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Week In Review

By Chris Helsel

Unusual Labor Dispute Arises as Chicago Cubs Trade Twelve Days For an Extra Year of Control of Budding Superstar

Each spring, every Major League Baseball (MLB) club gathers its top 60 or so players (including its most highly regarded Minor League prospects) and heads south to either Arizona or Florida for preseason practices and exhibition games. For established veteran players, this annual ritual, known as Spring Training, serves primarily as a chance to work out the cobwebs and prepare for another long 162-game campaign. For young prospects, however, Spring Training represents the chance of a lifetime: an opportunity to prove their mettle by competing against the game's best and demonstrating to their club executives that they are ready to make the leap to the Major Leagues.

For one top prospect, however, even a monumentally impressive Spring Training performance proved not to be enough - and the players' union is now crying foul.

Kris Bryant, 23, plays third base in the Chicago Cubs organization (Cubs) and is widely regarded as one of the sport's top young prospects. This spring, in only 14 games, he hit 9 home runs - more than any other player, on any team - and posted an other-worldly .425 batting average (for perspective's sake, no player has hit over .400 in an MLB season since 1941). However, despite out-performing every other player on the planet, the Cubs elected not to include him on its roster to begin the season. Instead, he was relegated back to the Minor Leagues.

Though no one in the organization will admit it, it is widely believed that this decision was based not on Mr. Bryant's playing ability, but rather the Cubs' intention to keep him under its control for as long as possible - at the lowest possible cost. Under MLB rules established by the collective bargaining agreement (CBA) reached between the MLB and the players' union (MLB Players Association, MLBPA), a club can retain a player on a league-minimum salary for the first three seasons of his career (with some exceptions beyond the scope of this article). For the next three seasons (years 4 through 6 of his career), if no separate contract agreement is reached, the player's salary is determined by an independent arbitrator who compares the player's ability - and therefore value - with that of other similarly situated players at his position. Importantly, during these arbitration-eligible years, though the player's salary is determined by merit, his parent club retains his exclusive rights. Only after completing 6 full seasons at the MLB level is a player granted free agency, whereby he can shop his services to the highest bidder.

Naturally, MLB clubs often seek to delay this process for as long as possible. Under the terms of the CBA, a player earns a year of "service time" if he spends 172 in-season days with the Major League club. A typical MLB season consists of 162 games and 21 off days, for a total of 183 "service days." Therefore, if a club relegates a player to the Minor Leagues for at least 12 days of any season (provided he is not on the 40-man MLB-eligible roster, which Mr. Bryant is currently not), the player does not accrue a year of service time, and his free agency is delayed for a full year.

This issue arises from time to time, but rarely with a player of Mr. Bryant's caliber. From a management perspective, it makes perfect business sense to briefly delay a player's arrival in the Major Leagues in order to stave off free agency - and retain control over him - for another full year. This does not make the delay any easier to swallow for Cubs fans, however, who have not experienced a World Series championship in more than a century. Perhaps more importantly, this seemingly flagrant exploitation of a CBA loophole has raised eyebrows with the MLBPA.

"Today is a bad day for baseball," the MLB Players Association declared on March 30th, the day the Cubs announced that Mr. Bryant would not be joining the club for the start of the season. "This decision, and other similar decisions made by clubs, will be addressed in litigation, bargaining or both." Though Cubs president Theo Epstein has insisted that the decision was in the interest of developing Mr. Bryant's baseball-playing talents ("People are trying to make this about business. There are valid baseball reasons"), the player's agent, Scott Boras, vehemently disagrees, telling USA Today that the Cubs are "damaging the ethics and brand of Major League Baseball."

Whatever the Cubs' rationale for declining to include Mr. Bryant on its Opening Day roster, the MLBPA's strong public response came as a surprise to many observers. As Mr. Bryant has not yet served a single day of MLB service time, he is not officially a member of the MLB Players Association; and because MLB in-season rosters are limited to 25 players, if Mr. Bryant were to join the Cubs MLB roster, another player would be have to be removed. This puts the MLBPA in the uncomfortable position of campaigning for a prospective future employee (albeit a highly valuable one) to take the job of one of its rank-and-file. This apparent conflict of interest has not gone unnoticed by MLB brass, who released a statement regarding the union's position on Mr. Bryant this week:

"We do not believe that it is appropriate for the players' association to make the determination that Kris Bryant should be on the Cubs' 25-man roster while another player, who, unlike Bryant, is a member of its bargaining unit, should be cut or sent to the minor leagues."

