Sports Agent and Sports Lawyer Blog

The NFL Players Association (NFLPA) has previously been to court regarding the use of players names and statistics on online fantasy football leagues. Last year in a case with CBS Interactive, the court concluded that the use of this information is protected under the First Amendment. This meant that the players names and statistics were seen as publicly available information and CBS could use this player information without paying a fee. The NFLPA is now appealing.

CBS is not the NFLPA’s only nightmare. Yahoo! recently alleged that the NFLPA has threatened to sue them if they continue to use players stats and other related information without paying proper royalties. The two parties had a licensing agreement regarding this issue, but when that ended in March of this year, Yahoo! now believes they should not have to continue to pay for this information. However only a month after the lawsuit was filed in a Minnesota court, the parties have apparently agreed to settle. The details of this settlement were not made public.

This type of action brings in the question of what should players be compensated for. They are essentially a brand. They add value to their teams and to items they are associated with. Athletes perform on the field and people off the field are making money selling their brand. Take Oakland A’s pitcher, Dallas Braden for example. Soon after Braden’s encounter with A-Rod where yelled at him for crossing over his mound, souvenir stands began selling “Get Off My Mound” T-shirts. The A’s marketing department went to get the shirt approved by the MLBPA, but it was rejected. Thus to get around this they redesigned the shirt so it does not have Braden’s name on it, although it does have a silhouette of him throwing a pitch. It is obvious they are making money off of Braden’s actions, but is something wrong with this picture if Braden is also not earning anything?

As an athlete you are not always aware of when and how and when your brand is being used for profit. You work hard to prove yourself on and off the field and others should not be taking advantage of your success. This is why it is important to have an agent to look out for you. Your agent can and should make sure your brand is protected. They are familiar with the law and know what you are entitled to.

If you are a professional athlete, your sports agent works for you. That means you can fire them if they don't meet your needs. Your agent, or lack of an agent, should not be a reason you miss out on opportunities to expand your career as a professional athlete. Agents communicate with teams, coaches, managers, along with negotiate contracts and establish endorsement deals all to promote your career. It is not enough to just get you on a team; agents must keep new opportunities coming for their athletes. There are thousands of possible sports agents out there, its important to find one willing to work hard to enhance your career.

Even agents who work for high profile athletes run the risk of losing them to other agencies. This was the case for IMG's Mark Ervin who represented snowboarding prodigy Shaun White. White is among the wealthiest, most successful and highest profile Olympic athletes outside of the mainstream sports. Despite his high profile and successful endorsement and sponsorship agreements, White apparently remained unsatisfied with his lack of opportunities following White's gold-medal performance in the Vancouver Olympics. Thus White recently left Ervin, to sign with CAA.

Although Ervin and IMG will still receive commissions on the endorsement deals they did close for White, they will now miss out on future opportunities. Losing a client like White is a huge loss. It has been said that White has a reputation for being very selective regarding endorsement deals (if you read his bio on his web site, it says he only partners "with companies he thinks are cool"), and we do not know the true details behind the reason for White switching agents. It is possible that he has unrealistic expectations in that the economy remains in the tank, he already has numerous endorsements and it may not be the former agent’s fault that White procured no new deals since his Olympic performance. Nevertheless, this is a lesson for all athletes (and their sports agents) which is that if you are unhappy with your agent, it may be time for a change.

This is an interesting article about NASCAR sponsorships by smokeless tobacco products and the changing landscape of spots sponsorships. At least one NASCAR team is losing it corporate sponsorship due to tighter restrictions on the advertising of tobacco products.

According to the U.S. Food and Drug Administration's website (http://www.fda.gov), "the new rule, Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents, restricts the sale, distribution, and promotion of these products to make them less accessible and less attractive to kids. Published March 19, 2010, the new rule becomes effective June 22, 2010, and has the force and effect of law."

How valuable are athlete endorsements? If you are the athlete, they are typically the gold standard. Everyone gets a salary, but not everyone receives an endorsement deal.

