Thursday, December 19, 2013

Is "Instant Racing" Coming To NJ?

On December 9, the Senate State Government, Wagering, Tourism & Historic Preservation Committee advanced S2935, a bill that would authorize "instant racing" to be offered at New Jersey racetracks, OTWs, and casino simulcast rooms. 

Instant racing is a form of horse race wagering offered only at wagering terminals.  The customer is offered a screen with horse numbers and past performance data, and the option to make traditional horse race bets.  The race itself is a randomly selected, recorded race, often from many years ago.  Because the track, date, and horse names are not identified, and the race is selected at random, it would be extremely difficult to identify the actual race so as to enable the customer to have the advantage of knowing the result.Instant racing is viewed as a way to offer racetrack patrons another form of wagering during the relatively lengthy periods between races.  Typically, at New Jersey's racetracks, races take place approximately every 20-30 minutes.  Moreover, the fact that instant racing uses a terminal that often looks similar to a slot machine might be more appealing to customers who prefer to use higher technology devices.One important issue was discussed during the committee hearing on December 9 - namely, the constitutionality of instant racing.  Currently, the New Jersey Constitution permits wagering only on live horse races and on simulcast horse races.  Instant wagering is arguably neither of those, and in light of how the courts generally strictly construe New Jersey's constitutional language and statutes authorizing gambling, instant wagering might be vulnerable to a challenge.  The solution discussed by the committee was to place instant wagering under the auspices of the Atlantic City casinos through the intrastate internet wagering protocols currently in place, thus deeming all wagers placed in and through an Atlantic City casino, avoiding constitutional implications.There are still a number of legislative steps for this bill to get through before becoming law, but it certainly appears that New Jersey continues to look for ways to be at the technological forefront in the gaming industry.

This article was originally published by Christopher L. Soriano, on the Duane Morris LLP Blog. You can view the original by clicking here

NFL, Retired Players Reach $42M Deal Over Publicity Rights

Former professional football players reached a $42 million agreement with the National Football League over use of their publicity rights, with a Minnesota judge signing off on the deal.

The settlement faced vociferous objections from a handful of class members, who argued that not a single athlete would see a guaranteed dime from the millions. U.S. District Court Judge Paul A. Magnuson had harsh words for the objectors in his order, calling them out for their "baser instincts, namely the lure of what their attorneys promise is lucrative financial payouts from the NFL."

The roughly 25,000 class members alleged that the NFL illegally used the likenesses of former players, particularly in NFL Films productions. Pursuant to the settlement, the NFL will create a $42 million Common Good Fund for the benefit of all retired professional players, with some money set aside to establish a licensing agency for the former players. When the licensing agency strikes a deal with an entity, 75 percent of the fees generated will be paid directly to the players whose rights were licensed, with the remaining 25 percent being paid to the Common Good Fund for the benefit of the class as a whole.

"The vast majority of class members see the settlement at issue here for what it is: a boon to those thousands upon thousands of former NFL players who can now reap the collective benefit of a large financial payout to a fund organized solely for their benefit, overseen by their comrades-in-arms," the court said. "That former players will also finally have an avenue to pursue commercial interests in their own images and in their images as part of their former teams, for the first time in conjunction with the NFL's copyrights and trademarks, is icing on the cake for those players and indeed for all former players."

Judge Magnuson found the settlement "fair, reasonable, and adequate" in large part because the chances that the lawsuit "will succeed are slim at best." Further litigation would be both complex and extraordinarily expensive, the court said, and the plaintiffs" case faced serious obstacles from the statute of limitations (at best, six years, which would eliminate a majority of the class) to the choice of law analysis.

With the "law" of more than 20 states referenced in the class's amended complaint – some of which contains law on the right of publicity, while others do not – a serious conflict between applicable state laws weighs heavily against the ultimate certification of the class, the judge explained. Damages for the tens of thousands of class members pose a similar problem, with just a handful of players entitled to substantial amounts and a review of each player's contract required. Football is a team sport, Judge Magnuson added, making valuation of publicity rights damages "a Herculean task."

"Each individual appearing in a game clip has publicity rights in his or her image. But the value of those rights must be divided among all those appearing in some way. Would a court apportion more value to a team's quarterback, because he stands above the line of scrimmage and is more visible in any game clip? Or perhaps a player with a distinctive hairdo, such as current Pittsburgh Steeler Troy Polamalu, deserves more compensation because his image is readily identifiable?" he wrote. 

"Magnify these individual issues times 53 players on each of 32 teams' active rosters each year, and it is easy to see that determining damages on either an individual or a class-wide basis would be nearly impossible."

Alternatively, the benefits of settlement are "numerous and far-reaching," Judge Magnuson concluded.

"The settlement provides benefits to the class far beyond direct economic benefits arising out of the alleged infringement of players' publicity rights, which for the vast majority of class members could be meager, at best," the court said. The court also noted that The Common Good Fund and the licensing agency are independent of the NFL and the players' union, which will protect the rights and interests of all class members.

To read the final approval order in Dryer v. National Football League, click here

Why it matters: The court's decision demonstrates how the complexity of a class action suit ultimately impacts the value of the settlement accepted by the court in lieu of litigation.  Judge Magnuson did not mince words when evaluating the plaintiffs' suit, explaining the potentially insurmountable obstacles of the choice of law analysis and determination of damages. (In a detailed footnote, he broke down what a hypothetical retired Minnesota Vikings player might be entitled to from an NFL film about the history of the franchise, estimating that even if 200,000 DVDs of the film were sold, the potential damages for a single player were roughly $200.) Facing an expensive, protracted, complex battle against a defendant with deep pockets, the court found the $42 million to be "the best solution.”

 

Linda A. Goldstein
Partner
Manatt, Phelps & Phillips LLP
LGoldstein@manatt.com

 

This article was originally published on the Manatt internet site. You can view the original by clicking here.


Corruption in Sport: Match-Fixing in Football

In light of the recent match-fixing arrests by the National Crime Agency, we thought it would be of interest to report on a recent event we attended on the evening of 11th November at Birkbeck University at which Declan Hill, investigative journalist and author of bestselling book The Fix, discussed the themes and issues in his upcoming book, The Insider’s Guide to Match Fixing in Football. Based on the doctoral thesis of Hill at the University of Oxford, The Insider’s Guide to Match Fixing in Football is an analysis of the motivations, mechanisms and methods which pervade match-fixing. The seminar also included discussion from Franz Tabone, UEFA’s Integrity Officer for Malta, and Tony Higgins, FIFPro’s spokesperson for the ‘Don’t Fix It’ project.

There has always been corruption in sport. However, according to Hill, recently match-fixing has been going “haywire”. The sports gambling market is huge in Asia, dwarfing the combined European and North American markets, and this acts to drive the manipulation of sporting fixtures. The proliferation of sporting manipulation in Asia has been well publicised, and there are now few sports which have not been faced with fixing scandals. The focus of corruption in sport has been on Asia, and unsurprisingly so in light of the scandals there, including when such damaging and quite frankly shocking situations are allowed to arise such as former President of Indonesia’s football association, Nurdin Halid, serving two years in jail for corruption whilst remaining as President of the Football Association.

Given the widespread match-fixing problems in Asia and the perceived lack of integrity, the attentions of the betting market have turned to European football matches. Sadly, but inevitably, the fixers’ attentions have followed suit.

Europol, the European Union’s law enforcement agency, reported in February 2013 that they had conducted a major investigation into match-fixing in Europe. The investigation, the largest match-fixing investigation ever in Europe, uncovered a total of 425 match officials, club officials, players and serious criminals from more than 15 countries, suspected of being involved in attempts to fix more than 380 professional football matches[1]. The activities formed part of a sophisticated organised crime operation which generated over €8million in betting profits and over €2million in corrupt payments to those involved. Amongst the suspicious matches identified were World Cup and European Cup qualification matches, two UEFA Champions League matches and several top flight matches in European national leagues.

Such investigations illustrate how match-fixing has proliferated in top flight games in Europe. In August 2013, Turkish team Fenerbahce were excluded from European competitions for the next two years after losing an appeal to the Court of Arbitration for Sport (CAS) against a UEFA sanction for match-fixing. The President of Fenerbahce was sentenced to six years in prison for his involvement[2]. In August 2013, Lazio captain Stefano Mauri was banned for six months by the Italian football federation for his part in alleged match-fixing two Serie A games. Italy in particular has been a prime target for match fixers; the well-known ‘Calcipoli’ scandal, uncovered in May 2006, led to the stripping of Juventus of their 2005 and 2006 Serie A league titles, and relegation to the Serie B division. So far most commentators believe that the Premier League remains untarnished.

Hill’s findings

According to Hill there are two types of match-fixing: fixing that takes place to defraud betting companies; and everything else, namely match-fixing to secure sponsorship or promotion for clubs. Hill believes some clubs in Europe have adopted a business model of intentionally trying to lose a number of matches per season; the profits of losing ‘fixed’ matches can exceed the value of winning those matches.

Hill remains upbeat about the prospects for tackling match-fixing however. “I think we can win”, commented Hill, “but first we need to know how the fixers operate”. Understanding why a player would fix a match is the main question. In The Insider’s Guide to Match Fixing in Football, Hill compiled a database of players who indicated whether or not they would fix matches, recording a number of variables. One variable stood out amongst the players who would take part in match-fixing – age. When players are over the age of 30, said Hill, matches are over three times more likely to be fixed.

Hill also highlighted the fact that many players in leagues around the world are not being paid. This point is highlighted by FIFPro’s ‘Black Book’ findings, which report that 41.1% of players in Eastern Europe are not paid on time. Non-payment is particularly common in international matches, meaning these games are at a higher risk of being fixed. As Tony Higgins of FIFPro highlighted at the seminar, the proliferation of match-fixing leads to television companies focusing their attentions on leagues which are perceived to have less of a problem with corruption, such as England’s Premier League. This in turn creates funding problems for clubs, intensifying the problem of players not getting paid, and in turn, sustaining match-fixing.

Whilst Hill noted that match-fixing is not particularly prevalent in the UK, he warned that the FA should not rest on its laurels – rather prophetic; his view was that the strong culture of gambling in the UK could act as a gateway to criminality in future. Vulnerabilities in the UK are likely to emanate from the lower leagues were players are paid significantly less than their Premier League counterparts, and we saw recently that four British footballers from those leagues were charged in September of this year by the Australian authorities in relation to match-fixing allegations concerning games there.

Solutions

An international approach to combatting corruption in sport is clearly required because the criminal conduct is taking place in multiple jurisdictions. A specialist international law enforcement agency dealing with corruption in sport would be the high watermark. In an ideal world it needs to be supported by international or even EU-led legislation requiring countries to criminalise sports manipulation and then monitor enforcement. The European Council has acknowledged the problem and sanctioned an international approach – in June 2013 it authorised the European Parliament to participate on behalf of the EU in negotiations for a convention to combat the manipulation of sports results primarily focussed on judicial cooperation in criminal matters and police cooperation. The European Parliament has also called on all member states to criminalise match-fixing if they have not already done so. Match-fixing in England could be prosecuted under Chapter 19 of the Gambling Act 2005 (cheating or aiding and abetting cheating), Chapter 45 of the Criminal Law Act 1977 (conspiracy), and most recently as a result of the Bribery Act 2010 (offering or receiving a bribe), and our wide money laundering offences can capture the proceeds of such criminality if not the individuals. But perhaps a dedicated offence may be helpful.

Just as importantly, sporting associations needs to educate their member clubs and sportsmen and women about the dangers of corruption in sport and the potentially serious consequences. As Mr Hill indicated on 11 November, the UK should not rest on its laurels.

 

Antonio Suarez-Martinez
Partner
Annie Clarke
Trainee
Edwards Wildman Palmer UK LLP

 

[1]https://www.europol.europa.eu/content/results-largest-football-match-fixing-investigation-europe

[2] http://www.bbc.co.uk/sport/0/football/21135626


This article was originally published on the Edwards Wildman Palmer UK LLP Anti-Corruption and Asset Recovery Blog. You can view the original by clicking here.


Wednesday, December 11, 2013

Cycling and the False Claims Act: Lance Armstrong’s Motion to Dismiss Hearing

Cyclist Lance Armstrong argued last week in federal court to have a False Claims Act qui tam suit against him dismissed as time-barred. The lawsuit, filed in June 2010 by Armstrong’s former teammate, Floyd Landis, alleges that Armstrong, his cycling team, the team manager and others defrauded the United States Postal Service of approximately forty million dollars worth of sponsorship fees between the mid-1990s and 2004 as a result of Armstrong and the team’s use of performance enhancing drugs and practices. Armstrong was stripped of his seven Tour de France titles in August 2012 by the United States Anti-Doping Authority, and admitted to using banned substances on national television in January 2013. The United States intervened shortly thereafter in some of the claims alleged by Landis, and now seeks treble damages.

Last Monday, on November 18, 2013, the federal district court for the District of Columbia heard nearly three hours of arguments in which Armstrong asserted that the Postal Service had constructive knowledge of his doping as early as 2000, when the French racing authorities conducted an investigation and allegations of the team’s drug use were widespread. The Postal Service chose not to investigate the allegations a decade before Landis’s lawsuit, and did not investigate in the subsequent years despite continued doping allegations. According to the defense, the Postal Service turned a blind-eye and renewed Armstrong’s contract because it profited from the publicity gained by the cycling team’s success.

The government’s last sponsorship payment to Armstrong’s team was made in 2004. Based on the timing of that last payment, Armstrong argues that the False Claims Act’s six year statute of limitations expired nine days before Landis filed his claim and now prevents the suit from going forward.

The government argues, however, that it was not on notice of Armstrong’s improper conduct before 2010. The French investigation found nothing, and Armstrong and his cycling team vehemently denied doping allegations and went to extreme lengths to cover up their use of steroids and other prohibited substances. As a result, the Postal Service had no way of knowing about Armstrong’s cheating. The government further argues that professional athletes routinely are accused of doping; such allegations do not inherently warrant an investigation, particularly in this case, when Armstrong and others repeatedly assured the Postal Service and the public that the accusations were unfounded.

The presiding district court judge, Judge Robert Wilkins, indicated during Monday’s hearing that he expects to let some claims go forward and plans to issue his ruling within thirty days. 
Landis, a former teammate of Armstrong’s, previously admitted to using banned substances and was stripped of his own Tour de France title. He has been a primary source for the Anti-Doping Authority’s investigation of Armstrong. In August, in connection with a federal deferred prosecution agreement, Landis admitted to defrauding donors contributing to his defense fund when he lied about using performance enhancers. He would receive a portion of the recovery in this case if the government succeeds.

The case, United States ex rel Landis v. Tailwind Sports Corp., et al, 10-cv-00976, is pending in the District Court for the District of Columbia.

 

Kristin Graham Koehler
Partner
Amy Deline
Associate
Sidley Austin LLP
kkoehler@sidley.com
adeline@sidley.com

 

This article originally appeared on the Sidley Austin LLP False Claims Act blog, here.


On secondment at Manchester City: the Gateley experience

Solicitor in Gateley's Commercial, Technology and Media team, Rachel Cowgill, discusses in detail her experience of being on secondment at Manchester City during her training contract.

As part of my training contract I was fortunate enough to undertake a six month secondment at one of the world’s largest football clubs – Manchester City FC. From an outsider’s perspective, it’s easy to think that the business of a football club begins and ends on the pitch. While the ‘beautiful game’ is the heart of MCFC, the substantial business infrastructure underpins everything the club does. A vital part of this machine is the MCFC legal team.

During my six-month stint at the club my work spanned player transfer agreements, sponsorship and endorsement deals, employment and IT matters. While the majority of the work fell under the umbrella of ‘commercial contracts’, no two days were ever the same. Football clubs are faced with a multitude of legal and non-legal issues. While some of the issues are commonplace within businesses generally, some are football-specific.

For example, if a club seeks to enter into an agreement with a new kit sponsor, not only must the parties reach agreeable commercial terms but they must also abide by the Football Association rules regarding kit advertising. These rules dictate how often the sponsor’s name, mark or logo may appear on the shirt and shorts and in what size. If a club participates in international competitions they must also comply with the relevant regulations of FIFA, UEFA and other Confederations.

In addition, as with other Premier League clubs, MCFC must ensure that it does not fall foul of the financial fair play rules which were brought in to prevent professional football clubs spending more than they earn in the pursuit of success. Non-football specific matters – for example the protection of intellectual property and confidential information – are just as important to the club. As with any business which licences its intellectual property, it must ensure that contractual terms and strict approval processes are put in place to control the use of IP by third parties. After all, prohibited use of IP could potentially damage the valuable MCFC brand. Likewise, when sharing sensitive information, confidentiality agreements must be drawn up to ensure that such information is not leaked into the public domain.

The MCFC secondment proved to be a steep learning curve for me. As a trainee solicitor I often came across the phrase ‘commercial awareness’ and I believe my true appreciation of this term only came following my secondment. I was able to observe and be a part of the inner workings of a business. I saw first hand the work that goes on behind the scenes to ensure that players are signed, training facilities are built and fan experience is improved, and how the legal team plays an intrinsic part in helping the club achieve success. The experience I gained was invaluable and something I will never forget. 

 


Tuesday, December 10, 2013

Paying the price for speaking freely about FIFA – the Triesman libel proceedings

The Court of Appeal will soon be delivering judgment in a high-profile clash between the head of Thailand’s football federation, Dato Worawi Makudi, and Lord Triesman, the former chairman of the FA, which raises an issue of high constitutional importance.

The background is all too familiar to any supporter of English football. Between 2007 and 2010, the FA stretched every sinew to bring the 2018 FIFA World Cup to England. No English icon was left untapped. Prince William, David Beckham and Sir Bobby Charlton were paraded before the FIFA Executive Committee. The bid was even announced by Adrian Chiles. A total of around £16 million was spent. Two votes were garnered.

In May 2011, Lord Triesman sought to explain this depressing outcome in evidence given to the Culture, Media and Sport Committee of the House of Commons. During that evidence, Lord Triesman alleged that Mr Makudi, who was a member of the FIFA Executive Committee with a vote on the World Cup bids, had attempted personally to secure the broadcasting rights to a proposed fixture between Thailand and England, and that it was “hard not to think” that Mr Makudi had been “…unaware of the idea settling in my mind, or in the minds of people in this country who are responsible for the bid, that these things would be linked”.

That evidence was, in itself, protected by absolute Parliamentary privilege. Article 9 of the Bill of Rights 1689 provides that the “Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament.” This is a “provision of the highest constitutional importance” (Pepper v Hart [1993] AC 593 at 638 per Lord Browne-Wilkinson) which ensures that evidence given to Parliamentary Committees cannot result in any civil or criminal penalty.

But what if a person repeats statements made in Parliament, or expressly relies upon such statements, in a situation which is not protected by absolute privilege? After Lord Triesman’s evidence to the Select Committee, the FA set up an inquiry. Lord Triesman tried to be careful not to add to his Parliamentary evidence. But he did repeatedly say, to the Chairman of the inquiry, that the inquiry should “rely upon” or “refer to” such evidence, and even gave a statement saying that his “…evidence in respect of” a particular issue was “set out in the transcript” of his evidence to the House of Commons.

It is well established that a person who has made a statement in Parliament which is protected by absolute privilege may lose that privilege simply by stating outside Parliament that he “did not resile” from that earlier statement: see Buchanan v Jennings [2005] 1 AC 115.

Relying upon that principle, Mr Makudi brought defamation proceedings against Lord Triesman, alleging that Lord Triesman’s statements to the FA inquiry were not protected by absolute privilege and were defamatory. Mr Justice Tugendhat struck out those proceedings, partly on the basis that a plea of qualified privilege by Lord Triesman raised an issue as to alleged malice, which could not be examined “…without also enquiring into his state of mind when he gave his Parliamentary evidence”, which the Judge ruled to be impermissible ([2013] EWHC 142 (QB) at para 101).

The High Court may have gone too far in this aspect of the ruling. In the MPs’ expenses case (R v Chaytor [2011] 1 AC 684), the Supreme Court ruled that: “…where a Member of Parliament affirms outside the House a statement made in the House. Such an affirmation can found a claim in defamation. This may well involve a challenge to the good faith of the defendant in affirming the statement, which will inferentially challenge his good faith in making the original statement” (para 45 per Lord Phillips). These observations reflected those of Lord Bingham in the Buchanan case, that “In such a case there will inevitably be an inquiry at the trial into the honesty of what the defendant had said, and if the defendant’s extra-parliamentary statement is found to have been untrue or dishonest the same conclusion would ordinarily, although not always, apply to the parliamentary statement also. But such an inquiry and such a conclusion are not precluded by article 9, because the plaintiff is founding his claim on the extra-parliamentary publication and not the parliamentary publication.”

It therefore appears to be the law that an inferential inquiry into the good faith or otherwise of Lord Triesman’s statements to the Select Committee is not precluded by Parliamentary privilege. This issue raises a question of high constitutional importance, which is no doubt one of the reasons why the Court of Appeal decided to hear the case. Indeed, in early November 2013 the Speaker of the House of Commons, John Bercow, took the unusual step of writing to the Court of Appeal in order to express concern at the potential impact of the case upon freedom of speech in Parliament.

The case has been heard by a panel comprising Lord Justice Laws, Lord Justice Tomlinson and Lady Justice Rafferty, and their judgment will be eagerly awaited by both sports lawyers, public lawyers and media lawyers alike.

James Segan
Barrister
Blackstone Chambers, London
JamesSegan@blackstonechambers.com


James Segan was junior counsel in the MP’s expenses case, led by Lord Pannick QC. This article was originally published in the Blackstone Chambers Sports Law Bulletin here.


Wednesday, November 20, 2013

NHL Players Defrauded in Series of Investment Schemes

National Hockey League Players were the primary victims of a series of fraudulent investment schemes orchestrated by financial adviser Phillip Kenner and former professional race car driver Tommy Hormovitis. Collectively, the players others lost about $15 million. The court papers charge conspiracy, conspiracy to commit money laundering and wire fraud. U.S. v. Kenner, No. 13-CR-607 (E.D.N.Y. Unsealed Nov. 13, 2013).

Phillip Kenner met a future NHL player while attending college. Subsequently, Mr. Kenner became a licensed financial adviser in Boston. From 1994 through 2003 he used his college connection who had joined the NHL to build a client list which included several professional hockey players. The list became the foundation for his firm which he opened in 2003.

From the opening of his firm, and continuing to the present, Mr. Kenner advised a number of NHL players regarding their investments. He counseled them to participate in a number of investment schemes which were fraudulent. Those included:

The Hawaii scheme: This was a real estate investment scheme in Hawaii. Mr. Kenner solicited thirteen players, convincing them to invest $100,000 each and open lines of credit which he controlled. In addition, Lehman Brothers Holdings, Inc. was convinced to invest $2 million. The funds were to be used to develop real estate on the big island. Instead, Messrs. Kenner and Constantine diverted the money to their personal use. The victims lost over $13 million.

The Eufora Scheme: This was a prepaid debit card business, initiated in 2002. Mr. Kenner informed the NHL players who put $1.4 million into the scheme that Eufora was an up and coming business. Another investor was convinced to put up about $200,000. Most of the money was in fact diverted to an account controlled by Mr. Constantine. Investors lost about $1.5 million.

Global settlements scheme: Beginning in May 2009 Messrs. Kenner and Constantine convinced players to invest about $4.1 million in a plan which called for funding an attorney’s escrow account, the Global Settlement Fund. The fund would be used to finance litigation related to Mexican land deals. Most of the money was diverted to the personal use of the defendants. The players lost about $1 million.

Sag Harbor scheme: In this scheme Mr. Kenner acquired a 25% interest in real property in Sag Harbor, New York by taking $395,000 from a player’s line of credit. The player was unaware of the transaction. He then convinced a second player to purchase what was supposed to be a 50% interest in the deal for $375,000. The player, however, received papers showing that he only had a 25% interest. The investors sold the property at a loss. Mr. Kenner then filed a lawsuit in Arizona against one of the investors in connection with the property.

The defendants were arrested in Arizona and appeared in court on Wednesday. The case is pending.


This article originally appeared on the 'SEC Actions' internet site, produced by Thomas O. Gorman of Dorsey and Whitney LLP. To access the original article, click here.