Mr. Bryant, for his part, has seemingly not let the club's decision affect his on-field performance. Despite admitting that he was "disappointed" not to be with the MLB club, he delivered a run-scoring single and stole a base in his Minor League season debut this week. The Cubs have not fared so well, beginning the season with a record of one win and two losses.

The Cubs, it should be noted, have not violated any MLB rules. Teams are not required to promote or demote any player based on others' evaluations of his performance; that decision is left solely up to the club. Regardless of how the team fares in the first two weeks of the season, the Cubs have seemingly decided that an extra year of team control is worth waiting 12 days for its top prospect to arrive.

The MLB season began last Sunday night, with the Cubs falling to the St. Louis Cardinals by a score of 3-0. Mr. Bryant's 12-day waiting period concludes this coming Friday - and if he makes his Major League debut at third base for the Cubs in Chicago on Saturday afternoon, now you'll know why.

http://www.nytimes.com/2015/04/07/business/kris-bryant-the-baseball-players-union-and-a-lesson-for-labor.html
http://www.washingtonpost.com/news/sports/wp/2015/04/02/how-the-cubs-kris-bryant-became-mlbs-most-intriguing-spring-story/
http://www.foxsports.com/mlb/just-a-bit-outside/story/chicago-cubs-kris-bryant-service-time-when-to-call-up-prospects-031115
http://www.si.com/mlb/2015/03/30/chicago-cubs-kris-bryant-minors-mlbpa

University of Virginia Fraternity Plans to Sue Rolling Stone Over Retracted Article Alleging Gang Rape

Phi Kappa Psi, the University of Virginia (UVA) fraternity at the center of a controversial Rolling Stone article from November alleging that a female student was gang-raped by its members in its house, plans to sue the magazine for defamation.

The article, entitled "A Rape on Campus," was retracted after the release of a scathing report by the Columbia University Graduate School of Journalism. The Columbia report, which was commissioned by Rolling Stone, described the failure of the magazine's journalistic process and found that it did not engage in "basic, even routine journalistic practice." Specifically, the report concluded that the magazine failed to corroborate the alleged victim's story with any of her friends who were quoted in the article using pseudonyms, did not adequately seek to identify the alleged leader of the assault, and did not give the fraternity sufficient information to respond before publication.

As of this writing, Phi Kappa Psi has retained an attorney but has not yet taken any formal legal action. Experts believe that despite the damning Columbia report and the article's retraction, the fraternity will have a difficult time succeeding on its claim. In addition to allowing public examination of its social activities (which could be highly embarrassing), the fraternity will also need to demonstrate that the claims made in the article were "of and concerning it" as an entity, rather than just the unnamed individuals accused of actually committing the sexual assault. Further, if the fraternity is deemed to be a public entity rather than a private one, it will need to meet the heightened standard of actual malice - rather than just substandard journalism - to succeed on a defamation claim.

http://www.nytimes.com/2015/04/07/business/media/university-of-virginia-fraternity-to-go-after-rolling-stone-for-rape-article.html

Swiss Art Dealer Charged With Fraud Over Alleged Undisclosed Multimillion Dollar Markup

Last year, Russian billionaire Dmitry Rybolovlev purchased an Amedeo Modigliani nude painting, "Nu Couché au Coussin Bleu," from American hedge fund manager Steve Cohen for $118 million... or so he thought.

Much to Mr. Rybolovlev's chagrin, he later learned that according to Mr. Cohen, the sale price was actually $93.5 million. Nine days after learning of the extreme price discrepancy, Mr. Rybololev filed a criminal complaint in Monaco against his supposed friend and art broker, Yves Bouvier of Switzerland, for fraud and money laundering.