Some people still believe that endorsements are worthless. In this commentary on CNN, former best-selling author Bob Greene weighs in on the topic:

How would you feel if you read an ecstatic movie review that made you want to run right down to the theater and buy a ticket -- and then it was reported that the reviewer had received a large check from the movie studio to make sure he gave the film a rave?

What Greene ignores is the obvious fact that the public knows that all endorsers are paid. It is not a trick. We know Brett Favre was paid by Wrangler. We know Peyton Manning was paid by DirecTV. We know Walter Dix was paid by Nike. Yet the endorsements still work because fans want to be associated with athletes.

Greene’s column makes no sense. He argues that the endorsements are useless because the athlete is being paid. What he ignores is basic sports business – and common sense. Consider Favre’s endorsement of Wrangler. If a consumer had the time and resources to carefully study Wrangler versus all the other jeans in the same price category, he would probably not find a substantial difference between Wrangler and the competition. I am sure that the company would disagree, but if you ripped off the labels from Wrangler and Levi's and Lee jeans, would there be a notable distinction? From Wrangler’s perspective, the company needs every possible edge to beat out the competition. So they pay a lot of money to a well-known quarterback to endorse them. They create an image that they feel is associated with Favre’s image. People already like Favre, and they see him having fun playing touch football in the park with his buddies while wearing Wranglers. This helps people make decisions.

People are not stupid. If Wrangler was actually terrible quality and it fell apart after you wore the jeans once, then Favre’s endorsement would not mean much. Instead, his celebrity endorsement separates the product from the competition.

Athletes contact me almost every day to ask how they can procure sports endorsements to further their career. I have been contacted by athletes ranging from established professionals who have lost their sponsorships for various reasons to novices who have not yet embarked on their career because they need funding to pursue their sport.

Oftentimes I am surprised that these athletes believe that all they need is an agent and the sponsorship money will automatically follow. Unfortunately, it is nowhere near that simple. As this article says, even Olympic medal winning athletes from Vancouver are going to struggle to find endorsements.

But the vast majority of Olympic athletes — even those who won medals — will have a harder time cashing in on their appearances at the Games. Winter sports like speedskating and bobsledding will all but disappear from the airwaves and, for many Americans, interest in them will not grow again until the next Winter Olympics in 2014.

If Olympic medal winners are struggling, that is an indicator that everyone else is strugglin as well. Companies are cutting back. Businesses are frugal with their dollars. While athletic sponsorships may be returning according to some published reports, it is still difficult to find money. I am not suggesting that it is impossible or that athletes should give up their dreams. Instead, I just want athletes to be realistic in their goals. Companies carefully scrutinize the athletes they endorse, and they have limited budgets. Unfortunately, it is not quite as simple as making on phone call to an agent, and then procuring sponsorships!

Sports lawyers around the country are starting to take increasing notice of MMA. As MMA moves further into the mainstream and the amount of money at stake continues to soar, you may see more lawsuits such as the Fedor-Affliction Entertainment dispute currently raging in California.

This week the court denied the defendant’s motion to dismiss, which is not necessarily a harbinger of things to come, as the standard to survive a motion to dismiss is not a high threshold. Sherdog provides its usual expert analysis and summary of the sports lawsuit by attorney J.R. Riddell:

In the suit, the world’s No. 1-ranked heavyweight and M-1 claim that Affliction breached the “Fight Agreement” requirement to stage and promote a third bout for the fighter after advertised opponent Josh Barnett was refused a license in California for an alleged positive steroids test two weeks before the event. They claim that Affliction did not undertake “all reasonable efforts” to find a fighter to replace Barnett, and even go so far as to argue that Affliction lost interest in promoting the third bout partly because it was apparently pursuing a competing objective at the same time -- repairing its soured relationship with competing promoter, Zuffa LLC, parent company to the UFC. Shortly after Affliction’s decision to cancel the event, the UFC announced that it had reached a sponsorship agreement to allow the previously banned clothing brand back into its shows.

Is it possible that sports agents who try to procure sponsorships for their clients are over-thinking the process a little too much? Milwaukee Wave soccer player Marco Terminesi probably thinks so.

