by JSEL | Oct 29, 2019 | Interviews
Earlier this month, Jim Quinn sat down with members of the HLS community to discuss free agency, competition, and other topics covered in his new book, Don’t Be Afraid to Win: How Free Agency Changed the Business of Pro Sports. Jim fielded a variety of questions from the large and eager crowd over Indian food and a shared excitement of the future direction of the major sports leagues. Below are some excerpts from the Q&A portion of his discussion on campus.
The interview was conducted by Madison Martin ’21 (Online Content Chair, Sports) and Daniel Alford ’20 (Executive Editor, Online Sports Content), from the Harvard Journal of Sports and Entertainment Law. It has been edited for clarity.
Q: Didn’t Curt Flood bring about free agency in baseball?
A: The answer is no, Curt lost the case. The Supreme Court continued the baseball exemption … but it did not apply to basketball, hockey, and football, so as a result, we pressed forward under the antitrust laws. The biggest issue was the non-statutory labor exemption – the owners said this was all part of collective bargaining, so it should be exempt from the antitrust laws. The issue got to be “when does the labor exemption end?” Various cases (including Powell) said – as long as there was a collective bargaining agreement in place and a union remained a union, it was exempt under the antitrust laws. As a result of the McNeil agreement, we entered into what was called the White Agreement. For further reading, see http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1068&context=sportslaw.
Q: Could you speak a little more on the history of lockouts and free agency?
A: Ironically, the first lockout we had in 1994 turned out to be a disaster for the owners, and the teams collapsed – this was the first instance of free agency in the NHL. The reality is, once you have some level of free agency, some level where the competitive market sets the price, it impacts everybody along the line, because a player still under contract will say, “So and so got 5 million, and I am a better player than him so I should at least get that much.” As a result, it set a bar that impacted hockey and led to the year-long lockout in 2005, where (Gary) Bettman insisted he needed to get a salary cap in order to survive, which is where we live today.
Q: Do you think any leagues are headed toward a lockout or strike?
A: I don’t think any of them are. The money now is so huge on both sides, that having a work stoppage that actually effects revenue streams is unlikely. You can’t get that money back, no matter what you do, whether you are an owner locking out or you are a player and going to strike and forego significant salaries, it is very difficult. Is it possible? It may be possible in baseball, because they have some complicated issues now with the “youth movement” and the way their system worked. It has worked for a long time, but there is a question of collusion because older players aren’t getting the same level of compensation, and you have this whole question now of all these younger players just starting and becoming stars immediately and the league has to figure out have to deal with that. The chief negotiator for the union is one of my former partners, and I know that these are issues that they are wrestling with.
Q: In Chapter 9 of your book, you further discuss salary caps. Was the argument against salary caps based on the fact that there was a trust in regards to employment? And how does it matter that it is sort of a non-essential industry?
A: The owner’s argument always was that they needed all the restrictions to maintain competitive balance. The argument has always been bullsh-t and it is for the next 100 years because if you have competent people running teams, with the Tampa Bay Rays as an example, in a system where you have free agency and the draft in some form — and as an aside, the draft has become a little bit of a farce, it is little more than a marketing tool than anything else — all of this has been a huge boom to professional sports because it keeps the different sports in front of the public the whole year, because something is always going on, then you can’t lose that competitive edge.
Q: Any opinions on recent NCAA litigation in CA?
A: I am sure you are aware now, at least three states have passed laws relating to the use of likeness, which is just a disaster – because you can’t possibly have fifty states regulating an industry that is essentially a national industry. What happens when Auburn plays UCLA? Can the Auburn players now get paid? Legislation has to be on a federal level, or the NCAA has to get its act together and craft rules that will allow this. I tend to agree with the view that stipends serve as a possible solution. Putting the names and likeness issues aside, for the D1 schools and perhaps others, to give players a stipend to offset their inability to work during the summer — they can’t get jobs and vacation and so forth — this would go a long way to quelling this whole issue. However, the NCAA still hasn’t gotten their act together, it’s a horrible organization, the problem is it has 1100 members, and little schools have the same voice as Michigan. It makes zero sense, and maybe eventually it will be done out by a conference by conference basis.
Q: But what about players that contribute significantly more?
