Three trends from the upfront season Kroenke comfortable wearing 2nd hat From the Field of Risk Management Plaintiff seeks documents from FSG Demos key to Microsoft’s MLS deal People: Executive transactions Reinsdorf values people he knows, trusts Racetracks attract music festivals For the WNBA, time for a clutch 3 Super Bowl’s numerals: Still a classic
SBJ/March 7-13, 2011/Labor and AgentsPrint All
NFL Players Association members, including New Orleans Saints quarterback Drew Brees (second from right) make their way into talks with the NFL in Washington, D.C., on Thursday.
While the sport last Thursday night appeared on the brink of returning to the days of grim labor strife, a federal mediator won at least a 24-hour reprieve for the league and players to continue talking.
• For continuing coverage of this developing story, visit www.sportsbusinessdaily.com.
It was unclear at press time whether another, longer extension to the expiration of the collective-bargaining agreement would be secured, but both sides were scrambling to avoid the litigation and potential work stoppages that would follow an expiration.
NFL spokesman Greg Aiello (left); Jeff Pash (center), league general counsel and chief labor negotiator; and Carolina Panthers owner Jerry Richardson, co-chairman of the owners’ labor committee
Meanwhile, a source said that the Reggie White v. NFL 1993 settlement, which governs the expiring CBA, had also been extended. That meant the NFLPA could file an antitrust lawsuit in the courtroom of Minnesota federal Judge David Doty.
If the two sides, after the extended talks, cannot reach a deal, the path seemed clear as of Thursday night: The union seemingly would decertify, the league would lock out the players, and the new players trade association would file an injunction seeking to block a lockout. An antitrust lawsuit would follow.
Sources said the NFLPA had already prepared the lawsuit and that star quarterbacks Peyton Manning, Tom Brady and Drew Brees were among about 10 NFL players who are named as plaintiffs in that case.
Earlier last week, developments looked particularly grim, with a two-day owners meeting shaved to just more than two hours. Owners traveled to Chantilly, Va., just outside Washington, D.C., last Wednesday, with the possibility of being there for two days to vote on a new labor deal. Instead, they were told when they got there they were going home that night, so little progress had been made. Even league titans like Dallas Cowboys owner Jerry Jones and New England Patriots owner Robert Kraft, who with eight of their colleagues had met with the union earlier that day, were sent packing.
“We have been very clear the TV money was a loan. It’s not a payment; it was not anything we were counting on,” said an exhausted-looking Jeff Pash, the NFL’s chief labor negotiator. “It doesn’t alter our planning one iota.”
Indeed, on the day of the extension, Fitch Ratings wrote that the league could survive for
AP IMAGES (2)
Top photo: Players Mike Vrabel and Domonique Foxworth. Above: New York Jets owner Woody Johnson.
But beyond the blocking of the fees, something else Doty wrote in his decision might have served as an alarm for the league as the week progressed. In the opinion issued last Tuesday, Doty wrote in a footnote, “The facts underlying this proceeding illustrate another abuse of that market power wherein various broadcasters of NFL games were ‘convinced’ to grant lucrative work-stoppage payments to the NFL if the NFL decides to institute a lockout. … Whether the contract insuring these payments might ultimately be deemed unenforceable because of their potentially collusive nature is not an issue before this court, but the court does consider the abuse of the NFL’s market power when finding that it did not act in good faith to benefit both itself and the Players, as required by the [CBA].”
There was certainly concern within NFL circles that any new antitrust lawsuit filed by a decertified union could end up in Doty’s court, sources said.
The path to last week’s deadline drama began in earnest in May 2008. That’s when the league exercised its option to opt out early from the deal the league and players had agreed to in 2006, contending it was too onerous for clubs.
Another significant event on the path to last week’s talks came on Aug. 20, 2008. Gene Upshaw, the longtime executive director of the NFLPA, died unexpectedly that day, severing the longstanding ties that the union and leaguehad enjoyed. Several ownership sources have said since then that the league
Top photo: Houston Texans owner Bob McNair (in blue). Above: Judge David Doty.
While many of the economic issues have received the majority of the attention in the dispute, and clearly they are key, the new league and union leadership is trying to forge a new working relationship.
DeMaurice Smith, Upshaw’s successor, did not have any of the longstanding relationships in the NFL and certainly didn’t share the same relationship with the commissioner that Upshaw had with Goodell’s predecessor, Tagliabue. The NFL has criticized Smith for going to the courts and the government instead of the bargaining table to get things done. Smith formerly worked for U.S. Attorney General Eric Holder, and perhaps it was no coincidence that while the two sides were negotiating Thursday, President Obama at a press conference made reference to the talks that were ongoing that day.
