SBJ/June 20-26, 2011/Labor and Agents

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  • Labor sides find 'deadline' in 8th Circuit ruling

    The NFL labor fracas for months has been searching for a meaningful deadline. At long last, one’s at hand: securing the framework for a new collective-bargaining agreement before a lockout decision is issued by the 8th U.S. Circuit Court of Appeals.

    Neither the NFL nor the players previously have been moved, at least at the same time, to resolve their dispute no matter the deadline they were facing, whether it was the looming expiration of the CBA in early March, the first round of court battles in April or mediation in May.

    It’s a well-worn maxim in labor battles that deals get done on deadline, but there hasn’t been a deadline the two sides could agree was urgent — until now. With owners set to meet Tuesday in Chicago, with a framework deal possible and progress occurring in negotiations over the last few weeks, there is a deadline.

    “Both sides have to recognize that the 8th Circuit may impact how much they may make, not just on this deal, but future deals,” said Gabe Feldman, director of the Tulane University sports law program and an NFL Network legal analyst. “It will at least in part help shape the leverage in future negotiations.”

    If the 8th Circuit were to rule not just that the three-month-old lockout can stay in place, but also that the players’ antitrust actions must wait, say, six months after a decertification, that would neutralize a major weapon in the NFL Players Association’s arsenal. Decertification followed by simultaneous antitrust action against the league, a sequence the players executed on March 11, has been an NFLPA threat for years.

    Under labor law, a union cannot sue for antitrust violations, but it’s long been an article of faith that by decertifying, employees could immediately gain antitrust protections. That exposes the league’s free agency restrictions to antitrust challenges, so the threat of decertification has always been viewed as a serious one by the NFL.

    “If the players lose the right to do this, they are dead in the future,” said Mark Levinstein, a Williams & Connolly partner who has represented athletes and sports unions. Without the decertification option, Levinstein predicts the players will have a tough time winning at the negotiating table if the owners can simply lock them out without fear of an antitrust response.

    While the 8th Circuit in its May 16 stay decision suspending a lower court’s injunction of the lockout strongly suggested the players’ antitrust lawsuit might have to wait a period of time after a decertification, that’s not a precedent until the appeal ruling, if it comes.

    “Right now the only legally binding precedent is [the lower court],” said John Goldman, a labor attorney with Herrick, Feinstein who described the stay as akin at this point to an advisory opinion. “From a legal perspective, there is no precedent from the 8th Circuit that says the league can lock them out and the players are not entitled to overcome that.”

    The players are not the only ones, however, to fear an 8th Circuit ruling, which could come as early as the end of the month.

    While the 8th Circuit is considered likely to keep the lockout in place, it could also say antitrust rules already apply, or at the least that they will soon, maybe by the start of the season. That could expose the league to potentially significant damages if the lockout were later found by a court to violate antitrust laws. One of the 8th Circuit judges had suggested a period of six months during June 3 oral arguments.

    “Without an exemption [from antitrust law], you can’t have salary caps and lockouts,” Levinstein said. “They [the NFL] have got problems.”

    The race to beat the 8th Circuit has not been a foregone conclusion. Many observers presumed the sides would wait for a decision and then assess their positions — the reason for predictions that the preseason might be lost, if not the start of the regular season as well. And until the first round of what were intended to be secret meetings occurred in Chicago June 1-2, on the eve of the 8th Circuit oral arguments, approaching deadlines did little to affect the talks. But Judge Kermit Bye of the 8th Circuit earlier this month warned each side that they both might not like a decision, and the realistic chance of missing games, and paychecks, seems to have brought a deadline into better focus.

    Levinstein warns, however, that it would be a mistake for the players to rush into a deal and drop the antitrust lawsuit as part of an umbrella settlement. In a normal unwinding of an antitrust lawsuit, he said, the class would have about six weeks to object to the terms of the settlement, and then the judge might take even longer to affirm the agreement. That timeline, in this case, would take the process well into the 2011 season, he said, something the NFL is sure to object to. But if the players simply pull the lawsuit, it would make it much harder to renounce union status again in the future, he said.

    “If they simply say ‘We will go back to being a union’ and drop the case, that is shocking,” he said. “It is a total loss in my mind [if that happens].”