A: You can’t do it that way, it’s college sports. Unless you want to decide that it is just professional football, and nobody really wants that, you have to guide out a different kind of system. It can’t be just the NFL without steroids. The name and likeness thing is more confusing, and I am not sure how this will ultimately play itself out – you are really talking about nationwide, a couple dozen players that people care about, it’s not a lot of players.
Q: You worked on the Florette age eligibility case (on safety issues with younger athletes). I am curious your thoughts on the Women’s Tennis Association and Coco Gauff being 15, with regards to restrictions on how much she can play?
A: If someone wanted to bring a lawsuit they would probably win it, because obviously she can play. There is no competitive rationale to bar someone like her from playing. It is paternalistic. Similarly, in the NBA, there should be no “one and done”. It is different than football because it is not a safety issue. If you can play at 17, I mean just look at Kobe Bryant.
Q: Are there one or two important issues for students to keep their eyes on?
A: The continuing issues of IP and in a broader sense, you know that there is the DirectTV litigation in the West coast, which is an interesting piece of litigation. The economics of these sports are likely to change over time. Right now, the live sports are the lifeblood of the networks. At some point, there is going to be bidding from Amazon and Netflix and maybe even Disney as they create these streaming services. These people have incredible amounts of money, certainly long term, and I know talking to the head of NBC Sports, they see that as a long-term serious threat to their business.
For more information on these topics and others, feel free to check out Jim’s book, Don’t Be Afraid to Win: How Free Agency Changed the Business of Pro Sports. https://www.amazon.com/Dont-Be-Afraid-Win-Business/dp/1635766788
by JSEL | Oct 28, 2019 | Highlight
The
Copyright Alternative in Small Claims Enforcement (CASE) Act sailed through the House of Representatives last week after a
410-6 vote, a move industry organizations and lobbying firms are calling a major win.
“The Recording Academy applauds the House for passing the CASE Act today, a…victory for music creators,” said Daryl P. Friedman, the Recording Academy’s Chief Industry, Government, & Member Relations Officer.
As its title suggests, the bill would create a small claims tribunal, the Copyright Claims Board, before which musicians, artists, and other content creators would be able to bring infringement claims totaling less than $30,000. Under current copyright law, infringement claims must be brought in federal court, where litigation can be prohibitively onerous and expensive.
Artists “currently have rights but no means to enforce them because federal court is too expensive and complex to navigate,” explains Keith Kupferschmid, CEO of the Copyright Alliance, the Washington-based advocacy organization whose members include the Motion Picture Association of America, The National Association of Broadcasters, and the Recording Industry Association of America.
Critics have voiced fears that the bill would provide copyright trolls with an easy means to bring a wave of opportunistic claims and point to copyright profiteering in the wake of the Digital Millennium Copyright Act as evidence that trolls will similarly benefit from the CASE Act.
Additionally, organizations such as the ACLU have voiced concerns over the bill not creating effective checks on the power of the Copyright Claims Board. Decisions made by the panel would not be subject to broad judicial review, but rather could face such review under limited circumstances enumerated in the bill, such as when decisions were based on “fraud, corruption, misrepresentation, or other misconduct.”
The President has already signaled his support for broad copyright reform last year by signing into law the Music Modernization Act. It is expected that the Senate will also act quickly in confirming the bill. If the Senate acts as decisively as the House, a veto-proof vote passage of the CASE Act could make the creation of the Copyright Claims Board a near inevitability.
Matt Shields is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and current second year student at Harvard Law School (Class of 2021).
Image: File:US Congress 02.jpg, Bjoertvedt, CC BY-SA 3.0
by JSEL | Oct 25, 2019 | Highlight
Electronic Arts (EA) CEO Andrew Wilson recently expressed interest in bringing back the once-popular NCAA Football video game franchise, if the legal framework governing college athletics changes in such a way that would permit its existence. Wilson made the comments at the WSJ Tech Live conference in California, favorably citing a newly signed California law that, starting in 2023, would allow college athletes to profit off of their name, image, and likenesses. The hope is that such a law could “clear the way” for NCAA Football’s return. To be sure, the NCAA opposed the California law and prefers to solve the issue of athlete compensation on its own terms.
EA Sports, a division of EA, last released NCAA Football in 2013—reporting indicates that the game was immensely “popular, ranking behind the FIFA soccer game and the NFL Madden game among EA Sports’ titles[.]” In 2013, the NCAA allowed its licensing deal with EA Sports to expire, citing “the current business climate” and litigation, like the Ed O’Bannon lawsuit, that challenged the revenue scheme related to the usage of college players’ names, images, and likenesses in broadcasts and video games.