Tuesday, November 19, 2013

McCririck age discrimination case: analysis

Racing pundit John McCririck has lost his age discrimination case against Channel 4 and IMG Media Limited. McCririck, who had worked for ‘Channel 4 Racing’ since 1984, was dismissed in October. He was aged 72 at the time. The tribunal found that the dismissal was objectively justifiable in the circumstances, on grounds that Channel 4 wished to attract wider audiences. A copy of the judgment can be found here

Why was he dismissed – reality TV appearances, chauvinistic views or age?

The tribunal heard evidence that part of McCririck’s on camera style included sexist views and male chauvinism (referring to his co-presenter Tanya Stevenson on air as “Female”). In his own evidence, McCririck stated that his “pantomime villain sexist image had been deliberately cultivated and played up”. The tribunal viewed DVD extracts of racing broadcasts, as well as extracts from McCririck’s appearances in Celebrity Big brother and Celebrity Wife Swap. Although the evidence suggested that McCririck’s reality tv appearances may have contributed to a reduction in his hours in 2008 and 2010, the tribunal found that there was no evidence that Channel 4 told McCririck at any time that his mode of dress, outspoken views or use of tic-tac language should be moderated.

In September of this year, IMG, having won the bid to cover ‘crown jewel’ events in the racing calendar, had received ‘talent tracker data’ from a market research agency, which was gathered in a national online survey. The talent tracker confirmed that McCririck was well known (with 78% ‘awareness’), but found that 61% of those surveyed did not enjoy viewing McCririck. Overall, he scored badly. In deciding on a new panel of racing presenters, it was decided that MrCririck should not have a role.

However, McCririck forwarded evidence sufficient to support an inference of discrimination, including that Ms Stevenson (aged 42 at the time) was kept on whilst McCririck was dismissed, and that all of the other presenters who were dismissed when compiling the new look line up were also aged over 50. Reference was also made to documentation which indicated that IMG’s bid was predicated on the fact that it intended to use “younger presenters to attract younger audiences” (despite there being evidence before the Tribunal that younger presenters would not achieve this).

Having concluded that McCririck had put forward sufficient evidence of age discrimination, the burden of proof should have shifted to IMG/Channel 4 to establish either:

(i) that there had been no discrimination because the decision to dismiss was not age related; or

(ii) that, even if the decision was age related, dismissal was a proportionate means of achieving a legitimate aim.

Unfortunately, whether or not the tribunal actually made a finding as to the reason for dismissal is not clear from the written decision. Having established a shift in the burden of proof, there is a ‘fastforward’ to item (ii) above, consideration of objective justification. This suggests a finding that the reason for the dismissal was indeed age. However, there are also parts later in the decision in which the Tribunal refer to the dismissal being because of McCririck’s persona. 

What was Channel 4’s justification?

The aim of IMG and Channel 4 was to bring horse-racing to a wider audience. Channel 4 gave evidence that, for the future of the sport and programming, it was important that it “grow a wider audience whilst not losing focus on the core viewer”, and that its aim was to “strike a balance between much of what currently works whilst bringing a fresh feel to the experience that will attract a younger audience”.

Surprisingly, the tribunal was satisfied that the aim was sufficiently “of a public interest nature” to be legitimate (following the Supreme Court’s decision in Seldon v Clarkson Wright & Jakes, which confirms that the aim must have a public interest nature, and be consistent with the social policy aims of the state, namely ‘inter-generational fairness’ and ‘dignity’). It also found that the means of achieving the aim were proportionate.

Accordingly, it found that Channel 4 had not contravened the Equality Act 2010 (and that IMG could not have helped them to do so).

Will there be an appeal?

McCririck has confirmed his disappointment in the decision, but is also reported to have said it is unlikely that he will appeal the decision, which was published on 13 November 2013. 

Whilst the tribunal found that there was sufficient evidence for the burden to shift to Channel 4 / IMG, it has failed to make any clear finding as to whether or not the dismissal was because of age. The lack of structure and clarity in the written decision could give grounds for appeal. 

Interestingly, the judgment also contains a statement that the dismissal was “because of [McCririck’s] persona” (in Celebrity television shows and press articles), “together with his appearances on Channel 4 racing where, as he accepted, his style of dress, attitudes, opinions and tic tac gestures were not in keeping with the new aims, and his opinions seen as arrogant and confrontational”. 

Even if an appeal is brought and a re-hearing of the evidence takes place, there does seem to be evidence that the decision to dismiss was not in fact age-related and that it was McCririck’s “arrogant and confrontational” persona that played the biggest part in his departure. Therefore, any appeal may in any event lead to a dead end.

 

Katie Russell
Associate
Shepherd + Wedderburn
katie.russell@shepwedd.co.uk

 

This article originally appeared on the Shepherd + Wedderburn internet site on 14 November. To view the original, click here.


Is Fantasy Sports Insurance Legal?

People have been playing in online fantasy sports leagues for a long time. When the federal government created a specific carve-out for fantasy sports in the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006, paid money leagues became legal on a federal level for the first time and the ability to collect monetary prizes in paid money leagues was left to the discretion of the individual States. Recently, a new wrinkle involving fantasy sports has come to prominence: fantasy sports insurance…but is it legal?

Legality of Online Fantasy Sports Betting

In order to fall within UIGEA’s exception provisions, the fantasy sports game must:

- have an outcome that reflects the relative knowledge and skill of the participants, but not chance;

- be determined predominantly by accumulated statistical results of multiple athletes participating in multiple real-world sporting events; and

- offer prizes that are not influenced by the amount of fees paid by, or the number of, participants.

Under the laws of many States, season-long and even multi-week online fantasy sports tournaments are not considered ‘gambling’. The regulatory trend in these states is to categorise fantasy sports as games of skill based on the sports knowledge of each league participant. The skill involved in fantasy sports betting exempts online fantasy sports leagues from the gambling laws of these States, which only regulate games premised on chance or luck. As we have previously addressed, daily fantasy sports leagues may introduce a higher degree of chance than season-long or multi-week leagues and, as such, invite allegations of illegal gambling.

Fantasy Sports Insurance 

A relatively new aspect of fantasy sports has developed, which allows fantasy sports participants to purchase insurance policies for the athletes on their fantasy teams. The insurance policies will pay out an agreed upon amount of money, should the policyholder’s fantasy sports athlete(s) be injured. The concept of fantasy sports insurance ensures that a player may recover some or all of his/her fantasy sports league entry fee should a member of his/her fantasy sports team be put out of commission due to injury.

Legality of Fantasy Sports Insurance

Whether fantasy sports insurance is legal under Federal and State law is an unresolved issue and requires an examination of the nuances of insurance law, specifically the concept of insurable interest. In order for any insurance policy to be valid, the policyholder must have a monetary or ownership interest in the thing he or she is looking to insure. This monetary/ownership interest is called an ‘insurable interest’. Without an insurable interest, the policy is void.

An insurable interest must exist at the time the insurance policy is purchased and exist throughout the policy period, including the time the subject injury is incurred. Without having an insurable interest in the thing being insured, it could be argued that one is making a bet that the insured property will be damaged or destroyed in order to collect the insurance money.

The threshold question relating to fantasy sports insurance is whether a league entry fee is considered an insurable interest in one’s fantasy sports athletes. While it is true that fantasy sports league participants usually pay an entry fee and, therefore, have some monetary interest in their fantasy sports athletes, their league entry fee is used to create a fantasy sports team based on a wager of skill. It follows that obtaining fantasy sports insurance could be construed as a wager of chance upon a wager of skill. The concept of insurable interest is meant to guard against wagering on an undesired outcome.

While the legality of fantasy sports insurance is still unclear, fantasy sports participants should use caution before purchasing a policy to insure their fantasy sports athletes.

 

David O. Klein
Klein Moynihan Turco LLP
dklein@kleinmoynihan.com

 

This article was originally published on the internet site of Klein Moynihan Turco LLP. To view the original article, click here.


O’Bannon Antitrust Class Action Against NCAA Survives Pleading Challenge

On October 25, United States District Court Judge Claudia Wilken denied the National Collegiate Athletic Association's motion to dismiss the civil class action complaint of a group of former Division I college basketball and football players. Led by former UCLA basketball star Ed O'Bannon, the players are suing the NCAA for alleged violations of the Sherman Antitrust Act. The lawsuit also named two other defendants, EA Sports and Collegiate Licensing Company (CLC). Notably, both are reported to have reached a confidential settlement with the plaintiffs in September 2013. 

The District Court's decision removes one of the last obstacles standing in the way of the plaintiff's motion for class certification, which, if granted, would allow the plaintiffs to try the case on the merits. If a jury finds in the plaintiffs' favor, the NCAA could conceivably be faced with a judgment in the billions of dollars. The parties have already briefed the class certification motion and the court has heard oral argument; they now await a decision from Judge Wilken.

Essentially, the lawsuit claims that the NCAA impermissibly required student athletes to relinquish all rights in perpetuity to the commercial use of their names, images, and likenesses, including after they graduate and are no longer subject to NCAA regulations. The claims against the NCAA concern the use of players' names and images in both live and archival broadcasts and footage, while the claims against CLC and EA Sports concern the same use in paraphernalia, such as jerseys, and in video games, where player-avatars are modeled after and closely resemble actual players. The former players claim that the defendants conspired to unfairly and unlawfully deprive them of their right to receive compensation for such.

The NCAA's motion to dismiss the operative complaint was based primarily on an argument stemming from a 1984 US Supreme Court case, NCAA v. Board of Regents, in which the Court commented in dicta that not paying student-athletes was necessary to "preserve the character and quality of the NCAA's product." However, Judge Wilken rejected this premise, noting that, in the Board of Regents case, the Supreme Court "focused on a different set of competitive restraints than the rules challenged in this case,” … “never even analyzed the NCAA's ban on student-athlete compensation under the rule of reason” – which is one of the factors for analyzing an antitrust claim – "nor did it cite fact findings indicating that this is the type of restraint which is 'essential if the [NCAA's] product is to be available at all.'"

Although its co-defendants opted to settle the plaintiffs' claims rather than risk certification of the class and a potentially-enormous judgment, the NCAA has vowed that it will contest this lawsuit all the way to the Supreme Court, if necessary. In fact, the same day that Judge Wilken denied its motion to dismiss, the NCAA sought leave of the Supreme Court to intervene in a separate but related action regarding rights of publicity.

Maidie E. Oliveau
Counsel
Stanley G. Stringfellow II
Associate
Arent Fox, Los Angeles
maidie.oliveau@arentfox.com
stanley.stringfellow@arentfox.com

This article originally appeared on the Arent Fox internet site on 1 November. You can access the original by clicking here.


Friday, November 15, 2013

Sport must tackle betting-related corruption

Sport must do more to tackle betting-related corruption, heard delegates at yesterday’s Sport & Betting 2013, a conference jointly organised by World Sports Law Report, World Online Gambling Law Report, Cecile Park Conferences and DLA Piper. However, it cannot act in isolation and needs better help from gambling operators and regulatory tools in order to do this.

Delegates heard that sport needs help because the unregulated market dwarfs the regulated market, making it impossible for it to police. The unregulated market also accepts bets that regulated bookmakers would not take – either due to the size of the stake, or because the bet itself appears corrupt. However global regulation is improbable and, even if possible, is unlikely to solve the problem. “The standardisation of the legal framework across the world is a pipe dream, at best”, said Mike O’Kane, Business Director for Ladbrokes. “Sport needs to deal with this issue without seeking regulatory change”.

Ladbrokes, one of Great Britain’s largest regulated operators, pointed out that it is one tenth the size of the Hong Kong Jockey Club (HKJC), and that the HKJC is one tenth the size of the illegal Chinese gambling market. Delegates heard how between US$250 million and $1 billion is staked on the outcome of every Indian Premier League cricket match, and US$2 billion on India v. Pakistan cricket internationals through the illegal market.

Yet despite evidence that sport has a problem, it has often failed to act. “Sport should be the aggressor”, said Barry Hearn, Chairman of World Snooker. “There must be a zero-tolerance approach, backed by education and punishment. My approach now is purely to frighten people to death!” Andreas Krannich, of SportRadar, pointed out that once a player is involved in match-fixing, the fixers “will never, ever let go”.

Delegates heard how the Scottish Football Association (SFA) had failed to act following the discovery that several players held accounts with Ladbrokes, in contravention of SFA rules preventing players from betting on football. O’Kane pointed out that there had been little action since the publication of FIFPro’s Little Black Book in February 2012, which found that one third of Greek players had been approached by match-fixers and half of Russian players were aware of match-fixing in their league. “We need clarity from sport on its own governance”, he said. “The betting industry can’t continue to be blamed”.

Paul Scotney, Director at Sport Integrity Services and formerly of the British Horseracing Authority, said that often, the regulations are not adequate to prosecute match-fixers, meaning that the incentive to tackle match-fixing is not as great as it could be. “In this country, there have been no new prosecutions since the 1960s for cheating at sports betting”, he said. “The 2010 Cricketers were prosecuted for offences other than cheating at sports betting. The reality is that it comes back to sport to deal with the problem.” He also pointed out that certain operators are unhelpful in sharing information with sport.

It was pointed out that operators have no issue sharing information with regulators, however sharing information with sport can sometimes be an issue, as operators don’t know what sport is going to do with that information. Operators raised concerns about whether that information will be leaked to the media, and whether personal or sensitive data will be adequately protected.

The cost of investigating match-fixing was also raised. Delegates heard that at the first committee debate of the Gambling (Licensing and Advertising) Bill 2013-14 on Tuesday, it was pointed out that sport receives government funding of between £6 million to £7 million to combat anti-doping, yet doesn’t receive a penny for integrity issues. One potential solution would be for operators to return a percentage of takings to sport, as in France, where a ‘sports betting right’ has been created. Eighty-three percent of competitions in France’s five main sports utilised its ‘sports betting right’ in 2010. The right returns 1.1% of stakes to the sport involved. In 2010, this generated €530,000; in 2011 it returned €1.1 million; €1.5 million in 2012 and has generated €1.3 million during the first three quarters of this year. Operators – perhaps obviously – were not keen on this idea.

It was also highlighted that retrospective investigations are almost useless in stopping those behind fixing games, as they punish the athletes involved, not the perpetrators. “Retrospective investigations do not help tomorrow”, said Chris Eaton, Director of Sport Integrity at the International Centre for Sport Security. “Another approach is needed to investigate match-fixing as it happens. Perhaps the best model would be a self-regulatory cooperative approach from the totality of the sports betting industry, at a global level.”

One method of accomplishing this is by using technology developed for the betting industry. Andreas Krannich of Sportradar, a company that provides services to the gambling industry, explained how its Fraud Detection System has helped uncover instances of match-fixing in Australia and – just this week – in Austria. The system tracks real odds movements as compared to calculated odds movements at over 350 bookmakers, looking for discrepancies to identify over 300 manipulated matches every year. He pointed out that such a system, which involves information on 190,000 individuals, would not exist were it not for the involvement of the regulated operators, and explained that such a system has an advantage over early-warning systems, as it can track live betting as it happens, enabling sport to potentially void a suspicious game.

The potential for sport to do this was also picked up by Eaton and Hearn. “You have to starve them of money”, said Eaton. “To do this, you have to work cooperatively with the betting industry”. Hearn said that World Snooker had “taken a match out of play” on a couple of occasions. “Once you start doing this effectively, then there is no point fixing”.

Both sport and betting operators were clear that a ‘Code for Sports Betting’, similar to the World Anti-Doping Code’, is not a solution to this problem. “The WADA model is one that has been discredited in sport”, said Eaton. “It is too oppressive. Sport has begun questioning that approach and Thomas Bach and the IOC have indicated that they would like WADA to take a more service-based approach.”

OTHER POINTS OF NOTE

• International policing is ill equipped to deal with match-fixing, as are local police, as they are jurisdiction based, unlike the fixers.

• There was a consensus that the global recession is likely to mean that the Chinese, Indian and US markets will open to sports betting as governments seek taxation revenues, but it will not happen overnight.

• The IOC is launching the pilot phase of its Olympic Movement Betting Integrity Reporting Mechanism at the Sochi 2014 Winter Olympics. It will continue to be used at the Rio Olympics, and monitoring of its success will take place in 2016/17.

• The European Sports Security Agency estimates the global sports betting of US$18.1 billion per year. China has global gaming revenue of US$10 billion, while the US has global gaming revenue of US$20 billion, 1% of which is regulated. Asia has global gaming revenue of $50 billion per year.

• Samantha Gorse, a researcher at the Centre for the International Business of Sport, pointed out that doping presents a match-fixing risk to operators, especially if people have inside knowledge of that doping.

• There are approximately 432 million sports betting odds movements per day.

• Sports betting is now the number one betting product in Spain, following its regulation.

• German sports betting operators are looking at challenging a 5% of turnover sports betting tax.

• Italy is set to license betting exchanges and betting on virtual events before the end of this year.

• The GB Gambling Commission has yet to address the issue of regulating use of inside information, despite the closure of a consultation into the issue. The Commission said that the appetite for a public debate on the issue was “not strong”; and that blanket rules were perhaps not possible without “killing the spirit” of some sports, such as horseracing.

• The GB Gambling Commission has yet to decide what should be done about sport-related spread betting. Spread betting is regulated by the Financial Conduct Authority, however there is a question about whether sports should be carved out, and the transfer of expertise in regulating sports spread betting to the Commission may mean that it is not worth the effort. This lacuna could present an integrity risk (e.g. it was discovered that spread bets had been taken about the number of cricketers coming out of the pavilion with sunglasses on their heads for some time).

Andy Brown


Wednesday, October 23, 2013

CONCACAF appoint WSLR Editorial Board member

The Confederation of North, Central American and Caribbean Association Football (CONCACAF) appointed World Sports Law Report Editorial Board member Dr. Laila Mintas as Director of Sports Integrity, effective 15 November 2013. In the new role, Dr. Mintas will oversee the design and implementation of systems and processes to prevent, detect, investigate, and respond to match-fixing issues within the CONCACAF region.  

Dr. Mintas brings extensive experience in the field as she served as Head of Legal and International Development for FIFA's Early Warning System (EWS) in Zurich, working in close collaboration with the FIFA Security and Disciplinary Divisions in matters related to match manipulation. She previously worked as a lawyer at the international law firm White & Case LLP (headquarters in New York) and has lectured law at the Humboldt University of Berlin. Dr. Mintas has published a number of articles on sports and gambling law and is also Co-Editor of Swiss sports law journal, Causa Sport.

“We are certain that Dr. Mintas’ vast experience and expertise will strongly benefit our aim of preserving and sustaining the integrity of our game”, said CONCACAF General Secretary Enrique Sanz. “We are committed to transparency and determined to build strong foundations for our sport by working with all members of the Confederation, governments and law enforcement agencies to combat match fixing and fight corruption in football”.


Thursday, October 17, 2013

Behind closed doors: how to avoid the problems of private proceedings

Arbitration is increasingly sport’s forum of choice for determining disputes. But the widespread adoption of this private and confidential process brings problems of its own. For example, how can parties ensure consistency of decision-making if they are unable to access decisions that have gone before? And what is to be done if different parties have the same dispute with a governing body, but there is no consent that the disputes be heard together?

The problems of consolidating (or not) related arbitral proceedings have been the cause of procedural difficulties on more than one occasion. During the pre-season period in 2007, England’s Football Association (FA) docked 15 points from Leeds United for its failure to comply with its Insolvency Policy in approving a Company Voluntary Agreement as a means for exiting administration. Rotherham United, which had also entered into administration at that time, sought to be joined to the arbitration between Leeds United and the FA pursuant to Rule K, as Rotherham feared that a similar deduction. However, Rotherham’s application was refused. Construing Rule K literally, the Tribunal determined that there was simply no dispute between Rotherham and the FA which gave the club standing to be part of those proceedings.

Similarly, as part of the fall-out from West Ham’s breach of the rules by its registration of Carlos Tevez in 2007, Fulham sought to consolidate its claim against the FA Premier League (FAPL) with that which Sheffield United was pursuing against the FAPL. Fulham’s application was refused. However, as a practical solution, Leading Counsel (Michael Beloff QC) for Fulham was allowed to make submissions at the hearing of Sheffield United’s claim, albeit he was not allowed to question witnesses.

Under the FAPL rules, a particular issue arises in relation to any dispute arising out of an employment relationship between a manager and a Club: The Managers’ Arbitration Tribunal is governed by Section Y of the FAPL rules and deals with disputes arising out of managers’ contracts only insofar as they involve the manager and the Club.

However, disputes between Clubs are dealt with by Section X of the rules. This means that if manager of Club A resigns in breach of contract and begins to work for Club B, Club A will have to institute separate arbitrations – one under Section Y against the manager and one under Section X against Club B (for example, for inducing a breach of contract) – which arbitrations cannot be consolidated unless all the parties consent. This is not ideal, although one way round a refusal of consent is to seek to appoint the same panel in both arbitrations and to attempt, once a Chairman is appointed, to have the arbitrations heard concurrently or immediately one after the other.

Sheffield United’s claim against the FAPL concerning Tevez (paragraph six, above) went to a full hearing in July 2007. A preliminary issue that arose was whether Sheffield United had sufficient standing under the rules to initiate a claim against the FAPL over its findings regarding another club (West Ham). Sheffield United prevailed. The tribunal held that, whilst the ordinary rule was that a third party club would have no standing to complain about a disciplinary decision on another club, the circumstances of the case were exceptional since Sheffield United was ‘directly and vitally affect[ed]’ by the West Ham decision.

A further dispute arose out of the Sheffield United litigation, again brought by Fulham. Fulham, like Sheffield United, brought a claim directly against West Ham (as opposed to Sheffield United’s challenge to the FAPL, above) on the basis that West Ham’s signing of Tevez in breach of the rules had led to Fulham’s relegation. A procedural wrangle ensued, namely whether the Award and Reasons of the tribunal in Sheffield United v West Ham (‘the Award’) was admissible as evidence of the truth of the facts found by that tribunal (Sheffield United having won its case on liability).

It was suggested that the tribunal ought to be instinctively reluctant to re-tread ground covered by a previous tribunal such that the Award should be admitted. The Tribunal had some sympathy for this position, and expressly found that it had the power to admit the Award. However, it did not do so as it was unconvinced that considerations of justice or convenience favoured the Award’s admission.

Procedural limitations (such as those on consolidation or joinder) would be best alleviated by express provisions in the relevant rules. The arbitration rules established by the London Metal Exchange (LME), for example, expressly allow for a panel to raise the issue of consolidating claims (and, if suitable, direct such consolidation) if a common question of law or fact arises in two or more arbitrations, or the arbitrations arise out of the same transaction(s) or for some other relevant reason. By the same token, the panel has the power to take the opposite measure, i.e. to order that an arbitration between two or more parties be divided and proceed separately where it considers it ‘expedient for the future conduct of all such proceedings’.

Jane Mulcahy
Barrister
Blackstone Chambers, London
clerks@blackstonechambers.com
 

This article originally appeared on the Blackstone Chambers blog. You can access the original by clicking here.


Tackling Doping in Sport webinar, 26 September 2013

One hundred and forty participants from 27 countries took part in the Tackling Doping in Sport webinar on Thursday 26 September, chaired by conference organiser David Longford. Delegates heard from the World Anti-Doping Agency’s (WADA) Director General, David Howman, and former skeleton athlete Adam Pengilly, Vice-Chairman of the International Olympic Committee’s Athlete Commission.

The main topic was the ongoing revision of the 2015 World Anti-Doping Code (WADC), the final draft of which is to be sent to all stakeholders in early October. The final drafts of the Code and all five of WADA’s International Standards will be tabled for approval by WADA’s Executive and Foundation Board at the World Conference on Doping in Sport, which takes place 12-15 November in Johannesburg.

The main ‘take home’ points from the webinar were as follows:

David Howman

• WADA received over 300 specific submissions from stakeholders, suggesting over 2,000 changes to the World Anti-Doping Code.

• “Our view is that the Code is clearer in language, shorter in length and stronger in its application”.

• Under the new version of the Code, WADA has the ability to get involved in investigations – something it has not been able to do to date.

• International Standard for Testing enhanced to become the International Standard for Testing & Investigations.

• WADA will be responsible for publishing information on suspect personnel, which will be made available to athletes. There is a need to be able to sanction athlete support people, such as the legal profession, medical profession, parents, teachers, sport administrators, etc.

• Following the efforts of the working group on the ineffectiveness of testing, WADA will be releasing a technical document on test distribution planning, after the World Conference on Doping in Sport in November.

• Protocols relating to storage mean that samples can now be stored for ten rather than eight years, due to recent re-analysis of samples revealing past anti-doping rule violations (e.g. Lance Armstrong).

