entire 2014-15 pre-season, regular season, and post-season only spanned seven months in its entirety (from October through April). The Bucks could very well likely argue that this qualifies it as a seasonal establishment under s. 213(a)(3)(A), and therefore that the team is not required to pay its cheerleaders in accordance with the FLSA.

NBA teams can credibly contend that they qualify for the s. 213(a)(3) exemption in at least some portions of their operations given the existing statutory language and accompanying regulations. Nevertheless, despite this potential defense, it would not be surprising if the Bucks ultimately chose to settle the suit before impending litigation commences. This would seem analogous to the path several National Football League (NFL) teams have chosen. NFL cheerleader lawsuits often settle the claims even though they arguably have an even stronger argument for exempt status under s. 213(a)(3) given the shorter length of their playing season.

Most notably, the Oakland Raiders agreed to pay its former cheerleaders $1.25 million to settle their minimum wage claims even though the U.S. Department of Labor had issued an opinion earlier that same year concluding that the team was not subject to the FLSA due to s. 213(a)(3) (Caitlyn Y and Jenny C, et al. v. NFL and the Oakland Raiders, et al.).

It would also not be surprising if this case motivates other NBA cheerleaders to file separate lawsuits against their teams. For the NFL, five additional teams quickly faced their own cheerleader lawsuits within a period of just a few months after the league’s first case was filed. The NBA is likely hoping that its teams do not face a similar outbreak of cheerleader minimum-wage litigation. At a minimum though, this case shows that the allegedly unlawful pay practices of professional sports teams still remain a pressing issue for the sports industry, and it may get worse for the NBA in the foreseeable future.

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Circumventing the Salary Cap

November 16, 2015


By Aasim Hirji – Thompson Rivers University 3L JD Student

The NHL Salary Cap currently has a ceiling of 71.4 million, with a floor of 52.8 million. This means that every NHL team must spend at least 52.8 million, and at most spend 71.4 million on player salaries. The issue with a firm salary cap is team’s will always attempt to circumvent the cap to help them out of situations. Cap circumvention is ruining the equitable arrangement of the salary cap, which is already hinged in favour of rich teams willing to spend to the cap. A prime example is the Mike Richards case with the Los Angeles Kings. In the 2013-2014 season, the LA Kings had a chance to use a compliance buyout on Mike Richards. This means that any buyout would only affect them financially, and would not go against their salary cap.

Compliance buyouts were a two-year measure brought in after the new Collective Bargaining Agreement that would allow each NHL team to buy out two players without any affect to their salary cap. The LA Kings were attempting to trade Mike Richards, with a few potential suitors, then some news came to their attention. Richards was held at the Canada-USA border for bringing oxycodone into Canada, thus giving the LA Kings potential to terminate his contract for “material breach”, despite no arrest at the time. The LA Kings used this to terminate his contract, unprecedented in the NHL. With the recent settlement between the Kings and Richards, it is clear that this is salary cap circumvention.

Elliotte Friedman, a Sportsnet report, stated: “If the Kings had bought out Richards last summer, he would have stayed on their payroll until the end of the 2024-25 season. The cap hit would move from approximately $1.2M this season to $1.7M next year, followed by $2.7M in 2017-18 and a two-season peak of $4.2M in 2018-19 and 2019-20.Then it would stay just under $1.5M for the final five seasons. With the agreement, Richards’ cash lasts until the end of 2030-31 campaign. As part of a pre-capture penalty due to decreasing dollar values towards the end of his contract, the Kings lose $1.32M from their cap this year — and the next four — with the settlement amount added to that total. Starting in 2020-21, the team’s only penalty is the settlement itself — and that’s not a high number, believed to be somewhere in the $550,000 per season range on average.”

Elliotte Friedman went on to say that other general managers are “screaming bloody murder and are threatening to make an issue about it at December’s Board of Governors’ meeting”. The LA Kings are not the only team guilty of such obvious cap circumvention. A much clearer example of cap circumvention was the trade between the Toronto Maple Leafs and the Columbus Blue Jackets. The trade was David Clarkson for Nathan Horton.

