Players with NBA experience who are currently free agents will be allowed to sign with CBA teams, though.  These players will not be able to negotiate any opt-out clause into their CBA contracts.  Such a clause would allow players to return to the United States and play in the NBA, should the NBA lockout end and a 2011/12 season commence.

In the past, the CBA’s 17 teams have been able to sign up to 2 players who do not have Chinese passports.  The exception to that rule applied to the 4 teams who fared worst the prior season.  Those teams could sign 3 foreign players, with the caveat that 1 of those players had to be Asian.  Now add on the additional restriction – no NBA players currently under contract allowed.  Case closed.

Cross China Off Carmelo’s And CP3′s List from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

With sponsorship being a key driver behind many events, stadiums and even players involved in the NFL, it is hard to believe that the league has not followed in the footsteps of many leagues around the world and introduced sponsorship on jerseys. This added revenue is the driving force keeping many teams afloat in leagues such as the English Premier League and the Australian Football League.

With Nike having the apparel sponsorship locked up for an estimated $220 million a year, it still leaves room for a main sponsor which could be placed either below or above the number on the front of the jersey. There is also ample room on the back, below the number, leaving a spot for a second sponsor or a repeat logo of the front sponsor.

So just how much would money would putting a logo on an NFL jersey bring in for the teams? Using current sponsorship deals as yardsticks, we can work out a possible figure.

Football powerhouses Barcelona and Manchester United each have deals which are believed to be in the region of $30-40 million per year. Though NFL is a massive sport worldwide, it doesn’t have the global pull of fans as much as these clubs do, especially in regards to TV audience and jersey sales. On the second tier, which includes teams such as Tottenham Hotspur and Manchester City, brands pay around $12-15 million for the main logo spot on front of their respective jerseys.

Taking a look at the MLS, shirt sponsorship varies from between $1 and $3 million, with that number expected to rise as the competition garners more support.

So looking at the data presented, it is possible that big market teams such as the NY Giants, Pittsburgh Steelers, Dallas Cowboys and Chicago Bears could reach a figure somewhere in the $15-20 million range with smaller market teams such as the St. Louis Rams reaching around $6-10 million. The disparity between the teams would be a slight concern, however there would be ways in which these teams could reach a similar figure. If the sponsorship was based on bonuses such as TV audience figures, making the playoffs and making an appearance in the Super Bowl, smaller teams would be able to bridge the gap through performance.

There would be no shortage of sponsors wanting to jump on board either, with the NFL breaking TV audience records all the time. Not to mention there is no stopping other leagues such as the NBA and NHL adopting this too.

I can’t quite fathom how this has not already been introduced, especially at a time when there is a shortfall between player and owner demands. Although a small figure in relative terms, it would certainly bring each side much closer together, and I’m sure fans wouldn’t have a problem with a company logo on their team’s jersey if it meant they could actually watch football.

Jersey Sponsorship: Could This Help Save The NFL CBA? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Happy Birthday to my mom, Gloria Heitner, who has to be the most amazing woman in the world.  New Orleans was a great time and Tulane put on a fantastic event.  Tomorrow, I will be speaking on a panel at the Nova Southeastern University Sports & Entertainment Law Symposium titled “Family Managing an Athlete’s Career.”  I will be able to discuss quite a bit regarding what I wrote in an upcoming Harvard Journal of Sports and Entertainment Law article titled, Closing the Cam Newton Loophole, a Sweeping Suggestion.  I have been attending quite a bit of hearings lately and taking a lot of depositions.  So I guess this is what life as a lawyer is all about.  Here are some stories I missed over the past week:

An All Football Wrap-Up

• Supposedly the largest deal ever given to an incoming NFL rookie [Under Armour Wins The Cam Newton Marketing Race].
• A look at what agents spend on their players leading up to the combine [$7.7 million spent on training rookie class].
• I’m not a big fan of this idea [Agent: Limit players to 16 games in proposed 18-game schedule].
• Includes quotes from Ralph Cindrich, Joe Linta, Peter Schaffer, and Eugene Parker [Agents don't expect much progress].
• This booklet has been sent out to all players [NFLPA Guide to the Lockout].
• Even though the league lost $32 million in 2009 and $45-50 million in 2010 [Huyghue: UFL plans to play, pay].
• So Oregon decides to let an agent off the hook at the same time it contemplates instituting a stricter athlete agent law? [Attorney general investigated agent-runner who paid former Oregon Ducks player]
• The comments are rather insightful [The NFL's Unfair Labor Practice Claim & Article LVIII(3)(A) of the CBA].