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  • NBPA filing alleges owner bypassed union, went to players

    Liz Mullen
    The National Basketball Players Association has alleged in the unfair-labor-practices charge it filed last month against the league that at least one NBA club owner bypassed the union and spoke directly to players about collective-bargaining matters.

    “What we are alleging is at least one owner went to some players and got a response from players, and amended the NBA’s proposal based on that response,” said Larry Katz, an attorney with the law firm Steptoe & Johnson, who is representing the union in the case.

    The allegation is one of seven the NBPA made in its charge, which was filed with the National Labor Relations Board on May 24.

    The NBA did not respond to an email seeking comment for this story. The day the charge was filed, the league, in a statement, said, “There is no merit to the charge … as we have complied — and will continue to comply — with all of our obligations under the federal labor laws. It will not distract us from our efforts to negotiate in good faith a new collective bargaining agreement with the Players Association.”

    The league and union were scheduled to hold two bargaining sessions last week. The NBA collective-bargaining agreement expires June 30, after which the owners can lock players out. The players are asking the NLRB to investigate their claims and seek an injunction to stop any lockout the NBA may try to impose.

    Since the NBPA made the charge, the union has provided the New York NLRB office that is investigating the complaint with a variety of documents, including bargaining notes, sworn declarations and proposals, Katz said.

    Katz declined to reveal the names of the players or the owner he alleged talked directly to the players about collective bargaining, saying that the players asked not to be identified for fear of potential retaliation.

    The National Labor Relations Act prohibits employers from attempting to negotiate with individual employees who are represented by a union.

    Additionally, the players allege, among other things, that the NBA engaged in regressive bargaining; “take-it-or-leave-it” bargaining; not providing financial information the union needs to back up the league’s demands for players concessions; and making demands that are destructive to the collective-bargaining process and signal to employees that back-and-forth bargaining is futile.

    “They are trying to prove a totality of conduct from which you can infer bad-faith bargaining,” said Bill Gould, Stanford Law School professor and former chairman of the NLRB.

    Gould noted that NBA officials have not only denied the charges but also stated publicly, repeatedly, that they have opened their financial books to the union. But just because the facts are in dispute, Gould said, does not mean the NLRB will not act.

    The NLRB will have to make an assessment based on the evidence it gathers from the union and the league as to “whether there is cause to believe there is a violation [of the law],” Gould said. If there is cause, that could start a process in which the NLRB issues a complaint against the NBA, with the matter then going before an administrative law judge. If the players prevail there, the NLRB could seek an injunction, he said. It all depends on the evidence.

    Katz said the investigator in the New York regional office of the NLRB was expected to finish his investigation by the end of last week. “Oftentimes at this stage of the investigation they will say, ‘You are not giving us enough evidence. Would you like to withdraw the charge?’” Katz said. “Thus far, they have not asked us to withdraw the charge, so that encourages us that the charge will not be dismissed.”

    Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter @SBJLizMullen.

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  • CAA Sports keeps Levine, Nuchow with 5-year deals

    CAA Sports co-heads Michael Levine and Howard Nuchow quietly in the last few months signed new five-year employment contracts to continue to guide and build Creative Artists Agency’s sports division, sources said.

    CAA Sports was launched in April 2006; Nuchow and Levine were two of the principals hired to run the group in early 2007. Sources said their original employment agreements were four-year deals.

    Other than the length of the new deals, terms of their contracts were not known. CAA declined to comment.

    SHANA WITTENWYLER (2)
    Under Nuchow (above) and Levine, CAA Sports has built a national sales team.
    Since launching in April 2006, CAA Sports has become a powerhouse in the American sports talent representation business. The agency now represents 650 athletes and has negotiated current playing contracts across the NFL, NHL, MLB and NBA valued at more than $3 billion.

    Nuchow and Levine manage sports agents who represent superstar athletes across sports, including LeBron James (contract only), Carmelo Anthony, Peyton and Eli Manning (contract only), Tony Romo, Roy Halladay, Sidney Crosby, Jimmie Johnson, Shaun White, and Novak Djokovic.

