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August 2011 Archives

August 2, 2011

Message from the Chair

I am pleased to announce the appointments of two Law Student Liaisons for the 2011-2012 academic year. As Law Student Liaisons, they will attend EASL Executive Committee meetings, participate in the lively exchange of ideas with EASL colleagues, assist with EASL programs and serve as the voice for their fellow classmates.

Nyasha S. Foy is a rising 3L at New York Law School. Nyasha is a student research fellow for the Institute for Information Law and Policy, New York Law School's home for the study of intellectual property and technology law, where she focuses on copyright, entertainment and music law. Additionally, she serves as the 2011-2012 Vice Chair for the National Black Law Students Association, Northeast Region. She is also a member of the New York Law School Moot Court Association and competed in the International Trademark Association's Saul Lefkowitz Moot Court Competition in spring 2011. She holds a B.A. in Music (Honors) and French from Wesleyan University and worked in marketing and advertising prior to attending law school. Nyasha runs her own music publishing company, yofoy music publishing.

Carey Alexander is a third-year student at St. John's University School of Law, where he is Associate Managing Editor of the St. John's Law Review. Prior to attending law school, Carey worked as an editor of the acclaimed consumer-advocacy blog The Consumerist, under both Gawker Media and Consumers Union. He was the web coordinator for the National Campaign to Restore Civil Rights, housed at New York Lawyers for the Public Interest, and served as a policy advisor to Bronx Borough President Adolfo Carrion. Carey received his undergraduate degree in Government from Skidmore College.

Warm welcome to Nyasha and Carey, the first EASL Law Student Liaisons from their respective law schools!

August 5, 2011

Message From the Chair

I hope everyone is enjoying the summer. I am delighted to announce two recent appointments to the EASL Executive Committee.

Judith B. Bass has been appointed as Co-Chair of EASL's Literary Works Committee. Judy is a media and entertainment lawyer with a solo practice who represents a variety of creative artists and producers in film, television, theater, publishing, licensing and the visual arts. She has worked, among other places, as an attorney and business affairs executive at Time Inc., CBS and Marvel Enterprises. An article about her practice entitled "Adding a Personal Touch for Less: Media Dealmaker Thrives Outside the Corporate World" appeared in the February 26, 2007 issue of Crain's New York Business. Her article entitled "Cariou v. Prince: Fair Use or Unfair?" will be published in the Summer 2011 issue of the EASL Journal.

Cheryl Davis has been appointed as Co-Chair of EASL's Diversity Committee. Cheryl is a partner at Menaker & Herrmann LLP, where her practice focuses on intellectual property matters (particularly copyright and trademark cases), employment, and real estate/construction related matters. She is also a published playwright whose work has been frequently read and performed nationally. Her play about the desegregation of the nations' school system, The Color of Justice, which was commissioned by Theatreworks/USA, received critical acclaim and tours regularly. Cheryl is the recipient of a Writers Guild Award for her work on the daytime dramatic serial As The World Turns.  Her musical Barnstormer received a Jonathan Larson Performing Arts Foundation Award and was in developmental production at the Red Mountain Theatre in Birmingham, Alabama in January 2010.

Warm welcome to Judy and Cheryl!

August 6, 2011

The End of the NFL Lockout

By Sylvia Chen

On July 25th, after 135 days of lockout and following the owners' approval, the players' representatives voted unanimously to approve a new collective bargaining agreement. The players voted to re-certify as a union (the National Football League Players Association, "NFLPA"), and the NFLPA is negotiating the last terms of a new collective bargaining agreement ("CBA"). The final negations between the union and the NFL concern drug testing, player conduct, grievances policies, disability issues, and pension programs. The NFL players voted to fully ratify the new 10-year CBA on August 4th.

What Led to the Lockout?

As the negotiations dragged on into mid-March, the players and the owners could not agree on how to divide the billions of dollars in revenues and other key issues. The NFL earns an estimated nine billion dollars annually.(1) The owners initially demanded an 18 percent decrease in players' compensation and an expansion of the season from 16 games to 18 games for at least two years.(2) The players wanted higher minimum levels of compensation. At the early stage of the negotiations, the players agreed on the 50-50 split after the first billion dollars. They also demanded full financial disclosure from all NFL clubs.

With regard to health and safety issues, the NFL intended to create new year-round rules. It offered to establish a fund for retired players, with $82 million contributed by the owners over the next two years. The players, however, demanded better protections for those whose careers are interrupted by injuries.

The Lockout

On March 12, 2011, the NFL announced a lockout of players hours before the old CBA expired.(3) The lockout, the first NFL work stoppage since 1987, suspended the negotiations. It barred the players from entering into practice or stadium facilities; players could not communicate with team officials; no players could be signed; and teams would not pay for health insurance for players.

