Sunday, July 10, 2005

ESPN The Magazine Story on NBA Draft Age Floor

ESPN's Morty Ain interviewed me for an article appearing in the current issue of ESPN The Magazine (July 18 issue). The article is entitled "The Spin: Teenage Wasteland," and it appears on page 38. Here is an excerpt:
But where the NBA sees a move that protects young players and the game, others see voodoo economics.

"High school players have done uniquely well in the NBA," says Michael McCann, a visiting scholar at Harvard Law School [actually, now a law professor at Mississippi College School of Law] and author of a recent article in the Virginia Sports and Entertainment Law Journal, "Illegal Defense: The Irrational Economics of Banning High School Players from the NBA Draft." According to McCann, prep-to-pro players averaged 12.6 ppg, 5.2 rpg and 2.1 apg in 2004-05, "dramatically outperfomring the average NBA player." (The league average: 9.4 ppg, 4.0 rpg and 2.1 apg.) McCann also notes that 27 of the 30 high schoolers drafted in the past decade are still in the league. "Simply put," says the prof, "for every Korleone Young, there are two or three Kevin Garnetts."

Okay, maybe not. But it's just as hard for McCann to buy David Stern's argument--served up to reporters last month--that "a player coming in later will be the same player; he will just be more skilled and more schooled." Less wealthy is more like it. McCann says a player could lose out on more than $10 million in salary and endorsements later in his career because of even a one-year deferral at the start. "The difference between the six-year deal you get at 28 and the six-year deal you get at 29," says McCann, "is material."
Thanks to Henry Abbot of True Hoop for discussing both the ESPN The Magazine story and my law review article, and to Scott of H-Town Sports for discussing my law review article.

Friday, July 1, 2005

Legal Issues of NBA Draft Age Floor

Blair Clarkson of the Los Angeles Daily Journal had an excellent piece yesterday on the legal issues concerning the new age floor in the NBA. He interviews a number of people, including Joe Rosen, Gary Roberts, and me. Here are some excerpts:
More important, some say, it's illegal.


"I definitely think we'll see at least one lawsuit challenge it," said Michael McCann, a law professor at Mississippi College School of Law. "It can be construed as a group boycott. These players can't go anywhere else to earn that kind of income."


McCann was part of the legal team for Ohio State sophomore running back Maurice Clarett, who two years ago sued the National Football League for keeping him out of the 2003 draft.


Like the NFL's policy, McCann says, the NBA's new age floor violates antitrust laws that prohibit policies that restrain trade.


"There's really only one employer [they] can work for to reap the rewards of their unique talents," he said. "The NBA has an economic monopoly on pro basketball."


But Gary Roberts, director of the sports law program at Tulane Law School and a former president of the Sports Lawyers Association, says that, because the age limit was agreed to by the players' union in bargaining sessions, the issue is exempted from labor laws.


"There is not one snowball's chance in hell of getting the age limit declared illegal," Roberts said. "Labor laws supersede antitrust laws when the matter at issue is the subject of mandatory collective bargaining."


In this case, because the league and union agreed on the age limit, the courts will view it as a collective-bargaining issue to be dealt with through that process, foiling any antitrust challenges, Roberts said.


"I don't see how you get around that," he said.


But that ignores the fact that the would-be players most affected by the decision weren't a party to the collective bargaining agreement, according to Joe Rosen, an adjunct professor of sports law at Boston College Law School.


"This should not be covered by the labor exemption because these [high-school] players are not covered by the collective bargaining agreement," said Rosen, who is starting a law firm and sports agency in Boston later this year. "The union doesn't represent the players who would bring this suit."


Roberts contended that collective-bargaining agreements apply as much to future members as current ones. He said that the appellate court's ruling against Clarett bears that out.


"Mike [McCann] has already argued that perspective and lost," Roberts said.


Prominent Los Angeles business and antitrust litigator Charles Stern, however, isn't so sure.


Stern said that the issue "raises some very troublesome questions." The Katten Muchin Rosenman partner believes the age limit boycotts an entire class of players capable of playing at the highest level. He says Roberts' contention that nonunion players are bound by union decisions is "probably an oversimplification."


Besides, McCann said, the decision to uphold the NFL's age limit was made only in the 2nd Circuit, leaving 11 other circuits to disagree if presented with a similar case, and the trial court initially agreed with Clarett.


"If labor laws always supersede antitrust laws when the matter is the subject of collective bargaining, then Clarett's case would never have made it out of pleadings," he said. "The fact that it did, and then won the first round, is pretty compelling evidence that the deference is not absolute, especially when management represents a monopoly like the NBA."