On its face, it appears to be a legitimate player-for-player swap. Nathan Horton’s contract had 5 of 7 years left on a $37 million contract. David Clarkson was on a $36.75 mil, 7-year contract. Similar contracts, however one major issue – Nathan Horton is likely permanently injured and the only reason he hasn’t retired is he is owed in excess of $25 million. David Clarkson was a potential buyout candidate, or alternatively, the Leafs would have an overpaid player on the cap. With this trade, Toronto can put Nathan Horton on Long Term Injury Reserve where his 5.28 million cap hit will not count towards the cap. TSN’s Bob McKenzie stated that other GM’s “get it”, but don’t like the fact that trades like this work.

The NHL has already addressed the method of circumventing the cap by burying players in the AHL, such as New York Rangers sending Wade Redden and his $6.5 million contract into the AHL. This rule was changed where teams do not receive full cap relief, rather the cap hit will be contract value- (minimum salary+$375000). Under these new rules, Wade Redden’s contract buried in 2015-2016 would have been 5.5 million instead of $6.5 million.

There were a few trades that raised some eyebrows in the NHL regarding salary cap relief from the use of long-term injury reserve. During the NHL draft, Philadelphia traded the rights to Chris Pronger to the Arizona Coyotes. Similarly, the Boston Bruins traded the rights of Marc Savard to Florida. Both of these players have career ending injuries and will not see another game in the NHL. Pronger’s deal had a cap hit of $4.9 million, with a salary of $575,000. Savard had a cap hit of $4 million, with a salary of 575,000. Prior to the Philadelphia trading Chris Pronger, there were thoughts that the Flyers did not want him to retire otherwise there would be a cap hit due to Pronger’s age. Instead, he stayed on long term injury reserve where the cap hit would not affect them. Once traded, Chris Pronger and Marc Savard were not placed on injury reserve, as the teams wanted their cap hits to count in order to get to the salary floor, thereby manipulating the entire purpose of the salary cap.

It is clear that salary cap circumvention goes against the spirit and purpose of the salary cap. The NHL must adopt measures to prevent this from happening. Changing the salary cap relief from burying players in the AHL is the first step. The NHL has also addressed contract lengths, used to bring down the cap hit of players in the recent Collective Bargaining Agreement. There must be careful monitoring of procedures, particularly in looking at the Mike Richards case, to prevent teams from circumventing the salary cap.

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Smoothing out the wrinkles in the NBA salary cap

November 16, 2015


By Afras Khattak – Thompson Rivers University 2L JD Student

The current National Basketball Association (NBA) collective bargaining agreement (CBA) is fixed to run through the 2020-2021 season. This however, is unlikely to happen as any time before December 15, 2016 either the NBA or the National Basketball Players Association (NBPA) can exercise an opt-out clause that would end the CBA on June 30th, 2017. The topic of controversy is understanding how the NBA’s immense nine-year, $24 billion contract with ESPN and Turner Sports (set to start in 2016) will affect the on-going negotiations to reach a new CBA. This infusion of money is going to increase the NBA salary cap from $63 million to approximately $90 million.

On the surface, players and fans would seem poised to celebrate a higher salary cap. There would be higher salaries for players, for whom teams would have more money to bid and in some cases might need to sign in order to satisfy the salary floor (90% of the total salary cap must be used). Along those lines, a higher salary cap would enable more teams to be “under the cap” and thus able to compete for free agents. Fans who feel as if their favorite teams are stuck in salary cap calamity would be granted a reprieve. However, assuming that either the NBA or NBPA opt-out and the two sides do not negotiate a new CBA before it expires in June 2017, it is likely that the NBA would be poised to lockout the players which would threaten the 2017-2018 season and potentially lead to antitrust litigation.

The issue for the NBA is that the NBPA does not seem poised to accept a proposal for ‘cap smoothing.’ Cap smoothing postulates that the salary cap be raised modestly and gradually over a several year span. The NBA believed that the NBPA would accept this term because players in multiple free agent classes would benefit from the surge in the salary cap. Additionally, the money from the players’ 51 percent of league revenue would still be split between all players so they still receive this payout. However, the NBPA has rejected this proposal.

NBPA chief Michelle Roberts explains: “The union should not have to police how much the owners spend. That’s not the job of the union. All of the caps that are on salaries now, the max deals and the shorter lengths and all of that, it’s all stuff that has been done to protect owners from themselves. [We have] been pretty strong on saying, hey, it’s not the job of the players to protect owners from other owners. Why should that fall on the players?”