• WADA will act as mediator where there is a disagreement between an international federation and a national anti-doping organisation about who should be responsible for testing at an event. “Bodies can both test in a mutually acceptable way”.

• WADA is disappointed at the “paucity” of the number of registered blood sample collections & is disappointed at the number of samples tested for erythropoietin (EPO).

• Education programmes needed by all signatories to the Code (WADA is keen to focus on testing and compliance – click here for a World Sports Law Report news article on this).

• Compliance – stakeholders have asked for WADA to set the bar high rather than low. A focus on “quality rather than quantity”.

Adam Pengilly

• Many athletes take supplements regularly as part of their training programme. In the UK, UK Anti-Doping and national associations are well-funded, helpful and informed. Batches of supplements are sent to labs to confirm that they aren’t contaminated. This is not the case in the majority of jurisdictions.

• The European Union should look at regulating the supplement industry.

• “Personal view is that athletes who have the resources to do decent checks really have no comeback”.

• The burden of proof for establishing a contaminated supplement is likely to be high.

• Every clean athlete wants to know that everyone in their competition has the same anti-doping burden. At the moment, this is not the case and this needs to be addressed.

• Suggestion of tiered harmonisation of anti-doping programmes. Perhaps the top five nations in a particular sport need more stringent anti-doping programmes than those who struggle to qualify.

• Compliance requirements need to be tougher, especially for those nations at the top.

• Athletes are willing to accept the anti-doping burden, as long as the system is fair.

Questions

• New WADA phone application is helping athletes comply with whereabouts requirements. Some athletes want GPS on smartphones to be used as whereabouts, through fear of forgetting to file a change (Adam Pengilly said this has happened to him and lots of other athletes). Other athletes find this idea horrifying.

• WADA is putting together a compliance programme which will be published next year.

• Athletes welcome an increased focus on athlete support personnel. However, it will be a big challenge to prove their involvement in causing an athlete to dope. Even so, if these people are not caught, anti-doping authorities will be failing in their duty, as conspirators ought to be brought to justice.

The Tackling Doping webinar was organised as a precursor to Tackling Doping in Sport, a two-day annual conference organised by World Sports Law Report in association with UK Anti-Doping. The conference will take place 19-20 March at Wembley Stadium. For more information, click here


Tuesday, October 08, 2013

FIFA Investigatory Chamber further clarifies role

The Investigatory Chamber of the FIFA Ethics Committee has further clarified its role in investigating the bidding process for the FIFA 2018 and 2022 World Cups. ‘While Article 36 of the FIFA Code of Ethics prohibits us from disclosing details about ongoing proceedings, the reports and inquiries suggest a need to clarify certain general information’, read a statement released today by Kirkland & Ellis LLP, the law firm which employs the Chairman of the Independent Ethics Committee, Michael Garcia. ‘As has been publicly reported, the Investigatory Chamber continues to investigate the bidding process for the 2018 and 2022 FIFA World Cup events. Members of the Investigatory Chamber intend to speak with and request information from representatives of every bid team that vied to host the 2018 or 2022 FIFA World Cup. Accordingly, the fact that we request a meeting with members of a particular bid team does not mean that any specific allegation has been made by or against that team or anyone associated with it.’ 

‘Pursuant to Articles 65 and 66 of the FIFA Code of Ethics, the Chairman of the Investigatory Chamber, Michael J. Garcia, is leading the proceedings as Chief of the Investigation. However, in order to avoid the appearance of any conflict of interest, the independent Deputy Chairman of the Investigatory Chamber, Cornel Borbely, is leading this effort with respect to the United States and Russia bids.’

‘It is not our role to determine the venue or timing of the World Cup. Our role, in this or any other matter, is to investigate potential violations of the FIFA Code of Ethics by football officials. We will consider any allegations and evidence indicative of such violations, and we urge anyone with potentially relevant information to contact us now. We emphasise that the FIFA Code of Ethics provides anonymity protections in appropriate circumstances.’

‘As in every case, we will use all investigative tools available to us under the FIFA Code of Ethics. These tools include the authority to impose disciplinary measures against anyone who breaches an obligation to cooperate with the investigation. Ultimately, we will submit a final report to the Adjudicatory Chamber. In addition to setting forth findings and recommendations, the report will document the investigative steps we followed, including what information and material we requested and what response we received. This investigation is likely to extend at least several months into 2014.’

This investigation end date dovetails with the decision made by FIFA’s Executive Committee on Friday 4 October, that no decision would be made on whether to switch the Qatar 2022 World Cup to winter before the 2014 FIFA World Cup Brazil. The Independent Ethics Committee was formed last year, along with a new Code of Ethics. Garcia hinted that it may look at the 2022 voting process during May’s FIFA Congress. The Independent Ethics Committee is funded by FIFA.

Andy Brown


Thursday, October 03, 2013

Retired NFL players settle concussion litigation, but potential insurance implications to be determined

Starting in July 2011, the National Football League (NFL) and helmet manufacturer Riddell Inc. began facing a number of lawsuits from thousands of former NFL players alleging that concussions and other injuries sustained during their NFL careers resulted in brain and other neurological damage. These concussion-related suits - eventually brought by more than 4,500 retired football players - were consolidated in the Eastern District of Pennsylvania in the case In re NFL Players’ Concussion Injury Litigation, E.D. Pa., No. 2:12-md-02323 (filed 31/1/12). On 29 August 2013, after nearly two months of intensive negotiations, former United States District Judge Layn Phillips, the court-appointed mediator in the consolidated suits, announced that the parties had reached a settlement agreement. Under the agreement, the NFL and NFL Properties, LLC will pay US$765 million to provide medical benefits and injury compensation for retired NFL football players, fund medical and safety research, and cover litigation expenses. Attorney fees, to be approved by the district court, will be paid in addition to the settlement amount. The settlement agreement must be approved by United States District Judge Anita B. Brody, who is presiding over these cases.

The settlement includes all players who have retired as of the date on which the court grants preliminary approval to the settlement agreement, their authorised representatives, or family members. Riddell and a number of related entities are not a part of the settlement agreement and therefore claims against them for design and manufacturing defects, as well as failure to warn, remain in litigation. If the settlement receives final approval, Riddell and related entities will be the only remaining targets, a potentially risky position since any damaging discovery might be harmful in current and future lawsuits brought by athletes in college, high school, and other types of contact sports (mixed martial arts, soccer, etc.).

Pending Insurance Coverage Cases Arising from the Concussion-Related Litigation

The NFL and Riddell tendered these concussion-related lawsuits to their insurers, resulting in an ongoing battle in various pending coverage suits between the NFL and its liability insurers to determine what, if any, coverage and indemnity will be provided to the NFL. On 12 April 2012, Riddell filed a declaratory judgment action against 13 of its insurers in Los Angeles Superior Court, putting at issue 37 primary and excess policies issued from 1959 through 2011 (Riddell v. Ace American Ins. Co., Cal. Sup. Ct. LA, No. BC482698, filed 12/4/12).

On 13 August 2012, Alterra American Insurance Company, a high level excess insurer, filed an action against the NFL in New York Supreme Court seeking a declaration that it does not have a duty to defend or indemnify the NFL under their primary, umbrella, and excess insurance policies in approximately 93 underlying concussion-related suits (Alterra America Ins. Co. v. NFL, Sup. Ct. NY Cty, No. 652813, filed 13/8/12). In response to the Alterra action, on 15 August 2012, the NFL filed a lawsuit in Los Angeles Superior Court against 32 general liability insurers that issued 187 primary and excess insurance policies over a period of 44 years, alleging that the insurers wrongfully denied coverage and seeking a declaration of the insurers’ duty to defend the NFL and indemnify it for any damages owed in at least 143 concussion related suits (NFL v. Fireman’s Fund Ins., Cal. Sup. Ct. LA, No. BC490432, filed 15/8/12). The NFL alleges that its insurers issued ‘occurrence policies’ that provide both primary and excess coverage to cover all sums the NFL may be legally obligated to pay as damages because of third-party bodily or personal injury caused by an occurrence. According to the NFL, the duty to defend - the key issue in dispute - is triggered when the occurrence leading to the liability resulted in injury during the policy’s period. The NFL also sued ‘Doe’ insurers that issued policies to Riddell, claiming additional insured status. On 21 August 2012, Discovery Property & Casualty Company and five affiliated companies (collectively, Travelers) filed its own declaratory judgment action against the NFL in New York Supreme Court, naming two dozen other insurers from the California action, claiming it owed them no contribution for the underlying brain-injury lawsuits (Discovery Prop. & Cas. Co. v. NFL, Sup. Ct. NY Cty, No. 652933, filed 21/8/12). The Travelers suit seeks a declaration that it is not obligated to defend or indemnify the NFL for any of the concussion-related suits because Travelers does not insure the NFL; it only insures NFL Properties, Inc., the NFL’s marketing company, which is not a party to the coverage litigation (although it is a party to the NFL concussion litigation settlement).

On 22 August 2012, Alterra amended its New York complaint to sue the NFL’s other insurers—the 29 insurers that were parties to the California NFL coverage action. On 19 September 2012, the two New York actions - Travelers and Alterra - were consolidated. On 25 September  2012, the NFL and Riddell declaratory judgment actions in California were deemed ‘related’ and assigned to the judge presiding over the Riddell action. All of the insurers (but one) moved to stay or dismiss the NFL coverage action in California on forum non conveniens grounds, arguing that New York was a more appropriate forum. On 28 November 2012, the court stayed the California coverage action pending the outcome of the parallel New York actions, finding that New York was the proper forum and that the NFL was ‘selective and tactical’ in choosing California. The NFL appealed, and on 28 May 2013, the Court of Appeals affirmed the judge’s stay order. In Alterra, the NFL filed a motion to stay or dismiss with prejudice, based on the prior filed more comprehensive NFL coverage action in California, but that motion was denied on 15 March 2013. As for the New York action filed by Travelers, the NFL filed a similar motion to dismiss, but that motion was denied. No coverage decisions have yet been made in these cases.

Future Insurance Coverage Cases and Potential Impact on Insurers

Although these insurance coverage actions are currently limited to former professional football players, there may be future insurance coverage cases involving college football, high school football, or other contact sports. For example, on 3 September 2013, three former college football players filed a lawsuit against the National Collegiate Athletic Association (NCAA) in the Eastern District of Tennessee on behalf of a class of plaintiffs defined as ‘All former NCAA football players residing in the United States, who did not go on to play professional football in the National Football League’ (Walker v. NCAA, E.D. Tenn., No. 1:13-cv-00293, filed 9/3/13). The plaintiffs allege that the NCAA failed to educate football players of the long-term, life-altering risks of head impacts, and did not establish known protocols to prevent, mitigate, monitor, diagnose, and treat brain injuries. Plaintiffs seek medical monitoring and their costs and attorney fees for the lawsuit. There is currently another class action against the NCAA pending in the Northern District of Illinois (Arrington v. NCAA, N.D. Ill., No. 1:11-cv-06356 (filed 12/9/11).

However, whether the insured is the NFL, the NCAA or the Ultimate Fighting Championship (UFC), the courts and the parties will face complex coverage issues due to the number of insurers involved and the nature of the alleged brain injury-related claims. One significant issue is that, similar to tobacco or asbestos litigation, the alleged injuries took years to develop and manifest; adverse health effects may only manifest themselves several years after the player retires. So, the definition of an occurrence will likely feature in the litigation. For example, should each game in which the player participated be an occurrence or each season? Depending on the answer, policy limits on several policies could be triggered, and complex allocation issues lay ahead. The larger issue for the courts is whether the primary insurers will have to carry more of the burden than the insurers who wrote the excess policies. Further, because insurance laws vary from state to state (New York law, for example, is thought to be more favorable to insurers than California law), the degree of impact on insurers may depend on where the cases are tried.

Dean Hansell
Partner 
David Newmann
Partner
Bety Javidzad
Associate
Liana G. Wolf
Associate
Hogan Lovells
dean.hansell@hoganlovells.com
david.newmann@hoganlovells.com
bety.javidzad@hoganlovells.com
liana.wolf@hoganlovells.com

This article originally appeared on the Hogan Lovells internet site. You can view the original by clicking here.

 


Wednesday, October 02, 2013

FIFA clarifies situation over 2022 bids investigation

FIFA has clarified that Michael Garcia is Chairman of its Independent Ethics Committee and as such, it has no say over whether an official investigation will be launched into the bidding process for the 2022 World Cup. Last week, WSLR reported FIFA’s insistence that no formal investigation into the bidding process is underway. This has not changed.

However since then, it has been reported that Garcia will be visiting all the bidders connected to the 2022 World Cup to assess whether there is a case to launch an investigation into the bidding process. “Michael Garcia is the Chairman of the investigatory chamber of the independent Ethics Committee”, said a FIFA spokesperson. “As such, we kindly ask you to directly contact his office”. WSLR is awaiting a reply.

The Independent Ethics Committee was formed last year, along with a new Code of Ethics. Garcia hinted that it may look at the 2022 voting process during May’s FIFA Congress. The Independent Ethics Committee is funded by FIFA.

Andy Brown


Tuesday, September 17, 2013

NCAA Issues Half-Game Penalty To Heisman Winner For Bylaw Violation

Heisman Trophy winner Johnny Manziel has been suspended for the first half of Texas A&M University’s season opening game for an ‘inadvertent’ violation of the rules of the United States’ National Collegiate Athletics Association (NCAA). The NCAA and Texas A&M announced that Manziel would receive the minor penalty because there is no evidence that Manziel received money in exchange for signing autographs, based on currently available information and statements made by Manziel to NCAA investigators.

Texas A&M suggested the penalty to the NCAA because it believed that Manziel had only committed an inadvertent violation of NCAA bylaw 12.5.2.1 by his signing of certain autographs. The bylaw specifically prohibits student-athletes from permitting the use of their names or likenesses to be used for commercial purposes, including to advertise, recommend or promote sales of commercial products, or to accept payment for the use of their names or likenesses. Although the NCAA accepted the proposed penalty, it specifically reserved the right to consider further action against Manziel pursuant to this bylaw if ‘additional information comes to light’.

In addition to its decision to declare Manziel ineligible and recommend the half game penalty to the NCAA, Texas A&M suggested the following additional conditions before Manziel could be reinstated by the NCAA:

• Manziel will address the team regarding the autograph situation and the lessons he has learned;

• Texas A&M will revise its future education programs to include information concerning student-athlete signing autographs for individuals with multiple items.

“Student-athletes are often asked for autographs from fans, but unfortunately, some individuals’ sole motivation in seeking an autograph is for resale”, said NCAA Vice President of Academic and Membership Affairs Kevin Lennon. “It is important that schools are cognizant and educate student-athletes about situations in which there is a strong likelihood that the autograph seeker plans to resell the items”.

Manziel has been the center of attention during pre-season practice since it was reported that he had allegedly been paid a ‘five figure flat fee’ by a Florida sports memorabilia dealer for signing autographs while he attended the 2013 BCS National Championship game. With daily speculation questioning the potential penalty Manziel might receive, the NCAA agreed to the proposed minor penalty following a lengthy interview session with Manziel.

The NCAA stated, ‘NCAA rules are clear that student-athletes may not accept money for items they sign, and based upon the information provided by Manziel, that did not happen in this case’.

Based on the information submitted by the University, the NCAA accepted the conditions as put forward by Texas A&M. “I am proud of the way both Coach (Kevin) Sumlin and Johnny (Manziel)  handled this situation, with integrity and honesty”, said Texas A&M University System Chancellor John Sharp. “We all take the Aggie Code of Honor very seriously and there is no evidence that either the university or Johnny violated that code”.

Gregg Clifton
Attorney
Jackson Lewis LLP, Phoenix AZ
gregg.clifton@jacksonlewis.com

Wednesday, September 11, 2013

Free Access to WSLR News

World Sports Law Report is offering free access to its news articles, which were previously only available to subscribers, for a trial period. Visitors to the World Sports Law Reportwebsite will be able to access key news on the regulation of sport, however access to analysis by key sports law practitioners will continue to be restricted to subscribers only. 

Historically, World Sports Law Report's news reflects three key monthly developments in the regulation of sport, stretching back over ten years. However, as the business of sport has expanded, these developments have become more frequent. As such, in the coming months, World Sports Law Report plans to reflect this increased focus on the regulation of sport by updating its news section frequently each month. 

The updated news section will complement World Sports Law Report's Twitter feed, @sport_law, which reflects daily developments in the regulation of sport by providing free analysis of key developments, as they happen. Users of LinkedIn can also stay updated by joining the World Sports Law Report group, available at http://www.linkedin.com/groups/World-Sports-Law-Report-2191126 

 

Andy Brown, Editor

 

 


Thursday, August 15, 2013

Premier League Cost Control and Sustainability Provisions Published

The Premier League (PL) published its latest handbook on 12 August, which contained two important cost control and profitability and sustainability provisions. Daniel Geey, Associate at Field Fisher Waterhouse LLP, explains the latest financial rule changes.
 

 

The PL does not use the term Financial Fair Play (FFP) to characterise its new rules but they bear some of the hallmarks of break-even, which are prominent in the UEFA and Football League FFP provisions.

Short Term Cost Control

Rule E.18 states that:

‘If in any of Contract Years 2013/14, 2014/15 and 2015/16 a Club’s aggregated Player Services Costs and Image Contract Payments:

E.18.1. exceed £52m, £56m, or £60m respectively; and

E.18.2. have increased by more than £4m when compared with the previous Contract Year or by more than £4m, £8m or £12m respectively when compared with Season 2012/13;

then the Club must satisfy the Board that such excess increase as is referred to in E.18.2 arises as a result of contractual commitments entered into on or before 31 January 2013, and/or that it has been funded only by Club Own Revenue Uplift and/or profit from player trading as disclosed in the Club’s Annual Accounts for that Contract Year.’

The definition of ‘Club Own Revenue Uplift’ is set out at A.1.32 of the PL rules and means ‘any increase in a Club’s revenue… when compared with its revenue in … 2012/13 (excluding Central Funds fee payments’.

The practical effect of the above is that only a £4m increase in the wage bill for PL clubs per season will be permitted. If a PL club spends more than an additional £4m on wages from the previous season, the additional wage cost can only be funded by increased commercial revenues that the club has made during that same season. The below table sets out the defined amounts:

Season The extra amount of PL Central Fund revenue that can be used to fund player wage costs (cumulative) If the wage bill is below the following figure, then the club are exempt from the restrictions
2013/14 £4m £52m
2014/15 £8m £56m
2015/16 £12m £60m

By way of practical example, if Liverpool’s 2012/13 wage bill is around £125m and for the 2013/14 season it increases to £130m, the club has spent £1m more than is permitted under Rule E.18. Liverpool must demonstrate to the PL that, in the same year of the wage cost increase, the £1m additional wage cost arises either from:

• contracts entered into before 31 January 2013;

• its own revenues excluding centrally distributed PL monies; or

• profit from player transfers.

Rule E.19 states that the 1 March 2014 (for the contract year 2012/13) will be the first time that each PL club will have to submit Form 3 to the PL, but that the first substantive assessment will occur in February 2015. Presumably assessment will occur around this time, as the PL will - in March 2015 - have the 13/14 contract year figures to compare against the 12/13 figures for compliance purposes. It appears from the guidance in the handbook that a Financial Regulatory Panel will be established to determine whether a club has complied with the cost control provisions and to sanction the club accordingly if they have been in breach.

Profitability and Sustainability

PL clubs can make a £15m loss over a three-year rolling accounting period. This means that a £5m per season loss can be covered by owner loans. Clubs can make a cumulative £35m loss over a three year rolling accounting period (i.e. the first being 2013/14, 2014/15 and 2015/16) I.e. a total loss of £105m with certain conditions attached (set out below).

Importantly, Rules E.52-E.58[1] will only come into effect from the 2015/16 season. By 1 March 2016, PL clubs will have to submit three years worth of accounts. For losses up to £15m over the three-year period, no owner guarantee will be required. If a club’s losses exceed £15m for the three-year period, the club in the relevant season has to provide:

• future financial information to the PL; and

• evidence of sufficient Secure Funding (as defined in Rule A.1.143) of up to £90m injected into the club by way of shares (Rule E57 and E.58).

If a club breaches the £105m limit, the PL board has the power to compel a club to adhere to a defined budget (Rule E.15.1) and/or refuse to register any new or existing player contract (Rule E.15.3). Rule E.58.2 appears to give a Regulatory Commission the power to further sanction a club for breaching these provisions. The outcomes of such reporting requirements may thus result in breaches, which could lead to sanctions such as points deductions, although a sanctioning tariff has not yet been published.

Related Party Transactions (RPT)

In the Football League and UEFA regulations, there are provisions to combat accusations of companies which have connections to the club from providing the club with an artificially high sponsorship deal. The UEFA regulations make reference to the test being ‘fair value’ for assessing the value of the contract. Interestingly, the PL is using a ‘Fair Market Value’ test (Rule A.1.32). However, the test for whether a deal is a RPT appears to be somewhat limited (Rule A.1.132). It sets out that a RPT is only if ‘the transaction [is] disclosed in a Club’s Annual Accounts as a related party transaction’. If it is not disclosed, then it cannot be classed as a RPT. This is a different approach to the UEFA test.

Promotion and Relegation

Lastly, it is not expressly clear how the PL will deal with relegated and promoted clubs. From first reading of the regulations it appears:

• accounts for years that clubs were in the FL will be used to assess PL compliance; and

• a promoted club’s accounts for the previous year then they were in the Football League will be used as the wage benchmark for how much a club can spend on wages whilst in the PL.

Conclusion

Any sanctioning decisions for breach of the above rules are still some time away but by March 2014, clubs will have to submit financial information to comply with the latest PL regulatory requirements. By the Spring of 2015, the first wage control decisions will occur, but it will only be in 2017 that the first break-even decisions will be taken.

 

Daniel Geey
Associate
Field Fisher Waterhouse LLP
daniel.geey@ffw.com

 

[1] Rule E.52 states: ‘Each Club shall by 1 March in each Season submit to the Secretary:

E.52.1. copies of its Annual Accounts for T-1 (and T-2 if these have not previously been submitted to the Secretary) together with copies of the directors’ report(s) and auditors’ report(s) on those accounts;

E.52.2. its estimated profit and loss account and balance sheet for T which shall:

E.52.2.1. be prepared in all material respects in a format similar to the Club’s Annual Accounts; and

E.52.2.2. be based on the latest information available to the Club and be, to the best of the Club’s knowledge and belief, an accurate estimate as at the time of preparation of future financial performance; and

E.52.3. if Rule E.55 applies to the Club, the calculation of its aggregated Adjusted Earnings Before Tax for T, T-1 and T-2 in a form approved by the Board.’

Rule E.55 states: ‘If the aggregation of a Club’s Earnings Before Tax for T-1 and T-2 results in a loss, any consideration from Related Party Transactions having been adjusted (if appropriate) pursuant to Rule E.53, then the Club must submit to the Secretary the calculation of its Adjusted Earnings Before Tax for each of T, T-1 and T-2.’

Rule E.56 states: ‘If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss of up to £15m, then the Board shall determine whether the Club will, until the end of T+1, be able to pay its liabilities described in Rule E.14.7.1 and fulfil the obligations set out in Rules E.14.7.2and E.14.7.3.’

Rule E.57 and E.58 states: ‘If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss of in excess of £15m then the following shall apply:

E.57.1. the Club shall provide, by 31 March in the relevant Season, Future Financial Information to cover the period commencing from its last accounting reference date (as defined in section 391 of the Act) until the end of T+2 and a calculation of estimated aggregated Adjusted Earnings Before Tax until the end of T+2 based on that Future Financial Information;

E.57.2. the Club shall provide such evidence of Secure Funding as the Board considers sufficient; and

E.57.3. if the Club is unable to provide evidence of Secure Funding as set out in Rule E.57.2, the Board may exercise its powers set out in Rule E.15.

E.58. If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in losses of in excess of £105m:

E.58.1. the Board may exercise its powers set out in Rule E.15; and

E.58.2. the Club shall be treated as being in breach of these Rules and accordingly the Board shall refer the breach to a Commission constituted pursuant to Section W of these Rules.’

This article originally appeared on Daniel’s Blog, ‘The Final Score on Football Law’, here.

A search for ‘financial fair play’ in World Sports Law Report’s archives revealed 29 articles. To access World Sports Law Report’s archives, which contain over ten years of sports law information, click here to sign up for a free trial.


