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SBJ/February 28 - March 6, 2005/Labor AgentsPrint All
The story of what really happened in the days surrounding the last-ditch weekend meeting that failed to save the NHL season may eventually come out in sworn testimony during future legal proceedings, labor law experts say.
I think that if there is going to be a legal dispute about whether or not either side has bargained in good faith, what happened will likely be a very important part of that dispute, said Rick Albert, a lawyer in the Los Angeles office of Foley & Lardner who has represented employers, including Major League Baseball, in labor situations.
Last week, there appeared to be a real dispute between the NHL and NHL Players Association over what happened both during the meeting and in the days leading up to it. Stories continued to circulate that the NHL told players that it would agree to a $45 million salary cap before the meeting, then reneged on that promise. The league and Phoenix Coyotes owner Wayne Gretzky say that didnt happen.
NHL Commissioner Gary Bettman, meanwhile, during an interview with New York radio station KFAN, accused the NHLPA of engineering a setup and said league officials realized that they had been had. That drew an angry response from NHLPA Executive Director Bob Goodenow, who said the remarks were totally untrue and a false characterization of events.
Bill Gould, former chairman of the National Labor Relations Board, said deception by either party could lead to an unfair labor practices charge.
If the NHL was found to have bargained in bad faith, it could prevent the league from implementing its own labor system. Conversely, if the union committed bad-faith bargaining, it potentially could hurt its ability to strike if an impasse wee declared and a new system put in place, Gould said.
NHL and NHLPA representatives declined to comment on potential legal strategies.
SFX Sports has signed its first action sports client, snowboarder Lindsey Jacobellis, who recently won a gold medal at the Winter X Games.
Although the signing marks SFX’s first real foray into the action sports world, the agency isn’t launching an action sports division, at least not yet, said Josh Schwartz, SFX vice president of marketing and sales, who will be Jacobellis’ primary agent. Schwartz said that although the company is not actively looking for more action sports clients, the signing could help the agency make contacts in that world.SFX expects Jacobellis to catch air — and airtime — at the 2006 Winter Olympics.
“She isn’t your typical snowboarder,” Schwartz said. “She has the opportunity to win two gold medals at the Olympics.”
In addition to endorsement deals, Jacobellis has done modeling work for Seventeen magazine and the Abercrombie & Fitch catalog.
LEGACY EYEING BUYOUT: The agents at Legacy Sports, the agency that was formerly Steinberg & Moorad, are working on a management-led buyout that would make the firm independent of parent company Loring Ward, said Legacy CEO Greg Genske.
“We haven’t completed a deal yet, but we have made a lot of progress,” said Genske, who would be part of the buyout along with football and baseball agents Scott Parker and Gene Mato and baseball agent Brian Peters. “Our hope is we are able to do that in the next couple of weeks.”
Loring Ward, formerly Assante Corp., announced earlier this month that it was divesting itself of Maximum Sports Management Inc., an agency owned by NFL player agent Eugene Parker, and hinted that it might be getting out of sports entirely.
Winnipeg, Manitoba-based Loring Ward said in a press release that it agreed to sell certain assets of Roanoke, Ind.-based Maximum back to the senior management of the firm, which includes Parker and agent Roosevelt Barnes. No financial terms were disclosed.
Sources said the company is leaving the sports business, after trying to build a multisport agency starting with the 1999 acquisition of the firm formerly owned by football agent Leigh Steinberg and former baseball agent Jeff Moorad. Steinberg left two years ago to found his own firm, Leigh Steinberg Enterprises, and Moorad left last year to become Arizona Diamondbacks CEO.
In a statement, Loring Ward Chairman Martin Weinberg said that he saw the company’s financial services business, not sports representation, as having the highest prospects for growth.
Loring Ward said it was “in various stages of discussion with its three remaining sports representation firms and will continue to operate them until such time as further determinations may be made.” Those other firms are an NBA player representation firm headed by agent Dan Fegan, an NHL player representation firm headed by agent Mike Gillis, and Legacy Sports.
SFX SIGNS ROLLE: SFX Sports signed University of Miami cornerback Antrel Rolle, a projected first-round NFL draft pick.
SFX Football agent Ben Dogra will represent Rolle. Rolle was represented by David Dunn of Athletes First.
OCTAGON ADDS RODGERS: Octagon signed California quarterback Aaron Rodgers for representation.
Rodgers and Utah’s Alex Smith, who is represented by IMG agent Tom Condon, are considered the top quarterback prospects in this year’s NFL draft.
ASHE STARTS WITH STOVALL: NFL and NBA agent Mason Ashe signed Florida State wide receiver Chauncey Stovall for representation in this year’s NFL draft.