Put simply, the NBPA is concerned that any form of cap smoothing would likely depress players’ salaries from rising as fast as they should or could under a more open system. This mode of reasoning likely stems from the players’ belief that they sacrificed a great deal in the last CBA, when the players’ share of league revenue fell from 57% to 51%. This will likely lead to a lack of cooperation as concessions will be expected and highly coveted in the next CBA negotiations.

The problem here lies in that the inability of the NBA to get a cap smoothing policy would lead to a disproportionately small number of benefiting players: those who are set to become free agents in 2016 and those whose salary negotiations are tied to available salary cap space. On the other hand, a cap smoothing structure would not reduce the amount of money received by the players; it would dictate how equitably and in what sequence the money is distributed.

The rejection of the smoothing proposal by and large means that the NBPA appears interested in negotiating policy changes within the framework of negotiations for a new CBA, rather than in piecemeal. Overall, the NBA may essentially have to accept the NBPA’s stance and make calculated tradeoffs to achieve their cap smoothing agenda because the longer it takes for both parties to agree on a strategy for incorporating the TV money, the clearer it becomes that there is a fraying relationship.

If one were to formulate a ratio for the likely labour dispute it would probably read: Fans who were irritated by the 2011 NBA labour dispute are going to despise the 2017 NBA labour crisis.


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NHL Contract Termination – Inconsistencies Based on Player Value

November 12, 2015


By Casey Goodrich – Thompson Rivers University 2L JD Student

A relatively recent phenomenon in the National Hockey League has been to grant star players exceptionally long term contracts, which front-load most of the payout in the early years of the contract. This is done to circumvent the salary cap limit, in effect lowering the player’s annual average cap hit, providing a great benefit to a team that is spending to the salary cap imposed by the league.

On the contrary, this type of contract can also be detrimental as it commits a team to a player for a very long period of time, which has obvious downsides regarding the player’s potential regression, which may include injuries, old age, and inconsistencies in their play. While this type of contract has largely become a thing of the past due to the new CBA provisions enacted, there are still quite a few active players that are currently signed to these long-term deals.

The reason that I mention this type of contract is that it has triggered some controversy based on how teams handle players that are signed long-term and are no longer valued as contributors to the team. A recent example of this was the Los Angeles Kings terminating Mike Richards’ contract in June, after he was charged with having possession of a controlled substance (oxycodone) at the Canadian border. The organization justified the termination by stating that there was “a material breach of the requirements of his Standard Players Contract”.

Richards had five years remaining on his contract, with an average salary (cap hit) of $5.75 million. The timing of the termination seems rather convenient, as the team had been attempting to trade him last season and ended up placing him on waivers in January due to his lack of production (resulting in the team saving $925,000 in salary cap relief). After the termination transpired, Richards filed a grievance with the NHL Players’ Association.

What really stands out here is the seemingly arbitrary decision that a team can make when a player is guilty of unlawful off-ice behaviour. There are currently stark inconsistencies with how teams manage contracts for players that are caught in illegal conduct. To illustrate this point, there have been other recent incidents that were handled in completely different ways than that of Richards. Zack Kassian of the Montreal Canadiens was recently suspended without pay and ordered to rehab (stage two of the NHL/NHLPA Substance Abuse and Behavioral Health Program) after he was involved in a car accident that left him with a broken foot and nose. This is a much fairer and equitable resolution, since Kassian can return to the team once doctors determine that he is well enough to play.

However, it does raise the question of the motives of a team. While it is entirely possible that Montreal was only doing what was in Kassian’s best interest, it is also important to note that Kassian is viewed as a young player with high potential (as evidenced by his draft position – 13th overall) and is currently on a very cost-controlled contract ($1.75 million for one year), which makes him a low risk, high reward player for the organization.

Another recent, more analogous example involved Ryan O’Reilly of the Buffalo Sabres, who was charged with impaired driving and fleeing the scene after he crashed his truck into a Tim Horton’s coffee shop. As of now, the team has honoured his contract without any publicized discipline. Notable factors behind this decision include Buffalo recently signing O’Reilly to a seven-year contract extension worth $52.5 million, after having traded for him in exchange for three players and a second round draft pick. It is also important to note that O’Reilly is 24 years old, so he is only just beginning to enter his prime. What is evident here is that the organization, after having given up a hefty package of assets to acquire O’Reilly, refrained from any discipline or contract termination based on the perceived value that he brings to the team. This is the opposite to how the Kings handled Richards due to the value of each player to their respective team.