Dang v. San Francisco Forty Niners

In this recent ruling, a District Judge confirmed that consumers can challenge Reebok's exclusive National Football League (NFL) apparel deal based just on a market of garments bearing NFL team logos. David Garcia and Leo Caseria, of Sheppard Mullin, examine the ruling and its implications.
 

On 2 August 2013 District Judge Edward J. Davila denied a motion to dismiss antitrust claims brought by consumers of NFL apparel against Reebok and the NFL in Dang v. San Francisco Forty Niners1. Plaintiff seeks to represent a class of National Football League (NFL) apparel purchasers who were allegedly overcharged as a result of an agreement that gave Reebok the exclusive right to make and sell NFL apparel. Defendants - Rebook, the NFL, the NFL teams, and an NFL licensing entity - argued that plaintiff lacked standing and failed to adequately plead a relevant market. Judge Davila denied defendants' motion to dismiss. The Court held that NFL apparel and NFL apparel licenses could be relevant markets because the NFL logos may be what consumers really want, in which case non-NFL apparel would not be a reasonable substitute. The Court also held that Dang had sufficiently pleaded standing in both markets, because he was present and injured in the retail market, and his injury was inextricably intertwined with the licensing market. The decision has potentially broad implications for similar licensing agreements throughout the professional and collegiate sports world, at least at the pleading stage.

Plaintiff Patrick Dang alleged that Reebok's exclusive licensing agreement caused Dang to pay an anticompetitive overcharge on purchases of apparel bearing NFL team logs and other NFL intellectual property. Dang alleged that the agreement violated Sherman Act Section 1 and sought injunctive relief on behalf of a nationwide class of indirect purchasers. Dang also alleged that the agreement violated California's Cartwright Act and Unfair Competition Law, and sought to represent a class of California indirect purchasers.

In their motion to dismiss, defendants argued that Dang's alleged relevant markets for NFL apparel and NFL apparel licenses were too narrow because a relevant market cannot be based on a single brand or trademark. The Court disagreed, holding that the alleged market consisted of all 30 NFL teams' logos, and all of those teams competed with each other for apparel sales throughout the country. In addition, unlike trademarks that only serve to identify origin, NFL team logos 'may very well be the products themselves that consumers seek to purchase'. Furthermore, the Court found that non-NFL apparel, such as baseball, collegiate, entertainment or fashion apparel 'would not suffice as a reasonable substitute' for NFL apparel.

Defendants also argued that plaintiff lacked standing under Associated General Contractors of Cal., Inc. v. Cal. State Council of Carpenters2 because he was not a participant in the market where competition was allegedly restrained; Dang was a retail consumer of NFL apparel, but the alleged restraint occurred in the upstream market for NFL apparel licenses. The Court disagreed. As to the retail NFL apparel market, Dang's allegations were sufficient to establish standing under AGC because he 'clearly states that he participated in this market and suffered an injury in the form of an "anticompetitive overcharge"'. As to the NFL apparel license market, Dang's alleged injury in the retail market was 'inextricably intertwined' with defendants' alleged licensing conduct because 'the relevance and value of the apparel to the consumers lie in their containing and displaying the logos and trademarks of NFL teams'. Moreover, Dang claimed that he paid an overcharge that was 'directly traceable to the licensing market'.

Finally, the court rejected defendants' argument that the complaint lacked sufficient detail regarding the nature of Dang's purchases (type of apparel, identity of manufacturer, where it was purchased). The Court held that the complaint had sufficiently alleged an exclusive licensing agreement that would affect all NFL apparel purchases.

The decision could open the floodgates for plaintiffs to file similar cases challenging exclusive licensing deals involving other professional or collegiate sports organizations. Indeed, even other kinds of exclusive licensing agreements may be targeted where the licensed intellectual property can be alleged to be what consumers really want. Whether Dang can actually establish his allegations remains to be seen. Consumers looking for jackets with NFL team logos might find non-branded jackets to be reasonable substitutes if they are lower priced.

 

David R. Garcia
Partner
Leo Caseria
Associate
Sheppard Mullin
drgarcia@sheppardmullin.com
lcaseria@sheppardmullin.com

 

1. Case No. 5:12-CV-5481 (N.D. Cal.).

2. Associated General Contractors of Cal., Inc. v. Cal. State Council of Carpenters (AGC), 459 U.S. 519 (1983).

 

This article originally appeared on the Sheppard Mullin Antitrust Law Blog here.

A search for ‘apparel’ in World Sports Law Report’s archive returned six items. To access World Sports Law Report’s archive, which contains over ten years of sports law information, sign up for a free trial here.


Tuesday, August 06, 2013

NY State Appeals Court Affirms That Assumption of Risk Is Inapplicable in Wrestling Case

A New York state appeals court has affirmed the ruling of a lower court, denying separate motions to dismiss made by two defendant school districts in a personal injury case.

The impetus for the action occurred on 17 March 2009, when plaintiff Anthony C. Philippou, then 13-years-old, was participating as a wrestler in a dual meet as a representative of Lawrence Middle School, in the defendant Lawrence Union Free School District (LUFSD). The meet was held at Baldwin Middle School, in the defendant Baldwin Union Free School District (BUFSD).

Philippou was injured during a match when two mats, which had been taped together, came apart as his hand and arm hit the wood floor, following an attempted take-down by his opponent. He ultimately sued BUFSD and LUFSD to recover damages for personal injuries.

Separately, the defendants moved for summary judgment, arguing that the plaintiff assumed the risk of injury. The trial court denied the motions. The defendants appealed.

The appeals court noted that the defendants were successful in establishing that the plaintiff, an eighth grader who was involved in wrestling, a contact sport, was aware of the possibility of injuries.

“It is well established that a voluntary participant in sporting events has consented, by their participation, to injuries which are apparent or reasonably foreseeable consequences of the participation. (Turcotta v. Fell, 68 NY2d 432). When the risk of a sporting activity is fully comprehended and apparent, the participant has consented to them and the defendant has performed its duty. (Id.) An infant plaintiff, a wrestler, was held to have assumed the risk of a blow to the jaw in a take-down move, (Edelson v. Uniondale UFSD, 219 AD2d 614), and to have assumed the risk of being thrown down to the floor by a teammate during practice when half his body landed on the mat and the other half landed on the hardwood floor surrounding the mat. (Egger v. St. Dominic High School, 238 AD2d 542).”

The appeals court noted that the plaintiff, who had never wrestled before joining his school's team, had participated in eight wrestling matches as of the date of the subject wrestling match.

It then went on to examine the doctrine of primary assumption of risk, which mandates that “a voluntary participant in a sporting or recreational activity, ‘consents to those commonly appreciated risks which are inherent in and arise out of the nature of the sport generally and flow from such participation.’” (Weinberger v Solomon Schechter Sch. of Westchester, 102 AD3d 675, 677, 961 N.Y.S.2d 178, quoting Alqurashi v Party of Four, Inc., 89 AD3d 1047,1047, 934 N.Y.S.2d 214, quoting Morgan v State of New York, 90 NY2d 471, 484, 685 N.E.2d 202, 662 N.Y.S.2d 421; see Trupia v Lake George Cent. School Dist., 14 NY3d 392, 395, 927 N.E.2d 547, 901 N.Y.S.2d 127; Turcotte v Fell, 68 NY2d 432, 438, 502 N.E.2d 964, 510 N.Y.S.2d 49; Viola v Carmel Cent. School Dist., 95 AD3d 1206, 1207, 945 N.Y.S.2d 155).

“The principle of primary assumption of risk extends to those risks associated with the construction of a playing field and any open and obvious condition thereon.” (Castro v City of New York, 94 AD3d 1032, 1032, 944 N.Y.S.2d 155; see Viola v Carmel Cent. School Dist., 95 AD3d at 1207).

“If the playing surface is as safe as it appears to be, and the condition in question is not concealed such that it unreasonably increases risk assumed by the players, the doctrine applies.” (Cotty v Town of Southampton, 64 AD3d 251, 254, 880 N.Y.S.2d 656; see Bocelli v County of Nassau, 93 AD3d 747, 748, 940 N.Y.S.2d 660; Palladino v Lindenhurst Union Free School Dist., 84 AD3d 1194, 1195, 924 N.Y.S.2d 474; Rosenbaum v Bayis Ne'Emon, Inc., 32 AD3d 534, 820 N.Y.S.2d 326).

However, “a board of education, its employees, agents and organized athletic councils must exercise ordinary reasonable care to protect student athletes voluntarily involved in extracurricular sports from unassumed, concealed or unreasonably increased risks.” (Benitez v New York City Bd. of Educ., 73 NY2d 650, 658, 541 N.E.2d 29, 543 N.Y.S.2d 29; see Schmidt v Massapequa High School, 83 AD3d 1039, 1039, 921 N.Y.S.2d 547).

“Here, the defendants failed to establish, prima facie, that the injured plaintiff, by participating in the wrestling match, assumed the risk of being injured in the manner in which he allegedly was injured here. The defendants' moving papers failed to demonstrate, prima facie, that the allegedly dangerous condition caused by the improperly taped or secured mats did not unreasonably increase the risk of injury inherent in the sport of wrestling. (see Blumstein v Half Hollow Hills Cent. School Dist., 96 AD3d 702, 703, 945 N.Y.S.2d 426; Cotty v Town of Southampton, 64 AD3d at 254; Laboy v Wallkill Cent. School Dist., 201 AD2d 780, 781, 607 N.Y.S.2d 746).

“Since the defendants did not establish their prima facie entitlement to judgment as a matter of law, we need not consider the sufficiency of the plaintiffs' opposition papers.” (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853, 476 N.E.2d 642, 487 N.Y.S.2d 316).

Anthony C. Philippou, etc., et al. v Baldwin Union Free School District, et al.; S.Ct.N.Y., App. Div., 2d Dept.; 105 A.D.3d 928; 2013 N.Y. App. Div. LEXIS 2494 2013 NY Slip Op 2556; 4/17/13

Attorneys of Record: (for appellant Baldwin Union Free School District) Ahmuty, Demers & McManus, Albertson, N.Y. (Glenn A. Kaminska and Nicholas M. Cardascia of counsel). (for appellant Lawrence Public Schools) Congdon, Flaherty, O'Callaghan, Reid, Donlon, Travis & Fishlinger, Uniondale, N.Y. (Gregory A. Cascino of counsel),. (for respondents) Nathaniel M. Swergold, Cedarhurst, N.Y.

This article originally appeared in Sports Litigation Alert. World Sports Law Report editor Andy Brown writes a European round-up for Sports Litigation Alert. A search through World Sports Law Report’s archives, which contain over ten years of archives sports law information, found almost 30 articles relating to liability. To access the archive, sign up for a free trial here

Wednesday, July 31, 2013

Final draft of new WADA Code

In November this year, the final draft of the new World Anti-Doping Agency (WADA) Code (set to come into effect on 1 January 2015) will be presented to the World Conference on Doping in Sport in Johannesburg. This will be the third Code to come into effect since WADA was established in 1999. WADA has conducted a two-year consultation with sports and government world-wide, and has received submissions ranging from slight tweaks to wholesale changes to the 25 Articles that comprise the Code.
In Australia, the Australian Sports Anti-Doping Authority (ASADA) is the organisation that ensures that sports are in compliance with the Code, and by extension, that Australia is in compliance with its international obligations.
ASADA will, in due course, roll-out updated anti-doping policies to sports for adoption. This is likely to be a cooperative process to occur later this year and next. However, in the interim, we provide a brief overview of some of the more notable changes that are likely to impact on sport in Australia. 

 

Creation of new violations

Significantly, two new Anti-Doping Rule Violations (ADRV) have been introduced into the new Code:

• new article 2.9 makes ‘complicity’ in an ADRV a violation; this was arguably always the case, but the new Code clarifies the position; and 


• new article 2.10 creates a violation of ‘prohibited association’. This violation was proposed early in the consultation process and has survived into this likely final draft despite being the subject of some debate. In short, new article 2.10 makes it a violation for athletes and athlete support persons to ‘associate’ with a coach or trainer who is currently serving a ban, or has in the last eight years been convicted of conduct that would amount to a violation.

There are other conditions in place, but in certain close-knit sporting communities, the enforcement of this rule may cause sport some headaches (for example: a husband and wife scenario where one is serving a ban and the other remains an athlete. The same applies for parents and children, neighbours, and so on). No doubt education and guidance on the application of this ADRV will need to be introduced to sport.

These two new rules raise the number of ways an individual can fall foul of the Code from eight to 10. 

Retirement and return to competition (Article 5.7)

Typically, retired athletes must sit out a period of time between returning from retirement to actually competing in sport. This sitting out period was originally designed to ensure that returning athletes, who during their retirement were not subject to testing, did not return to sport with the benefits of having been able to use prohibited substances. 

New Article 5.7 enables an application to be made to WADA to waive this rule on a case-by-case basis in circumstances where a strict application of the rule would be manifestly unfair to an Athlete. The effect in Australia is that retired athletes may be more likely to consider returning to sport if there is the possibility they can compete immediately. Hence, sports may wish to consider implementing some policies or guidelines on handling such matters, particularly around selection time for major events.

Therapeutic Use Exemptions (Article 4)

There are a number of changes to the TUE system that are designed to create mutual recognition for TUEs across sport. In short, the system hasn't changed insofar as non-international level athletes should continue to apply to their National Anti-Doping Organisation (NADO), and international level athletes should continue to apply to their International Federation (IF). However, the new Code establishes that if an athlete holds a TUE that meets the International Standard requirements, then the IF must recognise it. 

Similar rules are in place for Major Event Organisers. That is, appropriate nationally granted TUEs will suffice for athletes, and they won't have to go through the existing hassle of applying to multiple TUE committees. This addresses the current problem of athletes attending events believing they had a TUE in place, only for it to not be recognised. It will be interesting to see whether, in practice, TUEs granted to athletes from developing or non-established NADOs, or areas where there is a suspicion of irregular practices, will be considered acceptable to the sporting world at large.

Mandatory Provisional Suspension elimination (Article 7.9.1)

In circumstances where an athlete can establish that their ADRV is likely the result of a contaminated product, the mandatory Provisional Suspension can be eliminated. 

This new article is one of a number of new articles that are introduced with a view to increasing proportionality relating to sanctions in the Code. In practice however, it may not operate as smoothly as intended: it may take time and effort for an athlete to prove a product contaminated, and until they do so they are likely to be provisionally suspended anyway. 
 

Sanctions (Article 10)

The area of the Code with the most changes is Article 10, which deals with sanctions. The intent behind the changes is that WADA wants sports to take a harsher line on intentional doping and to have more flexibility when it comes to inadvertent doping. By way of example:

• bans will be four years for Prohibited Substances that are not Specified Substances, unless the athlete can show that the use of the Prohibited Substance was not intentional. Presently, the starting point for a ‘standard’ sanction is two years, which can be increased to four years for aggravating circumstances.

The new changes will mean that the starting point (for non-specified substances) will be four years, and this can be reduced where the athlete establishes non-intentional use. Hence, the onus is reversed from the sport having to show aggravation to increase the ban, and placed on the athlete to show lack-of-intent to lessen the ban;

• bans for Specified Substances can also be four years if the NADO can establish that the use of the Prohibited Substance was intentional. Under current interpretations, this may potentially lead to a four-year ban for the supplement-based stimulant cases that we see and hear so much about.

In Australia, unlike some other jurisdictions globally, the methylhexaneamine supplement cases commonly receive sanctions of a two year ban due, in part, to the athlete being unable to show 'no intent to enhance performance'. By extension, under the new regime, if the NADO can prove an intent to enhance performance (as opposed to the athlete being unable to prove no intent to enhance performance), the athlete may face a four year ban;

• bans for Evading, Refusing or Failing to Submit to Sample Collection, and for Tampering will also be four years, and will be from four years to life for Trafficking and Administration. Prohibited Association will range between one to two years based on the Athlete’s degree of fault; and

• if an athlete can establish that a product was contaminated, their ban may range from a reprimand up to two years. The effect of this is that in genuine contamination cases, innocent athletes may not face any time out of their sport. Currently athletes in this situation typically can hope at best for a 12-month ban under the No Significant Fault or Negligence provisions.

Substances of Abuse (Article 10.5.1.3)

A new article for substances of abuse has been included. It specifically refers to cocaine and cannabis, but others may be forthcoming. For a finding involving these substances, a penalty between a reprimand and up to one year may be imposed, and this will depend on the athlete being able to show that their use was unrelated to sport performance. Rehabilitation may also be imposed in place of part of the ban. Combined with the fact that WADA has also recently increased the detection limit for cannabis ten-fold, this sends a clear message to sport world-wide of how WADA wants these types of matters to be processed.

Other

Other new provisions include a requirement for athletes to cooperate with investigations into ADRVs. This is a timely inclusion, and echoes the ASADA Amendment legislation recently passed by the Australian parliament. 

Interestingly, There was a suggestion in the early drafts of the Code changes that WADA wanted to eliminate the ‘B Sample’ process. It was argued that it was too expensive to maintain, and particularly in circumstances where the B matched the A in almost every case, it had become redundant. The new Code however clarifies that the B Sample will remain. It was considered too important to maintaining a fair system and protecting athlete's rights to omit. WADA is also updating their International Standards that deal with testing, laboratories, privacy and so on.

 

Richard Redman
Senior Associate 

Garth Towan
Lawyer
Lander & Rogers, Australia
rredman@landers.com.au
gtowan@landers.com.au

This article originally appeared on the Lander & Rogers internet site here.

Footballer caught offside in religious debate

Footballer Papiss Cisse, who plays for Newcastle United in England’s Premier League, has refused to wear the club’s new strip as it is sponsored by Wonga, a loan company whose lending principles offend Sharia and Islamic principles relating to the charging of interest on loans. David Whincup, a Partner with Squire Sanders, explains whether pictures of him at a casino will undermine his position.
 

Hats off for a striking own-goal scored by Premiership Footballer Papiss Cisse in his dispute with Newcastle United FC (see our post of 15 July – Football Strip Adds Interest to Debate). To re-cap, Cisse has refused to wear Newcastle’s usual strip because the activities of its shirt sponsor, Wonga, offend Sharia and Islamic principles relating to the charging of interest on loans.

No solution to that issue has yet been reported, but you can expect what little sympathy Newcastle fans and bosses might have had for his position to have been significantly eroded by the recent appearance of photographs of Cisse in the City’s Aspers Casino. Aspers confirms Cisse as an ‘occasional visitor’ (i.e. more than once) who is – perhaps by way of distinction from other visiting footballers – “very well-behaved and very welcome”. The casino would not confirm whether Cisse did actually gamble – another infringement of Sharia law – and his agent denies it, but the photo of him sitting at a dealing table, hat pulled down (hats only permitted in the Poker Room, reveals Aspers’s dress code, oddly), may then take some explaining.

Helpful this may be to Newcastle’s PR position in its dispute with Cisse about the Wonga branding, but does it actually alter the law behind it? It would be a brave employer which took from an employee’s marginal respect for one tenet of his faith that he must therefore be equally willing to ride roughshod through others. However, the Cisse question is a little different. His issue with Wonga is not that it requires him to breach Sharia law in benefiting from the charging of interest, but that his wearing the strip promotes an organisation which does, and so gives the wrong impression to other Muslims. It is a much harder argument to contend that you are willing to be associated with certain non-Islamic behaviours and not others. At least with the strip issue, Cisse could argue that he is contractually bound to wear it and that his contract expressly prevents his wearing it being used to indicate his support for the sponsor. Periodically wandering into Aspers, on the other hand, must be seen as wholly voluntary and so quite without the same possible mitigation. Whether he did actually gamble is then about as relevant as whether he does actually lend money at usurious interest rates, i.e. not at all.

Cisse’s local councillor and a supporter in the Wonga debate says: “Islam is not about picking and choosing”. Maybe not, but his appearances in one of the region’s premier gambling joints have certainly lengthened the odds on his chances of success were this particular off-field drama ever to be played out in the Newcastle Employment Tribunal.

 

David Whincup
Partner
Squire Sanders, London
david.whincup@squiresanders.com

 

The article originally appeared on the Squire Sanders Blog, here.


Twitter parody accounts: the inside story on Adam Gilchrist’s Twitter twin

Samantha McHugh, a Solicitor at King & Wood Mallesons, provides an interesting insight into how parody Twitter accounts of famous athletes can lead to confusion and offence, and how athletes can best avoid that situation.

Soon after publishing our post about Adam Gilchrist’s Twitter twin, we received a direct approach from @AdamCGilchrist, the account in question:

‘Hi, thanks for following. What are you saying I need to change on my account in your tweet? It was not my intention for all of this that has happened, it was supposed to be just a bit of fun parody account and I certainly didn’t want to offend Gilly. I’m amazed that the journalist didn’t do due diligence as it clearly states parody obviously on my account and there is no blue tick next to my name. If you read the tone of most of my tweets – I would have thought it was ‘parody obviously’ – certainly didn’t expect any of this. Thanks for your time’.

Background

We’ll share ‘Fake Gilly’s’ side of the story shortly, but for those who missed it, here’s the background. Back in July 2012, the @AdamCGilchrist Twitter account was set up. The profile of the account did then, and has always clearly stated ‘Parody, obviously’. The person behind the account went about Tweeting all things cricket from the parody POV of the great man, Gilly. Last week, the account began live-Tweeting the opening Test of the 2013 Ashes – the ups, the downs, and the controversies. Little did our mystery Tweeter know he was about to be embroiled in a controversy all of his own.

After England’s Stuart Broad contentiously refused to ‘walk’ on day three, social and mainstream media were abuzz with opinion. Given the well-known incident from the 2003 World Cup semi-final, in which Adam Gilchrist showed true sportsmanship by walking, even though he was given ‘not out’, it is no surprise the parody account was sparked into action. The @AdamCGilchrist account Tweeted a series of Tweets about the incident, which were then falsely attributed by mainstream media, including Fox News, as originating from Adam Gilchrist himself:

‘Former Test wicketkeeper Adam Gilchrist, who earned a reputation during his playing career for not waiting for the umpire’s verdict and walking back to the pavilion, was angered by Broad’s decision. “Some people saying, you rely on the umpire. No you don’t, you rely on honesty”, Gilchrist tweeted, adding: “Disappointed by the Poms today, if you’re out - you walk”’.

Given the way Twitter feeds and conversations operate - where a user’s full profile is not displayed unless you choose to click to a new page - it is understandable (though not excusable) that such mistakes can happen.

Reports suggest the real Gilchrist has since launched his own Twitter feed to plead with the ‘imposter’ to shut the account. Is it fair, however, for @AdamCGilchrist to be pilloried in this way?

Twitter parody accounts

Twitter’s guidelines permit parody accounts, as long as they comply with Twitter’s various policies. We can only speculate about the basis for Twitter’s parody policy, although it’s well known that its CEO, Dick Costolo, is a former improvisational comedian who started out with the likes of Steve Correll. In other words, not taking Twitter too seriously, and having a sense of humour about it, is perhaps a lesson to all of us that ‘social’ is a core ingredient of ‘social media’.

@AdamCGilchrist is in good company with parody Twitter accounts forming a species of their own, some lauded, some less so. Take for example: ‘Not Mark Zuckerberg’, The New York Times and HRH Queen Elizabeth (which has more than one million followers).

Indeed, one of the trending parody accounts during the 2013 Tour de France is @TweeterSagan, who mimics the Slovak accent of the great sprinter during his Twitter feeds:

TweeterSagan® @TweeterSagan

‘It true, I suck compare to Cav. But compare to green jersey? I still first’.

2 RETWEETS 1 FAVORITE

Our fireside chat with ‘fake Gilly’

Exploring why people get involved with parody accounts is helpful in understanding this niche aspect of social media. For insights, we look no further than ‘Fake Gilly’, who has been kind enough to answer some questions we put to him. His responses are below.

1. What are your interests when you’re not tweeting as @AdamCGilchrist?

I’m a big sports fan as you can imagine, cricket, tennis, golf, soccer. I also have a wife and two kids whom I love spending time with. I occasionally like to travel as well when the opportunity arises through work and have spent several months in different parts of the globe.

2. What inspired you to open this parody Twitter account?

I thought it would be good fun. There are thousands of parody accounts on Twitter, some of which are really funny and I fancied trying my hand at it. I wanted to exchange views with fellow cricket fans with a bit of ‘tongue in cheek’ and to spark a bit of banter.

