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Volume 21 No. 2

Labor and Agents

Liz Mullen
Editor's note: Click here for updated news on Mark Steinberg — He is joining Excel Sports Management after his departure from IMG.

While it remained unclear last week where Mark Steinberg, agent to Tiger Woods, may end up, he has been in talks about joining Lagardère Unlimited, while talks about joining CAA Sports have ended, sources said.

Steinberg, who spent his entire professional career at IMG before leaving in late May, has been evaluating a number of possibilities and narrowing his options, sources said. Steinberg did not return a phone call last week seeking comment, but he previously has told SportsBusiness Journal he would take time investigating his possibilities before deciding what he wants to do with his career.

Lagardère COO Kevin O’Connor declined to comment. CAA officials could not be reached for comment.

Lagardère is said to be just one of the options Steinberg is evaluating. There are investors who are interested in the potential of backing him in his own venture, sources said. Additionally, there is continued speculation in the marketplace that he could join Excel Sports Management, the firm owned by NBA player agent Jeff Schwartz and MLB agent Casey Close. Like Steinberg, Schwartz and Close began their careers at IMG, and the three are said to be friends.

There is some potential synergy with Lagardère Unlimited, if the agent and the agency can come to terms. The agency’s parent company, French conglomerate Lagardère, is a major shareholder of Singapore-based World Sport Group, a leading sports media, management and event company in Asia, including having a presence in golf.

Lagardère entered the U.S. athlete representation business in a big way in 2010 when it acquired Blue Entertainment Sports Television, a company formed by sports entrepreneur Jonathan Blue. The U.S. sports company, which has a presence in a number of sports, was renamed Lagardère Unlimited.

Last year, O’Connor said the company would look at other acquisitions after integrating the assets of BEST and Lagardère (SportsBusiness Journal, June 21-27, 2010, issue).
SEGAL’S DEAL UP THIS YEAR: One of the best-known agents at the former BEST, now Lagardère Unlimited, is NFL agent Joel Segal.

Segal, who represents about 65 players in the NFL, including Reggie Bush, Michael Vick and Chris Johnson, has an employment contract that is up at the end of the year, sources said. It was not clear whether Segal, whose business was acquired by BEST in 2007, would sign a new deal with Lagardère upon expiration of his contract or join another agency that wants to enter the NFL player representation space.

Attempts to reach Segal for comment last week were unsuccessful.

JUDGE ISSUES ARREST WARRANT FOR KARL: A federal judge has issued a warrant for the arrest of Bryce Karl, a businessman who has attracted numerous NFL players to invest in his different projects, including oil wells and private jet hangars.

Judge Lance Africk issued an order late last month commanding U.S. marshals or any authorized federal enforcement officer to arrest Karl after he failed to appear at a hearing in U.S. District Court to explain why he reneged on a confidential agreement to settle a lawsuit brought against him by San Diego Chargers wide receiver Craig “Buster” Davis.

Davis, in a lawsuit last year, alleged that he relied on his financial advisers to transfer $500,000 out of his bank account for an interest in Teton Air Ranch, a private jet hangar project that was to be built in Idaho by Karl. Numerous NFL players have invested millions of dollars in Karl’s projects, which include other private jet hangars as well as oil wells.

Former No. 1 overall draft picks Mario Williams and JaMarcus Russell, as well as Carnell “Cadillac” Williams are among the other players who have invested in Karl’s projects. Attempts to reach Karl for comment were unsuccessful.

GOODELL, SMITH ADDRESS ROOKIES: NFL Commissioner Roger Goodell and NFL Players Association Executive Director DeMaurice Smith told drafted rookies at the NFLPA’s rookie symposium late last month that they hope to have a resolution to the NFL lockout in order to preserve a full preseason as well as a regular season.

Goodell and Smith spoke to about 155 rookies who voluntarily attended the NFLPA’s event, titled “The Business of Football: Rookie Edition,” held at the Ritz-Carlton in Sarasota, Fla. The two were asked a lot of questions by the rookies, who were drafted and then locked out.

The NFL and NFLPA last week were in confidential, court-supervised talks about a settlement that would end the lockout, which was imposed March 12. The NFLPA decertified as a union March 11 and filed the Brady v. NFL lawsuit that same day. The talks are aimed at settling that lawsuit as well as ending the lockout.

“Everyone wanted to know what issues were at hand, how long it would take for the lockout to be done, and there really were no straight answers given because they couldn’t give answers [because of the confidentiality of the settlement talks],” said quarterback Christian Ponder, the first-round pick of the Minnesota Vikings.

