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SBJ/November 17 - 23, 2003/Labor AgentsPrint All
NFL.com writer Pat Kirwan, who has a deal with agent David Dunn to get 40 percent of the agent fee on No. 1 NFL draft pick Carson Palmer's multimillion-dollar contract, says he is no longer working with any agents.
Quite a few eyebrows were raised in the agent community earlier this month when Kirwan gave a speech to players on the USC football team, warning them to stay away from agents.
"I told the underclassmen, 'You don't need an agent now,'" Kirwan said. "If you are a senior, you should find out the agent you want to use, but after the season is over."
As previously reported by SportsBusiness Journal, Dunn's attorney, Mark Humenik, testified under oath that Kirwan was to receive 40 percent of the 3 percent fee that Dunn's firm, Athletes First, will get on Palmer's six-year, $49 million contract. Humenik was testifying in a creditors hearing in the Athletes First Chapter 11 bankruptcy case.
If Palmer were to earn the entire $49 million, Kirwan could get as much as $588,000. At the very least, Kirwan would get $120,000 on Palmer's $10 million signing bonus, which is guaranteed.
Kirwan said he helped ready Palmer for the draft last year, but told the USC players he no longer does that kind of work.
Some agents wondered whether Kirwan could provide objective advice on agents when he is set to receive so much money from one particular agent. Kirwan wouldn't discuss his deal with Dunn.
Agents, too, said it is common to begin talks with prospective top NFL draft prospects well before the college football season ends. College-eligible athletes may talk to agents but cannot receive anything of value from them under NCAA rules.
One agent, who asked not to be named, said that agents who wait until the season is over to begin talking to college players "have no shot" at signing them.
AGENTS DESCEND ON ROETHLISBERGERS: Virtually every major NFL player agent who has represented a quarterback taken in the first round of the NFL draft has either called or flown to Ohio to meet with Brenda and Ken Roethlisberger, the parents of Miami (Ohio) quarterback Ben Roethlisberger, in the past few weeks.
Dunn and his former partner, Leigh Steinberg, have both traveled to the small town of Findlay, Ohio, to begin interviews in case Roethlisberger decides to declare himself eligible for the 2004 NFL draft, said Brenda Roethlisberger.
She said that among the other agents who have either called or visited are Mike Sullivan, director of football for Octagon; James "Bus" Cook, agent to Green Bay quarterback Brett Favre; and SFX Football agents Jim Steiner and Ben Dogra.
SOURCES: DUNN, ASSANTE IN SETTLEMENT TALKS: Dunn is in talks with Assante Corp. about settling the $44.66 million judgment against him and his company, Athletes First, sources say.
A federal court jury in Los Angeles found a year ago that Dunn had breached a contract with his former partners, Steinberg and baseball agent Jeff Moorad, and that his new company, Athletes First, competed unfairly against them. That verdict led to Dunn and Athletes First both filing for Chapter 11 bankruptcy protection.
Dunn's attorney, Humenik, wouldn't comment. An Assante spokeswoman also declined comment.
Assante Holdings Inc. board Chairman Harvey Schiller said he does not know if there are current settlement talks, but he said investors in Dunn's company had previously approached Assante about a settlement and those talks went nowhere.
But if Dunn does settle with Assante, his troubles may not be entirely over. The NFL Players Association disciplinary committee voted to suspend Dunn as an agent for two years, based on testimony in the Steinberg case.
The NFLPA, however, has been thwarted from moving forward with disciplinary proceedings against Dunn by his bankruptcy judge, who has denied the NFLPA's request to lift a stay against all administrative hearings against Dunn.
Richard Berthelsen, NFLPA general counsel, said a settlement of the case could affect the union's action.
"Assuming settlement means the end of Dunn's bankruptcy, which it almost certainly would, we would be able to proceed immediately with our disciplinary proceedings against Dunn," he said.
Staff writer Daniel Kaplan contributed to this column. Contact Liz Mullen with agent and labor news at lmullen@sportsbusinessjournal.
NHLPA Executive Director Bob Goodenow and his top deputies have spent the last six weeks visiting NHL teams, updating players on recent labor talks and, in the process, emboldening them against the idea of a salary cap.
