Business Regulation – Page 10 – Marquette University Law School Faculty Blog

Adding Context to the Fantex Public Offering

Post author:Christopher Flowers
Post published:November 18, 2013
Post category:Business Regulation Popular Culture & Law Public Sports & Law

Part 1 of 3: Legitimate or Emotional Investment?

During the NFL season, millions of fans are emotionally invested in their favorite teams and players. But since Fantex, Inc. filed a preliminary prospectus with the SEC on October 17, the notion of financially investing in professional athletes has generated considerable buzz. After letting the dust settle, a careful reading of the company’s prospectus reveals numerous red-flags regarding this IPO – most notably to potential investors.

At first glance, Fantex’s strategy to raise capital appears pretty straightforward. The company will raise $10 million by selling ten-dollar shares to the general public. Fantex also entered into a “brand contract” with Houston Texan’s running back Arian Foster. Under the terms of this contract, Fantex will make a one-time, $10 million payment to Foster in exchange for 20% of his future earnings. The company expects to enter into similar brand contracts in the future with not only athletes, but also entertainers and other high-profile individuals. If Fantex’s efforts are successful, it will issue dividends to investors. Therefore, the more shares that are purchased, the more dividends investors can expect to receive – right?

As with most IPOs, nothing is ever quite so clear. The details in the prospectus reveal that Fantex lacks any clear business model. More importantly, there is no clear plan for generating a return for investors. Based on the prospectus, it is safe to conclude that any reasonable investor would not purchase shares under this IPO. However, this offering is perfect for those investors who do not actually intend to make any profit.

Ice Gets Iced

Post author:Michael M. O'Hear
Post published:August 14, 2012
Post category:Business Regulation Criminal Law & Process Federal Criminal Law & Process Federal Sentencing Public U.S. Supreme Court

Earlier this summer, in Southern Union Co. v. United States (No. 11-94), the Supreme Court seemed to reverse course yet again in its on-and-off revolution in the area of jury-trial rights at sentencing. The revolution began with Apprendi v. New Jersey (2000), which held that a jury, and not a judge, must find the facts that increase a statutory maximum prison term. The revolution seemed over two years later, when the Court decided in Harris v. United States that no jury was required for mandatory minimum sentences. But, another two years after that, in Blakely v. Washington, the revolution was back on, with the Court extending Apprendi rights to sentencing guidelines. Blakelywas especially notable for its hard-nosed formalism: Apprendi was said to have created a bright-line rule firmly grounded in the framers’ reverence for the jury; we are not in the business, declared Justice Scalia for the Blakely majority, of carving out exceptions to such clear rules in the interest of efficiency or other contemporary policy concerns.

Then came Oregon v. Ice in 2009, which seemed to signal that the Court had again grown weary of the revolution.

The Interstate Commerce Act: A Final Convocation

Post author:Joseph D. Kearney
Post published:August 13, 2012
Post category:Business Regulation Legal History Public

Earlier this year I observed the 125th anniversary of the Interstate Commerce Act, among the most important statutes that Congress has ever enacted. I allowed that a future issue of the Marquette Law Review would publish essays by a number of leading scholars concerning the Act and its legacy. With the summer issue of the Marquette Law Review now out, that future is now.

The remembrance is titled “125 Years Since the Interstate Commerce Act: A Symposium in the Form of a Final Convocation.” As I explain in my Foreword (“The Last Assembly of Interstate Commerce Act Lawyers”), the essays, collectively available at the link at the beginning of this paragraph, are by an impressive collection of scholars:

James W. Ely, Jr., the emeritus Milton R. Underwood Professor of Law and emeritus Professor of History at Vanderbilt University, recalls “The Troubled Beginning of the Interstate Commerce Act”;
Randal C. Picker, the Paul and Theo Leffmann Professor of Commercial Law at the University of Chicago Law School, writes of the interplay between the Act and the antitrust law enacted only three years later, in “The Interstate Commerce Act and the Sherman Act: Playing Railroad Tycoon”;
Thomas W. Merrill, who is Columbia University’s Charles Evans Hughes Professor of Law, discusses the unusual phenomenon of administered contracts in the Act’s regulatory scheme, suggesting that the form of regulation was more impressive than the fact (in “The Interstate Commerce Act, Administered Contracts, and the Illusion of Comprehensive Regulation”);
Paul Stephen Dempsey, Tomlinson Professor of Global Governance in Air & Space Law and Director of the Institute of Air & Space Law at McGill University, focuses on the ICC as an agency, taking us broadly from its creation to its demise, in “The Rise and Fall of the Interstate Commerce Commission: The Tortuous Path from Regulation to Deregulation of America’s Infrastructure”;
Richard D. Cudahy, Senior Judge of the U.S. Court of Appeals for the Seventh Circuit (whose scholarly and judicial career was recently celebrated by the Yale Journal on Regulation, but no link is available), points us to the future, sketching the possible relevance of the Interstate Commerce Act’s paradigm for modern debates over regulation (“The Interstate Commerce Act as a Model of Regulation”); and
James B. Speta, Professor of Law at Northwestern University (and my fellow editor of this symposium), concludes the project with a critical assessment of the Act’s pertinence in an area—namely, telecommunications—with almost as much importance to the twenty-first century as the railroads (which the Act was passed to control) possessed in the nineteenth: “Supervising Discrimination: Reflections of the Interstate Commerce Act in the Broadband Debate.”

Most of these essays are short, and each is an engaging assessment of an act whose legacy can be felt today, not only in the general fact of the administrative state whose creation began with the Interstate Commerce Act but also in specific debates (as Prof. Speta demonstrates) about regulation today. We invite you to read the essays.