Here is another excerpt that discusses the distinctions between a hypothetical lawsuit by a banned teenager player and that brought by Maurice Clarett:

And a high-school basketballer challenging the NBA would have a much better case than did Clarett, McCann said.


Clarett had to argue a hypothetical point that he'd succeed in the NFL, but a proven 10-year track record in the NBA shows that players who skipped college are among the league's elite.


While researching statistics for a paper published in the Virginia Sports and Entertainment Law Journal in 2004, McCann found that players entering the NBA from high school average more points, more rebounds and more assists than other players.


Although some of the highly touted teenagers turned into draft-day busts, stars like Bryant, James, Tracy McGrady and Jermaine O'Neal have become franchise players who dominate games and reap millions in marketing for the league.


Additionally, McCann argues, the players excluded by an age limit suffer significant economic harm, making legal challenges more viable.


While the average NBA lottery pick will make $1.6 million a year in guaranteed contracts, plus countless more in endorsements, a player relegated to the NBA's developmental league or a European league until he comes of age may make only between $20,000 and $75,000 in his first year, McCann said.


And if that player is forced to play college ball for a couple years, he also runs the risk of sustaining a serious injury that could cost him millions, if not his entire career.


"If the Clarett decision had been straight down the line against him, the likelihood of an NBA case might be tough," Rosen said. "But the trial court ruled in his favor, so I think it's inevitable that an antitrust lawsuit will be brought."

For more, check out our recent discussion on this topic: Greg (arguing that the NBA and NBPA can legally ban teenagers) and me (arguing that a legal challenge to the age floor may prove viable; also check out my law review article Illegal Defense: The Irrational Economics of Banning High School Players from the NBA Draft). Also, be sure to read the comments section to the posts, as a number of Sports Law Blog readers have provided great insight and perspective (and I thank each of them -- those comments are much appreciated).

See Update 7/28/2005: NBA Player Arrest Study and Age/Education

Thursday, June 30, 2005

Introducing Orpheus Sports & Entertainment

We wanted to let you know that Joe Rosen (an occasional contributor to this blog) and Chris Brown, Boston attorneys who also are adjunct professors of sports and entertainment law at Boston College Law School, are joining forces as Brown & Rosen LLC and Orpheus Sports & Entertainment. Brown & Rosen LLC is a full service law firm with a specialty in sports and entertainment law. Orpheus Sports & Entertainment is a consulting company through which Joe and Chris provide representation services to athletes and entertainers. Joe and Chris have each been practicing for over six years in the sports and entertainment sectors. Websites will be up soon, and we will provide links when they are. Please feel free to call Joe at 617-877-3837 or e-mail him at rosenjs@comcast.net if you would like more information.

See 9/17/2005 Update: Profiles in Sports Law: Orpheus Sports and Entertainment Company

Wednesday, June 29, 2005

Court Rules In Favor of Angels

The city of Anaheim has suffered another legal setback in its continuing battle with the (Los Angeles) Angels. A California appellate court affirmed a lower court decision that will allow the team to use the Los Angeles name for the remainder of the season. The team was seeking a temporary injunction against the use of Los Angeles until the matter could go to trial. The court did not issue an opinion, but to issue the injunction it would have had to find that irreparable injury would be done to the city in its absence. The city must now decide whether to continue pursuing the case. (McKibben, "Anaheim loses its battle for now," LA Times, 06/28/05).

For more on Anaheim vs Angels, see these earlier posts (1/3, 1/10, 1/22).

Tuesday, June 28, 2005

The Red Herring of Age in the NBA Draft

The following is my reflection of the recent imposition of an age floor in the NBA Draft, and also my law review article Illegal Defense: The Irrational Economics of Banning High School Players from the NBA Draft.


Later tonight, the NBA will conduct its annual entry draft. Among those players drafted will be those who recently graduated from high school. Numerous basketball analysts and social commentators will express dismay at the prospect of these players skipping college and earning millions of dollars a year. They will then praise the NBA and the National Basketball Players’ Association for agreeing to institute an age floor of 19, effective for next year's draft.

What these analysts and commentators will not mention is that banning high school seniors from the NBA Draft is perhaps the most illogical decision in the history of professional sports. It may also prove illegal. Consider salient facts that belie popular rhetoric: high school seniors in the NBA average more points, grab more rebounds, and dish out more assists than does the average NBA player or the average player of any age group. Banning them is akin to removing the best part of a product from that product.