Based on these examples, it becomes clear that there is currently an inconsistency with how teams enforce or terminate contracts depending on how beneficial or detrimental a player is to the team. While a team should have the right to discipline its players for unacceptable off-ice behaviour, especially in extreme circumstances such as drug abuse, it leaves some uncertainty for the players involved. With the current cap era in the NHL, it is understandable why some teams are driven to terminate contracts, but the ambiguity that this creates can be problematic for the players.

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The Implications of the Mike Richards Settlement

November 11, 2015


By Nathan MacDermott – Thompson Rivers University 2L JD Student

After the Los Angeles Kings of the National Hockey League terminated his contract and his grievance was filed via the NHL Players Association, Mike Richards and the team entered into a settlement agreement on October 9, 2015. This settlement is the first of its kind, and will likely have significant ramifications going forward.

It appears that this agreement, although unique, complies with the NHL CBA and therefore all parties approved the settlement. But because it is the first of its kind, it appears that a number of owners are upset by it, as it has significant salary cap implications for the Kings going forward. Some might even suggest that it is a circumvention of the league’s salary cap although all parties, including the NHL and Kings’ President and General Manager Dean Lombardi deny this.

The original cap hit attached to Richards’ deal was $5.75 million for each of the next five seasons (totaling $28.75 million). Had they used a compliance buyout, as the team had planned to prior to the termination of his contract, the cap hit would have spread approximately $21.5 million unevenly over the next ten seasons (averaging $2.15 per season). The settlement extends the cap hit unevenly over 17 seasons and totals $17.1 million.

What about this deal is not a circumvention of the NHL salary cap? The Kings now gain approximately $4.4 million in cap space over the payout period (versus the compliance buyout), and they also get to do so over an additional 7 seasons. It is not surprising that this has upset a number of general managers around the league, but it may have also forced them to think long and hard. Although this appears to have been an option available to all GMs under the current CBA, this settlement may have given them all a new perspective on how to get out of ‘bad contracts.’ Yes the NHL and all parties involved have said that this is not a precedent, but is that really a possibility? If another team terminates a player in similar circumstances will the league not have to follow this same path? Some teams may be salivating at the idea of getting out of these ‘bad contracts’ by merely catching their players in a compromising situation.

If I were in the shoes of some of these players, and they certainly know who they are, I might find myself looking over my shoulder a little more often or maybe taking steps to be more cautious when off the ice. Due to the large scale of these contracts and the big business of sports, what is to stop a team from hiring individuals to follow these players? Say a team is looking to find a few million dollars in cap room and possesses one of these bad contracts, would it not make good business sense to keep a much closer eye on that player in hopes that he trips up and falls? There may be moral implications to this, but with the amount of money at stake for all involved those morals may just take a back seat.

In light of this the NHLPA will likely want to get to work as soon as possible to try and alter the language of the current CBA in an effort to better protect players. The NHL teams already seem to have the upper hand when negotiating player contracts, especially with the influx of young, talented players into the league. If these GMs are truly upset at the moment, now may be the best time for the NHLPA to approach them regarding possible changes to the language of the CBA. On the other hand, if these GMs are just showing their angry faces to the media while secretly scheming in the background, there may be an ugly road ahead.

I know this may all seem a bit ‘cloak and dagger’ for a professional sports league, but in case you have not seen any of the NFL’s behaviour over the years, be sure to take a look. It will be interesting to see how this all plays out in the days ahead.



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Lessons Learned for Maintaining a Lengthy Relationship

October 13, 2015


By Kelly Melnyk – Thompson Rivers University 3L JD Student

Earlier this year, it was announced that the Canadian Football League Players Association (CFLPA) had severed its relationship with Edmonton lawyer, Ed Molstad, after nearly 40 years. The change came after a round of negotiations in 2014 that left some players questioning the abilities of Mr. Molstad. It had also been alleged that Mr. Molstad had been overcharging the Union for services during his tenure as counsel, although that complaint was dismissed by the Law Society of Alberta.

The move by the CFLPA is one that should draw the attention of both Players Associations and young lawyers seeking to break into the field of sports law. These two sides are interrelated in that there is a certain level of responsibility that each party needs to accept. The elected representatives of the CFLPA and counsel both owe a duty to the members of the Union and so it becomes a matter of ensuring that the relationship best embodies this principle.