Shabbat Shalom: Friday Wrap-Up (2/18/2011) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The Special Master rejected the Union’s complaint; however the he did rule that the NFL violated the Reggie White settlement agreement governing the CBA, regarding the NFL’s specific media contracts with ESPN and ABC. Liz Mullen of SportsBusiness Journal reported that the Special Master did not grant the injunction, but instead, awarded $6.9 million in damages for the CBA violations of the ESPN and ABC contracts. According to the Associated Press, the NFLPA was asking for $60 million in damages, but was awarded $6.9 million. Most importantly, the Special Master did not grant the Union’s request for an injunction, thus allowing the NFL to keep $4B from the TV contract deals with networks in 2011.

After the ruling both sides claimed a victory. The Union was happy the Special Master found minor CBA violations with the ABC and ESPN contracts. NFL Executive VP & General Counsel Jeff Pash called the award a “modest” amount at a press conference, but had to be delighted with the outcome. Union spokesman George Atallah tweeted after the decision, “Now for the good news: The NFL, until the appeal in Minnesota, has $4 billion to not play football next year. VICTORY!”

I believe this is a clear victory for the NFL. Comparing an award of $6.9 million with $4 Billion from what the Union called “lockout insurance” gives the NFL a lot more chips at the bargaining table.

The fact that the Union immediately appealed the ruling, and is now asking U.S. District Court Judge David Doty, the judge in charge of overseeing the NFL’s CBA, to issue a decision on its appeal before the March 3^rd CBA officially expires is another example of how the Union is truly taking this ruling. One of my favorite quotes from an NFL statement over the weekend read, “As we have said all along, a new CBA has to be hammered out at the negotiating table, not in the courtroom. If the union commits to invest as much time, energy and other resources in negotiations as it has in its litigation strategy, a new agreement could well be reached by March 4.”

Although the NFL appears to have an advantage after the Special Master’s decision, the ruling could be beneficial to both side’s progress and enhanced efforts for a new CBA. This ruling could entice the NFLPA to negotiate more fervently in hopes of coming to an agreement before the critical March 4^th deadline, just like the league’s statement above suggests.

On a side note, the league’s Exec VP/Business Operations Eric Grubman also mentioned to reporters in January that the TV money at issue has to be repaid, with interest, once the games resume. Conversely, the NFL recently mentioned that it would not touch the $4 billion from the television contracts until a potential second lockout year in March 2012, if a new CBA still has not been reached. If these statements are true then the NFL now has even more incentive to come to an agreement for a new CBA and get these funds active.

Moving forward, Judge Doty will hear oral arguments for the appeal on February 24^th in an open federal courtroom in Minneapolis, Minnesota. Judge Doty has been favorable to the players in recent rulings. The NFL even asked the judge to remove himself from his role overseeing the NFL’s CBA after his decision in the Michael Vick ruling, claiming Doty was showing bias towards the NFL players by meeting with player representatives before hearings and making inappropriate public comments. However, I am not so sure about Doty ruling with the players on this decision.

NFL Management and the NFLPA will be enhancing the intensity of negotiations between the two parties over the next several weeks. Hopefully the Union will let Judge Doty decide this decision on appeal, and not let it disrupt the flow of negotiations. As we all know, the sides have many other issues to agree on before March 4.

