SBD/Issue 41/Leagues & Governing Bodies

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  • Jury Awards Group Of NFL Retirees $28.1M For Lack Of Marketing

    Richard Berthelsen Says NFLPA Will Look To
    Have Judge Throw Out Jury's Decision
    A federal jury stunned the NFLPA yesterday by awarding a class of retired players $28.1M for not marketing them and not representing their best interests. The jury found the union guilty on both contract and fiduciary duty breach, but awarded no damages for the contractual violation and $7.1M for the fiduciary duty breach. The jury also awarded $21M of punitive damages. In arguing to no avail to the jury, the NFLPA contended that awarding punitive damages would hurt the group's chances in its labor struggle with the league's owners. "We are obviously not pleased with any award of damages, but we believe that we have solid legal grounds to get this award overturned through post-trial motions and/or on appeal to the Ninth Circuit Court of Appeals," NFLPA interim Exec Dir Richard Berthelsen said in a statement on the union's Web site (Daniel Kaplan, SportsBusiness Journal). Ron Katz, the attorney who repped the 2,062 former players, said, “If you do the math, it comes out to $13,000 per class member. I think the former players are going to be very satisfied.” In L.A., Greg Johnson reports the attorneys and U.S. District Court Judge William Alsup “must still decide how to divvy up the award, some of which will go toward paying attorneys.” Berthelsen said that the union would appeal the decision if it fails to get Alsup “to toss out the verdict.” NFLPA outside counsel Jeffrey Kessler: “It’s an unjust verdict, and we are confident it will be overturned” (L.A. TIMES, 11/11). More Kessler: “The verdict is a complete miscarriage of justice. It is not supported by the facts in the case” (USA TODAY, 11/11).

    HOW DAMAGES WERE AWARDED: Kessler said it was telling that on the core contractual breach charge, there was no damages. The plaintiffs alleged that a group licensing agreement signed by the class of retired players entitled them to share in licensing revenue only going to active players. The jury sided with them on that, but then did not give them a penny. The fiduciary duty charge alleges the union turned its backs on the players who the group had an obligation to. However, during the trial, the plaintiff’s damages witness testified he had not done an analysis of how much the players should receive for this charge, which would have involved deciphering their marketability and what they would have gotten had they not entrusted some of their rights to the union. Nonetheless, the jury awarded $7.1M (Kaplan). In S.F., Bob Egelko reports the jury ruled the NFLPA “had failed to protect the retirees’ rights,” which “opened up the union to the steep punitive-damages decision” (S.F. CHRONICLE, 11/11).

    UNION SHOULD NOT MARKET RETIRED PLAYERS: Kessler in his closing arguments made clear one message that will remain from the jury’s verdict regardless of the appeal -- the NFLPA should not be trying to market retired players. The NFLPA is the only one of the big four sports unions to do so. Katz said, “I expect a leadership change at the NFLPA and I would hope that the new leadership would want to reconcile the active and retired players by, among other things, settling this lawsuit” (Kaplan).

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  • Critics Ponder ABC-NASCAR Relationship After Net Left Race Early

    Should NASCAR Have Been
    More Vocal Over Race Swap?
    ABC earned a 4.6 overnight Nielsen rating during the 7:00-7:30pm ET window for Sunday's NASCAR Sprint Cup Series Checker O'Reilly Auto Parts 500 at Phoenix Int'l Raceway before switching to ESPN2 in the Eastern and Central time zones for the last 34 minutes of the telecast. From 7:30-8:00pm ET, ABC earned a 3.8 overnight rating for "America's Funniest Home Videos" in the Eastern and Central time zones, with the Mountain and Pacific time zones continuing coverage of the race (THE DAILY). 

    PACING BEHIND: In Orlando, David Whitley writes, "I regret to inform you that one of the great sports debates of our time is over. NASCAR is not a major sport." What makes ABC's switch from the race "doubly depressing for NASCAR" is that "next to nobody seemed to care." Whitley: "As far as TV is concerned, you might as well be the WNBA. It comes down to leverage, and NASCAR doesn't have it" (ORLANDO SENTINEL, 11/11). A BIRMINGHAM NEWS editorial states NASCAR coverage on TV is "already such a nightmare that it's a miracle ratings are up," as no one "ever knows from week to week when races start anymore." Races might "start anywhere from" 11:00am-4:00pm CT. The editorial: "It's all because NASCAR lets the networks do as they please whereas the NFL has anti-Heidi language written into its TV contracts" (BIRMINGHAM NEWS, 11/11). In Dallas, Barry Horn wrote, "Let's get this straight: CBS doesn't abandon NFL games to go to '60 Minutes' but ABC left a NASCAR playoff race for a AFHV, a show with no redeeming social significance other than to fill an hour of air time" (DALLASNEWS.com, 11/10).

    FIGHT FOR YOUR RIGHT: The AP's Jenna Fryer noted ABC's swap had "ramifications, particularly the perception of how it views NASCAR." Fryer: "Yep, the network that promised to broadcast the final 10 races of the season on ABC as part of its estimated $270[M] a year contract dumped the closing laps of a championship Chase race for home video hijinks. Nice 'partner,' NASCAR" (AP, 11/10). In Roanoke, Dustin Long writes this is not the idea NASCAR Chair & CEO Brian France had when he said he wanted to "minimize change" this year. Long: "Where was NASCAR? ABC is seen in about 160 million homes. ESPN2 is in close to 100 million homes. How can such a move late in a race be acceptable to fans, advertisers and the sport? While NASCAR doesn't need to severely admonish the network for the change, even a statement expressing disappointment might at least show fans that the sanctioning body is willing to fight for them and keep this from happening again" (ROANOKE TIMES, 11/11). USA TODAY's Michael Hiestand writes leagues, "not their TV middlemen, are responsible for protecting their sport and fans," and if leagues want "certain guarantees, like events staying on the same channel until they finish, they should get it in writing." They should also be "willing to accept less TV money." Hiestand: "Could ABC have stuck with the race and ended up with a higher rating? Disney got to make the call. If it was important to NASCAR, they should have made it their business" (USA TODAY, 11/11). 