The NCAA Football franchise is definitely still on the minds of some at EA Sports headquarters. As Business Insider recently pointed out, EA folded some college football gameplay into its latest installment of Madden NFL—Madden 20—but safely included it in a pre-set, scripted mode (QB1: Face of the Franchise) which does not allow for player customization.
It seems unlikely that EA Sports would spite the NCAA and bring back some iteration of NCAA Football with only California schools. After all, EA jeopardizing its relationship with the NCAA could complicate future efforts to re-introduce NCAA Football in full if the legal landscape settles in such a way that creates the conditions necessary for the franchise’s return. Further, given the opposition to the California law from “[t]he University of California system, California State University schools, Stanford and USC[,]” it would be quite a reversal for the schools to come together and make their own deal with EA Sports for a video game, independent of their governing body.
The possibility of NCAA Football returning is sure to excite football fans and sports gamers (this author included). However, given the uncertain legal future of compensation in college athletics, it remains too early to tell if the once-prominent video game franchise will be making its way back to the shelves of local game stores anytime soon. If profit is any incentive, however, there certainly appears to be a deal waiting to be struck here.
Image: Photo a day project: December 2005, Jenny Lee Silver, CC BY-NC 2.0
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
by JSEL | Sep 18, 2019 | Highlight
August was dominated by reports that Spider-Man would be leaving the Marvel Cinematic Universe following an impressive theatrical run of the newest movie “Spider-Man: Far From Home.” Spider-Man’s possible departure is due to Disney and Sony failing to reach an agreement on funding and revenue sharing for future Spider-Man films. The very concept of this kind of split raises wider questions regarding intellectual property law and the future of the entertainment industry.
Fictional characters are often protected by copyright laws. An author’s copyright over a character provides them with the exclusive right to use, adapt, or market the character as they see fit. Because the rights are exclusive, no one can use the character unless they are given explicit permission from the author. However, permission is not all or nothing, and authors can place conditions on how the character is used and how long the permission lasts. This kind of permission is referred to as a license and is what Marvel originally sold to Sony in 1999. At that time, Marvel sold Sony Pictures an exclusive license to make Spider-Man movies. Because the license was exclusive, Marvel lost the right to produce its own Spider-Man movies. Marvel had previously granted merchandise rights to Sony in 1995. Because of the agreement, Marvel received 5% box office revenue of Sony-produced Spider-Man pictures while Sony was entitled to 5% gross of all Marvel merchandise sales.
Sony’s Spider-Man license came with numerous conditions, including one stating that it would lose the license unless it releases a new Spider-Man movie every 5.75 years. Over the course of the last several years, Marvel and Sony have renegotiated the terms and conditions of the film license on numerous occasions. In 2015, Sony hit a snag and struggled to produce commercially successful Spider-Man movies. Marvel, which had been recently acquired by Disney, gained considerable bargaining power and negotiated a new deal. In this deal, Marvel would assist Sony in production of Spider-Man movies in exchange for 5% gross revenue and the right to use Spider-Man in Marvel produced movies (MCU), while Sony would retain creative control, marketing and distribution. Marvel was also able to re-acquire all merchandising rights, generating an estimated $200 million per year.
This resulting deal is a shared license agreement. A 2011 amendment made to the license agreement between Sony and Disney lays down the groundwork for what the deal entailed for Sony and Marvel. The leaked documents reveal a series of conditions that limit how Sony can depict Spider-Man, including requiring that the character be a heterosexual male and abstain from sexual relations before the age of 16. The leaked documents also provide a precise account of exactly which characters are covered by the license — including a test that could be used to determine whether future characters would be covered. Those terms provide some insight into how Sony and Disney approached the character-sharing question and accounted for the possibility that Spider-Man would join the MCU for just a limited time. The agreement states that Sony “holds exclusive film rights to all characters in the Spider-Man universe,” and refers to an explicit list of characters covered by the agreement. This list includes 627 covered characters (Black Cat/Felicia Hardy, Mysterio, Electro, etc.), 70 “Teams/Groups/Gangs” (The Sinister Six), 544 “Supporting Characters” (Uncle Ben, etc.), and 82 businesses (Oscorp, etc.).