3. Why Gilly?

I thought Gilly would be a good one to do as a typical, upstanding, traditional Aussie bloke. If you look at the tone of a lot of my tweets they would be best read with a strong Aussie accent – particularly the ones where I talk about spending time on Gilly Ranch. I thought there would be a fair bit of humour in the role of supporting Shane Warne as mentioned in my bio following the years that we heard ‘bowling Shane’, ‘lovely Shane’, keep ‘em coming Shane’ etc.

4. How much time do you spend on the account each day?

When time allows, you will note that sometimes I don’t go on for a few days and then at other times I can go on four or five times in one day. I was particularly keen to tweet about the Ashes. 

5. Do you operate any other parody accounts (whether on Twitter or otherwise)?

No, not at the moment, although I have been considering starting another one for some time.

6. If yes, would you be willing to reveal which ones?

N/A

7. Did you know about Twitter’s Parody Policy before this?

Not really, I thought the statement of ‘parody, obviously’ in the bio would be enough – and obviously I will never have a blue tick next to my name.

8. What do you love most about Twitter?

It’s a great opportunity to chat and exchange views, it’s a quickfire forum and I don’t think it should be taken too seriously.

9. Can you give us any tips on how we too could end up with more than 6,000 followers?

Ha, given Gilly’s popularity I followed a few people in cricketing nations such as India, Pakistan, England and Australia which led to getting some follow backs. Once I then started getting a few retweets along the way the account picked up pace. I’ve also had a few mentions/ retweets from famous cricketers along the way, which usually show a spike in followers afterwards.

10. How have you felt about reaction by Adam Gilchrist to the parody account? Do you think it might impact your own conduct in the future?

If I was misquoted by the press I’m sure I would be frustrated too, although I repeat I’m amazed the press were able to make such a mistake in the first place. I do think however that Gilly might not feel so badly about me if he read the account and saw that I’m not actually trying to be him but just to provide a bit of light entertainment and the occasional view on cricket. I would love the opportunity to apologise to him for the furore that has occurred and for the fact I have led to him being ‘misquoted’, but I would also love to explain to him the ideals of the account and that offence was never intended.

Cheers,

Fake Gilly 
 
PS – yes I am ‘he’.
PPS – I think the Gilchrist who took to Twitter to ask me to stop is also a fake although I might be wrong. Gilchrist did an interview with the BBC after that account was set up and said he had never been on Twitter.

Managing parody Twitter accounts

It is for others to assess how they feel about parody accounts. We consider it incumbent on us to suggest a few tips to help all stakeholders manage the question of Twitter parodies.

• If you’re a journalist, check a user’s profile before attributing quotes. This means you won’t be left with egg on your face. This incident could easily have been avoided.

• If you’re starting a parody account:

- read Twitter’s Parody Policy;

- make clear that it’s a parody (have a think about what a ‘parody’ means, how you want readers to interpret your tweets, and whether each tweet should have a humorous tone. According to the Macquarie Dictionary, a parody includes “to imitate (a composition, author etc.) in such a way as to ridicule”);

• ensure your Twitter handle and username are not identical to the person’s name [Perhaps @AdamCGilchrist could change his handle to @notadamgilchrist or @thegreatgilly, with a corresponding user name]; and

• use images carefully. You will infringe copyright of the photographer/agency if you reproduce their photo without permission.

If you’ve been parodied:

• can you grin and bear it? Sometimes a laissez-faire approach is best;

• why not get on Twitter yourself (with a verified account displayed by the blue tick to which @AdamCGilchrist refers)? You could reap the benefits of those thousands of followers currently following your impersonator; and

• If not, and users are clearly confused, consider reporting to Twitter.


By Samantha McHugh, Natalie Hickey and Daniella Phair. This article originally appeared on IP Whiteboard here.


Thursday, July 25, 2013

Time for some sense on doping

Since it came to light that US sprinter Tyson Gay and five Jamaican athletes have reported positive A-samples last week, pandemonium has ensued. Newspaper articles have consistently described sprinters Gay and Asafa Powell as cheats, despite both insisting that they have never knowingly taken a banned substance. “We do not know the pathology in these particular cases but the broader message is simple: abnormalities will be found out”, Lord Coe told the Daily Mail. “There is no ambiguity about that. We will get rid of the cheats.”

WADA President John Fahey commented in a similar vein. “Every athlete in the world is responsible for what goes in his or her system – that’s the start and finish”, he told the Independent. “Every athlete has to make sure they know what they’re doing. My take is that no matter how big or great you are as a star and whatever your sport you’re not beyond the capacity to be found as a cheat through the methodology adopted.”

Understandably, the media have focussed on the second aspect of this – rooting out the cheats. As the above quote from Coe illustrates, we do not yet know the pathology in these cases, yet he goes on to talk about getting rid of cheats. Before his quote, which could be taken as labelling Gay and Powell as cheats, Fahey tells the Independent that he will not discuss individual cases while ongoing!

Neither the US Anti-Doping Agency (USADA) nor Gay has announced the substance involved in returning the positive A-sample. “I don’t have a sabotage story”, said Gay in a telephone interview with ABC News. “I don’t have any lies. I don’t have anything to say to make this seem like it was a mistake or it was on USADA’s hands, someone playing games. I don’t have any of those stories. I basically put my trust in someone and I was let down.”

A USADA statement read: ‘In response to Mr. Gay’s statements, USADA appreciates his approach to handling the situation and his choice to voluntarily remove himself from competition while the full facts surrounding his test are evaluated. The B-sample will be processed shortly, and as in all cases all athletes are innocent unless or until proven otherwise.’ In other words, Gay is still innocent until the B-sample is returned.

Powell released the following statement: ‘I will confirm that a sample I gave at the National Trials in June earlier this year has returned “adverse findings”. The substance oxilofrine (methylsynephrine) was found, which is considered by the authorities to be a banned stimulant. I want to be clear in saying to my family, friends and, most of all, my fans worldwide that I have never knowingly or wilfully taken any supplements or substances that break any rules. I am not now – nor have I ever been – a cheat.’

Powell’s statement confirms that his team is investigating how the substance got into his system and that he has also withdrawn from the International Association of Athletics Federations (IAAF) World Championships, Moscow, 10-18 August. The Jamaica Gleaner republished a statement from sprinter Sherone Simpson reporting a positive test for the same substance.

Oxilofrine (methylsynephrine) is listed as a stimulant under S6 of the World Anti-Doping Agency’s (WADA) 2013 List of Prohibited Substances and Methods. It is understood to be an ingredient in some dietary supplements. In 2010, cyclist Flavia Oliveira was banned by the United States Anti-Doping Agency for two years after reporting a positive test for oxilofrine. In the decision, she contends that oxilofrine may have entered her system due to consumption of a supplement Hyperdrive 3.0+, which doesn’t list oxilofrine on its list of ingredients but does list methylsynephrine, which didn't appear on WADA’s 2012 List but is understood to have a similar chemical structure.

Of the Jamaican athletes, only one (understood to be Powell) has requested testing of their B-sample, and the athlete has been notified of two possible dates for this by the Montreal laboratory accredited by the World Anti-Doping Agency (WADA) involved with testing the A-samples. The Jamaican Anti-Doping Commission (JADCO) is awaiting instructions from the other athletes before referring any cases to the Jamaica Anti-Doping Disciplinary Panel, reads a 15 July statement from Jamaican Prime Minister Portia Simpson Miller.

‘Let me take this opportunity to assure the Members of this Honourable House and the People of Jamaica that Jamaica - through its Anti-Doping Agency, JADCO - has consistently had a rigorous programme for in and out of competition testing while providing public education for all who participate or wish to participate in sport, including at the high school level’, reads the statement. ‘Questions have been raised regarding the delayed response of the Government to the public announcement of these findings. Let me assure you, Mr Speaker that as a Government we have made every effort to adhere to the rules governing the notification of the athletes whose A-Samples have returned Adverse Analytical Findings following testing at the National Junior and Senior Championships in June. Indeed, Mr Speaker, one of the athletes was only notified yesterday as he was travelling, so we had to delay our public statement until we were sure that due process was observed.’

In other words, what we have here is a number of athletes who have been labelled as cheats by the media following the return of a positive A-sample, despite the fact a positive test is inconclusive until the B-sample is returned. Of those that have confirmed the substance in their system, we know it to be an ingredient that sometimes goes under different names on the label of certain supplements. Therefore, is it right to label them cheats at this stage?

There could also be a commercial angle to this. Reuters reports that Chinese sportswear company Li-Ning has suspended its sponsorship agreement with Powell. If Powell’s B-sample comes back negative, does he have a legitimate claim against Li-Ning for unlawful termination of a contract? Even if the sample comes back positive and Powell is found to have inadvertently doped, after checking a supplement’s ingredients, he could still have a case.

Those involved in policing against doping in sport need to be careful not to be pulled in by their own rhetoric. Yes, sport needs to get tough on doping cheats, but it also has a role to play in supporting athletes accused of doping until they are proven to be cheats – a role that is becoming increasingly forgotten. Athletes such as Gay and Powell have not yet been proven to be cheats. Until that day comes, the sporting community has a duty to support them.

Andy Brown

World Sports Law Report organises Tackling Doping in Sport in association with UK Anti-Doping, which will be held 19-20 March 2014. search on World Sports Law Report's archives revealed five articles mentioning the Oliveira case. The archive contains over ten years worth of sports law information. To access this invaluable resource, click here for a free trial to World Sports Law Report.



Tuesday, July 16, 2013

NFL ‘Sacks’ Websites Selling Counterfeit Merchandise

A Manhattan Federal court has recently awarded the US National Football League (NFL) a $273 million judgment against the operators of over 1,000 websites selling counterfeit NFL merchandise. Edward F. Maluf and Christopher Baxter, of Seyfarth Shaw LLP, explain the ruling.
 

Retailers concerned about protecting their valuable trademarks recently secured a meaningful victory. On 28 June 2013, a Federal court in Manhattan awarded the National Football League (NFL) a $273 million judgment against the operators of more than 1,000 websites who were selling counterfeit NFL merchandise. This case, while providing a substantial financial award to the trademark owner, was also notable because only two months had elapsed between the time that the NFL filed its complaint and request for a preliminary injunction until the court rendered its judgment.

The defendants in this case were Asian counterfeiters who manufactured counterfeit NFL products outside of the US. The defendants then globally marketed and sold the products through their websites, many of which were designed to appear as if the NFL had authorised them. Further, these sites were in English, accepted payment in US dollars through a variety of portals such as PayPal and Western Union, claimed to provide superior customer service, and concealed the fact that the website registrants were not located in the United States.

The NFL, after determining that its valuable brand would incur significant irreparable harm from the defendants’ conduct, sued the defendants alleging federal trademark counterfeiting and infringement, cybersquatting, unfair competition and false designation of origin, as well as other state unlawful deceptive acts and practices. Specifically, the NFL claimed that the defendants:

• were part of a network of counterfeiters who engaged in the manufacture, importation, distribution, advertising and sale of products designed to look like genuine NFL products;

• without the NFL’s authorisation and in order to deceive NFL customers, used the NFL’s marks on websites designed by the defendants to appear as if they were authorised by the NFL;

• registered the domain names with a bad faith intent to profit from the unauthorised use of the NFL’s marks; and

• used the NFL’s marks in a manner likely to cause, and which has caused, confusion, mistake, and deception by and among consumers.

The NFL sought an injunction to prevent the defendants from using its marks, to have the infringing domain names disabled, and to transfer control of defendants’ registration, ownership, and control of the infringing URLs to the NFL. In addition, the NFL sought disgorgement of defendants’ profits realised from the sale of the counterfeit goods, statutory damages of $2 million for each and every NFL mark wilfully counterfeited by each defendant, as well as statutory damages of $100,000 per infringing domain name. Finally, the NFL sought its attorney’s fees and costs associated with the litigation.

When the defendants’ failed to appear, the court issued the NFL a default judgment. In so doing, the judge awarded the NFL maximum statutory damages totalling $150 million for wilful counterfeiting of the NFL’s products along with maximum statutory damages totalling $123.3 million for wilful cybersquatting. The Court allowed the NFL to collect money directly from the defendants’ PayPal accounts until the granted monetary relief had been collected in full, and to collect directly from the PayPal accounts of any of defendants’ newly discovered aliases, businesses, and/or websites. The judge also granted the NFL ownership and control of all the currently infringing domain names. Any newly discovered infringing domain names defendants controlled were also to be transferred to the NFL.

This case is a victory for retailers and others seeking to protect their trademarks from these opportunistic infringers. Because it did not have to engage in the extensive discovery and other related litigation activities that usually accompany a lengthy court proceeding, the NFL only had to invest a small amount of money in order to preserve its brand integrity and reputation. In the end, the NFL was able to recover significant money and maintain its global consumer goodwill.

Edward F. Maluf Partner
Christopher Baxter
Seyfarth Shaw LLP, New York & Boston
emaluf@seyfarth.com
cbaxter@seyfarth.com

This article originally appeared on the Seyfarth Shaw LLP internet site. To view the original article, please click here.
 
search on World Sports Law Report's archives revealed over ten articles dealing with counterfeit products. The archive contains over ten years worth of sports law information. To access this invaluable resource, click here for a free trial to World Sports Law Report.

Friday, July 12, 2013

Player Contracts 2013: Safeguarding Youth Key

The safeguarding of young players will become crucial in football, heard delegates at Player Contracts 2013, which took place in London on 11 July. Clubs are likely to target the youth market in order to remain within regulations restraining player spending, such as UEFA’s Financial Fair Play Regulations and the FA Premier League’s planned salary controls. However the effectiveness of such regulations is in doubt, as spending on transfers is increasing.

100 delegates from 13 countries heard presentations from FIFA, the FA Premier League, the European Club Association, the Professional Footballers Association and more. Kimberley Morris, of FIFA’s Transfer Matching System, outlined how the number of completed player deals fell by 2%, but the value of the deals increased by 39% in the first half of 2013 compared to the first half of 2012.

Patricia Moyersoen, legal advisor to clubs including AS Monaco (ASM) and Paris Saint-Germain, explained how France’s Ligue de Football Professionnel (LFP) is currently fighting government plans to tax anyone earning more than €1 million at 75%. Luca Ferrari, legal advisor to Italy’s Serie B, explained its plans for a salary cap.

Ged Roddy, Youth Director of the FA Premier League, explained how the FA Premier League has committed £350 million to invest in youth development from 2012-2015. He outlined how the Elite Player Performance plan is transforming youth development by ranking clubs according to player productivity in order to target investment in youth. Other sessions focussed on contract breaches, insolvency, compensation and cases involving youth players.

Delegates at the event included eight football clubs, two football leagues, two national associations, one international federation, four player organisations, player representation companies, agents and - of course - their numerous legal advisors. "The variety of the topics was very good, as was the quality of the presentations and speakers", said a delegate.

Player Contracts is just one annual conference organised by World Sports Law Report and Cecile Park Conferences. Other events include Sport & Betting and Tackling Doping in Sport. For full details including a full programme for Player Contracts 2013, please visit www.cecileparkconferences.com. Player Contracts 2014 will take place on 17 June.

Andy Brown


Tuesday, July 02, 2013

BT Ofcom complaint over BSKyB's supply of Sky Sports channels: previous complaint against Sky dismissed

British Telecom (BT) has made a complaint to the UK's Office of Communications (Ofcom) alleging that the terms on which BSkyB offers its Sky Sports channels to the YouView platform constitute abuse of a dominant position, contrary to Article 102 of the Treaty on the Functioning of the European Union. BT indicated that BSkyB has refused to supply Sky Sports 1 & 2 to the YouView platform unless BT supplies its BT Sport channels wholesale to BSkyB.

Ofcom has opened an investigation under section 25 of the Competition Act 1998, to consider whether BSkyB is in breach of UK or EU competition law. A decision on interim measures requested by BT is expected in July.

The complaint was made in the same week that Ofcom ruled on an earlier complaint made by BT in April that BSkyB unduly discriminated against it by refusing to air advertising for BT’s new television sports channels on Sky Sports channels, holding that BSkyB’s refusal was justified.

BSkyB refused to advertise BT Sport on Sky Sports, given the level of their investment in those channels. BT complained that this was in breach of the Code on the Prevention of Undue Discrimination between Broadcast Advertisers. Ofcom investigated the complaint and delivered its ruling last week, dismissing the complaint stating that by refusing to promote a rival’s sports coverage on its sports channels BSkyB was ‘pursuing a legitimate commercial interest’.

BT will be hoping for a decision on their more recent complaint in advance of the start of the next Premier League season in August. A positive result for BT would allow them to offer the full range of live matches on their YouView service, while denying BSkyB the ability to offer its satellite subscribers coverage of BT’s 38 live matches.

 

Andrew Preston, Trainee
DLA Piper

 

This article originally appeared on the DLA Piper blog here. Patrick Mitchell, a Senior Associate at DLA Piper, is a Global Editor of the blog and can be contacted on patrick.mitchell@dlapiper.com


Methylhexaneamine: why WADA needs to clarify its Prohibited List

Jamaican 400-metre runner Dominique Blake was recently banned for six years. The Jamaica Anti-Doping Disciplinary Panel handed down the penalty after Blake tested positive for the banned stimulant methylhexaneamine at last year's Olympic trials. It was her second offence.
 

Methylhexaneamine is classified as a stimulant under Section S6 of the World Anti-Doping Agency's (WADA) Prohibited List of banned substances. The likely source of the substance in Dominique's system is a supplement she was taking called Nuerocore. An examination of the Nuerocore label showed one of the ingredients as 'geranium extract (as Geranium robertianum, aerial parts)'. Methylhexaneamine is a component of the geranium extract.

As I explained in a 2009 Gleaner article, methylhexanamine (more properly called 4-methyl-2-hexanamine) is a natural compound found in tiny amounts in the oil from the leaves and stalk of the geranium plant. The oil is clear to light green in colour and has a minty-flowery smell. It is used mainly in the food and perfume industries. Methylhexanamine is the same substance for which Yohan Blake, Marvin Anderson, Lansford Spence, Allodin Fothergill and Sheri-Ann Brooks returned positive tests in 2009.

Back then, methylhexaneamine was not on the WADA Prohibited List of banned substances. It was put on the following year. Why were the athletes (except for Sherry-Ann Brooks) penalised, then? This was because WADA's 2009 List, while not naming methylhexaneamine specifically, included it under a broad category with 'tuaminoheptane and other substances with a similar chemical structure or similar biological effect(s)'.

I disagreed then and I disagree now with lumping compounds together under 'similar chemical structure'. This is because, without rigorous scientific analysis, one cannot equate similar biological effect with similar chemical structure. It is the similarity in biological effect which is important. Indeed, there are about 80 other compounds, as yet unnamed on the WADA List, which are similar in structure to tuaminoheptane and methylhexaneamine. They can all form the basis of career-ending decisions by the Jamaica Anti-Doping Commission (JADCO) and WADA, but are yet unnamed.


The main 2012 WADA List (The 2012 Prohibited List International Standard), which Dominique said she used to check her supplement, does not list 'geranium extract (as Geranium robertianum, aerial parts)' as a banned substance. This was part of Dominique's defence. However, as she found out, there is another 2012 WADA List called the 'Summary of Major Modifications and Explanatory Notes'. Rather than 'summarising', this List provided an additional six names for methylhexaneamine.


Within this 'Summary' listing, methylhexaneamine is described as 'geranamine, geranium root extract, or geranium oil, etc'. These names are close enough to those on her Nuerocore label, JADCO concluded, for Ms Blake to have been duly warned. So if an athlete was unaware that there is a supplementary List that must be checked as well, please be informed now.
And what about the trade names and the many other names (such as dimethylpentylamine, 4-methyl-2-hexanamine, and Forthan) under which methylhexaneamine is sold in the many supplements out there? The WADA List does not cover most of them, and athletes without scientific support can feel like they are in a loaded minefield, where even the best due diligence can come up short.



No scientific data


The situation is made more complicated by the absence of any scientific data which support the view of any performance-enhancing properties of methylhexaneamine. Indeed, the only study that I am aware of that investigated this (in searching more than 100 years of scientific literature) is a 2011 paper by Richard Bloomer et. al. in the Journal of Caffeine Research. The study showed that methylhexaneamine had no effect at all on athletic performance. Why is methylhexaneamine on the list then? Only WADA can say.


While WADA has an enormous job to do to weed out those who cheat by deliberately using performance-enhancing substances - and, in that regard, it must be supported - in many ways the present system is a minefield that is difficult to navigate, even for the most diligent athlete. The penalty for the athlete's transgression is so great that the following measures must be introduced sooner rather than later:


• WADA must present hard scientific facts on the banned substances in every single case to support sanctions. The scientific studies to date do not show any evidence that methylhexaneamine enhances athletic performance, yet the substance carries a severe penalty.


• The WADA List must be updated constantly to reflect all the scientific names, common and trade names of the banned substances therein. About half of the alternative names of methylhexaneamine are not on the WADA Lists, and;


• Only one List per year is necessary. If a summary List has to be used, it should not contain additional information, as this just makes things more difficult for the athletes. For example, the summary list for methylhexaneamine contained six different names other than those on the main List. An athlete could miss these if he or she checked the main List only. In Dominique's case, this oversight contributed to her six-year ban.


In all of this, our athletes need scientific support, replete with the appropriate education and training to navigate this obstacle course. The most recent case of Veronica Campbell-Brown returning a positive test for the banned diuretic Lasix serves to emphasise this. We have to act now! We can't afford for our athletes to make mistakes that can taint and ruin promising careers.



Peter L. Ruddock, PhD, is a medicinal chemist and served as expert witness for the defence team of Yohan Blake, Marvin Anderson, Lansford Spence, and Allodin Fothergill (v JADCO) in 2009, and for the legal defence team of Dominique Blake in Blake v JADCO in 2013.

peter.ruddock@yahoo.com

This article was originally published by the Jamaica Gleaner here


Thursday, June 27, 2013

Increased funding crucial to anti-doping

A call for increased funding to tackle doping in sport made by UK Anti-Doping (UKAD) during the Tackling Doping webinar on 26 June was underlined by today’s release of the World Anti-Doping Agency’s 2012 annual report. ‘The biggest constraint ahead for WADA is limited funding’, wrote WADA President John Fahey in the report. ‘For the second consecutive year, WADA’s Foundation Board voted to keep the 2013 budget frozen at approximately US$28 million, the same level of funding received in 2011, because governments did not agree to provide any additional funding for WADA. While I appreciate that economies across the world continue to struggle, this freeze is not ideal for the fight against doping in sport. WADA has dipped into its reserves over the last two years to cover shortfalls for its operating costs, but if funding continues to remain the same, the Agency will be forced to cut back its activities.’

“There needs to be a drive to increase investment”, UKAD Chief Executive Andy Parkinson told the Tackling Doping webinar yesterday. “The new version of the Code [2015 Code, published last week] is more targeted and focussed, but there is a feeling that certain organisations are not applying the Code in the same way that others are”. Parkinson said that more needed to be done to ensure that WADA has the resources available to investigate and sanction those not correctly implementing the Code.

Parkinson also supported a change of emphasis in the Code, regarding the introduction of four-year bans. Under the existing Code, sporting organisations would begin with a two-year ban, which could be increased up to four years maximum in cases involving ‘aggravating circumstances’. The 2015 version of the Code starts with a four-year ban, which can then be reduced depending on the circumstances of the case. “The current draft has taken great steps to punish serious dopers”, he said, adding that WADA would soon release a legal opinion on how this change complies with European Union law.

Delegates also heard from Ana Muñoz, Director of the Agencia Española para la Protección de la Salud en el Deporte (AEPSD), who outlined Spain’s new legislation criminalising doping. “Spain has arrived late to the fight against doping”, she said, “but 2013 marks a change”. Muñoz said that Spain is moving towards a general sports law covering match-fixing, doping and corruption. She said that the AEPSD would continue its appeal against a court’s decision to order the destruction of the blood bags connected to the Operación Puerto investigation once all appeals against its judgment imprisoning Dr. Eufemiano Fuentes have been exhausted. “We want the blood bags and the names”, said Muñoz. “It is essential to know who these athletes are”.

The Tackling Doping webinar, which was free of charge, was organised by World Sports Law Report in association with UKAD. The annual Tackling Doping in Sport conference will next take place in 2014 in London.