As a lawyer, being criticized for ones abilities and having their ethics questioned publicly by their own client can shake the willingness to represent said client to the best of their ability. However, representing your client’s interests even when they misbehave is an essential skill to maintain or restore the relationship, a skill that many young lawyers aspiring for work in the CFL should develop.

In a relationship that had lasted longer than many marriages, the CFLPA and Mr. Molstad found themselves in a situation that revolved around the question, “What happens when the relationship appears unable to sustain the duty?” The questions concerned Mr. Molstad’s abilities but also perceptions of overcharging appeared to have destroyed the trust in the relationship between counsel and client, making it impossible to continue on. Despite the concerns over performance and costs, the CFLPA issued a warm statement over Mr. Molstad’s contribution to the sport and the CFLPA over the last 40 years.

One cannot help but wonder if nearly 40 years of working together brought a level of complacency on both sides. In the complaint to the Law Society, the practice of charging a flat fee of $400,000 to the Union, plus a further $200,000 was found to be exorbitant by the complainant players. Mr. Molstad demonstrated that the hourly fee for his services would have amounted to nearly $1 million for that same year. This seemed to further enflame the complainants, demanding an explanation to some of the line items in the billings.

As up and coming lawyers, we are taught to ensure that our clients know what we are billing for and to track our hours. Using vague descriptors, such as “review of files” as alleged in the complaint, do not aid in maintaining a trusting relationship with the client. A senior lawyer ought to have kept better records of for the file but does this constitute a breach of the ethical obligations? The law society did not seem to think so. When representing some 500 players, the accountability is to be there on both the part of the lawyer and the CFLPA executive.

Providing a detailed accounting of services rendered for a large sports organization that can justify the cost is just one skill that a lawyer should have in order to build and maintain the client relationship. The Union bears responsibility for reviewing the bill and agreeing with the charges before proceeding with payment for the services. This was supported by the law society and is the practice in many industries. Rather than having a few members launch a complaint with the law society against counsel, the CFLPA should have pursued the concerns internally so as to avoid the public concerns that arise out of such allegations.

In any relationship, whether as the lawyer or the client, it is necessary to ensure that the communication is open to avoid a total breakdown of the relationship. Lawyers looking to step into roles with players associations should view the outcome between the CFLPA and Mr. Molstad as a cautionary tale on the duty and obligations to the client. Seemingly simple steps such as clear billing and communication allow lawyers and player’s unions to build and maintain trust. Had these steps been followed by Mr.Molstad and the CFLPA the relationship could have been extended for another ten years or more.

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FIFA: Corruption, Scandal, and Sponsorship: A New Hope

October 12, 2015

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By Tariq Salloum – Thompson Rivers University 2L JD Student

The Fédération Internationale de Football Association (FIFA) is the universe’s largest spanning sporting organization with six confederations and 209 national associations, indeed the FIFA Empire stretches nearly across every corner of the globe and there is no sight of its overwhelming success slowing down anytime soon. However, not all is well in the empire, with charges pending against multiple senior level FIFA level officials for corruption in the United States and the five-time elected President Sepp Blatter facing corruptions charges in Switzerland, and the FIFA ethics board internally investigating its top members – it seems the sponsors have had enough.

As FIFA’s top officials find themselves strife with corruption allegations, major sponsors such as Coca Cola, McDonalds, Budweiser and Visa are done with their wait-and-see approach with FIFA’s top officials, each issuing statements within hours of each other voicing their disdain with FIFA’s top officials including the president, Darth Vade …err – Sepp Blatter. So the question becomes, can our world’s top capitalists do what our world’s top governments can’t do, mainly remove Seth Blatter and his inner circle from the helm of the world’s most beautiful game.

FIFA is estimated to make $177 million a year in marketing deals from top tier sponsors such as Visa, Adidas, Hyundai and Coca-Cola, all of which have recently signed eight year deals worth a cumulative total of $993 million just between these four global corporations. In 2014, a World Cup year, FIFA is estimated to have made $2.1 billion dollars in revenue. Indeed, with all the corporate money that FIFA may lose if its top sponsors live up to their threats and were to withdraw its sponsorship and support if Sepp Blatter was to stay in power is considerable. One would suspect that Sepp Blatter’s fate with FIFA had been sealed.