Finally, the agreement contains provisions that apply to new characters, which are defined as “characters first appearing” after the agreement becomes effective. The agreement states that Sony has the rights to any new character who first appears in a work with “Spider,” “Spider-Man,” “Peter Parker,” or another Sony-exclusive character in its main title, and to new characters who shoot webs, have “Spider” in their name, or have a spider or spider web on their costume. While the specific terms of the leaked draft agreement are five years old and may not have ended up in the final agreement, it nevertheless provides a high-level understanding of how Marvel and Sony approached the license negotiations. It is clear that both studios had a plan for what they would do if their Spider-Man-sharing agreement broke down.
This shared license agreement initially seemed like a win-win: both companies would enjoy increased revenue at the box office in their respective productions through the shared-use of characters. However, in 2019, renegotiations collapsed and the exclusive film rights to Spider-Man reverted to Sony with Sony Pictures CEO stating that the “door on any potential deal is closed for now.” This may signal a permanent divorce between Sony and Disney.
Naz Khan is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current LLM Candidate at Durham University.
Image: Miles Morales Spider Man, Pat Loika, CC BY 2.0.
by JSEL | Jun 15, 2019 | Interviews
In the first part of a series of interviews with international soccer agent, Erkut Sögüt, we sat down to learn more about his background, his work, and how he sees the world of soccer evolving in the near future. Erkut, who has his PhD in sports law from Universität Osnabrück, is the director of his own agency (“Family and Football”), through which he represents many star Premier League players, including Arsenal midfielder Mesut Özil, Manchester City midfielder Ilkay Gundogan, Arsenal defender Shkodran Mustafi, and others. Whilst acting as the agent of Özil, he has dealt with all matters between the player and his club, including contract negotiations, commercial deals with Adidas, Mercedes-Benz and Beats, and the founding of the Özil Charitable Foundation. Dr. Sögüt has lectured at UCFB and FBA programmes as well as at Harvard University, and is fluent in German, Turkish, Spanish, and English.
The interview was conducted by Daniel Alford ’20 (Executive Editor, Online Sports Content) and Madison Martin ’21 (Online Content Chair, Sports), from the Harvard Journal of Sports and Entertainment Law. It has been edited for clarity.
Daniel Alford, Journal on Sports & Entertainment Law (JSEL): Hi Erkut, nice to meet you. Could you speak a bit about your background and how you got to where you are, especially in the sports industry and with Mesut?
Erkut Sogut (ES): Thanks, Dan! So, my story is I grew up in Hannover, Germany to Turkish parents who both had an amazing work ethic and wanted myself and siblings to achieve as much as we could. I was pushed to become a doctor or lawyer by my father, and eventually pursued a career in sports law. I’m currently based in London, and act as the agent and business partner of footballers (soccer players) such as Mesut Ozil. Besides football, I’m also a registered basketball and hockey agent too. It’s been an amazing journey thus far and feel that it is just the start!
The answer to this may actually surprise you, as I initially came into contact with Mesut through teaching! At the time, I was a lecturer (mainly in Germany and Turkey), teaching the regulations for being an agent. Lots of agents are actually the family members of players and many came to my seminars. Mesut’s father got in touch with me about assisting him and his team in Germany, and from there I became the lawyer of Mesut’s marketing company. As time progressed, I got closer with Mesut and it eventually led me to become his full-time agent! It’s amazing that it has now gone full circle! Having founded Football Agent Education a couple of years ago, I’ve been fortunate enough to go to some amazing universities across the world and teach the next generation of agents, as well as detail all of my experiences in my book!
JSEL: That’s so interesting to hear. Do you represent other athletes and how has that been?
ES: Yes – so the agency we founded is called Family & Football. Besides Mesut, we represent other English Premier League players including Mesut’s teammate, Skhodran Mustafi. In addition, we have Kieran Gibbs and Lucas Perez on our roster. Our mentality has always been simple: we’d rather have only a few high-profile clients and do everything we can to represent them as best as possible, on and off the pitch. That’s how we operate. Right now, we’re also starting to work with some really promising youth players in Europe, who we believe can reach a really top level too.
JSEL: And could you take us through your day-to-day? What is a day in the life of Erkut Sogut like?