Terminesi obtained a sponsorship for himself the old fashioned way. He ate at a local restaurant. He liked it. He talked to the restaurant’s manager. He asked the manager if the restaurant would sponsor him. The manager agreed, and now the soccer player has a sponsor:

"It's perfect for me," Terminesi said. "It's healthy food, and the players go there. And Felipe likes soccer." Camargo, a soccer fan himself, said he's been happy with the response so far. In his mind, both the Wave and his restaurant are on the same agenda: a fun, family-friendly atmosphere. "They care about their fans," Camargo said of the Wave. "And we care about our customers."

Of course I am being a little tongue-in-cheek with this post, as we know it is not always this easy to procure a sports sponsorship. Also, most leagues and governing bodies are not as loose with their sponsorship regulations as Major Indoor Soccer League, which allows individual players to place their sponsor’s logos onto their uniforms. Can you imagine the NFL allowing uniforms to be adorned with individual sponsor logos?!

The sports agent sponsorship scam which recently came to light in England illustrates yet again why all athletes should consult their sports lawyer before handing over their hard earned money.

In the latest scam, a British sports marketing agency asked for money up front from athletes in exchange for the promise of procuring endorsements. Even Andrew Steele, one of the athletes who was ripped off, acknowledged that he thought being forced to pay upfront was a red flag:

“I asked: 'why does it have to be up front, why can't I give it once the sponsorship has been secured?' They said that if the money didn't materialise then I would get a refund, so I thought I'd go for it.

Steele said his fears were lessened because the agent employed several prominent former athletes. This seems to be a common practice among sports marketing agents who are operating scams. They pay athletes to recruit other athletes. Because pro athletes tend to stick together, they feel better when one of their own is on board.

The bottom line here is that any time a sports agent request money up front, the athlete should run quickly in the opposite direction. While there may be certain hourly and flat-fee arrangement for certain types of sports agency duties, this type scenario is rare, and should only be entered into cautiously and with someone trustworthy. When in doubt, the athlete should consult a sports lawyer.

The sports media and sports business world was in a frenzy recently over the upcoming launch of TMZSports, a gossip site apparently to be devoted entirely to athletes rather than entertainers. TMZ is already an established media brand and is one of the world's most heavily trafficked web sites, and it earned $40 million in ad revenue over the past two years.

While pundits have weighed in on what this means for sports media, no one has yet discussed what this means for professional athletes and the people who help manage their careers such as sports agents and sports lawyers.

My take is that it while it seems scary - because TMZ habitually pays people for tantalizing photos - it is not something that should scare athletes. Any athlete with a brain already knows that even a minor transgression is in danger of being captured by a cell phone camera and posted online within seconds. The reason that athletes need not be worried is that as Shanoff writes in the first link that I posted above, the general public does not care about the private lives of its sports idols. There are, of course, obvious exceptions, such as the Tiger Woods story. The bottom line is that it’s one more thing for athletes and their agents to monitor, but athletes need not be worried because of a new gossip web site, even if the site is already branded as one of the world's most popular.

To think that the paparazzi will suddenly be parked outside of NFL practice facilities and following offensive linemen around town on their nights out is an over-exaggeration. The TMZ culture of celebrity worship is a phenomenon which has been ongoing for more than a century; entertainers have always been the target of obsession. Only the elite of the elite professional athletes, on the other hand, have been treated as celebrity objects. I predict TMZ's venture will be a non-factor within a year of its launch.

If you have ever wondered whether a professional athlete’s endorsement of a product produces measurable results, check out this unusual sports law controversy in Japan. Consumers are suing a purified water company because it falsely used Seattle Mariners star Ichiro’s likeness even though Ichiro does not use the product.

One of the comments from a plaintiff is startling:

In his lawsuit, the man claims that he trusted the company because he was told that Seattle Mariners outfielder Ichiro Suzuki regularly drinks the company's water and that it was a sponsor of the Beijing Olympics and the football World Cup."