No new talks have been scheduled between the league and the union since they exchanged proposals on Oct. 1, the 14th meeting between the two sides in the last year but the first that was made public to the media.
In this calm period following the storm of attention that meeting attracted, the union is trying to hammer home its position that it is trying to meet the league halfway.
"The message to all the players has been we're prepared to address the NHL's stated concerns in the context of a marketplace system," said Ted Saskin, the NHLPA's senior director. "The instruction from the players is very clear: They have no interest in us discussing or negotiating a salary cap."
The 30-team tour is close to complete, with a few more club visits scheduled between now and Thanksgiving. Meetings were generally held at hotels or neutral locations, and often scheduled around teams' visits to Toronto, where the NHLPA headquarters is located, or nearby Buffalo.
Players reportedly were asked to fill out a questionnaire that asked about their financial holdings, a reminder they may have to dip into their nest eggs should there be a prolonged work stoppage starting next season.
“They have no interest in us discussing or negotiating a salary cap.”Ted Saskin, NHLPA senior director
But the most important elements of the meetings were briefings on the Oct. 1 exchange of proposals.
The union had put forth a system, for the second time, based on luxury taxes and revenue sharing, as well as an across-the-board 5 percent salary cut. It estimated that within two years the new system would cut salaries by $200 million in total.
The league asked for a system that would limit payrolls to a set percentage of league revenue. Both proposals were quickly rejected by the respective sides, with the caveat that the NHL said it would consider the union's offer if it included a guarantee that the salary reductions would meet the projections.
That's where things stand now.
"We are willing to negotiate whenever they are willing to stand behind the proposal they make," said NHL executive vice president and chief legal officer Bill Daly. "They refused to do that in June when they first made this proposal, and when it was first rejected, and they refused again in October."
The league has said that high salaries have put the NHL in such a dire financial position that it can't afford to take a chance on any system that doesn't put strict and guaranteed limits on spending. Therefore, open-ended luxury taxes cannot be considered, because there's no way to accurately predict how effective they'll be in dragging down salaries.
The union counters that its proposal specifically tackles all the dynamics that the NHL itself says led to the salary explosion.
Saskin said players have wholeheartedly embraced the message from the union officials.
"The reaction has been one of support and strong disappointment that the NHL has given no indication of having any interest in negotiating," he said.
The NHLPA, sometimes criticized for being aloof or even hostile to player agents, also had a meeting with agents in late October.
"People were happy to be brought up to date," said veteran agent Don Baizley. "Right now there's a difference of opinion over business issues [between the league and the union] and they have to be resolved. We recognize there is a serious schism."
The NFL Players Association's disciplinary committee has decertified one player agent and issued complaints against two others.
The disciplinary committee decertified Ajili Hodari, finding that the agent took his entire fee out of a signing bonus paid to a former client, Carolina Panthers wide receiver Muhsin Muhammad, and also finding that Hodari offered an Ohio State football player a payment to sign with him.
Hodari has the right to appeal to an arbitrator, said Richard Berthelsen, NFLPA general counsel.
Hodari said he will appeal the decision. "These charges are without merit and I will be exonerated," he said.
Hodari took his entire fee for a five-year deal he negotiated for Muhammad out of the player's signing bonus, Berthelsen said. Under NFLPA rules, agents are allowed to bill for their fee — which is usually a percentage of the player's contract — as the player earns it, Berthelsen said.
Muhammad signed a five-year deal with the Panthers in 2000 reported to be worth $22.5 million, including a $6.5 million signing bonus that Hodari negotiated, according to press reports. Muhammad is now represented by agent Joel Segal.
The committee issued complaints against agent Brian Overstreet, finding that he interfered with another agent's client, and against agent Dwight Moss, based on a finding that Moss took $2,500 from the father of a football player, in violation of the union's agent regulations.
Overstreet and Moss have the right to answer the complaints issued against them before the committee decides what, if any, disciplinary action should be taken. The NFLPA's disciplinary action against agents ranges from a letter of reprimand to a fine, suspension or decertification.
Attempts to reach Overstreet and Moss were unsuccessful.
Hodari is listed on the NFLPA Web site as representing three NFL players.
