An Alternative Arena Approach: Arsenal and Emirates Stadium

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ArsenalRecently, Wisconsin governor Scott Walker approved an Assembly bill earmarking $250 million for the Milwaukee Bucks to use in financing their new downtown arena.

Since I was at the tail end of my London study abroad program at the time of the approval, it was interesting hearing a different perspective on the approach to arena building.

Over in the United Kingdom, it’s quite rare for the government to intervene (outside of the 2012 Olympics bid) in stadium deals.

I think back to the team I support as the ultimate in alternative model—Arsenal Football Club.

The Gunners were based in the Highbury, a 38,000-seat stadium that had existed since the 1920s. By the turn of the 21st Century, it was apparent to manager Arsene Wenger and the Arsenal board that to compete in England and Europe consistently, a new revenue stream was needed. This was before the staggering media rights deals for the Premier League started increasing at an astronomical rate.

Continue reading “An Alternative Arena Approach: Arsenal and Emirates Stadium”

Crowdfunding and Sport: How Soon Until the Fans Own the Franchise?

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Jamaika-BobThe latest issue of the Marquette Sports Law Review is now available online.  This is a faculty symposium issue.  I am proud to have my article, “Crowdfunding and Sport: How Soon Until the Fans Own the Franchise?,” included in this issue.  Here is the introduction.

The Green Bay Packers football team operates as a nonprofit corporation that has been publicly-owned since 1923.  Since that time, the franchise has raised capital by selling shares of stock in five different stock offerings, and there are currently over 350,000 individual members of the public who are shareholders of the team.  These shareholders are the joint owners of a sports franchise that is currently valued at $1.375 billion.

The public ownership of the Green Bay Packers is often noted in the media, and it is generally praised for contributing to the team’s strong tie to the surrounding community.  However, it is highly unlikely that any other N.F.L. team will follow in Green Bay’s footsteps.  Public ownership of franchises is actually prohibited under the current N.F.L. Constitution, and Green Bay’s ownership structure persists solely because of a grandfather clause that excludes the Packers from the prohibition.  Moreover, the unique nature of the Packer’s public ownership structure extends beyond the boundaries of the N.F.L.  The Green Bay Packers are currently the only wholly publicly owned franchise among all of the four major sports leagues (football, baseball, basketball and hockey) in the United States.

There is no reason why publicly owned professional sports teams cannot thrive and succeed at the same level as privately owned teams.  While public ownership of professional sports teams is relatively rare in the United States, it is common overseas.  Notable examples of publicly owned soccer teams are Real Madrid and Barcelona FC, both of which play in Spain’s Liga Nacional de Fútbol Profesional, commonly known as “La Liga.”  These teams are operated as “socios,” a form of nonprofit organization where fans of the club pay an annual membership fee for the right to buy season tickets in a special section of the stadium and the right to vote on certain management decisions.  Another team that plays in La Liga, Real Oviedo FC, has maintained consistent and significant numbers of public owners despite the relative disadvantage of being based in the region of Asturias, far from Spain’s major population centers.

It is not just that the United States lacks more than one example of a major league team that is wholly owned by the public.  It is also uncommon for American major league sports teams to have a minority ownership stake comprised of public shareholders.  In recent decades, the private owners of several major league franchises have experimented with establishing and maintaining a publicly owned minority stake, seeking to inject additional capital into their team whilst still maintaining control over the enterprise.  However, in each instance the private ownership group used a stock offering in order to create a minority interest, only to subsequently abandon the structure and negotiate the sale of the entire team to new owners.  For example, the Cleveland Indians baseball team held a public offering of shares in 1998 but went wholly private again in 1999.  The Boston Celtics basketball team had a longer run with minority public shareholders, holding a public stock offering in 1986 but eventually reverting to wholly private ownership in 2002.

Today the ownership of major league sports teams in the United States remains almost exclusively the province of large corporations, wealthy individuals or ownership groups comprised of these same two actors. Continue reading “Crowdfunding and Sport: How Soon Until the Fans Own the Franchise?”