In the most recent developments, it seems as the arm twisting by the sponsors has worked at least in the interim. As FIFA’s ethics committee has decided to suspend President Seth Blatter and those in his inner circle for at least 90 days, with no details being released until their investigation is finalized due to Articles 41 and 42 of the FIFA code of ethics.

However, Blatter issued a statement through his lawyers saying he was “disappointed” the ethics committee had not followed its own code in allowing him an opportunity to be heard, and claimed the suspension was based on “a misunderstanding of the actions of the attorney general in Switzerland.”

Amidst the united global alliance demanding the resignation of the 79 year old, Blatter still remains defiant and why wouldn’t he be? Up until now he has faced no real consequences for his alleged corruption. In fact, soccer/football and FIFA continue to grow in popularity worldwide year in and year out with no end in sight. No matter what, it seems that the heads of FIFA and the law are going to collide sooner rather than later. Whether it be business law, criminal law, international law, or internal regulations; it’s all sports law at this point and fittingly it seems that the scandals surrounding FIFA are only going to be settled in an adverse arena – albeit a legal arena – nonetheless the score will be settled once and for all … eventually.

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Contract Negotiations – Seattle Seahawks and Kam Chancellor

October 5, 2015


By Salman Karim – Thompson Rivers University 2L JD Student

This September Kam Chancellor, strong safety for the National Football League’s Seattle Seahawks, did something that the league’s players have very rarely done in the past. He extended his holdout into the NFL’s regular season and lost significant game cheques for the first two games of the Seahawks regular season.

Chancellor, who has three years remaining on his five-year deal signed in 2013, expressed his displeasure in his contract by sitting out for all of training camp. The Seahawks organizational policy is to not re-negotiate contracts with more than two years remaining.

Kam Chancellor and agent Alvin Keels demanded additional monetary guarantees in the contract, partly due to the compensation Chancellor’s other successful teammates had received. He felt underpaid in comparison to other lynchpins of the vaunted Seahawks defence, such as Earl Thomas, Richard Sherman and Bobby Wagner. His positon is understandable given the significant risk of injury and the typical short length of an NFL player’s career. Unlike contracts in other professional sports leagues such as the NHL, NFL contracts are not fully guaranteed and thus a player can be cut well before his contract expires and never see a large amount of that money they signed for.

Considering their salary cap structure, the Seahawks were forced to set a strong precedent in this dispute. As a team loaded with young talent, Seattle’s salary cap situation is a very tricky one to manage. By the nature of the business, good players will come and go, but the idea is to keep the core of great players together. Chancellor’s leverage to re-negotiate was weakened due to his 2013 contract compensating him as a top two player at his strong safety position already. Re-negotiating Chancellor’s deal this early would create discontent with other players, such as defensive end Michael Bennett, who also feel that they are worth more. Having signed a four-year deal last summer, the Seahawks management took a firm stance against this and Bennett decided holding out was not beneficial to his position. Although dissatisfied, he attended all of training camp and is honoring his contract.

As the NFL regular season was set to begin, the Seahawks chose to negotiate with Chancellor and proposed shifting $3 million salary from 2017 to 2016, bringing his salary to $8.1 million from the originally scheduled $5.1 million. This would then reduce the 2017 salary from $6.8 million to $3.8 million. Chancellor declined and his camp termed it as “a bandage solution”. As days wore on, the sides got as close as $900,000 apart but could not reach a resolution. It was reported that Chancellor’s camp had called the Seahawks “petty” over this small discrepancy. The owner of the Seahawks, Paul Allen, then publicly stated that they would not give anything more in the negotiations. This was serious given that Paul Allen rarely comments on team issues. It appeared that this holdout was headed for the regular season.

Chancellor missed the first two games of the Seahawk’s season; both losses where his absence was felt. In week 1 against the St. Louis Rams, Chancellor’s replacement Dion Bailey slipped and fell allowing Rams tight end Lance Kendricks to catch the game-tying touchdown in the fourth quarter. This sent the game to overtime where the Seahawks lost 34-31. After their 27-17 loss to the Green Bay Packers in week 2, pressure appeared to be mounting. However, two days after that loss, Chancellor announced he would return to the team.