The signing was one of the first client additions for Ashe since he formed his new company, Ashe Sports & Entertainment Consulting Inc. of Orlando. Ashe was formerly a partner with Bill Strickland in Strickland & Ashe Management.
Ashe’s clients include Minnesota Vikings quarterback Daunte Culpepper, New Orleans Saints quarterback Aaron Brooks and Memphis Grizzlies power forward Stromile Swift.
SONICS’ VOICE SIGNS: The Actors Group, a Seattle agency that specializes in representingKevin Calabro is firm’s “breakthrough.”
“We have been looking hard at the sports market here in Seattle for the past year or so,” said Jamie Lopez, president of The Actors Group. “Kevin is our first breakthrough, and we expect to leverage his signing to draw interest with athletes from all the major sports teams in town.”
The Actors Group, which is 17 years old, works in both television and radio. “We have relationships at every level with producers of TV [and] radio ads, multimedia and non-broadcast projects and dramatic programs,” Lopez said. “Bottom line, we can introduce an athlete to producers for so many different kinds of projects, which really makes us the ideal fit for sports celebrities, broadcasters, etc., who want to expand their opportunities into entertainment and commercial work.”
SOMETHING COOKING AT IMG: Walter Scheib, who earlier this month resigned or was pushed out the door as the White House chef, depending on who you talk to, signed with IMG for representation for commercial opportunities, including literary, speaking appearances and broadcasting. “I am looking forward to this new chapter in my career,” said Scheib in a statement. Scheib was White House chef for 11 years.
IMG senior vice president Sandy Montag, who will serve as Scheib’s agent, said in a statement that Scheib’s “experiences in the White House give him a unique perspective and experience, and we are eager to explore a number of areas for his expertise and talents.” Montag, who heads IMG’s broadcast division, signed former White House press secretary Ari Fleischer for representation last year.
Liz Mullen can be reached at email@example.com.
Octagon has closed its deal to acquire action sports athlete representation agency IMS Sports and hired IMS agent Circe Wallace-Hetzel to head Octagon’s new summer action sports division.
Financial details were not disclosed, but Wallace-Hetzel confirmed that IMS was acquired from her and IMS majority owner Ed Davidson of Cleveland, and that she has signed a multiyear employment agreement with Octagon.
IMS’ 30 or so athlete clients will become Octagon clients.
Wallace-Hetzel will report to Peter Carlisle, Octagon director of Olympics and action sports, who sold his business to Octagon in 2001.
Carlisle said Octagon holds “a leadership position” in representing Olympic and winter action sports athletes.
The Familie, with about 60 action sports athletes, holds the top position in representing summer athletes.
— Liz Mullen
The NHL is calling for a quick return to the bargaining table with the NHL Players’ Association in hopes of getting a labor agreement in place well ahead of the prime selling season for tickets and sponsorships.
What remains to be seen is whether the NHLPA will use that dynamic to gain leverage, delaying talks until after owners start feeling more financial hurt, or accept an invitation the league says it will make in the next few weeks.
Both sides remain bitter following the failed attempts to revive negotiations days after the season was officially canceled, and were pointing fingers at each other last week regarding who was at fault. Media reports that the sides had reached an agreement in principle and would be restoring a shortened season turned out to be a heartbreaking tease for hockey fans and an embarrassment to legends Wayne Gretzky and Mario Lemieux, who got involved in the talks for the first time in their capacity as team owners.
Now, the reality is setting in that if no deal can be worked out by May or June, the period when teams start unleashing season-ticket renewal campaigns and re-up sponsorships, it could deal a permanent blow to the financial foundation of the league.
About half the league’s 2003-04 revenue, or $1 billion out of $2.1 billion, came from ticket sales, and another $400 million-plus from arena-related activity, including advertising. An offseason without a labor deal could wreak havoc on those revenue streams, especially if the league moves toward using replacement players, an option it has acknowledged considering.
Team owners say they hope to avoid having to sell tickets and corporate deals without a labor agreement in place.
“It will be very difficult,” said Boston Bruins owner Jeremy Jacobs. He said he felt the cancellation has already done great damage to the sport, and that the longer the uncertainty continues the more of an impact there will be. “Quite honestly, in Boston I feel I can’t get the kind of attendance I did before. I think we set ourselves back a few years.”
Trying to stop the bleeding now, both the NHL and team officials will try to convince players that it’s in the best interests of both parties to get back to negotiations quickly.
“The sooner we get this negotiation done, the better it is for the industry and everyone in the industry,” said NHL senior vice president and chief legal officer Bill Daly. “I think they [the players] have an interest in getting a deal done at an early date as well.”
He said the league likely will reach out to the union not long after the NHL board of governors meets in New York on Tuesday.