Michael Sam and the NFL Locker Room: How Masculinities Theory Explains How We View Gay Athletes

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footballLast year, Michael Sam became the first openly gay player in the National Football League. Sam was drafted by the St. Louis Rams in the seventh and final round of the draft. He survived the initial round of pre-season cuts with the team, but was let go when the team had to make a 53-player roster. He was picked up by the Dallas Cowboys and played on the team’s practice squad. After seven weeks with the Cowboys, Sam was released and remained unsigned the rest of the season.

Sam’s coming out and his subsequent drafting and playing in the NFL caused quite a stir. According to one Sports Illustrated article, one NFL player personnel assistant said, “I don’t think football is ready for [an openly gay player] just yet.”

But why? Continue reading “Michael Sam and the NFL Locker Room: How Masculinities Theory Explains How We View Gay Athletes”

Unpredictable March Madness and the Law

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This past weekend sixty-four teams played a total of fifty-two basketball games. Games are broadcast over four different television networks, and tens of millions of eyes remain glued to T.V. sets across the country — soaking up each buzzer-beating shot and Cinderella story. Just as unpredictable as the outcome of each tournament game is the result of a case pending against the NCAA, the entity that profits enormously from the nation’s fixation with March Madness.

O’Bannon v. National Collegiate Athletic Association (NCAA), an antitrust class-action lawsuit, seeks to require the NCAA, and other enterprises who benefit from college-athletes’ images and popularity, to pay the players. This potential change in rules could shift these basketball and football stars from amateur to professional athletes. This change would significantly alter the landscape of collegiate sports.

Ed O’Bannon, a former UCLA basketball star, along with other former college athletes, filed suit in July 2009. The original defendants included the NCAA, the Collegiate Licensing Company, and Electronic Arts (best known for EA Sports). The latter two settled for $40 million. Last August, federal judge Claudia Wilken ruled in favor of the players, holding that not paying athletes for the commercial use of their likeness and image was a violation of antitrust laws. The NCAA’s appeal is being heard this month by the Ninth U.S. Circuit Court of Appeals.

This is a divisive issue that has passionate proponents on both sides. There are people in favor of paying college athletes and many that are opposed. In either case, one thing is certain: this March, there is much more than tournament brackets on the line.

What Is the NBA?

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basketballProfessor Nadelle Grossman has another forthcoming publication, “What Is the NBA?”, written for the faculty symposium issue of the Marquette Sports Law Review.  The abstract is below, and you can access the full article at SSRN:

The NBA’s organizational structure is curious.  While courts at times refer to the NBA as a joint venture and at other times as a single entity, their analyses are conducted not for state organization law purposes but to assess the NBA’s compliance with federal antitrust law.  Commentators, too, consistently address the NBA’s organizational structure only under antitrust law and not state organization law. As I argue, given the different purposes of these two legal regimes — antitrust law to protect consumers through preserving competition, and state organization law to ensure managers are faithful to the business purpose and to create a default structure among owners and managers — conclusions about the NBA’s organizational structure for purposes of compliance with antitrust law does not control the analysis of the NBA’s structure for purposes of state organization law.

To fill the gap in case law and commentary, this article analyzes the NBA’s organizational form under state organization law.  This analysis is important because the NBA’s organizational form impacts the rights and duties of the member team-owners of the NBA.  If, for example, the NBA is a joint venture partnership under state organization law — that is, an association of team owners who have come together to pursue a limited scope business for profit — then by default, its members would owe fiduciary duties to the other members and any member could seek judicial expulsion of a recalcitrant member.

The NBA, Television Broadcasting Rights, and Collective Bargaining

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Television broadcasting rights in professional sports are a huge chunk of the revenue equation for professional leagues, and it isn’t very hard to see how that is the case. For example, the current NBA TV deal is worth about $930 million annually. In 2016, this deal is set to expire and current reports indicate that an extension is in the works that will pay the NBA over $2 billon annually for the rights to broadcast games on Turner and ESPN networks. When this deal comes to fruition, the revenue generated by the TV deal will dwarf the money coming in from any other source.