    But in overseeing CAA’s sports division, Nuchow and Levine’s jobs go beyond talent representation. At the time Nuchow and Levine were hired, CAA said in a statement that they would help to expand the agency’s sports business into other areas such as broadcast rights, corporate marketing initiatives, and sports properties for sales/sponsorships opportunities.

    Under Levine and Nuchow’s leadership, CAA Sports has built a national sales team that has, in the last 18 months, negotiated more than $750 million in new sponsorship business for property clients such as Madison Square Garden and the New York Yankees. The group was recently hired by the San Francisco 49ers to sell naming rights for the team’s new stadium. Additionally, CAA, over the last few years has established a sports consulting division and counts RBS, the PGA Tour and the University of Colorado as consulting clients.

    Long viewed as the most influential Hollywood talent representation firm, CAA got into the sports business in 2006 when it hired former IMG agents Tom Condon (NFL), Casey Close (MLB), and Pat Brisson and J.P. Barry (NHL), as well as former SFX Sports NFL agent Ben Dogra. Since then, CAA Sports has made its foray into the representation of soccer, tennis, golf, and basketball players, further expanding the agency’s global reach.

    Nuchow and Levine were hired just ahead of CAA hiring Leon Rose, agent for NBA star James. CAA later hired NBA player agent Henry Thomas, who represents Chris Bosh and Dwyane Wade, making CAA the power broker during the last year’s NBA free agency period that saw all three players come together with the Miami Heat.

    Nuchow, formerly the president of Mandalay Sports Entertainment, and Levine, formerly the president of Van Wagner Sports Group, were originally hired along with television executive David Rone to oversee CAA Sports. Rone recently was hired by Time Warner Cable as president of its newly created division TWC Sports.

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  • NFL and NBA player agency Priority Sports steers clients through labor uncertainty

    More than three months into the NFL lockout, NFL player agent Kenny Zuckerman is working as hard as ever — but it’s a different kind of work.

    “I’ve had more parents [of NFL player clients] calling me the last six months, really the last three months, concerned about their kids,” Zuckerman said.
    A dad of a recently drafted client called Zuckerman to ask whether his son should attend a player-run team practice for the club that drafted him when he has no NFL contract. “A top player on the team said, ‘I want him there, because we are changing defenses,’” said Zuckerman, a partner in Priority Sports & Entertainment. 

    JENNIFER POTTHEISER / NBAE GETTY IMAGES
    Agent Aaron Mintz (right), shown with Paul George at the 2010 NBA draft, said the agency is preparing NBA clients for the possibility of a lockout.
    Other parents have called, worried that their sons — rookies through players with one or two years of NFL experience — have too much time on their hands. Zuckerman keeps in regular contact with these young players and their parents, as well as veteran NFL player clients, providing them with updates about the lockout.

    While all NFL player agents have been affected by the lockout, just as all NBA player agents will be affected if the NBA locks out players when that sport’s labor deal expires at the end of this month, arguably no single company in the business of representing pro athletes will be more affected by a double lockout than Priority.

    With offices in Chicago and Los Angeles, Priority represents about 100 NFL player clients and about 45 NBA clients. It also represents about 35 pro basketball players playing overseas. In the last three years, Priority agents have negotiated NFL and NBA player contracts with a total value of more than $1 billion.

    There are other sizable, independently owned NFL player-only practices, such as Rosenhuas Sports, and other NBA-only player representation practices, such as BDA Sports. Major agencies, such as CAA Sports and Octagon, would be affected by lockouts in the two sports, as well, but they represent athlete clients in other sports in addition to the NFL and NBA.

    Priority was founded by NBA and NFL agent Mark Bartelstein, who represented two-time NFL MVP Kurt Warner and currently represents NBA players Brad Miller and Mo Williams. Bartelstein said he and the seven other partners who own Priority have been preparing for lockouts in both sports for years.

    In addition to Bartelstein, Priority is owned by NFL agents Rick Smith, Mike McCartney, Deryk Gilmore and Zuckerman, along with NBA agents Aaron Mintz, Brad Ames and Reggie Brown.

    The potential for a lockout in both sports “has been on my mind, running the company, really, for the last three years,” Bartelstein said. “You could see the signs. When you run a business you always prepare for the worst. We have been preparing for it as a company, but more importantly, preparing our clients, so that they could be in a situation so that they could withstand a long lockout.”