“I would love to see everybody get right back to the table and get a deal done, so we can let our fans know there’ll be a season,” said Philadelphia Flyers Chairman Ed Snider.
“I don’t want to see us wait,” echoed New Jersey Devils President Lou Lamoriello. “This has to be approached, in my mind, as soon as possible.”
Daly said that at the final last-gasp negotiating session, NHLPA director of business relations Mike Gartner, an NHL hall of famer joining the proceedings for the first time, opened and closed the meeting by calling for both sides to seek a speedy resolution.
“I would have to surmise he was speaking on behalf of the players association,” Daly said.
The union has made no public comment as to when it hopes to resume negotiations.
NHLPA senior director Ted Saskin said last week, via e-mail, “Next week, the NHLPA will be holding meetings with our membership and the certified agents, and at the appropriate time further negotiations with the league will occur.”
The NHLPA meetings in Toronto will kick off today with two days of player meetings followed by an agents meeting on Wednesday.
In the players’ camp, there are some who believe that the leverage has reverted back to their side, because owners will feel the entire financial future of the sport slipping away during the offseason, while players are not paid during that period to begin with. The NHLPA is paying its members stipends of $5,000 some months and $10,000 other months. It’s a far cry from the average player salary of $1.8 million per year. But some still believe owners will feel more pressure in the spring than players.
But few are calling on the union to point that gun at the league’s head when so much seems to be at stake for both sides.
“On the leverage issue, I guess there’s an argument to be made,” said agent Don Baizley, who represents several of the league’s top players, including Peter Forsberg and Paul Kariya. “But the carnage to the game appears to be so serious. It looks like there was a little bit of traction and momentum the few days prior to the cancellation. I’d like to know if it would be possible to recapture any of it.”
In order to push the players association to the negotiating table more quickly, the NHL has a few carrots to hold out.
The league is still dangling one major incentive at players — the possibility of a pay scale not directly linked to league revenue.
The most notable progress in previous negotiations came when the NHL dropped its insistence that player salaries be directly linked to revenue. The NHLPA simultaneously came off its opposition to a team-by-team salary cap. With the philosophical barriers broken, many believed a deal was imminent, only to see the talks break down over the dollar amount for a salary cap.
At the press conference announcing the cancellation of the season, NHL Commissioner Gary Bettman said that sort of “delinked” deal was now off the table, because there was no way to accurately predict future revenue for the sport due to the damage caused by missing an entire season.
But in an interview last week, Daly indicated a deal not directly linked to revenue might be considered by the NHL as long as it is reached quickly.
“I wouldn’t say ‘under no circumstances,’ but by the same token I wouldn’t say it’s still there,” he said, referring to the sort of agreement the sides had been discussing in the final negotiating sessions prior to the season being canceled.
If there is no rapid resolution, Daly said the league has “four or five … business alternatives” it can pursue, each of which will be laid out to the governors this week. A decision regarding which alternative is employed will probably be made by April, he said.
Although he would not detail what any of those alternatives involve, one is the use of non-union replacement players.
In a television interview on MSG Network in New York last week, Bettman said the league will consider using replacement players next season if no new deal is reached. “It’s obviously an option,” he said. “I’m not prepared to suggest that’s the route we’re going to go at this time.”
One thing Bettman has made clear is that the league plans to start a season next fall, one way or the other.
That means that if there is no agreement in place with the union, teams will be faced with having to ask season-ticket holders and sponsors for money with no clear idea of what sort of product they can offer in return.
Many clubs have offered incentives to season-ticket holders to forgo refunds this year and keep their money with the teams, something that will likely make renewing season tickets easier.
The San Jose Sharks, for instance, are offering 7 percent interest to season-ticket holders to keep their money with the club, as long as that money goes toward season-ticket purchases in the future. The interest is reduced to 2 percent if at any time a season-ticket holder asks for his or her money back. Team President Greg Jamison said more than half of the club’s 10,000 season-ticket holders have kept their money with the team. The Florida Panthers said that 82 percent of their season-ticket accounts have chosen a similar option.
In contrast, the Buffalo Sabres never asked season-ticket holders for anything other than a $50 deposit. The Toronto Maple Leafs got full payment from season-ticket holders but have been allocating refunds throughout the season. The team has a 99 percent season-ticket renewal rate, and President Richard Peddie said he thinks most will renew again in order to protect their coveted seats.
But clubs admit the notion of selling high-priced tickets (the NHL average is nearly $45 per seat per game) and sponsorships without major league talent committed to play is something for which no one is really prepared.
Asked if he thinks he can sell season tickets under that scenario, Washington Capitals owner Ted Leonsis said, “I don’t know. I haven’t done it yet. … We’ll get the playbook from the league.”