Archive for the ‘Sports’ Category

This is for all my friends asking me about the NFL labor issues here is how I see the latest development

Monday evening, U.S. District Court Judge David Doty overturned a decision that would have allowed the NFL to use more than $4 billion dollars in media fees during a potential lockout next year. Briefly I discuss three areas of interest in this blog

  1. Why the court ruled the way it did
  2. What the ruling means
  3. How the court’s decision affects the ongoing NFL Labor negotiations

 

Why the Court Ruled the Way it did

The NFL Player’s Union (Players) filed suit against the NFL and its franchise owners collectively because it believed that the league had violated its duty to the Players by manipulating and renegotiating media contracts with DirecTV, CBS, FOX, CBS, NBC, and ESPN to give the league an unfair advantage over the Players in the event of a lockout. The media rights contracts would have given the NFL $4.2 billion for the 2011 season even if no football was played due to a lockout. Even without football games being played owners would still make money in 2011 while Players would recieve no income from their respective teams.

The structure of the league is made up so that the NFL acts not only to benefit itself to fullest extent possible, but to also do the same for its players. When the NFL was renegotiating the media contracts with the broadcasters they did so with only themselves in mind. The league leveraged its power and position with the pending lockout to charge broadcasters more in 2011 and beyond the expiration of the current Collective Bargaining Agreement. They did so in exchange for not charging broadcasters more in the 2009 and 2010 seasons which are covered by the current CBA. The district court in handing down its decision said that the NFL had a duty to act in “good faith” (honestly) and with their “best efforts” (diligently) and using their sound business judgment to benefit both themselves and the players. In the negotiations the only used their sound business judgment in good faith and best efforts to benefit themselves and not the Players. Al Davis once said “if you ain’t cheating, you ain’t trying”, the court here said that the NFL was trying a little too hard.  

What the ruling means

If the original ruling on the case had stood the NFL would have been able to use money from its media contracts during a potential lockout to “wait out” the Players. This would have given the NFL tremendous leverage against the Players. Judge Doty’s ruling blocked the NFL from waging their war of attrition on the Players. The judge may elect either to put the revenue from the media contracts  in an escrow account until the labor dispute is resolved or he can disburse the funds to the league and the union with the Players receiving a 59.5% share of that amount as provided for in the terms of the current Collective Bargaining Agreement. Either way the effect is that the NFL no longer has its “warchest” to fall back on. Owners will now have to bear the brunt of the lockout with their own reserves, rather than new revenue from the media contracts funds that they thought would be there to carry them through.

  How the ruling affects the current NFL Labor negotiations

Shortly before the expiration of the current CBA on March 4th – the NFL and the Players announced they would extend the CBA deadline by 24 hours. Then today, they announced that they would re-extend the CBA deadline for a week. NFL Commissioner Roger Goodell has stated that the ruling on the NFL Media Contracts case had no bearing on the league’s decision to extend the deadline. BALDERDASH!!! In fact, the NFL’s top attorney, Jeffrey Pash said that “I wouldn’t be surprised if the owners are here next week.” Considering that the owners have rarely opted to directly participate in labor discussions with the union, this signals a seismic shift in the NFL’s strategy surrounding the CBA and the Lockout. What changed? Metaphorically, the owners thought they had a big tax return check coming back to them this year. They were planning on using that money (like so many of us do when we get our refund checks) to go on “vacation” (collecting checks without working). Now that the owners have been told that they’re practically getting nothing back this year because they “fudged” on their taxes, all those plans have changed.

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            If asked, most Americans would say they dislike lies, liars, and pimps.  But, when  it comes to major college football most people condone, support, and even demand lying and pimping if it might help them win a conference championship.    There is no time where lying lies, liars, and pimps more celebrated than college football recruiting and the treatment of student-athletes by the NCAA. Everyone knows that, all things being equal (Conference, TV time, facilities, etc.), those with the best “mouthpiece” usually get the recruit to sign on the dotted line.  Whether it is the daily phone calls, mountains of letters, or in-home visits, college recruiters will tell top recruits just about anything to get them to sign.   However, I doubt that anytime during their recruitment are top athletes told that their “free four-year ride” to pay for their college education:  

  • Is NOT  really free;
  • Is NOT guaranteed for four (4) years; and
  • Is NOT  actually for a college education.