“They said their goal is they want to have a regular preseason, have it all resolved,” Ponder said. “We’ll see if it happens.”

Offensive tackle Anthony Castonzo, who was drafted in the first round by the Indianapolis Colts and also attended the question-and-answer session with Goodell and Smith, said, “They basically said if everything goes perfectly, according to plan, they said there will be a full training camp. They are pretty confident there will be a full training camp, but they would like [it] to be done soon enough so we can have some offseason stuff, too. [That] is the way that they put it.”

The NFLPA partnered with IMG to put on the rookie event after the NFL canceled its annual rookie symposium because of the lockout. Goodell and Smith flew from Minnesota — where they had been meeting — to Florida to speak to the rookies, who did not know that Goodell would be speaking to them until the night before.

Von Miller was among the rookies who heard Goodell and Smith speak.
“They started off telling us there were a lot of things they couldn’t tell us, because of the court order,” Castonzo said. 

Linebacker Von Miller, first-round pick of the Denver Broncos and No. 2 pick overall, said that he could “read body language” and got a good feeling about seeing Goodell and Smith on the stage together at the rookie event. Miller, who is one of the named plaintiffs on the Brady v. NFL lawsuit, echoed other rookies who said that although they are locked out, they are not letting it get them down. “It’s not really frustrating,” he said. “It’s all out of our hands.”
IMG SIGNS DUNGEY: IMG has signed 21-year-old motocross racer Ryan Dungey for management, sponsorship, licensing and marketing representation. Dungey has dominated the sport in recent years, capturing every major title and winning a total of 47 races.

“He is an exceptionally talented and driven athlete,” said Mark Ervin, IMG vice president of action sports. “We are looking forward to working with him to expand his brand beyond his iconic status in motocross and leverage his appeal on a broader scale.”

No. 6 pick Vesely  is a Wasserman client.
WASSERMAN, CAA, BDA REP FOUR NBA FIRST-ROUNDERS: CAA Sports, BDA Sports and Wasserman Media Group each had four player clients selected in the first round of last month’s NBA draft.

CAA agents Leon Rose, Henry Thomas and Rich Paul represent No. 4 pick Tristan Thompson, No. 5 Jonas Valanciunas, No. 19 Tobias Harris and No. 29 Cory Joseph.

Wasserman agents Arn Tellem, Alexander Raskovic, Thad Foucher and Lee Melchionni represent No. 6 Jan Vesely, No. 8 Brandon Knight, No. 22 Kenneth Faried and No. 26 Jordan Hamilton.

BDA Sports agents Bill Duffy, Rade Filipovich and Kevin Bradbury represent No. 11 Klay Thompson, No. 16 Nikola Vucevic, No. 18 Chris Singleton and No. 27 JaJuan Johnson.

Wasserman represents the most NBA draft picks overall this year, with seven players taken across the first and second rounds. Agent Jeff Wechsler and his company, 24/7 Sports Management, represents No. 1 overall pick Kyrie Irving. Rob Pelinka’s Landmark Sports represents No. 2 overall pick Derrick Williams.

Top pick Ryan Nugent-Hopkins, like the rest of the top three, has signed with Octagon.
OCTAGON CLIENTS GO 1, 2, 3 IN NHL DRAFT: In what is believed to be a first for an agency, Octagon had three of its player clients picked in the top three spots of last month’s NHL draft, led by No. 1 overall pick Ryan Nugent-Hopkins.

Octagon agents Rick Vallete, Peter Wallen, Allan Walsh and Robert Hooper also represent No. 2 pick Gabriel Landeskog and No. 3 Jonathan Huberdeau, as well as No. 7 Mark Scheifele, No. 10 Jonas Brodin and No. 30 Rickard Rakell.

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

Editor's note: This story is revised from the print edition.

The National Basketball Players Association has amended the unfair labor practices charge it filed against the NBA with the National Labor Relations Board to include an allegation that the league canceled the annual summer league without bargaining with the union, as it was required to do.

Additionally, the NBPA, in the amended charge filed with the board on July 1, said the NBA carried out its “threat” to lock players out despite there not being an impasse in the negotiations. “The NBA has asserted no (and has no) legally sufficient business justification and they have admitted in negotiations that the lockout will cost them approximately $1.5 billion per year,” the amended charge states.

The NBA declined comment on the amended charge.

The players union initially filed the charge on May 24, alleging that the league engaged in a number of activities that violate labor laws. The players are asking the labor board to investigate the charges and seek a federal court injunction to end the NBA lockout. The NBA has stated that the allegations in the original charge are without merit.