Mr. Bouvier, whose relationship with Mr. Rybolovlev dates back to 2003 or 2004, heads a company that stores art, wine and other collectibles in giant climate-controlled warehouses, known as freeports, in Switzerland, Luxembourg and Singapore. Building upon his extensive connection to the art world, Mr. Bouvier also became an art broker/dealer and has sold a total of 40 works to Mr. Rybolovlev (and Cyprus-based trusts owned by his family) over the last decade.

According to the complaint, Mr. Rybolovlev and Mr. Bouvier developed a close friendship, with Mr. Bouvier attending numerous parties thrown by the Russian billionaire across the globe. Mr. Rybolovlev alleges that he entrusted the Swiss broker with handling the verification process and pricing of each work he purchased. He now alleges that Mr. Bouvier took advantage of this trusting relationship by falsifying documents to fraudulently disguise the painting's sale price and take a large cut for himself, on top of the agreed-upon sales commission of 2%.

In Monaco, aggrieved parties can file criminal complaints, which are then forwarded to the police for investigation. If the police establish that the claim is valid, judicial action is commenced. In a scene straight from a crime caper film, Mr. Rybolovlev invited Mr. Bouvier to "chat" regarding payment for the purchase of another painting. Upon arrival, he was arrested by 8 police officers and held on €10 million bail.

In addition to the issue with the Modigliani painting, Mr. Rybolovlev also allegedly discovered an even larger price discrepancy in his purchase of a Leonardo da Vinci painting the year before. In 2013, one of his family's trusts bought the Italian master's "Salvator Mundi" through Mr. Bouvier for $127.5 million. Only later did he discover that the seller received only $75 to $80 million, with Mr. Bouvier presumably pocketing the $45-50 million difference.

Mr. Bouvier asserts that he is not a personal friend of Mr. Rybolovlev and was never an agent or broker, but rather an independent art seller. The distinction is an important one, because the duty owed to a buyer by his representative in a sale is considerably greater than that owed by an independent seller. "I've never been a broker," Mr. Bouvier said, "my company was the seller [...] and the alleged commissions are not commissions but administrative costs."

http://www.nytimes.com/2015/04/05/business/a-multimillion-dollar-markup-on-a-modigliani.html
http://www.forbes.com/sites/afontevecchia/2015/03/12/steve-cohens-modigliani-in-the-middle-of-an-art-market-war-billionaire-rybolovlev-vs-yves-bouvier/

Court Grants Injunction Preventing "Rampage" Jackson From Participating in Ultimate Fighting Championship Event

This week, a New Jersey state court judge granted a preliminary injunction preventing former Ultimate Fighting Championship (UFC) Light Heavyweight champion Quinton "Rampage" Jackson from making his planned return to UFC later this month, due to an existing contractual obligation to a rival promotion.

Mr. Jackson, 36, who participated in UFC from 2006 through 2013, was scheduled to return to the company for its April 25th pay-per-view event, "UFC 186". However, Mr. Jackson signed a contract with another mixed martial arts (MMA) circuit, Viacom-owned Bellator MMA, in 2013, and that company filed suit in chancery court claiming a breach of that contract. Although Mr. Jackson's return to UFC was announced in December, Bellator did not bring the breach of contract claim until early March.

In court, Mr. Jackson contended that it was in fact Bellator, not he, who was in breach. According to Mr. Jackson, Bellator had failed to properly promote him during his time with the promotion, leaving him free to re-sign with UFC. He also argued that being prohibited from fighting at "UFC 186" would bring his "successful career as an MMA fighter ... to a crushing conclusion" and would "effectively put (him) out of business."

Judge Karen L. Suter of the Superior Court of Burlington County (NJ) disagreed, and granted the injunction this past Tuesday. In her ruling, Judge Suter pointed to the strict language of Mr. Jackson's Bellator contract. She determined that despite Mr. Jackson's concerns, he "was aware of the extent and duration of the exclusivity provisions of the (Bellator) agreement." She continued, "Allowing (Mr. Jackson) to participate in the UFC match will deprive (Bellator) of having a well-known and successful fighter in its league, a benefit for which it was entitled ... and confer this benefit upon its primary competitor." Judge Suter also noted favorably that Bellator had pledged to arrange future fights for Mr. Jackson consistent with their existing agreement.