The NFL Gets to Keep A 4 Billion-Dollar Bargaining Chip from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The NFLPA’s reasoning for making this particular seminar mandatory is that it is the last seminar “prior to the end of the CBA and possible lockout.”  This is what I find most interesting about the message sent to NFLPA Contract Advisors:

The NFLPA requests that you not book rooms at the following Indianapolis hotels as they have labor issues and our contract advisors should not do business with companies that do not treat their employees with fairness and respect.  The hotels are:  Hyatt Regency, Westin and Sheraton.

I’m surprised the NFLPA did not also tell players to avoid flying Brazilian airlines…you know, since the NFLPA is now promoting boycotting all companies that have labor issues…

Annual Agent Seminar In Indianapolis Will Be Mandatory In 2011 from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The main issue in CBA negotiations has, and will be, the percentage of NFL revenues to player salaries.  Other major concerns include, NFL rookie salaries and the legal inability of franchises to recoup signing bonuses from players who breach contracts or refuse to perform.

The authors of the article take the position that the owners cared so much about labor peace and preventing a potential labor stoppage back in 2006, that they agreed to a CBA that had unfavorable terms.  There is a thought that former NFL Commissioner, Paul Tagliabue, lobbied ownership to accept the deal because he wanted his legacy to be that he presided over almost two decades of uninterrupted labor peace.

Many pages are dedicated to providing a formal history of the NFLPA, its major players, and the numerous legal actions it has been a part of over the years of its existence.  It certainly is not a short read, but I believe that it is important to have a good understanding of the history of negotiations between the NFL and the Players Association in order to have a full grasp on what is going through the minds of the bargaining parties today.

The use of media by both sides of the negotiation table is nothing new.  In fact, it was heavily used in the NHL’s battle with the NHLPA earlier this decade.  It is also being heavily employed by the NFL and the NFLPA during this round of CBA negotiations.  This time, new media in the form of blogs and Tweets are involved, as well.

In such contentious negotiations, it is very difficult, and sometimes impossible, to determine which side has a better case.  And at the end of the day, it does not matter; everyone suffers if a season, or part of a season, is lost due to a labor battle.  Is the NFL bargaining in good faith?  Should there be a rookie salary cap?  Does the union truly have all the financial information it needs to bargain?

Interestingly, when the authors released the piece, they wrote that there is no need to create artificial deadlines, “as  these will obstruct the natural development of negotiations between the parties.”  DeMaurice Smith certainly did not agree, as the NFLPA had an “internal deadline” for agreeing to a new CBA, which apparently has already passed.  Going back to my previous point about new media, check out where the news was posted – on the League’s own blog focused mainly on labor issues.

Skip to the end of the IPLJ article and you will see the authors’ predictions, which includes the belief that Ownership will lockout the players.  And then there is decertification talk, which has been gaining momentum as of late.  Every NFL team has approved of a plan to decertify the NFLPA if there is not a new CBA agreed to by March 3, 2011.  I assume that the date is subject to change.  Decertification would mean that the NFLPA is no longer a union; players could then sue the league under an antitrust claim.

Will There Be A 2011 NFL Season? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

If you haven’t been following the trials and tribulations of the Ilya Kovalchuk saga over the last few months, you either aren’t a sports fan or you are still wrapped up in the Lebron James to Miami Heat ordeal.  In case you had other news on your mind, here is a recap of the events that came to an abrupt, and somewhat anti-climatic, end last Friday, September 4th.

In mid-January of this year, a fellow SAB writer noted that Kovalchuk’s future was in flux with his then-team, the Atlanta Thrashers.  Not too long before the March 3rd trade deadline, he was traded to the New Jersey Devils for a player package of several prospects, including Patrice Cormier.  While many saw this trade as purely a rental player situation for the Devils, team officials apparently thought otherwise, as they kept pursuing a long-term contract with Kovalchuk after their season ended with an early playoff exit in the first round.