The NBA imposed the lockout upon expiration of the league’s collective-bargaining agreement on June 30.

Among the allegations in the original charge are that league officials dealt directly with players instead of union officials; failed to produce documents to back up the league’s justification for “harsh and regressive” demands; and engaged in “take it or leave it” bargaining.

“The NBA implemented the lockout to compel the employees’ acceptance of the NBA’s illegally tainted bargaining scheme,” the new charge states.

In addition to implementing the lockout, the new charge involves the league’s cancellation last month of the summer league, something the NBPA said was a mandatory subject of bargaining.

The summer league is an annual 10-day event held in Las Vegas in which rookies and select other players get to showcase their skills.

“The NBA failed to provide the NBPA with a reasonable opportunity to bargain over the unilateral change, which the NBA publicly announced as a fait accompli following the conclusion of the parties’ bargaining session on June 17, 2011,” the charge states.

In recent weeks, an NLRB investigator has interviewed seven to 10 people who have knowledge of the allegations the union has made against the NBA and is in the process of preparing affidavits of statements by those individuals, said Larry Katz, outside labor counsel for the NBPA in the case. Katz declined to name the people who were providing information to NLRB investigators.

The case is being investigated by the NLRB’s New York regional office, and because the labor dispute is so high profile, Katz and other attorneys expect that the NLRB’s national office in Washington, D.C., would make any ultimate decision on the disposition of the charge.

As the NFL and its players strive to agree on a new labor deal to end the now four-month-old lockout, a separate issue has emerged that could still endanger the preseason and perhaps the regular season: how to unwind the antitrust case filed against the league by 10 players.

Outside counsel for the players, which include Tom Brady and Drew Brees, are pushing for the case (Brady v. NFL) to become a class action before it’s settled as part of a new labor deal, multiple sources said. A class-action settlement requires a 30- to 45-day window for comment, perhaps longer. So even if a deal on issues like revenue split and rookie wage scale is reached as soon as this week, unless the league is willing to lift the lockout before the resultant settlement is formal — something league brass have publicly said they will not do — it could mean a longer wait to open the NFL season, these sources said.

Jim Quinn is representing players in the antitrust lawsuit, alongside Jeffrey Kessler.
While the push for class standing could still be dropped, the outside counsel, Jeffrey Kessler and Jim Quinn, could want a class action in part because any other disposition of the lawsuit might suggest the NFL Players Association’s decertification and simultaneous antitrust lawsuit was a sham, as the league alleged. That could impair the strategy of decertification in the future.

“I really don’t get how they get it done on time,” said Mark Levinstein, a sports labor attorney at Williams & Connolly who is a counsel to the United Football League. “The players’ view is the league will open camps on faith [once the framework is agreed to], and the league’s is players will just drop the lawsuit and have a union.”

Quinn in an email replied “nonsense” to questions about whether pushing for a class certification would delay the process. He did not reply to follow-up questions about how the season could open on time if a class motion is filed and the league will not open camps until all legal procedures are completed.

For Brady v. NFL to become a class action, counsel would need to file a class motion before the court, which would then give class members — in this case, all players — time to object. The court could then certify the class and approve the settlement, with the labor deal likely an amendment to the agreement. This is what unfolded with an antitrust case against the league in 1993.

In late May, at an owners meeting in Chicago, NFL general counsel Jeff Pash said the league would not lift the lockout until every “i” was dotted and “t” was crossed. Asked later about the issues of class certification, he responded there was no class, so it should not be an issue. Indeed, two immediate options would be that the 10 named players could voluntarily dismiss the lawsuit, or only they sign a settlement.

That would destroy the leverage of NFL players in future negotiations, Levinstein contended. The threat to decertify and file antitrust cases is a major weapon of players, he said.

In recent weeks, the sources said, Kessler and Quinn have advocated for a class certification as a way of protecting NFL players’ future rights.

If a class is certified, the lawyers would likely become trustees of the class, which would earn them fees. Kessler had been trustee of the now-defunct “White class,” which formed in 1993 in the wake of the settlement of the Reggie White antitrust case. The White class expired with the old CBA in March.

In addition, antitrust cases that are settled traditionally bring judicial oversight. The league opposes judicial oversight of the NFL’s labor ties with the NFLPA. Commissioner Roger Goodell told reporters in May that he anticipated a new deal would drop judicial oversight. The NFLPA has declined to comment on this point. So even if the league and players can figure a way to agreeably and expeditiously resolve the lawsuit, they would still have to agree on the issue of dispute-resolution mechanisms.

“Thirty-two owners will stay shut for the season over that one,” said one league source about judicial oversight.