Smith’s insistence throughout the talks that the league open all of its financial books to prove its profit margins are shrinking has caused fierce resistance within the league. While it may have added to the level of distrust between Smith and the league, it has won him the allegiance of players throughout the league, who say that they are more informed about their union than they have ever been, under Smith’s leadership.
To that end, NFLPA members were ecstatic last week when Smith’s strategies led to the significant win in Doty’s court.
But both before and after that decision, much of the chatter last week leading up to the events of Thursday was not whether the sides would settle, but rather when announcements would be coming about decertification and lockouts.
The dour mood was a stark change from the sentiments that had been felt by many for months. Despite the long-established threat of a lockout that had been hanging over the NFL business, many of the people who make their living in pro football were sanguine. That had changed by last week.
“There was always optimism, even in the league offices. People thought they would get this thing done,” said one NFL insider last week. “This week, it’s like it’s sinking in. It is like a pall over the business. It’s depressing.”
Said one longtime agent of the mood, “You know what it feels like? It feels like ’87, right before the strike.”
That 24-day work stoppage resulted in one game being missed and three games being played with replacement players.
Anxiety was high last week among many people who feared losing their jobs or taking pay cuts.
“I have never seen coaches as anxious and mad in all the years I have been doing this,” said Larry Kennan, executive director of the NFL Coaches Association, a trade association that represents assistant coaches throughout the NFL. “In 95 percent of the contracts, they say you are going to take a cut in pay [with a work stoppage].”
But as some felt dread last week, others still clung to hope in the last hours before the expiration of the CBA.
“The majority of people I have talked to, from players to front-office people to coaches, they are optimistic that people are, at the end of the day, going to put their differences aside,” said Peter Schaffer, co-owner of All Pro Sports & Entertainment and who has been an NFL agent since 1989. “We are all hoping and truly believe at the end of the day we are going to resolve this.”
The case was filed in 2008 after Kim fired veteran golf agent Rocky Hambric, his first agent, and signed with IMG. The case has been the talk of the golf world because of its potential to reveal secrets about the golf talent representation business.
Hambric had subpoenaed numerous documents from IMG, including notes, letters, e-mails and memos, which referred to any and all communications or meetings the agency had regarding IMG representing Kim. But Hambric Sports; Kim’s company, Team AK Inc.; and IMG filed a notice of settlement in U.S. District Court in Dallas late last year. The terms of the settlement are confidential.
PGA Tour player Anthony Kim swung from Hambric Sports Management to IMG in 2008.
“The parties state that they have settled in principal all claims between them,” according to the notice.
Hambric also sued another agency, Gaylord Sports Management, and Kim’s adviser, Sterling Ball, in regard to the matter. The settlement with IMG and Kim “does not implicate or end the ongoing dispute” with Gaylord and Ball, the notice of settlement states.
AGENT HANDCUFFING ROCKS COMBINE: Every year it seems, in the business of representing premier college football players headed for the NFL draft, there is some sort of controversy involving at least one high-profile agent. Some years, the drama involves a prospect’s agent switch, and there have been at least a couple of public arguments that have almost resulted in fisticuffs over an agent firing.
Last week, the agent rumor mill went into overdrive with talk that a high-profile NFL agent was handcuffed for some alleged wrongdoing involving access to players at the NFL combine in Indianapolis. As happens in the NFL agent community, the story grew larger than life, as it continued for days without any official comment from Indianapolis police or the NFL as to what happened, with several high-profile agents from at least two different agencies rumored to be involved in some way.
After an Internet report naming prominent agent Pat Dye Jr. as the agent handcuffed, Dye acknowledged that he was detained by Indianapolis police and later released for entering the Crowne Plaza, the players’ hotel.
The Crowne Plaza is one of a few areas set up for the combine that NFL Scouting, the company that runs the event, has deemed “secure” to only allow players, the NFL and NFL Scouting staff.
Dye said he was handcuffed and questioned by Indianapolis police after he and his partner, agent Jimmy Sexton, went to the players’ hotel on Thursday night of the combine to finalize a marketing deal with Under Armour, at the invitation of Under Armour.
“We were contacted by Under Armour that they would like to have [Dye’s and Sexton’s client Alabama wide receiver] Julio Jones formally sign his seven-figure marketing deal that includes a national television commercial,” Dye said last week.
Dye added that Under Armour provided the credentials. “I did nothing wrong or illegal,” he said.
The NFL, meanwhile, did its own investigation of the incident.