However, after that period, things turned down right wacky with Kovalchuk’s contract situation.  He officially became an unrestricted free agent (UFA) as of July 1st.  Unlike past years, where big ticket UFAs were signed right after the start of the free agency period, Kovalchuk remained unsigned for several days.  At one point, Kovalchuk was rumored to be in negotiations with several teams, including the Devils and the Los Angeles Kings.  In fact, rumors circulated that the Kings had even nearly worked out a contract with the Russian sniper, only to be spurned at the last minute as the Devils re-signed him to a long term, lucrative offer…or did they?

While the NHL community broke news that forward had signed an extremely front loaded deal with New Jersey worth $102 million over 17 years, that same deal was soon challenged by the NHL front office as a circumvention of the Collective Bargaining Agreement.  The NHL Players Association did not take this rejection of the contract offer lightly, and the dispute soon went before an arbitrator, which eventually sided with the NHL after a 2 day hearing.  Because of this ruling, Kovalchuk was instantly deemed a UFA, once again, on August 9th.

While to many, this may seem like a strange group of events in and of itself, the story does not end there. The Devils then made a reported offer of nearly $100 million over 15 years, which was submitted to the NHL around August 27th.  On nearly the same day, Kovalchuk’s agent, Jay Grossman, reportedly threatened to sign his client to a contract to play in the KHL next season if that specific version of the contract was not approved within a 48-hour deadline.  Clearly neither the 48-hour deadline nor the reported threat to leave for the KHL were enforced by Grossman.

Of course, now that Kovalchuk is officially signed, his agent may have been trying to call the NHL’s bluff.  Unlike the departure of previous NHL players for the KHL, such as Jarmir Jagr, none have been in their prime nor still a potent offensive force quite as much as Kovalchuk.  He has scored no less than 29 goals in a season since coming on as an 18-year-old rookie 2001-2002, and that was in 65 games.  A player of Kovalchuk’s status would not have been a death blow to the NHL, but it would have certainly served as a healthy reminder that the KHL is surely becoming a comparable league.

Why does this all matter to NHL players and GMs?  Under the previous CBA language, GMs and agents had found an apparent loop-hole in the system.  Several high profile signings have taken place in the last several years that were top-heavy, meaning there were high paying early years and minimum salary requirements in later years.  These include the contracts of Roberto Luogno with the Vancouver Canucks, Marian Hossa with the Chicago Blackhawks, Chris Pronger with the Philadelphia Flyers, and Marc Savard with the Boston Bruins.  From the League’s standpoint, when a team structured deals in this manner, front loading contracts over a long period of time, it was a circumvention of CBA language regarding averaging the salary of a player over the life of the contract.  This means that in most cases, and likely in the case of Kovalchuk’s $102 million, 17 year offer, the contract would end long after he had ended his playing career.  Thus permitting teams to have a lower cap hit earlier in the contract when it truly mattered.

Under the old CBA language, teams could then benefit from the lower cap hit in the early years because of the reduced pay when the player is the in the twilight of his career.  Then, as one commentator noted,

Under these circumstances the teams involved could potentially buy out the contracts at a much less punitive financial hit near the tail end of the deals.  It is also believed that the players involved have no intention of completing the contracts and would likely retire before they enter the final years at near minimum salary.

The saga was not without its critics.  Marc Savard’s agent, Larry Kelly, openly criticized NHL Comissioner Gary Bettman for his treatment of the events, and Kelly even threatened litigation if Bettman revoked his client’s contract.  While no players have been quite as outspoken, there are probably more internal rumblings than any outside of the locker room will ever hear.  Luckily for the League, no such revocation of contracts took place in the modification and Kelly can rest a bit easier.

However, with the signing of Kovalchuk comes some amendments to the current CBA that will effect how teams structure long-term contracts with players.  The NHL and the NHLPA agreed to change CBA language that now covers long-term contracts, or those for five years or longer.  With these changes, which went into effect as of Saturday, September 4th, teams are essentially prevented from securing long-term deals that will result in a lower cap-hit once the player retires at the tail-end of his contract.  Two changes are of particular importance for teams looking to sign a player to a contract of five years or more:

1. While players and clubs can continue to negotiate long-term contracts (five years or longer) that include contract years in a player’s 40s, for purposes of salary-cap calculation the contract will effectively be cut off in the year of the contract in which the player turns 41.