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  • KHL's Inaugural Season Hampered By Worldwide Economic Crisis

    Russia's Continental Hockey League (KHL) is "undergoing growing pains in its inaugural season," according to Eric Duhatschek of the GLOBE & MAIL. KHL teams have "missed payroll and there's uncertainty about its smaller franchises," while "worries are also mounting about the possible impact of the world economic crisis on its well-moneyed backers, many of them who rely on high world oil prices for their wealth." KHL club SKA St. Petersburg Player Personnel Dir Igor Larionov, who last night was inducted into the Hockey HOF, said that the "economics of the KHL make little sense today, given that some teams in Moscow draw as few as 1,000 or 2,000 fans a game and ticket prices are modest." At that rate, Larionov does not believe that the player salaries "on offer last season ... are sustainable over the long term." Larionov: "You want to be wise economically. You want to get ticket sales and apply to the salaries. Now, we have great support for big companies and business people, but how long is it going to last? That is why we have to sit down and talk." Larionov, who was joined at last night's induction ceremony by KHL President Alexander Medvedev and KHL BOD Chair Slava Fetisov, said that the KHL this spring will meet to "devise a plan for the future," which could include expanding the league "beyond the Russian border." Larionov indicated that possibilities include an "Asian division (with China, Japan and teams on the Russian East Coast) and another division that would incorporate some of the major cities in Europe" (GLOBE & MAIL, 11/11).

    ON THIN ICE? In Edmonton, Jim Matheson reports KHL club Severstal Cherepovets "may not have paid their players since August," while clubs Moscow Spartak and MVD Balashika are "behind in payments." Also, KHL club Avangard Omsk, for whom former NHLer RW Jaromir Jagr plays, "may also have been delinquent." Larionov said, "I'm getting some stories about this, and I have addressed that with Alex Medvedev. It's a big concern, the sponsorship of some of these teams. We have to make this work." Larionov added of the KHL, "I don't think it's a threat to the NHL right now. Some NHLers went to play in Russia, but not many big names, except Jagr" (EDMONTON JOURNAL, 11/11).

    Alex Medvedev Says NHL, Russia's KHL
    Have "Different Business Models"
    FACE OFF: Medvedev yesterday appeared on CNBC and when asked about comparing his league to the NHL, he said, "We have different business models. We're not so much dependent on the revenues from ticket sales, at least nowadays." Medvedev also noted Russian Prime Minister Vladimir Putin told Medvedev he considered hockey a "tool to promote cooperation between nations and that's why despite all the economic difficulties which could appear, we'll be in a position to continue our project" ("Street Signs," CNBC, 11/10). Larionov yesterday "called for the NHL and KHL to work together to grow the game internationally." Larionov: "We don't need a cold war right now in hockey. The KHL is starting to make its first steps toward recognition. We should be working together (with the NHL) to make the game globally recognized and to find new markets" (TORONTO STAR, 11/11). NHL Commissioner Gary Bettman said, "The fundamental issue for us is the [KHL] fundamentally does not respect contracts. We do not register a player until we know he is free of other contracts. The Continental League won't do that" (GLOBE & MAIL, 11/11). SPORTINGNEWS.com's Craig Custance wrote Medvedev at last night's ceremony preceded Bettman "down the red carpet by about 15 minutes, the two leaders of opposing leagues in the same building, putting aside differences, to honor Larionov" and the other HOF inductees (SPORTINGNEWS.com, 11/10).

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  • Australia IRL Event Ends Due To Unresolved Scheduling Dispute

    Scheduling Dispute Brings
    Australia IRL Event To An End
    The IRL Nikon Indy 300 at Surfers Paradise, Australia, "has been axed after the Queensland Government and race bosses failed to reach an agreement on its future," according to the AAP. Queensland Sports Minister Judy Spence said that the government "had opposed moves by the Indy Racing League to move the event from October to March." Spence: "They have an expanded series of events and our Indy clashes with the early part of the American Football season. Moving our race to March as they had requested was not an option due to the clash with the F1 Grand Prix in Melbourne and the Clipsal V8 race in Adelaide" (AAP, 11/11). The INDIANAPOLIS STAR reported negotiations "broke down after local backers and series organizers failed to agree on the timing of the event." Surfers Paradise had held an open-wheel race every year since '91 (INDIANAPOLIS STAR, 11/11).

    NO PLACE LIKE HOME: IndyCar Series sources said that driver Danica Patrick "will go wherever she can get the biggest check and they would not be surprised if she tried to line up a NASCAR deal." But SI.com's Bruce Martin reported "after watching former Indy Car drivers [Sam] Hornish Jr. struggle and Dario Franchitti fail in NASCAR, few observers think it would be the wisest move she could make." Martin wrote Patrick "remains a big name in the IndyCar Series despite winning only one time, but once the novelty wore off in NASCAR, Patrick would get lost in the crowd" (SI.com, 11/10).

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