The NFLPA disciplinary committee, headed by NFLPA President Trace Armstrong, found that Overstreet interfered with agent Frank Bauer's client, Tennessee Titans defensive end Anthony Dunn, Berthelsen said. Agents complain regularly that other agents are interfering with their clients, but such cases are difficult to prove.
However, in this case, Dunn provided the disciplinary committee with an affidavit regarding the incident, Berthelsen said.
In the case of agent Moss, the disciplinary committee found that he took $2,500 from the father of a football player, telling the father that was part of a $5,000 fee charged to get the young man a spot on an NFL club roster, Berthelsen said.
"He didn't get him a job and he did not pay the money back," Berthelsen said.
Moss was not listed on the union's Web site as representing any NFL players.
While a group of top jockeys is challenging a state racing commission's legal right to regulate advertising on their apparel, the National Thoroughbred Racing Association is continuing to work on a business solution to growing concerns about the athletes' ability to engage in ambush marketing.
The NTRA is in talks with potential new sponsors about including jockeys in their advertising as part of their overall sponsorship of the sport, said Greg Avioli, NTRA deputy commissioner.
In addition, the NTRA is in talks with "leading jockeys" about working together on sponsorships, Avioli said.
"As a practical matter, the sport needs to address this in a coordinated fashion in the same way that other sports do," he said. "The NTRA is not opposed to all jockey advertising. We are opposed to advertising in the nature of ambush marketing that would damage the new and growing list of NTRA and Breeders' Cup sponsors."
Thirteen prominent jockeys, including Gary Stevens, Alex Solis and Edgar Prado, filed a lawsuit in Jefferson County, Ky., circuit court on Nov. 6, claiming that a Kentucky Racing Commission rule prohibiting them from wearing advertising, symbols or wording on their breeches violates their First Amendment rights.
It is just the latest skirmish between the jockeys and racing authorities. Earlier this year, Visa publicly objected when three prominent jockeys wore ads for Wrangler or Budweiser on their pants during the Belmont Stakes. And the NTRA won a temporary restraining order just weeks before the Breeders' Cup prohibiting Jockeys International Management Group (JMG) from soliciting advertising for jockeys to wear at the Oct. 25 Breeders' Cup World Championships at Santa Anita.
In the lawsuit filed Nov. 6, 13 jockeys who wore the emblem of the Jockeys' Guild on their pants during the Kentucky Derby also are challenging $500 fines they each received, saying that a Kentucky Racing Commission rule prohibiting logos is overly broad and unconstitutional.
Bruce Miller, attorney for the Kentucky Racing Commission, said the case pits free speech rights against constitutional guarantees of states rights. In Kentucky, the racing commission has the ultimate authority to govern horse racing.
Right now, just the state racing commission and the individual jockeys are part of the suit, but Miller said more industry groups and companies could join. "If this isn't resolved, I can't believe there would not be a collection of lawyers in it because there are too many oxen in this corral that stand to get gored if they don't participate," he said.
The racing commission's position is that advertising on jockeys' pants could make it difficult for stewards to evaluate racing infractions in the case of inquiries.
"When you look at those films of jockeys going 45 miles an hour, you have to be able to distinguish the jockey's hand, and if it's all cluttered up like a NASCAR driver, the steward has a more difficult decision," Miller said.
Lawrence Mentz, attorney for the jockeys, said the jockeys wore Guild patches in other states, including at the Preakness Stakes in Maryland, and were not punished for it.
Mentz said he does not know if the case might result in allowing jockeys to wear commercial advertising on their pants. He said it is possible the court could find the rule unconstitutional but still permit restrictions on commercial advertising.
JMG chief executive R.J. Kors sees a potential for the lawsuit to affect the 100 jockeys he says he represents.
"I am not involved [in the suit], but my counsel tells me I am involved because we are in the business of representing athletes," Kors said. "How can you suppress the jockey's rights, when in the same state you have golfers, tennis players and other independently contracted athletes and they are allowed to have sponsors when they compete? You can't do that."
Even if the jockeys win their suit, the result likely won't affect professional team sports, said Howard Ganz, a partner at law firm Proskauer Rose, who represents the NBA and Major League Baseball in labor issues.
Athletes' rights to endorse products while competing in the four major leagues are governed by the league's collective-bargaining agreement or by contracts between players and their teams, Ganz said.