    Priority’s financials are private. Bartelstein said the company is profitable and does not have any debt.

    Zuckerman noted that Priority has not laid off any of its 30 employees since the NFL lockout began. In fact, Priority recently hired three new employees to help the company continue to expand into new areas, such as social media.

    As far as preparing its NBA and NFL player clients, that work has included talking to each player’s financial adviser as well as talking to the players directly.

    Detroit Lions center Dominic Raiola, a Priority client, said, “I remember Priority contacting me about the possibility of a lockout, and I transferred that to my financial adviser. It was a couple of years ago.” Since the lockout started, Raiola said, he gets constant updates from his agent, Zuckerman. For example, Zuckerman texted him when the lockout was briefly lifted in late April and when it was put back in place days later.

    NBA player agent Mintz noted that on the basketball side, the company has the experience of the 1998-99 NBA lockout and has used that knowledge to prepare for another one.

    “This summer, we put together training programs for all of our players in Los Angeles and Chicago to get the work in since they will be locked out,” Mintz said.

    Priority’s client list includes a number prospects for this week’s NBA draft, including Florida forward Chandler Parsons, Wisconsin forward Jon Leuer, Boston College guard Reggie Jackson and San Diego State forward Malcolm Thomas.

    Last year, Zuckerman represented defensive tackle Tyson Alualu, who was the surprise of the first round of the NFL draft, going No. 10 overall to Jacksonville. In last year’s NBA draft, Mintz represented Paul George, a player who was taken at No. 10 by Indiana.

    While Priority doesn’t have the flashiest client list in the business, the agency represents a number of solid NBA and NFL players who have long careers.

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  • IMG taps 2 for U.S. golf

    On the heels of Mark Steinberg’s departure, IMG Golf selected two new department heads who are based in London and Singapore. The natural reaction to the heightened global focus, both internally and externally, was: What about the U.S.?

    IMG has addressed that question by coming up with the formal name of IMG Golf Americas for its U.S. base in Cleveland.

    Jon Wagner and Clarke Jones, a pair of IMG Golf senior vice presidents, will lead IMG Golf Americas, which will cover the United States, Canada and Latin America.

    Guy Kinnings from London and Robbie Henchman from Singapore were installed as the co-chiefs of IMG Golf when Steinberg left last month. They jointly report to IMG President and COO Mike Dolan.

    While Kinnings has strong contacts in Europe and Henchman is dialed in throughout Asia, they say they will work collaboratively with Cleveland-based Wagner and Jones.

    “The four of us have talked a lot more in the last three weeks than we have in a long time, and it’s been great,” Wagner said last week from the U.S. Open, where all four executives were at Congressional. “There’s definitely an inclusive feel to things.”

    The name of IMG Golf Americas also “puts an emphasis on the domestic market and how important it is,” Wagner said. “This is where most of the governing bodies are, this is where the major manufacturers are, the PGA Tour — this title supports all of that.”

    Wagner said he will be more focused on business development and events while Jones will be heavily involved with player representation, although “there won’t be any decisions made where we won’t cover everything together,” Wagner said.

    IMG’s clients include the world’s No. 1-ranked golfer, Luke Donald; Camilo Villegas; Steve Stricker; and several others on the PGA Tour and internationally.

    While Tiger Woods announced his intention to leave IMG to go with Steinberg, Annika Sorenstam has not said whether she will follow Steinberg. As of last week, she remained an IMG client.

    Steinberg has not yet said whether he will join another athlete representation firm or start his own business.

    In addition to player representation, IMG Golf runs more than 40 events globally and consults with companies such as General Electric and RBC.

    Because the newly named IMG Golf Americas includes South America, IMG will have a particular interest in Brazil, where golf will be played for the first time as part of the 2016 Olympics. It also will have an interest in Colombia, which is Villegas’ home country, and in other Latin American markets.

    “The PGA Tour is talking about a new Latin American series, you’ve got the Olympics, you’ve got tour winners [Argentines Angel Cabrera and Andres Romero],” Jones said. “But the game is still viewed as being played by relatively few people in those countries. That really is the last frontier in golf development.”

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