Andy Brown


Friday, June 21, 2013

Training Compensation and Contract Termination in Portugal

Felix Majani, a consultant with Coelho Ribeiro e Associados, examines how training compensation and contract termination in football is regulated in Portugal.
 

The two major regulations governing the payment of solidarity mechanism and training compensation in Portuguese football are the collective labour agreement for professional football players (CCT)1, and the regulations of the Portuguese Football Federation on the status and transfer of players (PFF Transfer Regulations). The amount of training compensation that shall be due to the training club immediately following the signing of a first professional contract by a player is mandated by Article 28 of the CCT, as well as by Article 20 of the PFF Transfer Regulations.

The rules of the federation 

Under article 20 of the PFF Transfer Regulations, training compensation is payable to all the club(s) involved in the training and development of the player:

• When the player signs his first professional contract.

• Each time the professional player transfers to another club up to the end of his 23rd birthday.

• When the professional is transferred between clubs or two different associations (whether during or t the end of his contract), before the end of his 23rd birthday.

Annex 4 of these regulations establishes a table similar to the one contained within the FIFA regulations for training compensation. Training compensation is not due when:

• the training club terminates the player's contract without just cause2;

• the player is transferred to a category 4 club;

• the professional re-acquires amateur status upon being transferred.

In accordance with Article 3 annex 4 of the PFF Transfer Regulations, the duty to pay training compensation lies with the club which registers the player as a professional for the first time. It must pay all the clubs which contributed to the training and development of the player from his 12th birthday.

Calculation 

Article 5 Annex 4 of the PFF Transfer Regulations mandates that the amount due to all previous clubs involved in the player's development is calculated on a pro rata basis by multiplying the number of years the player spent training from his 12th birthday to his 21st birthday. In case of subsequent transfers, the same is calculated on the basis of the training costs incurred by the new club multiplied by the number of years of training spent by the player at the former club. For players aged 12-15, the training costs are assessed on the basis of the training and education costs of category 4 clubs.

The CCT provisions 

Annex 3 Chapter 2 of the CCT foresees the indemnification of all training clubs for the development and training of players in two situations:

• When the player signs his first sporting professional contract.

• Compensation in situations besides this.

Annex 3 Chapter 2, Article 33 of the CCT entitles all the clubs involved in the training and education of amateur players to indemnity (compensation) immediately following the signing, by players, of their first professional contract. The minimum conditions entitling the training club to receive such payments are set out in Annex 3 Chapter 2, Article 33.2 of the CCT, and are as following:

• The training club must have communicated in writing to the player, before 31 May of the year in which the player's training period is due to end, informing him of its desire to enter into a professional contract with him on the terms, conditions and minimum remunerations that have been fixed for players by the competition in which the club has been integrated.

• The training club must submit a copy of this letter of intention to contract the player to the Portuguese professional football league and the Sindicato dos Jogadores Profissionais de Futebol (SJPF) no later than 11 July of the following year. The SJPF is the Portuguese professional footballer's union.

• The player must not, as at the 31st of December of the year when his 'contract' with the amateur club has come to an end, have reached the age of 24 years.

These minimum conditions must correspond to the value of the remuneration due under the previous 'amateur contract'. To this value, 10% is added from the list of compensation maintained by the Portuguese professional football league.

This amount must always, if possible, be agreed in writing between the clubs and the said agreement must be registered at the offices of the Liga Portuguesa de Futebol Profissional (LPFP). Annex 3 Chapter 2, Article 32.3 of the CCT requires the compensation to be paid within 30 days following the registration of the said agreement.

Pursuant to article Annex 3 Chapter 2, Article 33.6 of the CCT, in cases where the training club has terminated the amateur's contract without just cause, it is not entitled to receive any training compensation from the player's new club as and when the player signs his first or subsequent professional contract(s) in future.

The amount

Pursuant to Annex 3 Chapter 2 article 33.4 of the CCT, the amount of training compensation due to the former club shall not be less than 20 times the amount of salaries received by the player under his new professional contract. In cases where the player has played for more than one club during his training period, this amount shall be distributed proportionately among all the clubs involved in his training, according to the number of seasons spent by the player with them.

The LFPF maintains an annual list containing the names and amount of compensation due to the training clubs of all the players listed therein. This list must be sent no later than 15 June each year by the LFPF to the SJPF and the PFF. Annex 3 Chapter 2, Article 36 of the CCT requires any club which signs professional contracts with any of the players listed therein to communicate in writing to the player's training club(s) and submit relevant documentation to the LFPF.

Both rules are more or less similar and are applied in parri passu, with each making up for the other in situations of doubt or in cases which are unclear.

Solidarity mechanism 

This is provided for by the rules of the PFF on the status and transfer of players. They are similar to and modelled around the FIFA regulations for the status and transfer of players.

The buying club must deduct 5% of the transfer fee agreed between it and the selling club. It must then distribute this fee (5%) to all the clubs for which the player played between his 12th and 15th birthday. For the clubs which the player played for during his 16th-23rd birthday, the buying club must pay them 10% of the transfer fee and not 5%.

It is the duty of the buying club to pay the solidarity mechanism to the previous clubs. This amount (5%, or 10% where applicable) is distributed equally among all the clubs involved in the training and education of the player. Pursuant to Article 20 of the PFF's Statutes, solidarity mechanism payments are paid on each occasion the player transfers, but only before the expiry of his contract and not for transfers effected by players who are out of contract. No payment is due for players who transfer on 'Bosman' free transfers.

Annex 5 of the PFF's Statutes establishes a table similar to the one maintained by the FIFA regulations on the status and transfer of players clarifying the different percentages used for calculating the amount (5% or 10%) according to the ages during which the player spent at each club.

Unilateral termination of contract

The rules governing the compensation due in cases where contracts are terminated with just cause for gross misconduct are provided for by the PFF Transfer Regulations and the Collective Labour Agreement (CLA) between the LFPF and the SJPF published in chapter 5 of the Portuguese labour official gazette3. The PFF transfer regulations contain no specific provision with regard to calculation of compensation in cases of termination with just cause. This relevant provision (Article 14) only says that: 'a contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause'.

The calculation of compensation is foreseen in the CLA. The rules of the CLA provide, under Article 48.1, that in cases where it is the player who has terminated his contract with just cause as a result of the club's gross misconduct, the player will be entitled to compensation equivalent to the amount he would have received had the contract been performed to its end. If the player signs a new contract, the amount that he will receive as from the new contract, and from the new season, should be deducted from the amount which he was allowed to receive from the original contract.

Pursuant to Article 48.2 of the CLA, the compensation only includes the basic remuneration and the eventual bonus due under the season in which the contract was terminated. This is without prejudice to the player's right to sue in civil courts for more compensation in case the damages he has suffered are greater than the amount he would have received under the contract, as provided for under article 48.3 of the CLA.

Under article 51.1 of the CLA, in cases where it is the club which has terminated the contract with just cause as a result of the player's gross misconduct, the club will be entitled to compensation for the damages suffered. In case the club benefits from the said termination (because it did not replace the player or it gets a new player with a lower monthly salary) the financial benefits received there from will be deducted from the damages suffered.

 

Felix Majani
Consultant
CRA - Coelho Ribeiro e Associados, SCARL, Lisbon
felix.majani@cralaw.com

 

This article was originally published on Coelho Ribeiro e Associados' website, here.

 

1. Published in the Boletim Do Trabalho e Emprego (the Portuguese labour official

gazette) 1st serie number 33 of 8 September 1999.

2. Annex 4, Article 2(ii) of the PFF Transfer Regulations.

3. Ibid. footnote 1.


Thursday, June 20, 2013

Tough Love for Accidental Dopers

Lawyers representing athletes face a difficult task in convincing the Court of Arbitration for Sport (CAS) and National Anti-Doping Panels that their client did not intend to take a substance included on the World Anti-Doping Agency’s Prohibited List. Tom Mountford, a Barrister with Blackstone Chambers, examines how the CAS has taken differing approaches to interpreting Articles 10.4 and 10.5 of the World Anti-Doping Code, which allow an athlete to reduce his sanction if they can prove how a substance entered their system.
 

Kutrovsky and Qerimaj; Oliviera and Foggo: these are cases all too familiar to sports lawyers representing athletes who have accidentally (or allegedly accidentally) fallen foul of the anti-doping regime. These cases represent two conflicting branches of Court of Arbitration for Sport (CAS) authority on the proper approach to intent and reductions of periods of ineligibility when an athlete says that he accidentally consumed certain prohibited substances, and they have continued to exercise the National Anti-Doping Panel in recent cases.

Specified substances under the WADA Code

The problem stems from the special provision under the World Anti-Doping Agency (WADA) Code for the consequences of a doping offence in respect of certain ‘specified’ prohibited substances (being a particular subset which is only banned in competition). If an athlete fails a drug test for a specified substance, he or she may be able to argue that he or she should benefit from one of either rule 10.4 or 10.5 of the WADA Code, which allow for a lesser penalty than the usual penalty for a first time doping offence of two years’ ineligibility.

Rule 10.4

Rule 10.4 provides that where a doping offence relates to a specified substance and the athlete can show how it came into his body and/or came into his possession, then the athlete may qualify for an elimination or reduction of the period of ineligibility – to somewhere between a reprimand and no period of ineligibility up to a maximum period of ineligibility of two years – if the athlete can establish ‘to the comfortable satisfaction of the hearing panel, the absence of intent to enhance the Athlete’s sport performance or mask the Use of a performance-enhancing substance’.

This test has led to a number of conflicting decisions on the question whether for an athlete to benefit from Rule 10.4, the correct question was whether he intended to take the specified substance to enhance his performance or whether he intended to take the product which contained the specified substance to enhance his performance. If, for example, an energy drink contains amphetamines, is the correct approach to ask whether the athlete intended to enhance his sporting performance (a) in taking the energy drink or (b) in taking the amphetamines?

CAS decisions: Oliviera and Qerimaj

In Oliviera, the CAS Panel hearing the case opted for the second of these potential answers, holding (at paragraph 9.14): ‘The Panel does not read clause two of Article 10.4 as requiring Oliveira to prove that she did not take the product (i.e., Hyperdrive 3.0+) with the intent to enhance sport performance. If the Panel adopted that construction, an athlete’s usage of nutritional supplements, which are generally taken for performance-enhancing purposes, but which is not per se prohibited by the WADC, would render Article 10.5 inapplicable even if the particular supplement that is the source of the positive test result contained only a specified substance…’. This reasoning was agreed with by two further CAS Panels in the subsequent cases of Kolobnev (29 February 2012) and Lapikov (10 July 2012).

In Qerimaj (decided on 12 September 2012; shortly before Kutrovsky), another CAS Panel followed Oliviera in holding that nutritional supplements are usually taken for performance-enhancing purposes, which is not per se prohibited and that ‘…the primary focus can obviously not be on the question whether or not the athlete intended to enhance his sport performance by a certain behaviour (i.e. consuming a certain product), but moreover if the intent of the athlete in this respect was of doping-relevance’.

CAS decisions: Foggo and Kutrovsky

By contrast, a subsequent CAS Panel in Kutrovsky (3 October 2012) elected not to follow the Oliveira, Kolobnev, Lapikov decisions, and instead to follow the earlier case of Foggo (3 May 2011), in concluding that the mere fact that an athlete did not know that a product contained a specified substance did not itself establish the relevant absence of intent under Rule 10.4. This had not produced particular harshness in the Foggo case, as the CAS Panel concluded that Mr Foggo’s use of an energy drink called Jack3d was not intended to enhance his sporting performance. Likewise in Kutrovsky, the CAS Panel concluded that although the athlete could not come within Rule 10.4 (despite his ignorance that the Jack3d contained a specified substance), he could still benefit from Rule 10.5.2 on the basis that he was not significantly at fault.

Tough love before the National Anti-Doping Panel (NADP)

The Oliveira-Qerimaj line of authority was therefore promising for athletes who had failed doping tests in cases where they were unaware that the product contained a specified substance. Unfortunately for those athletes, in recent cases the NADP has rejected the attempt to rely on that line of authority and has instead endorsed the Foggo-Kutrovsky line, adopting a strict approach to the interpretation of Rules 10.4 and 10.5 (which allows for a reduction of the sanction in cases where the athlete was not or ‘not significantly’ at fault).

In the case of Whyte (NADP Decision 22 January 2013), a Panel of the NADP (noting that the prospective draft of the WADA Code and Commentary favours the Foggo/Kutrovsky approach) applied the Kutrovsky approach to find that the athlete had intended to enhance his sporting performance in using the same energy drink (Jack3d) as had been in issue in Foggo and, accordingly, that he could not benefit from Rule 10.4. However, contrary to the decision in Kutrovsky, the Panel concluded that the athlete could not benefit from a reduction on the basis of no significant fault under Rule 10.5.2 either, by reference to his inadequate investigations into Jack3d. Mr Whyte appealed to an Appeal Tribunal of the NADP. The Appeal Tribunal dismissed the appeal noting the duty of utmost caution imposed on athletes in the advisory opinion in FIFA v WADA (CAS 2005 IC.976 & 986). The Appeal Panel expressed doubt as to how the CAS Panel in Kutrovsky had reached its decision that Mr Kutrovsky was not significantly at fault, and dismissed Mr Whyte’s appeal on the basis that the inadequate inquiries made meant he could not benefit from a reduction for no significant fault under Rule 10.5.2. The Appeal Panel also set out a general warning and reminder stating:

‘This case emphasises, yet again, the dangers of athletes taking supplements which contain MHA. These risks have been the subject of a public warning by UKAD following the publication of the decision in UKAD v Wallader made on 29th October 2010. A number of sports governing bodies have issued warnings about MHA. On 28th August 2012 the Medicines and Healthcare Products Regulatory Agency removed Jack3d containing MHA from the UK market, following serious concerns about the safety of this substance. A list of supplements which have been tested to proper standards is available at www.informed-sport.com. Any athlete who uses a supplement which is not on that list is running a serious risk of attracting a doping violation.’

In similar vein, in the case of Llewellyn (14 February 2013) an eminent Appeal Tribunal composed of three Queen’s Counsel rejected the Qerimaj approach and took the exceptional step of expressly doubting the CAS decisions in both Oliviera and Qerimaj, stating at paragraph 5.42, ‘Suffice it to say that the Appeal Tribunal is of the view that Qerimaj and Oliviera should not in future be followed.’ This is a comment which James Segan has already discussed in his blog post on the need for a Grand Chamber of CAS to avoid the confusion of conflicting CAS decisions – see here. Despite having no power to overrule a decision of CAS, the NADP has therefore sent a clear message of its tough new intent. Some will argue this is the tough love the anti-doping system needs to be effective; others that this is harsh justice for individual athletes who through ignorance or naivety test positive for a prohibited substance through use of an energy drink or similar product.

Tom Mountford
Barrister
Blackstone Chambers, London
tommountford@blackstonechambers.com

Members of Blackstone Chambers have been involved in a number of the cases above.  Nick De Marco and Tom Mountford acted for the athlete in the NADP’s first decision in Whyte; Ian Mill QC and James Segan acted for the athlete in Lapikov; Robert Englehart QC was a member of the Appeal Tribunal in Llewellyn; Charles Flint QC was the Chairman of the Appeal Tribunal in Whyte; and Michael Beloff QC was a member of the CAS Panel in Kutrovsky.
 

This article originally appeared in the Blackstone Chambers Sports Law Bulletin here.


Wednesday, June 19, 2013

'11 of Hearts' Trademark: Why Bale Should Consider a Transfer to Guernsey

In recent years, sport has been no stranger to bizarre trademark claims, especially in the US. As World Sports Law Report highlighted in its April edition, National Basketball Association (NBA) star Jeremy Lin last year sought to trademark 'Linsanity', a phrase coined following a winning streak. He has been followed by another NBA star, Antony Davis, who has sought a number of copyrights based on his trademark 'unibrow'; and National Football League star Tim Tebow, who has trademarked his touchdown celebration as 'Tebowing'.

It appears that Tottenham Hotspur player Gareth Bale - or more likely agents who represent him - has been watching. Bale has sought to trademark his '11 of Hearts' goal celebration with the UK's Intellectual Property Office. Whether the IPO will accept such an application remains to be seen, however there is a jurisdiction where such an application would be welcomed - Guernsey.

The Channel Island, just off the coast of French Normandy, is a British Crown dependency, but as it is not part of the United Kingdom or the European Union, creates its own laws. At the end of 2012, the Channel Island of Guernsey created the world’s first registrable image right that can register a person’s image, nicknames, videos, mannerisms and distinctive characteristics. Tennis's Heather Watson has registered her image, and law firm Collas Crill IP was behind the deal.

'The very notion of image rights is hugely problematic from a UK perspective', wrote David Evans and Jason Romer of Collas Crill IP in the June edition of World Sports Law Report. 'Under UK law, there is no definition of an image right per se, and the Courts have struggled with various ways in order to try to fill this gap. The Guernsey Image Right allows your clients to register their images, nicknames, videos, mannerisms and any distinctive characteristics that identify them. These rights will be registered on the register and can include all of those features that are so difficult to define in a contract. We have all grappled with what a ‘gesture’ or ‘mannerism’ means in that definitions section before - now it really means something and can be directly referred to in relevant contracts'.

 Perhaps Bale and his advisors should consider an IP transfer from the UK to Guernsey…

Andy Brown


Tuesday, June 18, 2013

NFL Commissioner Says Redskins Is A 'Positive' Nickname

National Football League (NFL) commissioner Roger Goodell has said the Washington Redskins's nickname has 'a positive meaning' in a letter to 10 members of Congress, who had earlier urged team owner Daniel Snyder and the NFL to change the name because it is offensive to many Native Americans. The members of Congress sent their letters to Snyder, Goodell and the other 31 NFL franchises in May. Goodell's response was sent June 5, a copy of which can be viewed on the Indian Country Today Media Network.

'The Washington Redskins name has thus from its origin represented a positive meaning distinct from any disparagement that could be viewed in some other context', Goodell stated. 'For the team's millions of fans and customers, who represent one of America's most ethnically and geographically diverse fan bases, the name is a unifying force that stands for strength, courage, pride and respect'.

Betty McCollum (D-Minn.) and Eni Faleomavaega (D-American Samoa) responded to Goodell's letter with statements of their own. McCollum said Goodell's letter was 'another attempt to justify a racial slur on behalf of Dan Snyder and other NFL owners who appear to be only concerned with earning ever larger profits, even if it means exploiting a racist stereotype of Native Americans'. Faleomavaega said that Goodell 'completely missed the point regarding the Washington franchise's name'.

The letter to Snyder said that 'Native Americans throughout the country consider the "R-word" a racial, derogatory slur akin to the "N-word" among African Americans or the "W-word" among Latinos'. The nickname is the subject of a long-running legal challenge from a group seeking to have the team lose its trademark protection. The team’s owner has vowed he will never change the name.

W. Gregory Guedel
Attorney
Foster Pepper Pllc, Seattle
guedw@foster.com

Greg is chair of Foster Pepper's Native American Legal Services Group and edits its blog, where this post originally appeared here.

 


Friday, June 14, 2013

May Editorial: Moving the goalposts

Would you spray a product derived from deer antler velvet into your mouth in order to aid recouperation from a back or knee pain? You would do that without question? OK. If you were a professional athlete, would you use such a spray if you knew it came from a company called Sports With Alternatives To Steroids (SWATS)? Comfortable with that? OK. How about if you visited the SWATS website and were greeted by background pictures of bodybuilders ‘feeling the burn’ and stocked with products such as ‘Jacked Spray’. Still comfortable? If you looked at the people behind SWATS and found they were bodybuilders and not scientists. Still unconcerned? How about if you checked the ingredients of the spray and found that it contained IGF-1, which features on the World Anti-Doping Agency’s Prohibited List?

Vijay Singh’s lawsuit is surprising, because under the strict liability conditions mandated by Article 2.1 of the Code, he has been very lucky. Professional athletes know that they are responsible for what goes into their body and that ignorance is not a defence for violating the World Anti-Doping Code. Singh’s lawsuit claims that he checked the spray bottle and SWATS said that their products were all-natural and didn’t contain any banned substances. There is a raft of case law in anti-doping which illustrates that this is no defence.

However, the lawsuit again highlights the difficulties that international sporting federations face when the World Anti-Doping Agency (WADA) moves the goalposts. Singh’s lawsuit arose because the PGA Tour was forced to drop its charges against him after WADA confirmed that it no longer considers ‘deer antler spray’ to be prohibited. This was news to the PGA Tour. It now faces a legal battle which if Singh wins, will undermine the anti-doping process and in which it is accused of 'recklesss administration and implementation of its Anti-Doping Program'.

If Singh’s lawsuit is successful and he is awarded damages, the danger is that this case could embolden athletes who have (arguably) not carried out sufficient checks on the substances they are using. Currently, the onus is on the athlete to check that the substance they are using is not on any prohibited lists. Do we really want to put the onus on international federations to check with WADA that their lists have not been amended? This will be something for the court to decide…

For more on the Vijay Singh lawsuit, see this news article and this feature, from Stacey Shevill of Squire Sanders.

Andy Brown


Thursday, June 13, 2013

Henning Berg v Blackburn Rovers: Contract Termination

In the case of Henning Berg v Blackburn Rovers Football Club, the High Court determined that a contractual payment due as compensation on early termination of a fixed term contract was enforceable. Liz Ellen and James King, of Mishcon de Reya's Sports Group, examine the ruling and its implications.

Blackburn Rovers terminated the three-year fixed term contract of their manager, Henning Berg, in December 2012, after just 57 days in the job. There was a contractual provision in Mr Berg's contract giving Blackburn the express right to terminate early, provided that the Club paid Mr Berg a sum equal to his gross basic salary for the unexpired balance of the fixed period as 'liquidated damages' – totalling £2.25 million. The Club initially admitted liability and agreed to pay Mr Berg the remainder of the contract, but later sought to argue that the contractual provision was a so-called penalty clause (a pre-determined amount disproportionate to the financial loss likely to be suffered on a breach of contract) and that it was therefore unenforceable. The reason for raising this argument was that if the clause was deemed to be a penalty, payment under it could not be enforced by Mr Berg, who would only be entitled to damages for breach of contract under normal contractual principles (meaning he would be required to mitigate his loss, i.e. limiting his entitlement to damages by requiring him to find alternative employment).

It is established law that payments due on an event, such as the exercise of an express right to terminate a fixed term contract early, which is not a breach, cannot be invalidated as penalties. Applying existing law, the High Court found that because the payment to Mr. Berg was due on the occurrence of an event other than a breach of contract, the relevant clause was valid. The agreement expressly granted Blackburn the right to terminate the fixed term early. As such, termination in accordance with it could not be a breach, and thus could not engage the law on penalties.

In summary

A contractual payment on early termination will not be a penalty and will therefore be enforceable. Penalty clauses can only apply in circumstances where the trigger for payment is a breach of contract.

In Practice

When drafting or negotiating service agreements and contracts of employment, to increase certainty and reduce the risk of a penalty argument being raised, avoid describing non-breach payments as 'liquidated damages'. Damages are only relevant where there has been a breach of contract. For employers looking to limit the payments to be made on termination, it is better to expressly provide for a reduction in the contract, rather than later trying to rely on a penalty argument.

 

Liz Ellen, Associate
James King, Solicitor
Mishcon de Reya, London
liz.ellen@mishcon.com
james.king@mishcon.com

 

This article was originally published on Mishcon de Reya's internet site here.


Wednesday, May 22, 2013

UEFA's Financial Fair Play Regulations and compliance with EU law

On 6 May, Belgian player agent Daniel Striani lodged a complaint with the European Commission challenging whether UEFA's Financial Fair Play Regulations comply with European Union law. Andrew Nixon, a Partner with Sheridans Sports Law group, examines previous challenges to sporting rules based on EU competition law grounds, and assesses how the European Commission may view the Financial Fair Play Regulations

In 1995, the case of Jean-Marc Bosman came before the European Court of Justice (ECJ) and changed the face of football in Europe. The case involved (amongst other issues) a challenge to the legality of the transfer system for football players. The ECJ found in favour of Bosman and against his club, RFC Liege, the Belgium FA and UEFA, determining that transfer fees for out of contract players were illegal where a player was moving between one EU nation and another.

Almost 18 years later, a Belgian football agent called Daniel Striani has lodged a complaint with the European Commission on the basis that UEFA's Financial Fair Play Regulations (FFP) are anti competitive and will negatively impact on his ability to generate income. It is a challenge that may yet have an impact as significant as that of the Bosman case.