       First, the four-year scholarship every high school football player dreams about getting is actually a one (1)-year, renewable at the institution’s discretion, financial aid package.   Regardless of all the talk about “we are going to treat your son like he is my own” and “we stress education and getting your degree to all of our players” that coaches spew during recruiting,   once on campus, if the athlete does not perform to the desired level that the coach anticipated, the athlete runs the real risk of having his “full ride scholarship” cancelled after his subpar season.  Take the case of Joseph Agnew formerly of Rice University, hardly the bastion of athletic dominance, who is suing Rice after his scholarship was not renewed between his sophomore and junior years due to several injuries.  Like most D-1 scholarship athletes, Agnew had multiple scholarship offers out of high school.  However, when he got injured and couldn’t help the school and coaches win games (i.e., earn money, prestige, and recognition), he had no protection from losing his “full-ride” scholarship.

               Second, according to a recent ground breaking research study, the average “full scholarship” Division I athlete actually pays about $3000.00 annually in school-related expenses.   It’s just wrong that while head coaches enjoy guaranteed multi-million-dollar-a-year contracts and six-figure bonuses for  championships, and the NCAA and member universities bathe in multi-billion dollar TV deals, so-called student-athletes are not compensated for their labor (I thought this sort of practice was generally outlawed by the 13th Amendment!?!) that generates the billions enjoyed by the coaches and the NCAA. This is truly outright shameful in and of itself.  Yet, for these same athletes to actually have to pay thousands of dollars each year to the same institutions that  profit off them is absurd and a moral outrage, especially when you consider that 80% the athletes at these institutions are Black kids from poor inner-city communities whose family oftentimes can’t even afford to even attend one home game, let alone subsidize their son’s alleged “full ride.”

          Third, while coaches receive six-figure bonuses for wins, bowl games, and championships, I am not aware of one coach in America who has that  type of bonus clause tied to the graduation rate of his athletes (although I would not be surprised if long-time coach of Penn State Joe Pa did).  Therefore, it is easy to understand why the top schools athletically oftentimes have the worse graduation rates for their athletes.   For example, 2010 National Champion Auburn only ranks 85/120 in graduation rate for its football players.  It’s even more egregious when you take a look at the graduation rates of African-American athletes.  For example, of the 70 football teams that played in a bowl this year, the African-American football athlete’s graduation rate was only 60 percent.     That’s why I’m in full agreement with U.S. Education Secretary Arnie Duncan  who recommends that the NCAA penalize coaches and universities that don’t graduate their players the same way the NCAA allows those same coaches and universities to benefit when the programs have on-the-field success.    

                In closing, too many student-athletes will complete their college eligibility without a degree from their school, no pro career, and in debt to the school for which they just made millions. Therefore, I call on the NCAA to immediately stop Green-lighting lies (letting recruiters tell kids they are offering them  “full-ride” four-year scholarships), liars (coaches who stress education and personal development, but continue to have dismal graduation rates), and pimping (earning billions of dollars from student-athletes’ labor and likenesses, without allowing the student-athlete to receive any benefit).

LeBron’s Decision Should be Celebrated

Posted: February 16, 2011 in Race, Sports

This summer we’ve all heard or read something negative about NBA star LeBron James and “The Decision” to leave the Cleveland Cavaliers for the Miami Heat. I know I’m in the minority when I say I completely understand and celebrate his decision.

It seems as though the masses have written off America’s best basketball player today as the latest self-indulged superstar (even though he accepted less money to go to Miami), which is a tremendous fall from his status as one of the more admired professional sports figures.

The reaction by Cavaliers’ owner Dan Gilbert and subsequent statements by Rev. Jesse Jackson, coupled with strong media attention, elevated the matter beyond a simple career decision by an athlete. It all forces me to ask: If James were white, would this have happened?

Gilbert’s tyrannical open letter to Cavs’ fans led Rev. Jackson to say “he speaks as an owner of LeBron and not the owner of the Cleveland Cavaliers.” His comments highlight a long brewing sentiment in the African-American community about confusing prominent black athletes with “$40 million slaves.” Some may dismiss this view as playing the race card, but frankly it is a very common feeling among African-Americans.