It’s not uncommon for an athlete to sue a company which falsely uses his likeness. I have never seen a case such as this one, in which consumers believe they were duped by a false endorsement. A closer review of the article reveals that only part of the lawsuit is about Ichiro's allegedly false endorsement; a rogue investor may have hyped the company, thereby inducing investors to lose large amounts of money. Still, I think this lawsuit speaks to the power of professional athlete branding - if a business is linked with the right athlete, the public will buy the product.

When Bears quarterback Jay Cutler started mouthing off about what he perceived to be poor officiating, the media in Chicago took notice. Apparently, Cutler has been complaining during the game at a level far more than normal to the officials. Maybe he is looking to use them as scapegoats for his poor on-field performance.

For some reason, Bears coach Lovie Smith has done a poor job of bringing Cutler’s complaining under control. So does that mean Cutler’s sports agent should try to step in? Sports agents are not babysitters, but they often have the means to persuade their clients that certain actions have adverse consequences. This is not a complex formula: If Cutler were perceived as a “good guy” he may be more likely to procure additional well-paying endorsements. If he were perceived as a “complainer” then Cutler’s public persona will not be well-received.

Sometimes you have to wonder if the folks at Nike really are smarter than everyone else in the sports endorsement world. Nike has announced a partnership with the group that regulates high school sports in Texas:

As part of the agreement, Nike will provide discounted rates to the roughly 1,300 UIL-member schools. Nike also will be an official sponsor at both UIL athletic and non-athletic events

What does this mean on a practical level? While most high school athletes will never have the opportunity to turn professional, those who do will have already been Nike clients for many years by the time that they begin their professional careers. So who do you think they are more likely to sign with if they have been associated for Nike since their formative years? That’s right, Nike.

We have blogged on multiple occasions about creative methods of obtaining sports endorsements. Here is an interesting endorsement which apparently has an indirect payoff.

NBC is allowing viewers to submit a design for skier Lindsey Vonn’s helmet. The contest does not disclose a direct payoff to Vonn, but it is sure to increase her visibility. Every time she is shown on TV, the network will highlight that she has a helmet designed by a viewer, and Vonn will stand out from the pack of usually faceless Olympians who are shown on TV only once every four years.

Vonn’s agent should be commended for procuring this endorsement opportunity. It is especially praiseworthy because the agent probably drew no direct commission for brokering the deal, but he knows it will pay off in the long run.

Sports Agent Lawyer Blog was recently quoted in an article in San Diego City Beat about the energy drink sports endorsement market.

While I have no knowledge of any of the principals involved in the story or the legal proceedings, I was asked to comment by the reporter about the agent’s purported practice of taking a direct commission from the energy drink company when he linked his athletes to the company.

The article calls it a “questionable double-dipping practice.” Here is how it works: The agent has a business relationship with a sponsor. The agent also has athlete clients who need sports endorsements. Naturally, the agent links the athlete and sponsor together and everyone is happy. The questionable practice is that the agent not only takes a commission from the athlete – all marketing agents take a commission when they procure endorsements – but he is also paid by the company.

Here is my quote about the practice:

Attorney Jason Wolf, who blogs about these issues at Sportsagentlawer.com, said this double-dipping isn’t illegal.

“It’s not common, but it’s also not uncommon,” Wolf said. “It’s not unethical, but it raises some questions as to whether the agent is in it for himself or has his clients’ best interest in mind. It makes me raise maybe one eyebrow instead of two.”

The reason this raises questions is that the agent is supposed to have his client’s best interests in mind. This practice is not proof that the agent is failing to meet his fiduciary duty, but it definitely raises questions. I also suggested that perhaps one reason that the practice is not unethical is that there is no uniform code of ethics governing sports agents, and no enforcement of such regulations. Without a code of ethics, how can conduct be deemed to be in violation of the ethical regulations?

Here are a couple of lawsuits which have been spurred by the upcoming winter Olympics.

First, We have news of a bizarre sports lawsuit in Canada regarding women's ski jumping. From the article:

Forget all of that and consider that a judge ruled that the International Olympic Committee effectively has legal jurisdiction over the Canadian Government. The logic of this decision continues a process where the people of Vancouver have been smashed by the stateless, mobile dictatorship of the IOC.