Common sense might suggest that NBA teams can more deftly measure a player's ability after he has played in college. But remember, age is merely a proxy for maturity and preparedness. For instance, the federal government has determined that 18 is the age when citizens are mature enough to vote. Surely, some citizens younger than 18 possess the requisite maturity to vote, and of equal certainly, some older than 18 do not. And in a perfect world, this is something that we could test. But for a variety of practical and legal reasons, we can't, so we use a proxy.

NBA teams are radically different. They do not need proxies to tell them which players should or should not be drafted, because their scouting departments already provide that information. Pre-draft evaluations entail exhaustive reviews of game tape; private workouts; interviews with prospective draft picks, as well as their coaches, families, and friends; and even cognitive and psychological examinations—all done to specifically measure the ability of that player to succeed in the NBA. In short, the behavior of NBA teams contradicts the very premise of an age proxy.

Moreover, to the extent teams want to avoid mistakes in drafting, perhaps they should hire better scouts. Consider the long list of college seniors who NBA teams wrongly predicted would become stars: Ed O'Bannon, Mateen Cleaves, Trajan Langdon, Troy Bell, Reece Gaines, Rafael Arajuo--this list could go on for pages. An age floor would not have stopped teams from selecting these players. Along those lines, sometimes it isn’t about the player’s age; it’s about others' ability to measure his talent.

And this begs a question: why preclude 18-year old basketball players from earning a paycheck when 18-year olds can earn an income doing just about anything else sports or entertainment related? Players in baseball, hockey, soccer, golf, and tennis, can all earn millions by age 18, and some at earlier ages. Teenagers can even become professional boxers and repeatedly punch and get punched in the head, and yet they do not encounter the same moral outrage experienced by those who seek to take jump shots on NBA courts.

Of course, if we believe the opponents to allowing recent high school graduates in the NBA Draft, we would also believe that high school players tend to be less mature and law-abiding than is the average NBA player. But since when did when did age and college experience prove predictive of NBA player behavior? Latrell Sprewell, a college graduate, choked his coach at age 28. Ruben Patterson, also a college graduate, pled guilty to attempted rape and became a registered sex offender at age 25. And with two years of college credit in tow, a 24-year old Ron Artest attacked a fan in Detroit. In contrast, NBA players without college educations have been, by in large, a model group of citizens. In fact, of the 36 high school players who have been eligible to be picked over the last 10 years, only four have encountered any criminal crimes, and in the case of both DeShawn Stevenson and Kobe Bryant, those charges were subsequently dropped.

Lastly, remember that education is not a “one-shot” deal in life. A number of NBA players have gone back to college later in their careers, after they have made their millions. Sometimes the most intelligent course of action is playing first and studying second. That seems especially true given the real possibility of suffering a career-ending injury at any time on the basketball court: if that injury occurs on an NBA court, the player has a guaranteed contract, likely worth millions of dollars; if it happens on a college court, well, let's hope his grades are good (which is not likely given draconian time constraints on his studies: the average Division I basketball player spends 40-50 hours per week playing games, practicing, attending team meetings, lifting weights, and traveling, at the same time most colleges and universities prohibit all their other students from working in excess of 10-20 hours per week; no wonder why of the 65 teams that participated in the men's 2005 NCAA Tournament, 42 of them failed to graduate even half of their players.).

Despite the irrationality and unfairness of an age floor, the NBA contends that it has a legal right to collectively-bargain one, and it cites the National Football League’s recent judicial victory over an amateur player, Maurice Clarett, who sought to challenge an age floor. But remember: the legal precedent "established" by Clarett v. NFL is only the ruling of one U.S. federal court of appeals; there are 11 other ones that might disagree if presented with the same or similar facts. Moreover, while Clarett had to argue a hypothetical, a banned high school basketball player would possess 10 years of incontrovertible evidence: those who skipped college are the best group of players in the NBA.

The legal argument will also contemplate how the NBA possesses an economic monopoly on pro basketball. While it is technically correct that a banned 18-year old could play in Europe or in the minor leagues, there is an astronomical pay disparity between playing in the NBA and playing in those venues. Put differently, they are not substitute employment opportunities, and there is real economic harm in the disparity. Just consider this: the average first round pick in tonight’s draft will earn $1.6 million next season; if instead he could only play professionally in the CBA or the NBDL, he would make between $20,000 and $35,000. If he went to Europe, he would be lucky to break $75,000 in his first season. And then add to that lost endorsement opportunities, and the economic harm is even greater. Really, this isn't a matter of apples and oranges. It's one of apples and tic-tacs, and that is often a tell-tale sign of a group boycott from an economic monopoly.