Brady v. NFL

In response to the lockout, the NFLPA decertified itself as a labor union in order to allow the players to be heard in court. Tom Brady, Drew Brees, Peyton Manning, and seven other players filed a class action complaint alleging that the lockout would violate federal antitrust and state contract and tort laws. The players also sought a preliminary injunction that would prohibit the NFL from imposing or continuing the lockout.

The district court rejected the NFL's argument that the Norris-LaGuardia Act prevented the court from granting injunctive relief. The district court held that this particular scenario was not a case "involving or growing out of a labor dispute" - as defined by the federal statute. The district court entered an order to enjoin the lockout.

On appeal, the Eighth Circuit reasoned that the Congress drafted the Norris-LaGuardia Act in broad language, and that the definition of a labor dispute is expansive. The Eighth Circuit referenced the statutory language, that "labor dispute includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in . . . seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee."(4) The Circuit court held that the dispute between the players and the league over the CBA was a case 'growing out of a labor dispute' between employers and employees.

The Eighth Circuit reversed the district court's decision and ruled in favor of the NFL to allow it to continue the lockout. However, the court also permitted the players' antitrust lawsuit to move forward.

The New CBA

The end of the lockout introduced a new CBA. The players and the owners have agreed on the key issues, including how to divide the revenues, from which the players will receive 47 percent of the NFL's revenues over the next 10 years, as opposed to 51 percent in the previous agreement.(5)

Furthermore, the owners will have to guarantee that 89 percent of the money set aside goes towards compensation. For the players, the new agreement improved upon the previous guarantee at 87 percent, which also included several loopholes that allowed owners to spend less.

The new deal provides players whose careers are interrupted by injury up to 1.5 million dollars in compensation during the two years after injuries occur. The retired players as a group will receive up to one billion dollars more in benefits during the next 10 years. (6)

The Outlook

At the end of the day, both the players and the owners win. While the latter will receive a higher share of revenues, the real dollars for the formers' incomes have increased. The NFL is a profitable enterprise. Billions of dollars are at stake. Both the players' and the owners' need to benefit from a football season this year outweighs their underlying demands.

(1) Russell Arch, 2011 NFL Lockout: Why the Players' Side Is Right, Bleacher Report, March 13, 2011. < http://bleacherreport.com/articles/634383-the-2011-nfl-lockout-why-the-players-side-is-right) (accessed on July 23, 2011).
(2) Matthew Futterman, The NFL's More Perfect Union, The Wall Street Journal, July 26, 2011.
(3) Simon Evans, NFL Announces Lockout of Players, Reuters, March 12, 2011. www.reuters.com/article/2011/03/12/us-nfl-lockout-idUSTRE72B25I20110312> (accessed on July 23, 2011).
(4) 29 U.S.C. § 113(c).
(5) Matthew Futterman & Lauren Schuker, NFL and Players Agree on New Deal, The Wall Street Journal, July 26, 2011.
(6) Id.

August 17, 2011

Hosers or Hosed? Labatt Brewing Co. Ltd. v. NHL Enterprises Canada and the Battle over Beer Rights

By Carter Anne McGowan

Few if any sponsorships are more lucrative in professional sports than beer sponsorships. The National Hockey League (NHL or League) - long sponsored by Anheuser-Busch-owned Labatt in Canada - recently found itself embroiled in litigation brought by Labatt alleging that the League breached its Canadian beer deal when it entered into a U.S./Canada beer sponsorship with Labatt's archrival, Miller Coors (Molson Coors in Canada). On June 3, 2011, two days after NHL Commissioner Gary Bettman trumpeted the Molson Coors deal in his annual state-of-the-game speech at the Stanley Cup Finals, Justice Frank Newbould of the Ontario Superior Court ruled that the League engaged in double-dealing when it contracted with Molson Coors regarding rights the court deemed already granted to Labatt.

The case presents a fact pattern only a contracts professor could love: at issue were law school favorites like the interpretation of a renewal clause, waiver, the point at which an agreement becomes binding, and agreements to agree. In brief -- as brief as one can be - the NHL twice expressly extended a period of exclusive negotiation provided in the renewal terms of the 2008 contract between the League and Labatt, and then, instead of further express extensions, made casual intimations that extensions "would not be an issue" as they progressed toward an agreement. Labatt and the NHL exchanged non-binding term sheets and letters of intent setting forth their agreed upon deal points through November and December 2010 and, instead of signing any of these, agreed to go directly to a long-form agreement. After a month of exchanging mark-ups, on February 8th of this year, the NHL told Labatt it was terminating negotiations. On that same day it signed the biggest beer sponsorship in League history: a seven-year, $375 million deal with Molson Coors.