Background to the Financial Fair Play Regulations

The spending of football clubs, particularly those licensed by and under the jurisdiction of UEFA has long been an issue and a point of debate within the sport. In England, whilst commercial revenues have continued to rise (the Football Association Premier League sold the broadcast rights for seasons 2013-2016 for £3.018 billion), that has not necessarily reflected itself on the balance sheet, with many clubs having experienced falling operating profits and pre-tax losses. Some clubs have been able to operate as normal and, indeed, expand squads and wage bills, as losses were underwritten by wealthy investors and benefactors. Other clubs have operated at levels above their means, gambling player wages against receipt of broadcasting revenue, a strategy which has on more than one occasion led to insolvency events involving high profile clubs.

In September 2009, the first steps were taken to positively address the spiralling debt within European football when UEFA's Executive Committee approved the concept of financial fair play. The objectives were as follows:

  • to protect the long term viability of European club football;
  • to introduce more discipline and rationality into club finances;
  • to decrease pressure on salaries and transfer fees and limit inflationary effects;
  • to encourage clubs to compete within their means;
  • to encourage long-term investments in academies and youth infrastructure; and
  • to ensure clubs settle liabilities on a timely basis.

The overriding obligation on clubs licensed by UEFA is, over a period of time, to balance their books or break even. Under the rules, clubs cannot, repeatedly - as part of a multi year assessment - spend more than their generated income, thereby enabling a longer term view to be formed. The UEFA Executive Committee approved the creation of a Club Financial Control Body in June 2012 (replacing the Club Financial Control Panel), which oversees the application of the Financial Fair Play Regulations alongside the Club Licensing System and is competent to impose disciplinary measures. Clubs have had their accounts monitored since summer 2011, with the break even assessment covering financial years ending 2012 and 2013, to be assessed during the 2013/2014 season.

The principles behind FFP were also adopted domestically in England, initially by the Football League, which has had to deal within a number of insolvency events and administrations. In the Football League Championship (the division below the Premier League), clubs have agreed to introduce a break even approach based on the UEFA FFP model, whilst in League 1 and League 2(the two divisions below the Championship), clubs will implement the Salary Costs Management Protocol, which (broadly) limits spending on total player wages to a proportion of each club's turnover. Just last month, the Premier League ratified its own financial fair play regulations which, amongst other elements, will mean that clubs with a total wage bill of more than £52 million will only be allowed to increase the wage bill by £4 million per season for the next three seasons (restrictions applying to broadcasting income only).

The Striani Challenge

The overall objectives of FFP are, on the face of it, in the interests of the game and its future as a self sustaining sport. Indeed, the licensee clubs themselves agreed to the implementation of the rules. Why, therefore, has Striani launched this challenge?

There are real issues of sporting regulation that will need to be addressed and analysed by the Commission. The key arguments that Striani will employ will be that the break even rule (Article 57 of the UEFA Financial Fair Play Regulations):

  • will restrict outside investment in football clubs;
  • effectively preserves the dominance of clubs that do not operate losses by preventing clubs operating at losses in order to break through(I wonder if the point here is that it preserves the dominance of clubs that have previously operated at a loss - e.g. Chelsea and Manchester City - by preventing other clubs from doing the same?); and
  • will dampen the transfer market and salary levels, with a knock on effect on Striani's ability to generate revenue and income.

The merits of the complaint

The reality is that the competition rules of the Treaty on the Functioning of the European Union (TFEU) were drafted with more orthodox industries in mind than sport and, perhaps, the key document when assessing the Commission's attitude to sporting rules is its 2007 White Paper on Sport. This addresses, amongst other matters within sport, governance and licensing.

Indeed, at paragraph 4.7 of the White Paper, the Commission acknowledges the usefulness of robust licensing systems for clubs as a 'tool for promoting good governance in sport'. The Commission stated that these licensing systems generally aim to ensure that all clubs respect the same basic rules on financial management and transparency. However, such systems must be compatible with competition laws and the Internal Market provisions and must have at their heart a legitimate aim and objective.

There are a number of industry nuances which are recognised and will be applied when assessing compliance with Community law. For example, sport must involve uncertainty of outcome and there must therefore be a degree of competitive balance and equality within competitions which, of course, sets it aside from other industries in which - unlike sport - there is no interest in competitors retaining economic stability.

However, despite these accepted nuances, the Commission will not reject the complaint simply because FFP purports to maintain competitive balance - indeed, one of Striani's key arguments is that it does the exact opposite). The ECJ has long since rejected the 'sporting exception' argument on the basis that, as determined in Meca-Medina & Majcen v the Commission1, sporting rules do not fall outside the scope of EU competition law simply because they regulate sport. In Meca-Medina, the ECJ ruled unreservedly that although the doping ban was proportionate in the circumstances and doping rules were a legitimate means of protecting sporting integrity, all sporting regulations which produced appreciable economic effects must be subject to review. The objective of the anti doping rules was to ensure fair competition, a level playing field for all and were 'inherent in the organisation and proper conduct of competitive sport'. However, will the Commission (and, if necessary, the General Court and the Court of Justice of the European Union - as it is now named) view FFP in the same light?

The Commission has produced a methodology as to how it will apply competition law to sport. The first question to be considered is whether or not the body that adopted the rule is an undertaking, or an association of undertakings. The second question will be whether or not the FFP regulations (specifically the break even rule) restrict competition, or indeed constitute an abuse of a dominant position. In answering this question the Commission will give consideration to the overall context of the rules, whether or not the rules are inherent in the pursuit of the body's objectives and whether or not - in light of the overall objective - the rule is proportionate. Thirdly and fourthly, the Commission will consider if the rule affects Member State trade and if the rule fulfils the conditions of Article 101(3) TFEU, which lists exceptions to the prohibition on restrictions to free trade.

What broad conclusions can be reached by applying this methodology to FFP? Is UEFA an undertaking? An undertaking is described as an entity engaged in economic activity and there is no doubt that UEFA, and its member clubs, are undertakings within the meaning of Articles 101 and 102 TFEU. Indeed, UEFA would be considered to be an association of undertakings.

Do the FFP rules restrict competition or constitute an abuse of a dominant position? Rules drawn up by a sports governing body will constitute a decision by an undertaking, or an association of undertakings. Therefore, on that basis, those rules may have the effect of distorting competition, even if the objectives are not such and there is merit in any argument that FFP has a distortion effect.

Do the FFP rules pursue a legitimate objective (the impact of which is proportionate to that objective)? The ruling in Meca-Medina discounts any reliance on the sporting exception argument. However, legitimate objectives will relate to organisation and proper conduct of competitive sport and, arguably, FFP complies with this requirement in that its objective is to safeguard the financial stability of the sport. However, the Commission will need to analyse whether or not FFP goes further than is reasonably necessary to secure the objective of financial stability.

Will FFP affect inter-Community trade? The answer to this question will almost certainly be yes and it is generally accepted that rules adopted by international sports governing bodies will affect trade when an economic activity is involved. In this case, FFP will inevitably have an impact on the transfer market and player trading between Member States.

Is the restriction justified? It will be, but only if the beneficial effects of the rule outweigh its restrictive effects, and there is merit in any argument that it does not. The purpose of the break even rule is to ensure that clubs spend within certain limits, thereby ensuring they do not overstretch themselves financially. From a competition perspective, this will inevitably dampen the player transfer market, which will have a knock on effect on the ability of agents such as Striani to generate income. The rule will also prevent investment in clubs by third parties which will arguably preserve the dominance of certain clubs, as opposed to making the competition fairer and more balanced. That reduced investment will also have a direct impact on playing squads, both in terms of the level of player remuneration and the size of those playing squads.

The Commission responded positively to complaints raised with it in relation to the FIFA Player-Agent Regulations in the late 90's, eventually issuing a statement of objections in which it asserted that the FIFA Player-Agent Regulations contravened then article 81(1) of the Treaty by limiting access to the player-agent market. Notably, the Commission took the view that the objectives of the regulations could be achieved by less restrictive means, stating that:

'The Rules prevent or restrict natural or legal persons with the necessary vocational skills from having access to a job. The Commission recognises that there must be checks on access to the profession and that some rules are necessary in order to ensure the smooth operation and to prevent deterioration in the ethical values in sport. However, the rules must be in proportion to the objective pursued. There are clearly other rules which could ensure professionalism on the part of agents without being unduly restrictive.'

A key question will therefore be: are there other feasible rules which could ensure financial fair play in European football, which meet the objectives, but are less restrictive? Arguably, these less restrictive, objective-meeting rules are already in force. It has always been the case that clubs are required to demonstrate, as part of the licensing criteria, that there are no overdue payables to other clubs, their employees, or to tax authorities. Indeed, it will also inevitably be argued by Striani that there are other, better means of redressing competitive imbalance, such as a restructuring of the revenue sharing mechanism between clubs, with perhaps the adoption of a form of 'tax' on the higher spending clubs.

It is the writer's view that employing a regulatory system of financial control is a justified means of ensuring that football clubs compete within their own commercial boundaries and the objective of FFP is therefore credible and justifiable. However, it is entirely possible that the challenge will find its way to the Court of Justice of the European Union (as it is now known) and it will not necessarily be a comfortable ride for UEFA. Whether or not Striani can take his place alongside the likes of Bosman and Meca-Medina remains to be seen and will be watched with interest.

Andrew Nixon Partner
Sheridans, London
anixon@sheridans.co.uk


1. (Case 519/04) ECR 2006 1-6991.


Monday, May 20, 2013

Cricket disciplinary appeal is an Arbitration

The Commercial Court has ruled that Pakistani international bowler, Danish Kaneria's appeal proceedings against his life time ban for involvement in spot-fixing under the ECB's Disciplinary Regulations are an 'arbitration' for the purposes of the Arbitration Act 1996. The decision is a momentous one for sports' lawyers and governing bodies, not least in terms of the Court's supervisory role over sporting bodies' disciplinary procedures and the ability to rely on a Court to entertain appeals from, and make ancillary orders in support of, those processes.

In England and Wales Cricket Board Limited v Kaneria [2013] EWHC 1074 (Comm), the ECB sought a witness summons to compel its main witness, the cricketer Mervyn Westfield to attend the appeal hearing and give evidence. The summons was sought under s.43 of the Arbitration Act on the basis that the appeal proceedings constituted an arbitration; this was contested by lawyers acting for Mr Kaneria. The sole question for the Commercial Court was whether the appeal proceedings constituted an arbitration under the Act.

Unlike in some other notable cases (e.g. Stretford v The Football Association [2007] EWCA Civ 238) nowhere in the ECB's disciplinary regulations were its procedures described as an "arbitration", and there was no written agreement that used the word arbitration. Furthermore, the regulations described the ECB as "prosecutor" and the player as the 'accused'. Mr Kaneria argued that they were internal disciplinary proceedings and not an arbitration.

Mr Justice Cooke found that the characterisation of the appeal proceedings could only be that of arbitration on the one hand or internal disciplinary procedure on the other. It was in this context that Mr Kaneria's arguments about the 'ouster of the court's jurisdiction' were considered. If the appeal proceedings constituted an arbitration then remedies for serious irregularity and rights of appeal or recourse to the court were expressly governed by the Arbitration Act, in particular, sections 67 to 69. Whereas, if they were merely internal disciplinary proceedings, then the court could only intervene if there was either a breach of human rights, a breach of contract or if 'some form of judicial review was found to be available' (such as applied in the decision in Bradley v The Jockey Club [2005] EWCA Civ 1056).

The Court applied the test set out in dicta of Thomas J in Walkinshaw v Diniz [2000] 2 All ER (Comm) 237 that asked whether the procedure was one that in substance sought to determine legal rights and obligations of the parties judicially, with binding effect, enforceable in law, thus reflecting in private proceedings the role of a civil court of law. Applying the factors set out in Walkinshaw, Cooke J. found that

  • the parties to the appeal were afforded a proper opportunity of putting their case, not least as the appeal hearing was a complete re-hearing;
  • there were no unilateral communications between the parties and the arbitrators;
  • the parties had the right to call witnesses and present evidence;
  • the decision of the appeal panel was final - there was no further appeal;
  • the proceedings contemplated that they be carried out between the parties whose substantive rights were determined by them;
  • the jurisdiction of the appeal panel derived from the consent of the parties, by means of the ECB's Regulations which Mr Kaneria accepted when he signed the required undertaking of a cricketer, and he himself had brought the appeal;
  • the constitution of the Appeal panel was chosen by a method to which the parties had consented, that is the ECB's disciplinary regulations;
  • those regulations provided that the Appeal panel be impartial between the parties - and it was independent from the ECB "prosecution";
  • the Appeal panel's decision was intended to be enforceable in law; and
  • the regulations provided that the Appeal panel make a decision on a dispute already formulated at the time.

 

Mr Kaneria had argued that the Appeal Panel was not truly independent because, amongst other things, it contained people associated with the sport of cricket and not just independent lawyers and, moreover, it was appointed by the Chairman of the disciplinary panel. These arguments were rejected. There was a distinction between the ECB as prosecutor and the Appeal Panel which was appointed by an independent QC and contained lawyers. The fact that some members of the Appeal Panel had links with cricket was thought to be beneficial, and it did not mean they could not be impartial. In any event, importantly, Cooke J noted that the real issue was one of impartiality and not independence (although the latter may give rise to the former).

Mr Kaneria's argument that the proceedings were not an arbitration because the word arbitration was not used in the regulations (but words like 'prosecution' were) was rejected. The Commercial Court is used to seeing agreements that amount to arbitration agreements although informally worded. The court looked at the substance of the agreement (here, the regulations) and not the labels the parties used or failed to use to describe them.

Mr Kaneria argued that according to Stretford there had to be 'a clear and unequivocal agreement to arbitrate' in particular because an arbitration involved a waiver of the right to a public hearing under Article 6 of the Convention. But the Court found nothing in these points. Mr Kaneria had agreed to be bound by the ECB rules and regulations and was aware of the disciplinary and appeal procedures. There was no provision that the disciplinary proceedings be held in public and nor was there an expectation that they would be. Indeed Mr Kaneria had never requested that they be. It did not matter whether the proceedings were 'internal disciplinary proceedings' (and subject to Bradley type review) or an arbitration - in either case they would have been held in private.

The decision may put to an end to the debate about whether properly constituted sports disciplinary procedures constitute an arbitration or just internal procedures subject to Bradley type review (and the Court noted that in Bradley two members of the tribunal were Jockey Club members and no one even thought to argue the proceedings were arbitral).

However, this does not mean all disciplinary procedures will inevitably be arbitrations. They are unlikely to be unless they at least satisfy the test set out in Walkinshaw.

There are at least 10 key considerations arising from the decision:

1. Whether or not a disciplinary procedure is an arbitration does not depend on the use of the word in the rules, but the substance of the procedure.

2. Whilst formal independence between the "prosecutor" and the disciplinary panel is not stricly necessary, it will often be important to establish impartiality of the panel; so will the fact that it has some legal/judicial experience.

3. Disciplinary proceedings should contain procedural safeguards that allow both parties to fairly put forward their case, call and challenge evidence etc.

4. It is possible (and was contemplated in Kaneria) for a disciplinary procedure not be an arbitration (because it lacks the necessary legal safeguards) but for an appeal procedure arising out of it to be one - this may be of important practical benefit for sports governing bodies who wish to have a more efficient and less "legalistic" first stage disciplinary procedure but nevertheless seek finality by having an appeal process in the nature of an arbitration.

5. The much trumpeted expansion of the Bradley jurisdiction in some quarters may now be silenced. Although it is likely that some disciplinary bodies' procedures, lacking appropriate legal safeguards, shall not constitute arbitrations and will thus still be subject to the court's supervisory review powers under the Bradley jurisdiction.

6. But in many respects there may be little distinction between the courts' power to review under Bradley principles and under the Arbitration Act - both routes contain important procedural safeguards and in both the bar for an "appeal" is very high.

7. There are a number of advantages for sports bodies in their disciplinary procedures being arbitrations, in particular confidentiality, finality of proceedings and the ability to obtain ancillary orders from the court.

8. Some of these advantages may also be utilised by the athlete. On the other hand the obvious "disadvantage" to the athelete is that, save for an error of law or procedural irrelularity, if the disciplinary proceding is an arbitration he has noweher else to go afterwards.

9. So far as the availability of ancillary orders is concerned, there are a wealth of orders that parties to an arbitration may wish to apply to the Court for, for example, enforcing compliance with a preliminary decision of the disciplinary tribunal (s.42 of the Arbitration Act), obtaining a witness summons (s.43, as applied in the Kaneria case); enforcing compliance with costs orders and the making of any other orders in support of the arbitration a court could make (in exceptional cases including search and freezing orders) (s.44), and applying to the court for a preliminary determination of law (section 45).

10. Lawyers acting in sports disciplinary cases, (whether for athlete or governing body) need to be familiar with the structure of the Arbitration Act so they can advise on rights to appeal under it and other procedural challenges that can be made.

Nick de Marco
Barrister
Blackstone Chambers, London
nickdemarco@blackstonechambers.com

This article was originally published here on the Blackstone Chambers Sports Law Bulletin blog.
Ian Mill QC and Nick De Marco represented the ECB in the Kaneria case.
The full judgment in the case can be found here


ASADA investigates the NRL - a legal perspective

Following the release of the Australian Crime Commission report in February 2013, the Australian Sports Anti-Doping Authority (ASADA) has commenced investigations into doping in Australia's National Rugby League (NRL), as well as the Australian Football League (AFL). Although these investigations have received wide spread media attention, there has been considerable uncertainty as to how these investigations will be conducted and the powers of ASADA generally.

What is ASADA?

ASADA was established in 2006 and power is conferred on it by the ?Australian Sports Anti-Doping Authority Act 2006 (Cth).

Some of ASADA's functions include:

  • establishing a National Anti-Doping scheme (NAD Scheme);
  • compliance with World Anti-Doping Code (WADA Code); and
  • ensuring that sports administration bodies adopt anti-doping policies that comply with the NAD Scheme and the WADA Code.

ASADA and the relationship with the NRL

The NRL implements an Anti-Doping Policy of the Australian Rugby League Commission, which explicitly adopts the WADA Code and the National Anti-Doping (NAD) scheme. The policy is reviewed annually to ensure it remains Code compliant with the requirements of both the WADA Code and ASADA. ASADA has the power to advise the NRL to issue notice of an alleged breach of the NRL Anti-Doping Policy. The notice must set out the player's options in accepting a nominated penalty under the WADA Code or proceeding to a hearing before the NRL Anti-Doping Tribunal.

What breaches are currently being investigated?

As the investigation is being conducted confidentially, it is difficult to know the substance of the allegations. However, at this stage, it appears that the investigation relates to breaches of the NRL Anti-Doping Policy and does not extend into criminal sanctions.

The primary breaches being investigated arise out of Article 2.1 of the WADA Code, which provides that the presence of a 'Prohibited Substance' will constitute an anti-doping rule violation. This is a strict liability offence. In relation to what constitutes a Prohibited Substance, the World Anti-Doping Agency (WADA) publishes a prohibited list annually.

Further anti-doping rule violations include:

  • refusing to submit a sample (Article 2.3);
  • tampering with a sample (Article 2.5);
  • possession of Prohibited Substances (Article 2.6);
  • trafficking or attempted trafficking of Prohibited Substances (Article 2.7); and
  • assisting in or covering up anti-doping violations (Article 2.8).

Burden and standard of proof

The NRL's Anti-Doping Policy adopts Article 3 of the WADA Code, which provides that the relevant Anti-Doping Organisation (in this case, ASADA) has the burden of proof in establishing that a violation has occurred. This must be proved to the 'comfortable satisfaction of the hearing panel, bearing in mind the seriousness of the allegation made'. The standard is greater than the balance of probabilities, but does not require an offence to be proved beyond reasonable doubt.

What penalties can be imposed?

For Prohibited Substances, the WADA Code imposes a period of ineligibility of two years for a first offence and a lifetime ban for subsequent offences. There is a suggestion that ASADA is offering a reduced six-month suspension for any players that confess to administering banned substances. However, Article 10.5.3 of the WADA Code only allows for the 75% reduction in the ineligibility period in circumstances where 'substantial assistance' is provided to the investigations, which would require a player to disclose information that leads to other anti-doping violations being discovered. Admitting their own guilt alone would not be enough.

The timing of any admission is also important. Were a player to admit to their own anti-doping violation before ASADA is to that point aware of the breach, the standard two-year penalty can be reduced by up to 50%. This only applies where the player comes forward voluntarily and not in circumstances where the player knows that they are about to be caught in any event.

The NRL's Anti-Doping Policy provides that if more than two members of a team are found to have committed an anti-doping rule violation, the NRL shall impose an appropriate sanction on the team, such as loss of points or disqualification, in addition to the sanctions imposed on the individual. This is derived from Article 11 of the WADA Code.

Are there any defences available and what must players and clubs do to comply?

The following defences can be raised. However, some defences are only partial defences or will lead to a reduction in sentence.

1. No fault or negligence - If a player can establish that they could not reasonably have known or suspected that they had used or been administered the Prohibited Substance then no suspension will apply. It is a completely exculpatory defence, but is extremely difficult to prove and requires the player to admit the presence of the drug in their system.

2. No significant fault or negligence - Sanctions may be reduced by up to 50% where a player demonstrates that they bear no significant fault or negligence. Again, if the player wishes to use this defence, there must be an admission that the substance was in their system.

3. Substantial assistance - This was referred to above and requires a player to provide full disclosure of all information that leads to the discovery of an anti-doping violation by another person. Factors to be considered include the number of individuals implicated, the status of those individuals in the NRL and the seriousness of the violation.

4. Therapeutic use - Athletes with documented medical conditions may request a therapeutic use exemption. However, this must be requested within 21 days of becoming aware of the medical condition and therefore is unlikely to apply to the investigations involving the NRL.

In addition to the specific defences available under the WADA Code, athletes have previously alleged failures in the process arising out of issues such as lack of procedural fairness, or defects in the evidence against them. Sections 102 and 103 of the NRL Anti-Doping Policy require all players and other interested parties, including coaches, trainers and agents, to co-operate with any ASADA investigation. The scope of this obligation is currently the subject of debate and has held up the current investigation after the completion of only one interview.

Although all parties have an expressed a desire to complete the investigation as quickly as possible, the potential consequences of the investigation are very serious and further issues will undoubtedly arise.

Brendan Hoffman Partner
Gadens Lawyers, Sydney
bhoffman@nsw.gadens.com.au

This article was originally published on Gadens Lawyers' internet site here: http://tinyurl.com/bw6ton2


Thursday, May 09, 2013

Free TV Australia proposes ban on the promotion of live odds

The body representing all of Australia's commercial free-to-air television broadcasters, Free TV Australia (Free TV), has released its proposed amendments to the Commercial Television Industry Code (Code). The amendments, which are supported by the Government and commercial and subscription broadcasters, aim to reduce and control the promotion of live odds during sports broadcasts.

Promotion of live odds by commentators

Commentators will be the most impacted by the amendments, which restrict the promotion of live odds by commentators at certain times before, during and after play. In particular, the proposed amendments prohibit commentators and their guests from promoting live odds as part of a broadcast of a live sporting event:

  • At any time during play.
  • During scheduled breaks (e.g. half time in a match).
  • During unscheduled breaks (e.g. when play is suspended due to rain).
  • 30 minutes before play commences.
  • 30 minutes after play has concluded.

Promotion of live odds by other persons

The promotion of live odds will be permitted, where the promotion is an advertisement or clearly identified sponsorship segment, delivered by a person other than a commentator:

  • Before play commences.
  • During schedules breaks.
  • During unscheduled breaks.
  • After play.

Rules for the promotion of live odds

The proposed changes, require that a promotion for live odds contains, or concludes with, a responsible gambling message. The proposed changes also prohibit the promotion of live odds that 'are directed at children', that 'portray live odds betting as a family activity', that 'promote betting on live odds as a way to success or achievement' or that 'associate a bet on live odds with alcohol'.

What the changes will not cover

The changes do not restrict promotion of live odds for other sports events occurring live at the same time. The changes will also not apply to commercials or sponsorships relating to gambling or betting organisations that appear during a live sporting event, as long as there is no specific reference to live odds relating to the sports event being broadcast. The ban does not cover live sporting events that consist of horse, harness or greyhound racing.
The Code will not cover contracts entered into before 27 May 2011. The proposed amendments to the Code are available for public consultation until 20 May 2013.