UFC announced on Friday that in the wake of the ruling another fighter, Steve Bosse, will replace Mr. Jackson at "UFC 186". In its statement, the company noted that although Mr. Jackson intends to seek an emergency appeal that would allow him to fight, with the event drawing nearer it was necessary to find a replacement fighter.

In another statement earlier this week, UFC also stressed that it was not at fault for the breach of contract, as Mr. Jackson had represented himself as a free agent when he entered into negotiations for his return to the company.

"The UFC organization was surprised about the ruling because Mr. Jackson represented to UFC on multiple occasions that he was free to negotiate and contract with UFC. The UFC organization is also surprised that Bellator sat on its alleged rights for months before taking action."

UFC also added that it could pursue "action" to protect its rights, though it did not specify against whom.

Unfortunately for UFC, this recent turn of events leaves the company's upcoming pay-per-view event in apparent disarray. In addition to losing Mr. Jackson, UFC has also had to scratch two other heavily anticipated bouts originally scheduled for "UFC 186", including the original main event. One cancellation was due to an injury and the other the result of a fighter failing a post-match drug test from an earlier event.

http://www.foxsports.com/ufc/story/preliminary-injunction-granted-quinton-rampage-jackson-pulled-from-ufc-186-040715
http://mmajunkie.com/2015/04/judge-explains-why-she-backed-bellator-in-ruling-against-rampage-jackson
http://www.ufc.com/news/Bosse-to-Debut-against-Maldonado-at-UFC-186

After 25 Years, Indian Supreme Court Allows School Performance of "Jesus Christ Superstar"

Twenty-five years after initially appealing a local government ban on a high school performance of "Jesus Christ Superstar," an Indian educator has succeeded in convincing the country's Supreme Court to allow the rock opera to go forward.

In 1990, students at Corpus Christi High School in Kottayam, a district in the southern Indian state of Kerala, staged the first of two planned performances of the Andrew Lloyd Webber/Tim Rice musical. The second performance was called off, however, under a "temporary" ban issued by district authorities. The administration's rationale was that the rock opera could offend religious minorities and incite a breach of the peace.

Indian educator Mary Roy, who founded the school, immediately filed an appeal. The Supreme Court allowed the play to be performed once more the following year despite the ban, but the case has lingered in the courts ever since.

The original decision to ban the religious musical reflects a tendency in India to suppress potentially offensive material. Just last month, in fact, a court blocked the broadcast of "India's Daughter," a BBC documentary about a gang rape.

This week, the "Jesus Christ Superstar" case finally came to a close when the Supreme Court ruled that the show could go on. Attorney Shridhar Chitale, who advocated in favor of lifting the ban on the play, noted: "The play has been shown in other parts of India, in other parts of the world, including the Vatican. Why should it be banned in one district? You could sit in Kottayam district and access the play online."

http://www.nytimes.com/2015/04/09/world/asia/after-a-quarter-century-of-legal-wrangling-in-india-a-rock-opera-can-go-on.html

Heirs of French Art Dealer To Benefit From Sale of Nazi-Stolen Monet

Under the terms of a restitution agreement with the consignor of a Claude Monet painting seized by Nazis during World War II, the painting's rightful owner's heirs will receive an undisclosed amount of compensation from its sale by Christie's this May. The oil on canvas painting, "Haystacks at Giverny," was owned by René Gimpel, a Jewish French art dealer, until he was detained by Vichy forces and deported to a German concentration camp during the war. By 1967, it had entered a private collection in Switzerland, and is now expected to fetch between $12 million and $18 million at auction.

Mr. Gimpel's grandson, also named René, 67, says the painting is listed in grandfather's records as of 1931. The elder Mr. Gimpel lost his entire collection when he was sent to Neuengamme concentration camp, where he died.

The family has also reached restitution agreements on two other artworks owned by Mr. Gimpel, including a Thomas Gansborough portrait which sold for $31,400 at auction last year.

http://artsbeat.blogs.nytimes.com/2015/04/09/heirs-to-french-art-dealer-may-benefit-from-sale-of-monet-lost-during-world-war-ii/?_r=0

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This page contains a single entry from the blog posted on April 11, 2015 2:05 PM.

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