Molson Coors had approached the NHL regarding sponsorship rights on January 3, 2011. Over the next several weeks, various NHL-related sources informed Molson Coors that the NHL already had a Canadian deal with Labatt. On January 26th, the NHL proposed exclusive U.S. beer sponsorship rights to Molson Coors; Molson Coors responded that it was only interested if the sponsorship was for the United States and Canada. The next day, the NHL agreed that it was able to grant such rights. Molson Coors agreed to the deal with the proviso that the NHL indemnify it against any claim brought by Labatt. Thirteen days later, the NHL and Molson Coors agreed to terms and signed a letter of agreement, including the requested indemnity. Labatt promptly brought suit. (Labatt Brewing Co. Ltd. v. NHL Enterprises Canada, L.P. (2011 ONSC 3219).)

At trial, Labatt argued that after its exclusive negotiating period was twice expressly extended, the NHL then waived the time limit (or, in the alternative, represented an intention not to be bound by the express exclusivity period due to its course of conduct), and the parties had come to "terms of renewal" as stated in the renewal clause of the 2008 contract which, although less than fully-negotiated terms of agreement - required the parties to continue to negotiate until they reached agreement on all business terms. The NHL countered by claiming that the exclusive negotiation period ended on October 22nd, irrespective of the NHL's continued negotiating thereafter, and that requiring it to continue negotiating until the parties reached agreement on all business terms after agreeing on terms of renewal constituted an unenforceable agreement to agree.

Justice Newbould, taking a view that comported entirely with neither NHL nor Labatt arguments, held for Labatt, finding that the negotiating period was indefinitely extended by the NHL; "an agreement" was reached on November 12th and therefore there was no obligation that Labatt and NHL ever reach a long-form agreement; and the NHL was precluded from negotiating with Molson Coors as of November 12, 2010.

As the clock ticked inexorably toward the 2011 - 12 season - without a pro season start minus the seemingly necessary beer sponsor in place - the NHL requested and received an expedited appeal at the Ontario Court of Appeals. In a brief eight-page ruling that did not even discuss three of the NHL's four grounds for appeal, the Court of Appeals reversed Justice Newbould's decision. (Labatt Brewing Company Limited V. NHL Enterprises Canada L.P. (2011 ONCA 511).) The reversal came on procedural grounds, with the appellate court finding that Justice Newbould had erred in determining that the NHL and Labatt had reached a binding sponsorship agreement as of November 12th when neither party had argued that a binding agreement was reached on that date. Citing many precedents in Canadian law, the Court of Appeals found that it was procedurally unfair to the NHL to determine a case based on a novel theory of liability not raised by either party at any point during litigation, as that left the NHL without the ability to rebuff the assertions made under the theory.

As of this blog, the 2011-12 NHL season will commence with Molson Coors as the League's beer sponsor. However, Labatt is contemplating further legal action and has acquired direct beer sponsorships with three Canadian teams, which sponsorships include the extremely important pouring rights in those teams' arenas. Meanwhile, the case will not go down as one of the finest moments in the NHL's legal history, as it appears that neither the NHL nor Molson Coors acted in an altogether upstanding fashion during these negotiations. Perhaps the current result is legally correct, but the whole affair leaves a bad taste in the mouth...perhaps the taste of spoiled beer.

August 19, 2011

Message from the Chair Judith B. Prowda

I am delighted to announce the appointment of our first out-of-state Law Student Liaison, Aaron E. Rosenthal, who will be entering his 3rd year at DePaul University College of Law in Chicago. Like his fellow Law Students Liaisons, Aaron will attend EASL Executive Committee meetings, engage in the lively exchange of ideas with EASL colleagues, assist with EASL programs and serve as the voice for his fellow classmates.

Aaron is the current President of the Art and Cultural Heritage Law Society at DePaul. His work during law school has included a clerkship at the Chicago History Museum and an internship with The Lawyers' Committee for Cultural Heritage Preservation. Last spring, he participated in DePaul's National Cultural Heritage Law Moot Court Competition as a member of the Ghost Team, and drafted a section of the bench memo.

Aaron received his Bachelor's degree from Brown University in Old World Art and Archaeology, and his Master's degree in Art Business from the Sotheby's Institute of Art - New York. His Master's thesis; " Sellers of Ancient Art, the illicit trade in antiquities and CPAC: Kill or Cure?", focused on the development of bilateral trade agreements between the United States and archaeological source nations, and their effect on New York's market for antiquities.

About August 2011

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in August 2011. They are listed from oldest to newest.

July 2011 is the previous archive.

September 2011 is the next archive.

Many more can be found on the main index page or by looking through the archives.