Intentional or not, James has now joined the likes of Muhammad Ali, Curt Flood, Moses Malone and Michigan’s Fab 5, as trendsetting African-American athletes who rocked the establishment and revolutionized the American sports landscape.

Any move James makes is colossal. His impending free agency threatened to overshadow the Lakers and Celtics in the NBA finals. His courtship by several NBA teams pleading for his services was must-see reality television.

What disturbed me most was hearing Cleveland fans and media make comments like “LeBron owes us” and “we allowed him to make millions playing basketball.” As fans, we do purchase tickets, souvenirs and concessions for the games. Ticket sales plus lucrative TV contracts fund players’ salaries.

Fans have a right to say what they want, but the free-market American economy “allows” professional athletes to be paid. James, like most employees, had a marketable skill and was simply paid what the market dictated. He produced tangible results that improved his employer’s bottom line.

As an athlete who understands that he is an actual business, James leveraged his fame for what essentially became an hour-long, national LeBron James infomercial. This was a savvy business decision, one that any other forward-thinking company would make.

Even if you disapprove of how James announced his choice, he should be credited for donating all “The Decision” sponsorship money — reportedly $2.5 million — to the Boys and Girls Clubs of America.

In my two decades participating in elite level athletics, including providing business and legal counsel to professional athletes for the last seven years, I have witnessed the sad statistic recently cited by Sports Illustrated that approximately 80 percent of professional athletes are broke two years after their playing careers are finished.

James is smart to take every opportunity to build a sustainable business that has the capacity to flourish beyond his finite playing career. Would Steve Jobs, Bill Gates, Warren Buffet or any other business superstar turn down the opportunity to do the same?

LeBron’s decision should be celebrated as a classic American dream fulfilled. A gifted individual defies conventional wisdom and makes an unpopular decision without fear of — or at least being willing to endure — the repercussions because it’s what’s best for his family

On January 16, 2011, some Dallas-based athletes and their charities came under scrutiny for allegations of inefficiency and waste in a Dallas Morning News article entitled, “Experts Say Pro-Athlete Sports Charities Could Do Better.”  In the article, writer Scott Farwell states that, among the twenty-two (22) athlete-based charities he reviewed, he found a “series of shortcomings,” such as spending “more on overhead than on charity,” being “out of compliance” with legal and tax obligations, and athletes starting charities just to “improve their public image and endorsement income.”

For nearly a decade, I have studied, lectured, written about, and worked with professional and collegiate athletes as a university professor, athletic department consultant, and attorney. Through my experience in working with athletes and their related business, social, and economic issues, I am well aware of and agree with many of the points raised in this article.  Further, while it is valid to hold accountable any charitable organizations use of donor funds and compliance with applicable regulations and standards, I have found athletes are more than willing to give back at the expense of their own personal wealth and time — if not more so than any other group of highly trained and overworked professionals (i.e., attorneys, doctors, investment bankers, etc.) in America.

 In my experience, both “status” and “branding” rarely, if ever, have been the driving force behind why an athlete wants to give back.  This is especially true of the vast majority of NFL and NBA players, most of whom come from poor, inner-city African-American communities, and unfortunately often view sports as the only away out of the “hood” and the only means to help others still trapped in those environments to achieve their dreams.  Therefore, I believe that the shortcomings addressed by Mr. Farwell have less to do with the heart and desire of athletes, and more to do with the larger issues that commonly hinder professional athletes when it comes to their business affairs.  Most athletes are prevented from maximizing their opportunities because of:

  • A lack of and/or disregard for business and financial knowledge;
  • T he hiring of unqualified friends, relatives, and/or unscrupulous “professionals” to manage their business and financial affairs; and 
  • Inadequate planning to deal with the likely reality of a sudden and substantial decline in income and status when their professional athletic career is over.

The reasons for these deficiencies are both predictable and understandable.  After all, most of the athletes who create these charitable private foundations are really still just young, inexperienced “kids” when it comes to business issues.    Then, suddenly, they find themselves in a financial position to fulfill their heartfelt obligations and give back to the community that gave to them — to help other young people in that community who wish to follow in their footsteps.  Let’s acknowledge it:  they have committed themselves to the business of being a professional athlete, which is a 24-7 job in and of itself!  And yet they also volunteer to undertake the demanding responsibilities of a philanthropist.