Here is the bottom line: The court ruled that the International Olympic Committee is in violation of Canadian law by excluding women's ski jumping from the 2010 Winter Olympics, which will take place in Vancouver. However, the court apparently also rules that the IOC's regulations are superior to Canadian law, which has enraged an activist group (and the reporter who wrote this article).

Next, we have news that Vancouver plans to reform its sign ban after a civil rights group sued claiming it infringes on free speech:

The Vancouver-based British Columbia Civil Liberties Association accuses the city of stalling on the changes and says it will press ahead with the suit to prevent enforcement of the law. The ordinance prohibits the posting of signs that aren’t approved by the city, except for those celebrating the 2010 Winter Olympics. The law applies in a 40-block area downtown.

Have you heard about the sports agent who obtained an endorsement for his pro athlete client, but the athlete had to pay money for the privilege of doing the endorsement, instead of the other way around?

A new mouth guard on the market, which retails for up to $800, is being presented as a performance boosting mouthguard. Among the endorsers of this product are All-Pro RB Adrian Peterson and NHL Hall of Famer Brett Hull. They not only endorse the product, they have invested in the company, Bite Tech, which manufactures the special mouthpiece.

The article raises two interesting points. First, should agents advise their clients to try new products if they are alleged to improve performance? (We will cover this in a future blog post; for now, consider whether a sports agent would be wise to recommend that his client try one of the new and improved hockey helmets)

Second, and more importantly, is this a good endorsement if the athlete is not paid anything? The article makes it sound like Hull, Peterson and the others who are involved aren't necessarily endorsing the product as much as investing in a business in which they believe. However, the article also contains this excerpt, which makes me think there is a little bit of a smoke-and-mirrors situation going on here:

But Bite Tech's biggest boost has come from its litany of athlete investors and users, a testament to Kittelsen's prodigious ability to work the room. For instance, Kittelsen first met Hull at Michael Jordan's golf tournament and later cornered him at a restaurant. Hull says it was his idea to invest in Bite Tech, which is precisely what Kittelsen wanted the hockey star to think.

"It has to be their idea," Kittelsen said. "If it's their idea, then they really believe" in the company.

So in other words, the founders of this company have essentially found a way to promote their product that is virtually revolutionary. Not only do they pay nothing to big-time athletes in exchange for an endorsement, they actually have convinced the athlete to pay the company for the privilege of endorsing! Brilliant marketing for the company, but for the agent and athlete, it may not be the smartest move. To be sure, if the product works and the business takes off, the athlete has made a good investment. But at what cost? A superstar such as Adrian Peterson has a brand to protect; he cannot be involved in just any random product. Now he is not only receiving nothing for an endorsement, he is actually paying this company for the privilege of serving as a spokesperson.

Brock Lesnar has been hospitalized with a major illness.

Lesnar is a fascinating topic for this blog because his athletic career has run the gamut from WWE to the NFL to UFC. His endorsement prowess is something we were going to cover in a future blog pose. Now it looks like he is facing some major health problems:

UFC President Dana White has commented on the situation by saying "He's in a hospital up in North Dakota somewhere right now," said White. "He doesn't want to talk about it publicly, but he's in bad shape."

Here's hoping that Lesnar recovers quickly so that he can continue to blaze trails in the UFC world (not to mention defend his title).

We recently blogged about pro athletes suing reporters. Now comes word that the Major League Baseball Player’s Association is closely monitoring baseball team media comments for signs of a collusive-type effort to artificially limit baseball salaries.

Michael Weiner, MLBPA’s new leader, says the union is worried about the “predictions” that a glut of players who are not tendered contracts by their teams will result in lower salaries for free agents:

"I don't think it's an accident that in recent weeks, management officials, without attribution, have been making predictions about what's going to happen in this year's free-agent market," Weiner said. "There have been predictions about the [money] players will get, what players will be offered [salary] arbitration and what players will be non-tendered [contracts].