While the value of the NBA’s television broadcasting rights are staggering, the most interesting aspect of the new deal is how it will affect the collective bargaining process. In 2011, the NBA suffered through a lockout where owners claimed to be losing hundred of millions of dollars each year. For this reason, the owners argued, the player’s cut of the revenue needed to be scaled back. By the time the lockout ended, the owners had modest success in achieving this particular goal, pinning the player’s share of basketball related income back to between 49% and 51%. The previous basketball related income split was approximately 57–43% in favor of the players.

With the television revenue doubling by 2016, the owners will not have a leg to stand on if they again try to argue that teams are losing money. Considering the amount of money set to be on the table, the players are likely to fight for a bigger chunk. And if the owners aren’t reasonable about it, the league could be looking at another lockout.

Packers CEO Wants to Enhance “Fan Experience” at Lambeau

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The Green Bay Packers have sold out every home game since the Fourteenth Century, right? Nothing to worry about when it comes to attracting fans and providing them a good experience, right?
Not right if you’re Mark Murphy. In an “On the Issues with Mike Gousha” program at Eckstein Hall on Tuesday, the president and CEO of the Packers described in detail the team’s efforts to improve the “fan experience” and to make Lambeau Field a year-round destination for events and experiences that extend well beyond game days.

Murphy told a capacity audience in the Appellate Courtroom that, as much as Lambeau is revered as a football shrine, until the large-scale renovation of the stadium in 2003, it was used for 10 games or so each year and not for much else. He called the decision to add a large atrium which includes the Packer Pro Shop and areas for eating and drinking “a brilliant decision” that opened the way to making Lambeau a year-round facility. “It completely changed the organization and particularly Lambeau Field,” Murphy said.

Murphy joined the team in 2008 and is overseeing several hundred million dollars in continuing expansion and improvements to Lambeau, including the addition of 7,000 seats, a new sound system, two HD video boards, and a large gate at the north end of the stadium. Continue reading “Packers CEO Wants to Enhance “Fan Experience” at Lambeau”

Common Sense Could Have Saved NFL from Domestic Abuse Furor

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Ray Rice. Adrian Peterson. These names used to cause fans to wax poetic about on-field performances the previous Sunday or potential blockbuster fantasy football trades. Now, mentioning them conjures up nothing but negativity.

The recent revelation of domestic violence issues in the National Football League has given the league something serious to think about. Once the beacon of how profitable and well-run a professional sports league can be, the NFL is now operating under a cloud shrouded in darkness. The league’s actions, or lack thereof, are coming under fire, and rightfully so. It is impossible to predict exactly what the investigation being headed by former FBI Director Robert Mueller will reveal, but it is likely that it will reveal missteps on the part of the NFL in handling the domestic violence issue.

What further inflames the matter is that domestic violence involving NFL players is not a new controversy, yet a specific policy is just now being put forth. According to a database compiled by USA Today, domestic violence issues account for 85 of the 713 total NFL player arrests since 2000. A CNN story also recounted past NFL handling of domestic abuse episodes. Knowing this, it is bewildering that the Ray Rice situation was the catalyst for implementing a league-wide policy. Continue reading “Common Sense Could Have Saved NFL from Domestic Abuse Furor”

Brutality Touches Down at Home

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imagesVR6YYD65Anyone living in the United States who has watched TV in the last two weeks is undoubtedly aware that the NFL is in the midst of a storm of bad publicity. First, we saw the chilling videotape of Baltimore Ravens running back Ray Rice delivering a punch to the head that knocked out his then-fiancée (now wife) Janay Palmer, and then roughly dragging her off the elevator and dropping her like a sack of potatoes on the floor. Only days later, the Minnesota Vikings found themselves in the midst of a similar scandal when their star running back Adrian Peterson was charged with felony child abuse in Texas, where it is alleged he beat his 4-year-old son with a “switch.” Perhaps learning from the debacle that ensued when NFL Commissioner Roger Goodell originally imposed a meagre two-game suspension on Rice for his misdeeds, the Minnesota Vikings have suspended Peterson from games and team activities indefinitely, although since he continues to draw his $11 million dollar salary, he is hardly a sympathetic character at the moment. Meanwhile, the incidents involving NFL player violence against their partners and children keep surfacing.