On average, neither these young professional athletes, nor their social or family networks, has any experience with, exposure to, or knowledge about the business, political and legal worlds into which they are literally thrust overnight, and they have no idea how to leverage their new found status to do long-term, sustainable good works.  Thus, oftentimes, they either rely on the assistance of well-meaning, but inexperienced family members and friends, or they hire the services of shady or unconcerned business and legal professionals.  Hence, their foundations may not exactly comply with legal and tax requirements and may have higher overhead for administrative and salary costs.   

But, these “philanthropists in training” are nevertheless probably still “philanthropists in deed.”   They do serve a great need and provide great societal benefit.  Oftentimes, these athlete-based foundations are “niche philanthropies” that give back to the athlete’s community in important charitable ways that are usually overlooked, untargeted, or unreachable by more established or mainstream charities.  At the same time, they provide a training ground for the highly successful professional athlete to become an influential philanthropic business person in their own right, as an extension of their professional career.

             Take, for example, third-year running back for the Dallas Cowboys Felix Jones — the 2011 winner of the NFL Alumni’s Spirit Award, which is given annually to a current or former NFL player who has demonstrated a commitment to youth and community service.  Since entering the league at only twenty-years (20) of age, with no formal business or philanthropic background, but a genuine desire to give back and listen and learn from his advisors,  Felix has provided countless hours of community service and donated thousands of dollars of signed memorabilia and game tickets to charitable causes.  He has personally given $5000.00 each to: a) his high school towards the purchase of Football State Championship rings, b) his middle school for the purchase of new football uniforms and equipment; c) his pee-wee team for travel expenses to a national tournament; and d) the Salvation Army for Christmas gifts for low-income families.  Felix also partnered with then-Tulsa Mayor Kathy Taylor to become the 1st Official Spokesperson for the City of Tulsa’s “Mentoring to the Max” program, and he created an annual free football and life skills academy for inner-city high school student-athletes. 

Additionally, during his rookie season, after being notified that the ACT preparatory program at the local Boys & Girls Club — that had helped him pass “the test” so he could accept his football scholarship — was going to shut down due to lack of funding,  Felix donated $10,000.00 to keep the program going.  Then, after his Running Back to Make a Difference Foundation, a 501(c) (3) tax-exempt organization (with a mission to inform, inspire, and empower Tulsa inner-city youth to become well-rounded and productive citizens of their communities through life skills and college preparatory training) was established in February of 2010, Felix partnered with the annual MVP Charitable Weekend and raised $50,000.00 for the ACT program.  Administered by the Tulsa Salvation Army’s North Mabee Boys & Girls Club, the ACT Program now will prepare 300 inner-city high school students for college entrance exams and provide them assistance with their applications for college, financial aid and scholarships over the next four (4) years.

  Felix a great example of why individual athlete charities and causes are important to support — they deal with special charitable niches that are often forgotten or under- the-radar issues, causes, and/or communities.  Additionally, however, Felix’s example shows how other individual athletes can ensure the success of their charitable endeavors — give back to causes that they are truly passionate about, seek partnership with established and credible organizations and people working in the space they are passionate about, and hire and heed the advice and counsel of competent and professional individuals to ensure their wishes are being properly handled. 

In closing,   I hope that Mr. Farwell’s article prompts athletes and those who work with them to pursue excellence and full legal compliance regarding their charitable endeavors.  But the fact remains that amount of time most professional athletes put in when it comes to charity is staggering.  The work so many of these young men give to charity is truly commendable and they should be lauded for their efforts. So, even with  many of the valid shortcomings discussed by Mr. Farwell, considering all that is not in their favor, athlete-based charities actually do better than should be expected.  More importantly, because the length of an average professional athlete’s career is less than four years, and (according to Sports Illustrated) eighty percent (80%) are bankrupt, jobless, and/or divorced within two (2) years after their athletic careers are over, I believe that we should contextualize and understand the underlying reasons why many athletes are not able to fully maximize their potential regarding all of their off-the-field  charitable business undertakings, rather than unfairly criticize the sincere efforts they do make.