ES: Every day is different, and that’s what makes this job so exciting. There’s no such thing as a typical day, but I’ve tried to make a routine for myself as much as possible. I wake up at about 5:00 and either start by reading contracts, sending and responding to messages, or anything else that needs to be done. This time of the morning is great, as few people are awake, and I feel I can really concentrate. As soon as I do arrive in the office, I normally have a meeting with my team to update each other on the latest, and make sure we keep on top of all the projects that we’re currently running. From there, the day may entail a number of different things. Whether it be sitting down with a club, a sponsor, other agents, visiting a client’s house, or flying abroad for meetings, anything can happen!
Even on the weekend the job doesn’t stop – in fact it’s sometimes busier! At Mesut’s box in the Emirates we have fifteen seats, and we often host important guests from abroad. Part of what I do is looking after them – meeting them in the days leading up to and after the game, as well as entertaining them during the match. Usually after the match ends I go downstairs to speak with Mesut. Every game, we have at least five seats reserved in our box for kids from local London charities, and we also of course take them after the game to meet Mesut. For me this is the most fulfilling thing I do.
JSEL: Wow, sounds very busy. What is, then, the most rewarding aspect of your job?
ES: As I mentioned before, the charity work we do with Mesut is incredibly rewarding for both of us. Not only is it rewarding, but I see it as one of the most important things I do. Aside from this, I’m fortunate to work with a great group of players, and as such have had lots of memories. In January 2018 we secured the biggest Premier League contract in history for Mesut and was obviously something really special and a moment to be proud of. Negotiating transfers and contracts always have their thrills – it’s hard work yet gives you this incredibly satisfying buzz. But at the same time, I still have this passion for teaching and education. As I said before, I deliver football agent seminars in London and guest-lectures globally, and the fact that people come from all over the world to see me speak is a truly irreplaceable feeling. Spreading knowledge, experience and advice is a true privilege for me. Likewise, when I see people have ordered our book from Australia, or Asia, or the US, it’s special.
JSEL: It is great to see such a rewarding return on your hard work. I must then ask, what keeps you up at night?
ES: What keeps me up at night? My son Emre! He’s nearly two years old, and incredibly full of energy! It’s funny because in the garden I even got artificial grass and a goal, so I’m training my son! I’m trying hard to make him a left-footed player, but he still shoots with his right.
JSEL: Perhaps the next Messi? Speaking of which, how do you see the industry in the next ten years developing?
ES: The issue with football agency lies in its registration process. The rules to become an official agent are so relaxed and the procedure is extremely simple. Of course, initially this may seem like a good thing – it means that people can be an agent tomorrow if they wanted to! However, this is the main problem. You have people that are unqualified and don’t know how the industry works suddenly being able to represent a player. A lot of the time as an agent you can be dealing with players that are in their early twenties, or even teenagers. If you have people going to these young players saying that they are capable of representing them, but in truth only became a registered agent the day before, then the problems are obvious to see. Suddenly, lots of players are poorly represented by people with no experience or who operate immorally. In very few professions is this wide-scale lack of regulation present. I’m actually part of FIFA’s football agent commission, and one of the things we’re trying to tackle is exactly this. Whether it be the re-introduction of an exam for agents, or just more rigorous rules, it’s obvious something has to be done.
JSEL: That makes sense. How about yourself and your future?
ES: Actually, I see myself in the US! Not only has it always been a dream to move to America, but given how quickly the game is growing here it makes business sense for me too! The structure and the team we have created in London is really fantastic. We are like a family. Replicating this same setup in America is something that I really want to do, and perhaps even venture into other sports such as basketball. Also, I definitely feel that I want to do more on the educational side. As I said, it’s my passion, and teaching in perhaps more of a full-time role is something that is certainly a potential priority.
JSEL: That would be truly wonderful. We see the game growing exponentially here. Do you see any room for growth in the EPL here stateside? How about MLS?
ES: Obviously, it is tricky with the time difference (especially on the West Coast) but given how the English Premier League is going from strength to strength I think that viewership of soccer will only rise as the sport in general grows in North America. There’s a huge amount of talent right now in England, and with six of the best teams in the world playing in the Premiership, it’s at its height of entertainment.
I believe that the MLS has incredible potential. US soccer is growing incredibly quickly, and events like the 2026 World Cup will only boost the league. Like all American sports, the MLS is run really well, and all the regulations serve to help and grow the clubs. In the past the US has been seen as an almost retirement league for top players, but I feel that the MLS is becoming much more than this. It’s producing amazing young talent of its own, and I am confident that it has the potential of becoming a top-tier league in the coming years