Chancellor accrued more than $2 million in fines from his holdout and returned without any changes to his contract. Some of the fines will be rescinded by the Seahawks, but how much is to remain confidential. Chancellor has made it clear that he would like to re-address this issue next summer when he has two years remaining on his deal. Precedent for this was set last summer when the Seahawks shifted some money around for running back Marshawn Lynch whose contract had two years remaining. It appears as though Chancellor would have been better off playing through this season and attempting to re-negotiate next year rather than holding out with little leverage. His motivation is understandable but Seahawks policy made the situation a very difficult one. Caving in a situation like this could have been disastrous for the team’s competitive future. In the end, the Seahawks stood firm and set a strong precedent for upcoming contract negotiations.

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Two Stones, One Ray-ven

October 11, 2014


By Michael Truong – Thompson Rivers University 3L JD Student

Recently, the National Football League (NFL) has come under intense scrutiny not for the violence on the field but off of it. Ray Rice, a running back for the Baltimore Ravens, is at the centre of the NFL’s domestic violence controversy.

Early in 2014, Rice was arrested for assaulting his then-fiancée and now wife, Janay Palmer. Shortly after, TMZ released a video of Rice dragging an unconscious Palmer out of an elevator. The NFL responded by suspending Rice for two games. In September of 2014, TMZ released a more complete video, which showed Rice punching Palmer in the face rendering her unconscious and then dragging her out of the elevator. The Baltimore Ravens terminated Rice’s contract while the NFL suspended him indefinitely.

There is little doubt that Ray Rice deserves a significant punishment from the league. That much is clear. Given that NFL Commissioner Roger Goodell initially punished Rice with a two-game suspension, should he have been able to substitute the two-game suspension with an indefinite one based solely on the new video evidence? While Section 4 of Article 46 of the NFL Collective Bargaining Agreement (NFL CBA), also known as the “One Penalty Rule”, bars discipline of a player for the same act by both the Commissioner and the team, there is no similar provision in the NFL CBA that addresses whether the Commissioner can alter punishments already handed down. The NFL Constitution and the NFL Personal Conduct Policy are also silent.

Had Commissioner Goodell suspended Rice indefinitely from the outset, Rice would have had far less legal flexibility because the NFL Personal Conduct Policy gives the league wide discretion to punish players for conduct detrimental to the league. Given that Commissioner Goodell did not “get it right” the first time, it seems natural that the concept of double jeopardy should warrant some consideration. While the rule of double jeopardy may not readily apply in this case, particularly because a collective bargaining agreement governs the relationship between the NFLPA and the NFL, Rice may nevertheless be able to mount a compelling argument that Commissioner Goodell overstepped his authority by essentially handing down two punishments for the same act.

According to the timeline of events, TMZ released the first security video in early 2014, Rice apologized a few months later, and then the Commissioner handed down the initial suspension. While “new” video evidence subsequently emerged, the facts of the situation remained largely unchanged. The league claimed it never saw the second video but this implies that had it seen the video, the result would have been different. In reality, the increased penalty was more likely the result of the video being released to the public and Commissioner Goodell acquiescing to public outrage.

Commissioner Goodell had access to the first video which depicted Rice dragging a limp Palmer from the elevator. How did he honestly think Palmer became unconscious? With Rice’s statements that he “made the biggest mistake of [his] life” and his actions “were totally inexcusable” alongside the video evidence, the league knew that violence was involved. Should the manner in which Palmer was rendered unconscious have justified increasing an already imposed penalty? Rice admitted his role, if not explicitly then at least implicitly, and he accepted responsibility; thus, the Commissioner’s increased penalty looks like a second punishment. If Section 4 of Article 46 of the NFL CBA precludes disciplining a player for the same act by both the Commissioner and the team, surely the “One Penalty Rule” can be read as also barring the Commissioner, or the team, from punishing a player twice for the same act.

This is supported by the apparent finality of the initial suspension. Double jeopardy hinges on the idea that an individual cannot be placed in jeopardy twice for the same offence. The assumption is that the initial punishment is final; if not, then double jeopardy does not apply. The NFL would be hard-pressed to assert that Rice’s initial two-game suspension was not the end of the matter, especially since the decision was made following a hearing and not appealed. Seeing as the NFL CBA and the NFL Constitution are silent as to whether the Commissioner can increase or substitute an already imposed punishment, the NFLPA’s next step should be to address this glaring hole.

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Owning a Player: Fantex and the Arian Foster IPO

November 23, 2013


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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