SBJ/March 21-27, 2011/Labor and Agents

NFL warning sponsors about deals with players trade group

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The NFL, despite having locked out the players, was continuing to use player images on team websites and NFL.com last week without their permission, citing a First Amendment justification. The development comes as the league also disclosed it is advising sponsors to be wary about signing group licensing deals with the players’ newly established trade association, strongly suggesting that the group might not have the legal right to market the players.

Since 2000, NFL sponsors had been able to sign players to group licensing deals, a right contained in the collective-bargaining agreement. Those rights expired with the CBA’s demise earlier this month, meaning NFL sponsors no longer could use player images.

The decertified NFL Players Association, which now is acting as a trade association and not a union, has said it continues to represent players for group licensing, but the league is questioning that assertion.

“We don’t understand the source of their rights,” said Gary Gertzog, the NFL’s senior vice president of business affairs. “In the [now expired] CBA, it states group licensing rights are designed to support the objective of the union. If the union no longer exists, there is certainly a question whether those rights are valid, and people who do business [with the new players association] should be looking into those questions.

“We have communicated to our sponsors who were relying on these rights [that] if they are still interested in group players they will have to find out how to access those benefits, whether through some other entity the former union has or going directly to the agents or players,” he said.

The NFLPA did not reply to requests for comment over several days last week on these matters. Two weekends ago — immediately after the expiration of the CBA and before Gertzog’s comments here — Keith Gordon, the head of the commercial marketing and licensing arm of the NFLPA, said the decertified group “is now actively engaging with non-NFL sponsors who seek to align themselves [with NFL players].”

Gertzog pointed to the following line of the now-expired CBA as evidence, by his contention, that the new NFLPA probably does not have player rights: “In consideration for this assignment of rights, the NFLPA will use the revenues it receives from group licensing programs to support the objectives as set forth in the bylaws of the NFLPA.” His point is that group licensing is tied directly to the union’s bylaws, which no longer exist.

The dispute will not cover all sponsorships because the NFLPA cut its own player deals for trading cards, video games and apparel. “The waters are very murky,” said Woody Thompson, executive vice president of Octagon, whose clients include Sprint and MasterCard, NFL team sponsors. “There are statements being made by a number of parties about what will and will not fly for [NFL] sponsors and non-sponsors. I think it’s a little bit of a wild West show right now.

“We are hearing a lot of different versions of this, and without having a full understanding of the legal documents, it’s tough,” Thompson added. “The PA is telling us that their marketing agreements are unaffected … but if the PA doesn’t exist, I don’t know how they can have any rights over what we do with individual players.”

Gertzog said that if a league sponsor signed a player deal, the league would not prevent team logos from being used in those ads.

David Grant, a principal at Team Epic, which has as clients NFL sponsors Visa, FedEx, IBM and Mars (Snickers), says that much is subject to interpretation right now, and such uncertainty is not a good thing.

“Are you going to sign up for something that over the course of the next few months may change drastically,” he said. “We can live with a season, a shortened season or no season. What we can’t live with is uncertainty. That’s what we have, now and for the foreseeable future. When you have uncertainty, your only choice as a marketer is to look other places. So everyone loses here: the league and the players.”

While the NFLPA also did not respond for comment on the website issue, the lawyer for Jim Brown, who is suing Electronic Arts for allegedly unlawful use of his image, said the new NFLPA is likely to take action.

“I suspect that this will generate another claim in the lawsuit by the players, who will allege that the NFL is infringing their rights of publicity and the trademarks they have in their own personas,” said Ron Katz, partner with Manatt Phelps.

An intellectual property expert disagreed, saying the league could make a convincing First Amendment case, which is the justification cited by Gertzog. The primary purpose of league websites are to inform, and most of the players are public entities, said Barry Werbin, a partner at Herrick, Feinstein and chairman of its intellectual property and technology group

“The fact that the league is a commercial entity doesn’t mean the usage is for commercial purposes,” he said. “But I would understand the ire of the players.”

Staff writers Terry Lefton and Liz Mullen contributed to this report.

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