A lot has already been said and written about these cases, and much of the discussion is thoughtful and educational. Numerous commenters, including New York Times columnist Michael Powell, have pointed out that we should not be so shocked that players who are rewarded for brutality on the football field revert to violent behavior at home. He makes an excellent point. After all, the NFL is not the only place where people who use force, sometimes brutal force, in their jobs have a hard time turning it off at home: the military and various police forces have faced similar issues. Moreover, we live in a society with a high tolerance for violence, at least violence of a recreational sort—as evidenced by numerous TV shows, video games and movies. Continue reading “Brutality Touches Down at Home”

Time for Changes in the Policies of Major League Soccer

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soccerMajor League Soccer (MLS) is the top-flight soccer league in the United States. Unlike professional soccer leagues in other nations, MLS does not use a federation model. In a federation model, a governing association controls each level of the sport, from the amateur ranks that play on Saturday afternoons to the highly paid professionals. In this structure, any team is theoretically capable of reaching the highest level of the pyramid because teams are promoted and relegated up and down the ranks at the end of each season. Instead, the structure of MLS is more akin to other American leagues: private associations in which the owners dictate operation in strictly professional ranks.

Like the other American sports leagues, MLS has largely seen its structure challenged under antitrust law. In Fraser v. Major League Soccer, 284 F.3d 47, 61 (2002), a group of players argued MLS teams’ agreement not to compete for player services was in violation of the Sherman Act. The First Circuit Court of Appeals disagreed because the appellants failed to make the requisite relevant market showing. Id. at 69. Further, the district court’s finding that MLS was a single entity for antitrust purposes was not reversed because the court did not need to decide the issue. Id. at 56.

Within the typical American league structure, the single entity antitrust exemption has not been widely adopted because teams do compete against one another for the services of players, fans, etc. While Fraser leaves the door open for further discussion of MLS and the single entity exemption, recent developments in MLS have revealed a window for claims under the law of private associations. While the remedies are not as lucrative as the treble damages in antitrust cases, the law of private associations could require the league to change its practices. Continue reading “Time for Changes in the Policies of Major League Soccer”

Is it Time to Bring Back the Marquette Law School Baseball Team?

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Vintage BaseballEvery now and then the debate over whether or not Marquette should re-establish its varsity football team gets revived. Once a respected participant in the highest level of college football, Marquette unceremoniously dropped football in 1960. (See also here.)

In spite of its long tradition in sports law, it is a not well known fact that our law school once had its own baseball team. In his The Rise of Milwaukee Baseball: The Cream City from Midwestern Outpost to the Major Leagues, 1859-1901 (p. 324), Milwaukee historian Dennis Pajot notes that in 1895, a team called The Milwaukee Law Class competed with the city’s other amateur teams.

The Milwaukee Law Class, organized by the city’s law students in 1892, was Milwaukee’s first law school. In the mid-1890’s, its name was changed to the Milwaukee Law School, and in 1908, it was acquired by Marquette University. This is why the law school celebrated its centennial in 1992. (A second centennial celebration in 2008 marked the 100th anniversary of Marquette’s acquisition of the Milwaukee Law Class/School.) Continue reading “Is it Time to Bring Back the Marquette Law School Baseball Team?”

Remembering the 1964 All-Star Game

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johnny callison cardLast week’s Major League All-Star Game was pretty entertaining, as All-Star games go. The game was reasonably close throughout, and the outcome was never entirely certain until the final out was made. Even though the American League jumped off to a 3-0 lead in the first inning, by the middle of the 4th inning, the game was tied at 3-3. The AL went back up 5-3 in the bottom of the 5th inning, before the offense disappeared on both sides. Neither team scored after that point, and together they combined for only two hits and two walks.

The 2014 game also ended a string of somewhat one-sided games. In 2011 and 2012, the NL prevailed by margins of 5-1 and 8-0, while last year the American League shut out a hapless NL squad by a 3-0 margin.

Submerged in the discussion of the game were occasional references to the 1964 All-Star Game of fifty years ago. That game, one of the most exciting All-Star games of all time, was played on July 7, 1964, in recently opened Shea Stadium, the new home of the hapless New York Mets. Continue reading “Remembering the 1964 All-Star Game”