As an agent, I think this behavior, if true, is deplorable. However, as a sports agency that counsels its clients on how athletes should utilize the media to deliver the right message, a subject which we have blogged about on several occasions here, this is a situation to monitor. It shows that even when you hear something as seemingly innocuous as sweeping predictions about the market, there is a method to the communication.

If you’re an MMA fighter, you have to be pleased at the recent news that Georges St. Pierre has signed with Under Armour. As MMA goes more mainstream – and people finally recognize MMA for what it is, which is a legitimate sport that has nothing in common with WWE – more endorsements are sure to follow.

A lot of people are probably asking themselves: Now that St. Pierre is in the fold, who will be next? The question that I would like answered is: Which mainstream company will dip their toes into the MMA world next? It’s not like MMA is a stranger to big corporations; many endorse the league overall. But to date few major sports endorsing companies endorse individual athletes, and that is sure to change now that Under Armour has signed up St-Pierre. This is good news for MMA fighters and their sports agents.

For more information on sports agents and endorsements, contact sports attorney Jason B. Wolf.

Here comes another story of professional athletes who were bilked out of their hard-earned money. Several players on the Columbus Blue Jackets recently spoke to a reporter about the instances in which they were swindled.

As always, the article is just another cautionary tale which has at its root the fundamental problem of who an athlete can, and cannot, trust. This is why we here at Sports Agent and Sports Lawyer Blog continually emphasize the theme that athletes need to employ risk managers, someone who can assess and analyze each and every investment opportunity and explain the pros and cons to the athlete. This person should be an attorney, but not necessarily be the athlete's personal counsel, and should not be the athlete's financial adviser.

It's easy for the athlete to be seduced when approached by an inventor or entrepreneur who promises to give the player a share in the Next Big Thing. There is no doubt that occasionally, some people do have solid ideas and the athlete could actually benefit from making an investment. More often than not, the opposite is probably true. We have written several times about athletes and their financial problems. Even having a professional financial adviser is not always sufficient:

Most athletes have a financial adviser, but the people serving in that capacity vary widely.

Several Blue Jackets said they allow relatives or family friends to manage their money. Other players are represented by large sports agencies that handle all their financial matters, including bill and mortgage payment.

It's a subject that will never go away until athletes get smarter about their overall risk-taking strategy. People essentially need to allocate only a fraction of their overall disposable income to high-risk ventures. Then they need to figure out the best way to maximize that percentage. Blue Jackets player Rick Nash has the best approach. His lawyer, agent, financial adviser and accountant are all unrelated to one another. This ensures that there are greater checks and balances.

Athletes need endorsements. Olympic athletes especially need sponsorships. We have blogged several times previously about various methods used by Olympians to raise money for their sports careers, from creative endorsements to new techniques to find sponsorships. Now comes what is believed to be a first in Olympic history.

The Colbert Report is sponsoring the U.S. Speedskating team. What is unique about this opportunity is that Colbert is not paying any money to the team. Instead, he is asking his fans to donate money. Time will tell how much money this deal brings in for U.S. Speedskating. It seems like an unusual sponsorship arrangement. It is probably an indication of how difficult times are for athletes if they have to sign endorsements with businesses in exchange for nothing more than a promise to ask fans for donations.

If an athlete endorses a product, does it sell? This is the first of several blog posts we intend to write about the process of endorsements by pro athletes.

There is no doubt that corporations benefit when they hire pro athletes to endorse their products. The exposure is priceless when millions (or more) people watch an event in which an athlete is utilizing his sponsor's product. As for the question as to how much help an athlete's endorsement offers to a product's sales, that can only be answered on a case-by-case basis. This article implies that Lance Armstrong's endorsement of these Oakleys may help the company sell them for $400 apiece.

Corporations don't always have a strong process for following up on their endorsement money and tracking actual sales. It could be that these glasses will sell for $4,000 because they are solidly made, available in limited quantities (only 200 pairs are being produced), and have acquired a special status as sought-after by luxury consumers. How much of that aura surrounding the product can be traced back to the athlete's endorsement? It may be nearly impossible to definitively answer that question.