Judith Miller Partner
DLA Piper Australia
judith.miller@dlapiper.com

This article originally appeared on DLA Piper's Sports Law Blog, at http://tinyurl.com/dxbbnmf


Friday, May 03, 2013

Liar, Liar - Should Polygraph Evidence be used in Sports Tribunals?

The use of polygraph or lie detector evidence in sports law cases has been much debated. Given that evidence beyond adverse analytical findings is being used more frequently to prove doping violations pursuant to the World Anti-Doping Code, there are calls for the use of such evidence, both to prove cases against and to exonerate athletes accused of doping. In cricket, in a bid to fight corruption, Steve Waugh, ex Australian captain, has led calls for the use of lie detectors. He 'convincingly' passed a test to 'demonstrate' that he had never been involved in match fixing. The Marylebone Cricket Club released a statement: 'The World Cricket Committee accepts that the use of polygraph tests is a sensitive subject, but their potential use should now be widely debated in the game'.

There is considerable disagreement as to the accuracy of polygraph testing. Claims as to its reliability seem to range from 60 - 95% accuracy. In the case of Alberto Contador at the Court of Arbitration for Sport (CAS), the Panel heard evidence from two leading professors who suggested an accuracy of 95% with 5% false positives i.e. people said to be lying who were not, in fact. Nonetheless there must always be a degree of self-interest in assessing the validity and value of one's own expertise.

In the UK, polygraph evidence is not used in courts, but it has begun to impact upon other legal procedures. The use of lie detector tests for certain criminals, subject to licence conditions, has been legalised and sex offenders can now be assessed for release based in part on such investigations. Polygraph evidence is used in criminal proceedings in some US States, although it is often said that the role of the jury in deciding the truth should not be usurped by scientific devices and the like.

The polygraph measures a person's physiological responses (e.g. pulse, respiration, blood flow etc.). The theory is that a person's natural fear of being caught out in a lie will result in increased physiological responses when answering the relevant questions as opposed to when answering the control questions.

Opponents of the testing suggest that it can be defeated in a number of ways including by the adoption of 'counter measures' (such as the use of drugs and hypnosis) to reduce the variance in physiological response, but also by the self-infliction of pain to derail the control response. Indeed, a statement from Lance Armstrong's lawyer in 2012 said that the cyclist would be willing to take such a test to prove his innocence suggests that he was massively confident of successfully defeating it. Armstrong's nemesis, Tyler Hamilton, even admits in his book 'The Secret Race' to having beaten the lie detector machine.

The position of CAS with regard to the admissibility of this type of evidence has shifted. In 2008, the Swiss athlete Daubney sought to rely upon a successful polygraph test to prove his innocence of knowingly taking cocaine. CAS ruled that such evidence ws inadmissible under Swiss law and, accordingly, any statement made to the expert by Daubney was purely admissible as a personal declaration. The expert scientific evidence was not admissible. Subsequently in the case of Alberto Contador, he successfully argued that, pursuant to WADC Article 3.2, 'facts relating to an anti-doping violation may be established by any reliable means' which had not been in force at the time of Daubney, led to such evidence being admissible. The admissibility was not challenged by the other parties. CAS ruled that the evidence added 'some force' to Contador's 'declarations of innocence, but do not, by nature, trump other elements of the evidence'.

The Chinese judoka Tong Wen also sought to rely upon polygraph evidence at CAS. Both Wen and Contador were represented by Mike Morgan of Squire Sanders. The Respondent objected, but CAS did not ultimately make any finding about this aspect of her case. They ruled that the Respondent had not proved the doping violation because the B sample had been tested without the athlete being present and, accordingly, the adverse analytical finding was inadmissible.

Mike Morgan has reportedly made the point that such evidence should only be admissible where the athlete has consented to the procedure. Compulsion to take the test is, he argues, likely to skew the results of the test and accordingly render it unreliable in any event.

It is therefore more than likely that this type of evidence will prove more useful - but to a limited degree - to the accused athlete, rather than the prosecuting authority.

Phil Gibbs, Barrister
KCH Garden Square, Leicester
pgibbs@kchgardensquare.co.uk

This article was originally published on Phil's sports law blog, http://gibbsbarrister.blogspot.co.uk/


Thursday, March 21, 2013

Former Chelsea Football Club Sports Psychologist sues Vancouver Canucks over work permit dispute

An Italian sports psychologist has filed a claim with the British Columbia Supreme Court, claiming that the Vancouver Canucks are responsible for damages relating to wrongful dismissal and mental distress.

The psychologist, Mr. Demichelis, claims that the Vancouver Canucks and co-owner Mr. Aquilini induced him to leave his employment with the Chelsea Football Club in the United Kingdom and to work for the Vancouver Canucks in Vancouver.

Mr. Demichelis claims that he initially declined the Canucks offer of employment but that he later accepted it after sustained efforts on the part of Mr. Aquilini and the team. Mr. Demichelis specifically states that the Vancouver Canucks stated to him that he was the person the Canucks needed to improve the players' physical and psychological well-being. Mr. Demichelis also claims that he was told that his expertise was essential to winning the Stanley Cup.

Mr. Demichelis further alleges that he agreed to a two year contract with the Canucks starting July 2012 for a salary of $700,000, along with a signing bonus of $400,000. He also states that the Canucks agreed to market Mr. Demichelis' expertise to other professional clubs in North America.

Mr. Demichelis was told in December 2012 that his employment would end at the end of January 2013. He claims that the club explained to him that, as part of the process of trying to secure him a work permit, they found Canadians that were able to fulfill the requirements of his role.

Mr. Demichelis claims that he has suffered significant damages in part because he gave up his employment in the United Kingdom and moved his family to Vancouver.

The Vancouver Canucks have yet to file a Statement of Defence.

What does this mean for employers?

This case demonstrates the potential pitfalls in the employment of foreigners. In particular, employers can face significant liability when disputes arise from the hiring and/or employment of temporary foreign workers. This issue is becoming increasing commonplace in large part because of the exponential growth in the number of temporary foreign workers in Canada. There are now approximately 250,000 individuals entering Canada on an annual basis under a temporary work permit, and 500,000 temporary foreign workers in the country at any given time.

Employers should accordingly ensure that they receive adequate employment and immigration advice to ensure that all matters relating to the hiring of foreign workers are addressed adequately and in a seamless fashion. This can help to ensure that employers are in the best position to defend against claims should disputes arise.

Sharaf Sultan
Associate
Heenan Blaikie LLP
ssultan@heenan.ca

This article was originally published on the Heenan Blaikie website here


Wednesday, March 20, 2013

Newcastle could appeal to FIFA against FA’s decision not to sanction McManaman

 A summer agreement between football’s stakeholders prevented retrospective action from being taken against Wigan Athletic’s Callum McManaman, following a horror tackle on Newcastle United’s Massadio Haidara on 17 March. This is despite the FA’s own regulations allowing retrospective action to be taken. However Newcastle United, which called the FA’s disciplinary procedures ‘not fit for purpose’ in a 19 March statement, may have a case to appeal to FIFA.

 

‘Following consultation with the game’s stakeholders (the Premier League, the Football League, the Professional Footballers’ Association, the League Managers’ Association, Professional Game Match Officials Limited and the National Game) in the summer, it was agreed that retrospective action should only be taken in respect of incidents which have not been seen by the match officials’, read a 19 March statement from the Football Association (FA).

 

However, the FA’s rules do allow retrospective action to be taken. Section A, Regulation 8(j) (Rule E3) of the FA’s Disciplinary Handbook states: ‘A charge of Misconduct…may be brought against a Player in relation to an incident whether or not the same incident has been dealt with by the referee’.

 

FIFA regulations would allow a Newcastle appeal. Although Article 72 of the FIFA Disciplinary Code mandates that the referee’s decision is final, it also provides that ‘in certain circumstances, the jurisdiction of judicial bodies [Disciplinary Committee, Appeal Committee & Ethics Committee] may apply’. These ‘certain circumstances’ are defined in Article 77 as ‘sanctioning serious infringements which have escaped the match officials’ attention’ and ‘rectifying obvious errors in the referee’s disciplinary decisions’. Newcastle may have a case here.

 

Further salt has been rubbed into the wound with the news that the FA is to charge Newcastle’s Assistant Manager John Carver with misconduct in relation to the match against Wigan. The club is understandably upset. ‘Newcastle United, along with other clubs, have had players suspended for incidents reviewed after the game’, read its 19 March statement. ‘Whilst not trivialising these incidents, they were not, in our opinion, of the seriousness of Callum McManaman's tackle on Haidara. Whilst we understand that the current procedures give the FA limited options, it cannot be correct that the most serious offences - those which have the potential to cause another player serious harm - can go unpunished, even if the original incident was seen by match officials. We will now be making a strong representation to the FA and the Premier League to see how a more appropriate, fair and even-handed disciplinary process can be introduced at the earliest opportunity to prevent incidents of this nature going unpunished in the future.’

 

If that doesn’t work, a FIFA appeal may be the next option.

 

Andy Brown


Friday, March 15, 2013

Education and Intervention Key To Tackling Doping in Sport

 

Sport should focus more on education and intervention rather than increased testing to combat doping, heard delegates at Twickenham Stadium for the sixth edition of Tackling Doping in Sport. The 250 delegates present also heard that while international sporting federations are doing more than ever before to take anti-doping efforts to remote jurisdictions, the system needs to punish those who do not correctly implement the World Anti-Doping Code.

 

“WADA needs to evolve with the Code”, said Andy Parkinson, Chief Executive of UK Anti-Doping in his opening address. “Should WADA have investigative powers? Yes, but it should investigate uninvited countries and sports that are not correctly implementing the Code. We want WADA to be more than just a service provider.”

 

Rob Koehler, Director of Education and Program Development at the World Anti-Doping Agency (WADA), highlighted that while the Code places emphasis on testing, very few anti-doping organisations are carrying out education programmes. He revealed that WADA will attend a May meeting with the International Olympic Committee (IOC), international federations, UNESCO, International Fair Play and more on educating young people about anti-doping. This problem was further highlighted by Stephen Watkins of the Rugby Football Union, who raised significant issues regarding supplement use amongst young rugby union players.

 

Speakers also highlighted difficulties with the current testing-focussed regime and how they are being overcome. Thomas Capdevielle of the International Association of Athletics Federations pointed out that WADA's requirement for sample collection under the Athlete Biological Passport to be analysed in 36 hours by an accredited laboratory can be problematic in certain jurisdictions. The IAAF is launching a satellite laboratory in Eldoret, Kenya, using staff from the accredited Lausanne laboratory.

 

Hannah McLean of UK Anti-Doping gave a fascinating example of how cooperation with law enforcement worked to combat doping in the case of an athlete and coach whose house had been raided to find 60,000 steroid pills. The case revealed that if anti-doping authorities can prove that an athlete intended to cheat by taking what they believe to be a prohibited substance, then analytical evidence showing that a substance had prohibited drugs in it is not essential. She also revealed that an athlete can renounce possession if they make a mistake and buy a prohibited substance by immediately informing the national anti-doping authority concerned.

 

Anti-doping authorities also face a challenge presented by the European Union's revision of its data protection laws. Lars Mortsiefer, Head of Legal at the Nationale Anti-Doping Agentur Deutschland, said that WADA's requirements “cannot be reconciled” with the wishes of the Article 29 Working Party of data protection regulators.As reported in World Sports Law Report, the Art. 29 WP wrote to WADA last week with a 13-page list of issues with the Code. Dan Cooper, WADA's External Privacy Counsel, said that international transfer of data could “prove problematic” and that blood profiling would be “impossible” if current issues were not resolved.

 

Other issues raised included;

• Interpretation of Article 10.4 of the Code by administrators at the Court of Arbitration for Sport (CAS) can be problematic;

• The 2015 Code needs to clarify whether CAS Arbitrators can still work for sporting organisations, or if they need to be truly independent;

• The US Equestrian Federation is using polygraph (lie detector) tests in anti-doping cases already;

• Clarification is needed as to what constitutes 'substantial assistance' to reduce an athlete sanction under Article 10.5.3 of the Code.

 

Tackling Doping in Sport is organised by World Sports Law Report, Squire Sanders (UK) LLP and UK Anti-Doping.


Tacking Doping in Sport Day 2: Code Revisions Need Closer Examination

  Planned revisions to the World Anti-Doping Code need closer examination before the 2015 version is published, heard delegates at day two of Tackling Doping in Sport 2013, which took place 13-14 March at Twickenham Stadium. The 250 delegates from over 30 countries held a lively round-table discussion on contentious areas of the new version of the Code, with suggestions to be submitted to the World Anti-Doping Agency as part of its Code Review process next week. 

 

Joseph de Pencier, CEO of the Institute of National Anti-Doping Organisations kicked off the day by highlighting seven main areas of change in the 2015 Code. The audience was split over whether the standard two-year ban for a first time offence should be increased to four years, as proposed in the 2015 Code. Under the 2009 Code, sporting organisations wishing to prosecute an athlete who has intended to cheat for longer must push for 'aggravated circumstances' under Article 10.6 to scale a first time offence ban up from two years to a maximum of four. However, UK Anti-Doping (UKAD) pointed out that they are often curtailed from doing this by a caveat to Article 10.6, which allows an athlete to 'avoid the application of this Article by admitting the anti-doping rule violation'.  

 

Under the current 2009 Code, the onus is on the international federation (IF) to 'scale up' the ban under Article 10.6. Under the 2015 Code, the onus is on the athlete to scale the standard four-year ban down. There was much debate over whether it is right to place the onus on the athlete to reduce the ban, especially now that athletes face having to pay costs at the Court of Arbitration for Sport should they lose a case, if the IF delegates sanctioning to the national association concerned. “I must now advise athletes that they could face having to pay CAS costs as well as legal costs”, said Antonio Rigozzi, Partner, Levy Kauffmann-Kohler. 

 

Concerns were raised that this could deter appeals from athletes who had inadvertently ingested prohibited substances with no intent to cheat and, conversely, that a four-year ban was so lengthy that it would result in endless appeals from athletes keen to avoid the end of their career. John Ruger, Athlete Ombudsman for the US Olympic Committee, highlighted that between 40% and 60% of US doping cases are inadvertent. “Most athletes have made silly mistakes and for those that have not, penalties can be upscaled”, said Athlete Lawyer Howard Jacobs. “A four year default ban places the burden on the athlete to prove they are not an intentional doper rather than on the IF to prove intentional doping”.  

 

“In cases of inadvertent doping, rank injustice should not be allowed”, said Adam Lewis QC, of Blackstone Chambers. “Where everybody accepts that there has been no intention to cheat, the Code should provide for this”. 

 

It was also pointed out that the 2015 Code doubles the initial doping sanction for competing while banned. Ruger pointed out that if a four-year standard is used, this could result in some athletes facing an eight-year ban for competing in a competition they did not realise they were banned from taking part in. 

 

Issues were also raised around the drafting of certain changes within the 2015 Code. De Pencier pointed out that Article 8.1 of the 2015 Code entitled athletes to a 'fair hearing as set forth in Article 6.1 of the European Convention on Human Rights and comparable principles generally accepted in international law' and clarification is needed as to what this means in practice. He also said that provisions in Article 10.4.2 on contaminated products need clearer definition. Athlete lawyer Howard Jacobs pointed out that the definition of 'contaminated product' in the Code as 'A product which an Athlete or other Person could not have known contained a Prohibited Substance' has the potential to undermine the whole purpose of the contaminated products rule. 

 

Practical issues were also highlighted, such as those involving regulation of drugs for 'therapeutic use' (therapeutic use exemption - TuE. It was pointed out that if an IF doesn't recognise a National Association's TuE, then that can cause issues for the athlete who qualifies for international competition when competing at the national level, as they may find they fail to qualify again due to competing against NA athletes who have that TuE. 

 

Away from the Code revision debate, a fascinating insight into how the media can work with anti-doping authorities was presented by freelance journalist Hajo Seoppelt, who has been carrying out an investigation into doping in Kenya for German state broadcaster ARD. The International Association of Athletics Federations (IAAF) had highlighted how this problem is being resolved through the use of mobile doping units in areas such as Kenya on day one of the conference. 

 

Brett Clothier of the Australian Football League showed that while the Australian Crime Commission's report into doping in Australian sport had highlighted the involvement of organised crime in doping, it has also revealed a number of other issues. These involved the role of anti-ageing parlours in the supply of drugs into the Australian market; and how Australian sport has been using drugs not regulated under the Code, such as drugs not yet tested on humans. 

 

In wrapping up the conference, Mike Morgan of Squire Sanders (UK) LLP said that the event had provided a “balanced discussion” between those arguing for longer sanctions for doping and those arguing for redemption. “Everyone has different ideas about policing integrity, and that's why this conference is worthwhile”, he said. 

 

The conference was covered by media organisations including The Independent, Reuters, The Guardian, the Washington Post and more. Tackling Doping in Sport is an annual event organised by World Sports Law Report, Squire Sanders (UK) LLP and UK Anti-Doping. World Sports Law Report also organises conferences on Betting in Sport and Player Contracts. For more information, visit www.CecileParkConferences.com 


Tuesday, March 12, 2013

February WSLR Editorial: Silo-busting: integrity's new frontier

There have been a number of significant developments in the ongoing battle against match-fixing this month. However, what is interesting about them is how well they illustrate the lack of a coordinated approach to tackling match-fixing. All the different bodies involved are operating in silos, rather than talking to each other.

Europol revealed details of a large-scale investigation into match-fixing. FIFA pointed out that many of the cases revealed by Europol have been dealt with - it has its Early Warning System GmbH to help with this - and launched a website for whistleblowers with information on corruption. Interpol held a conference on match-fixing that illustrated how law enforcement needs to cooperate to tackle match-fixing, yet has made no concrete moves towards this itself. Legislators drew up new plans to regulate operators on the premise of protecting consumers from corruption. Gambling operators bemoaned attempts to further regulate them, yet also complained about lack of consultation with regards to attempts to tackle match-fixing.

This may sound strange coming from the Editor of World Sports Law Report, but sport is unique as a legal discipline in that a debate exists as to whether 'sports law' exists at all, or whether sport is simply governed under a number of established legal disciplines. As with all legal disciplines, sport is regulated through criminal and civil law, but also through the various rules of international federations and national associations that govern different sports. Tradition dictates that sports organisations regulate on a national level with loose international governance. The European Commission has even recognised that sport regulations can have 'special characteristics' which might fall outside of normal law in its White Paper on Sport.

The number of bodies involved in regulating sport is therefore huge. As there is nothing connecting them, they all operate under their own codes and traditions. They are also interact with civil and criminal law, and the bodies involved with policing that area. This situation might be described as a 'lacuna', and goes some way to explaining why sport has failed to get to grips with tackling match-fixing.

This is why initiatives such as the International Olympic Committee and Council of Europe initiatives against match-fixing are so important. Somebody needs to take control of the process and set guidelines as to how all the bodies involved should interact together to regulate an international problem such as match-fixing. As pointed out by the European Sports Security Association in this edition, if sport wants to continue to exist in parallel with the normal rules of law, then it needs to get its house in order before somebody else does it for them.

Andy Brown


Tuesday, February 26, 2013

FIFA Licenses Goal-Line Technology Companies

Cairos Technologies AG today became the third company licensed by FIFA as a Goal-Line Technology (GLT) provider, after agreements were signed with Hawk-Eye and GoalRef in November last year. FIFA has also launched a tender for these three companies to bid to become official GLT provider for the FIFA Confederations Cup 2013 and 2014 FIFA World Cup, both of which will be held in Brazil.

FIFA was initially opposed to GLT, however changed its tune in Summer 2010. It was widely reported as a u-turn by football's governing body, however as regular readers of this blog will know, I believe that FIFA has played a far cleverer game. When announcing its approval for the Hawk-Eye and GoalRef systems, the International Football Association Board (IFAB) 'was keen to stress that technology will only be utilised for the goal-line and no other areas of the game'. This statement kills any other attempts to use technology to make football fairer stone dead.

FIFA could have utilised the big screens now present in nearly every professional stadium for referees to instantly review any goal-line situation, as fans watching on TV do. This would have been a cheaper solution to the problem, but one that FIFA chose not to use. Why? Because FIFA can't generate money from technology that already exists in football, but companies providing new technology will be happy to pay FIFA.

This financial motive is underlined by page 3 of FIFA's 'Application as a Licensee for GLT' document, which reads: 'The FIFA licensing scheme for goal-line technology offers two options to licensees: a non-commercial option containing the authorisation to install licensee's goal-line-technology systems worldwide which can be used in official matches, and a commercial option which additionally provides the licensee with certain marketing rights in relation to the FIFA quality programme for goal line technology to communicate its status globally as an official FIFA licensee for goal-line technology. Both options are presented by FIFA to the applicant at the initial meeting. An administration fee is payable by all licensees which contributes to the expenses incurred for the licensing/certification and registration of goal-line technology systems and installations. In addition, where the commercial option is taken, a licence fee will also be due.'

This is why I am sceptical of suggestions that FIFA has 'seen the light' regarding GLT use in football. FIFA is a shrewd commercial operator and I believe that its so-called 'u-turn' on GLT is a licensing exercise to make money. As I have stated before, GLT will only make football marginally fairer. During the 2010/11 FA Premier League season, just four incorrect goal-line decisions were logged, compared to 151 incorrect decisions on goals related to the offside rule. The evidence for this is here.

If the introduction of technology into football was about making football fairer, a better solution would be to use TV replays. Both rugby codes manage this without ruining the flow of the game, however if the football authorities are worried about this, perhaps a system similar to that used in cricket - where players are allowed to seek reviews of a decision - could be used. Football is faster flowing than cricket, so I would advocate a system where the Captain of each team is allowed to refer three decisions per game to the video referee. This would be a better solution than GLT and would also be cheaper. However it won't make money for football, so FIFA and the IFAB have ensured it will never be introduced.

Andy Brown


Friday, February 22, 2013

Media circus

The jury is still out on whether Lance Armstrong is playing a clever game. As was pointed out by Anti-Doping Denmark following Michael Rasmussen's subsequent confession to doping, Armstrong decided against confessing to anti-doping authorities, instead choosing the medium of a TV interview. In terms of the way that the anti-doping community normally operates, he has yet to 'confess' to doping.

Armstrong chose not to contest USADA's evidence against him in an arbitration hearing, after a Texas Court granted USADA's motion to dismiss his appeal against the charges. This was despite the judgment stating that arbitration is the correct forum for the issues around USADA's evidence relying on witness testimony to be discussed. 'The deficiency of USADA's charging document is of serious constitutional concern', reads the judgment. 'It appears USADA's evidence will revolve more around eyewitness testimony than lab results. The Court must presume the arbitration panel will discount the weight of those results to the extent it finds them unreliable or unpersuasive. Armstrong will be able to call into question the reliability of any witness testimony, by affidavit or otherwise, that was not subject to cross-examination'.

Yet despite this, Armstrong chose a TV interview over arbitration and did not call the evidence into question. Unsurprisingly, Oprah Winfrey did not press Armstrong on this crucial issue.

As pointed out by Kris Lines and Jon Heshka in this issue of World Sports Law Report, USADA has acted as 'judge, jury and executioner' so far in the Armstrong case. The evidence against him has not been independently examined by any authority, let alone a court of law. He has not even confessed, as such. All we have is that he says he doped in winning his seven Tour de France titles, but "the last time I crossed that line" was in 2005.

It is important that Armstrong has put a time limit on his doping activities, despite USADA's evidence suggesting he was doping as late as 2010. He has publicly stated that he wants his lifetime ban reduced to eight years, which means he would be free to compete - at the latest - in 2014.

Armstrong has rejected approaches from USADA to cooperate and has focussed instead on giving evidence to a WADA and UCI-led truth and reconciliation commission for cycling. This now looks unlikely to happen, due to ongoing arguments between the two bodies over who should establish and fund such a commission.

Armstrong also faces lawsuits from a number of individuals and companies keen to recoup money. As he hasn't confessed and USADA's evidence has been criticised by a court of law, these lawsuits may prove difficult to pin down. The most important of these is a lawsuit brought by Floyd Landis under the Federal False Claims Act, which alleges that by accepting sponsorship money from the government, the US Postal Service Cycling team was defrauding the government.

However, the lawsuit asks for trial by jury. Armstrong's advisors could argue that the jury has been prejudiced by the media circus that ensued around his Oprah interviews.

Is Armstrong playing a clever game? It appears so, but only time will tell.

Andy Brown