Nevertheless, tonight’s NBA draft may prove to be the last one where the optimal draft group--high school seniors--can participate. Maybe high school seniors aren't the ones who need more education.

See Update 7/28/2005: NBA Player Arrest Study and Age/Education

Saturday, June 25, 2005

NBA Draft Age Ban Discussion

See Update 7/28/2005: NBA Player Arrest Study and Age/Education

Some quick hits:


Omar Kelly of the South Florida Sun-Sentinel discusses the issue (Kelly, "Preps Pipeline Closing," 6/25/05). He discusses my view and that of Professor Bob Jarvis:
Michael McCann, an incoming professor at Mississippi College School of Law and a member of Clarett's legal team, believes a similar anti-trust lawsuit against the NBA is imminent, possibly coming as early as next season from a player with the 7-foot Oden's stature. McCann believes that case would have more merit than Clarett's because of the league's history.

"The road for this has been paved by the Clarett decision," said Bob Jarvis, a sports law professor at Nova Southeastern University, who is writing a book, Sports Stories, which takes a look at prominent sports legal cases. "If Clarett had gone the other way, the NBA wouldn't even think of doing this."
Emily Badger of the Orlando Sentinel also discusses the issue (Badger, "Pro Leagues Not Immune to Labor Woes," 6/25/05), and cites remarks from Professor Joe Rosen--Partner of Orpheus Sports and Entertainment Consulting Company in Boston and adjunct sports law professor at Boston College Law School--as well as Professor Paul Haagen, co-director of the Center for Sports Law and Policy at Duke University School of Law:
"When agents and players see the amount of money going into teams with huge TV contracts, huge sponsorship deals, group licensing deals, when they see all the money going to the owners, players think, 'We should be entitled to that. We need to deal with this on the labor front,'" said Joe Rosen, a lawyer and partner in the Orpheus Sports and Entertainment consulting company in Boston.

"Stability in economics leads to stability in labor relations," said Paul Haagen, co-director of the Center for Sports Law and Policy at Duke University's school of law.
Also, Professor Rich Karcher--director of the Center for Law and Sports at Florida Coastal School of Law--responds to Greg's excellent post below and raises several excellent points of his own:
I have to take exception to Greg's opinions on the new NBA age limit. Even though it's only a one year difference, it's so much better for the clubs because they don't have to spend the resources scouting high school games and they get to see the kids in a much more competitive D-1 environment so it eliminates a lot of the risk that's involved in scouting/assessing high school talent. I don't agree with Greg's "one and done" argument that, because players will go pro after one year, colleges will be discouraged from taking the high school superstars. In fact, I think the reverse will happen. Under the 18 year rule (just like in baseball), colleges are hesitant to sign the elite players because they risk losing a scholarship if the player signs a letter of intent and ends up going pro after high school. Under the new rule, there's no risk of losing the scholarship. In addition, there's always the possibility that the college coach will be able to convince the player that it is in his best interest not to go pro after only one year of college.

Wednesday, June 22, 2005

Connecticut Ethics Panel Clarifies Rules for Coaches' Endorsements

A Connecticut ethics panel has ruled that the law preventing state employees from using their public office for private gain applies to all state employees, including UConn basketball coaches Jim Calhoun and Geno Auriemma. While the report specifically exempts current contracts the coaches have, including with Nike, the endorsement deals will face more intense scrutiny upon renewal.

The commission's report clarifies that the so-called "celebrity exception," which had been implied in previous reports, does not exist, and that all state employees must be treated equally. This does not mean that Connecticut public employees cannot attain any private gain, however. For instance, the state's former forensic chief Henry Lee gained fame and consulting fees assisting in several high-profile cases, including the O.J. Simpson murder trial. The key seems to be whether or not the outside contracts would impair the "independent judgment" of the coaches. (Kauffman, "Ethics panel clarifies policy for coaches," Hartford Courant, 06/21/05; "Board rules no ethics exceptions for celebrity state employees," Conn. Times, 06/21/05).

It will be interesting to see how Calhoun's extension is scrutinized when it is renewed in August. If it comes under heavy fire, big-name coaches may be reluctant to come to UConn in the future and potentially jeopardize a large portion of their income. Chances are good, though, that the state will find a way to accept these deals. But as one columnist asks, wouldn't it be better if these endorsements benefited the school and not the individual coach? ("No special terms for stars," 06/22/05).