“Those who used the credentials were fully cooperative with security when the misuse of credentials was discovered, and explained that they had no intent to violate Combine rules and access a secure area,” said the NFL, in a statement. “They believed at all times that the credentials were appropriately authorized. After fully reviewing the facts, we accept this explanation and consider the matter closed.”
The NFL also noted the following: “Those who provided the credentials were dismissed from the Combine.”
Under Armour declined to comment on this story.
ORNSTEIN IN INDIANAPOLIS: One of the aforementioned NFL combine dramas involving agents in years past occurred last year in Pullman’s Restaurant, a pub attached to the very same players hotel where the incident with Dye occurred this year. That issue involved Mike Ornstein and Bill Henkel and the marketing representation of two prospective NFL players.
Ornstein caused a stir at the combine again this year simply by being in attendance. Perhaps best known as the former marketing agent to New Orleans Saints running back Reggie Bush, Ornstein was sentenced in November to eight months in prison after pleading guilty to two felonies involving the resale of Super Bowl tickets and NFL jerseys falsely advertised as game-worn.
People at the combine were surprised to see Ornstein at a number of restaurants and hotels around downtown where NFL-related events were being held, including in the Westin Hotel, where the league held its meeting for general managers and coaches.
Ornstein told people in Indianapolis that he would be reporting to prison soon, sources said. At press time for this column early last week, the Federal Bureau of Prisons inmate locator stated Ornstein was “in transit,” which means he is under the supervision of federal marshals, a spokesman for the Bureau of Prisons said.
OCTAGON SIGNS NICHOLAS: Octagon has signed Atlanta Falcons linebacker Stephen Nicholas. Octagon agents Doug Hendrickson and CJ LaBoy will represent him. He was formerly represented by agent Chad Speck.
MAXX SIGNS EVANS FOR POST-NFL WORK: Maxx Sports Entertainment has signed New Orleans Saints running back Heath Evans for broadcasting work after his NFL playing career. Maxx President Mark Lepselter and Maxx agent Michael Klein will represent him. Evans, 32, completed his 10th NFL season in 2010.
Maxx specializes in representing athletes for post-career work. Maxx client and former NHL star Jeremy Roenick, who is an analyst for Versus and the NHL Network, recently signed a deal with HarperCollins to write an autobiography.8;
Liz Mullen can be reached at firstname.lastname@example.org. Follow her on Twitter @SBJLizMullen.
Editor's note: This story is revised from the print edition.
The division of Octagon that runs golf and outdoors has been renamed “global events,” and the group is shifting away from golfer representation.
Octagon has been active in running golf tournaments, pro-ams and other corporate events for close to 20 years, going back to its days as Advantage International, and recently it has expanded to include other types of events, such as the Toyota Texas Bass Classic and the WTA Mercury Insurance Open tennis tournament.
“We’re not stepping away from golf, but we are expanding beyond those borders into other sports where our logical skill set from running events will apply,” said Chris Higgs, managing director of Octagon’s new global events division. “Events are events and that’s been 80 percent of what we do. Even if you move into a fishing event or a tennis tournament, you’re still managing crowds, selling sponsorships and selling tickets. There are obviously nuances that come with each event, but the basic principles apply.”
Octagon has responsibility for six golf tournaments across the LPGA, Champions Tour and Nationwide Tour. In all, Octagon has 23 events budgeted in 2011.
But Higgs, who joined the company in 2009 from the LPGA, said Octagon will no longer pursue athlete representation deals in golf. The company has a small group of four golfers, including Champions Tour player Bobby Wadkins, who came over with agent Vernon Spratley when Octagon acquired Pros Inc. in 1999. But as Higgs surveyed the golfer representation landscape, he decided there wasn’t as much opportunity there.
“That landscape has changed quite dramatically when you look at the players, the fee rates and what the endemics [equipment companies] are paying to the top players,” he said. “They’ve taken most of the money out of the middle and moved it to the top. … You’ve really got to have strength in numbers.”
Higgs said he thinks those dynamics will lead to further consolidation in the golfer representation business. “I wouldn’t say that we’ll never get back into it, but we’re definitely stepping to the side,” he said.
Higgs reports to Octagon President Phil de Picciotto. Global events on occasion will work with Octagon’s consulting clients in golf, which include MasterCard, BMW and Kodak, and is run by Scott Seymour, senior vice president. But the global events division also works with a client list that includes Sybase, SAS, The Ace Group, Wal-Mart, Procter & Gamble and Toyota.
Asia is expected to play a large role in the growth of the global events division. Higgs’ group has hired Jung Jee from Velocity to open an office in Beijing and lead Asian business development. That brings global events to 11 offices in four countries.