This basically means that if a 33-year-old player signs an eight-year contract, the amount owed to him in the first seven years of the contract will be averaged for the purposes of salary-cap computation. Then, in Year 8 of the contract, the salary he will make for that particular season will determine his salary-cap hit for that season.

…

2. In any long-term contract that averages more than $5.75 million for the three highest-compensation seasons, the cap charge will be a minimum of $1 million for every season in which the player is 36-39 years of age. That $1 million value will then be used to determine the salary cap hit for the entire contract. If the contract takes the player into his 40s, the previous rule goes into effect.

With these amendments comes an agreement by the NHL to drop its investigations into the contracts of the “suspicious” contracts entered into by the likes of Luongo, Hossa, Pronger, and Savard.  That part of the agreement is no doubt music to the ears of Grossman, Kelly, and others that represent the long-term contract players.

Now that an amicable end has been reached, one can only speculate what each side determined its primary bargaining chip to be.  Did the NHL really think it would be able to revoke the contracts of players that had already signed long-term contracts, with no immediate and long-term repercussions through the NHLPA and players defecting to the KHL?  Was Kovalchuk worried that he might not be able to a) receive similar compensation in the KHL or b) have to eat his own words and play in the KHL, which has an arguably less talented player crop top to bottom than the NHL?  Will the NHL reject contract offers from teams that attempt to find other “loop-holes” in the CBA down the road?

Just because the NHL has officially accepted the Devils’ contract offer with Ilya Kovalchuk, I have a feeling the fallout is far from over.  When the current CBA ends on September 15, 2012, long-term contracts will certainly be at the front of discussions for a future CBA.  There is no doubt in my mind that the NHL will put its mind to work determining what other loop-holes GMs and agents might find in the CBA.

The Kovalchuk Deal and the CBA Redux from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

As you can see, 30% of the total salary in 2010 is $195,000. Therefore, in the new deal the total salary each year can only increase or decrease by $195,000, and nothing more. Here is how the rule will be applied after signing a new deal:

Some of you may be asking why we sometimes see players like Patrick Willis getting these mega deals while still on his rookie contract. Well, that is what signing bonuses and escalators are for. Teams often give a player like Willis a huge signing bonus and a lot of easily achievable escalators.

Let’s face it – The rules in the NFL CBA are mostly on the side of the individual teams and not the players. This is mostly evident in the fact that a club can end a player’s contract if he doesn’t perform well enough. The player cannot just terminate his contract if he’s not happy, so that’s why we hear a lot about holdouts. When I was younger boy entering my teens, I would often stage holdouts at my house. I knew I had no say in my household and the rules heavily favored my parents. In order to combat that, I would refuse to go out when my parents wanted to. That’s kind of a random example, but hopefully makes the situation more clear.

Anatomy of the NFL 30-Percent Rule from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

HGH Testing

Players strongly oppose HGH testing, while the league has become more and more vocal in the past few months about mandating it.  Although the Players Association insists that there is no room for performance enhancing drugs in the league and that they would be open to fair and accurate testing, NFLPA President Kevin Mawae points out that the current available test “is not completely reliable” because it only has a 48-hour window of detection versus the 14 day test that is being developed.  Seemingly counter-intuitive are claims by the U.S. Doping Agency, which insist that the current blood test is completely reliable.  While a urine-based test has been the preferred method due to its simplicity to administer and deal with, it is believed to be several years away from complete development.  It’s as clear as an empty syringe, that the players will deny the sanctity of the currently available test and just have to figure out a new argument a few years down the road when that urine test is generated.

Winner:  Players

18 Game Season

Players are vehemently opposing the lengthening of an already grueling 16 game regular season, plus the possibility of playoff games, while owners are reveling in the thought of it.  Dropping two preseason games, which fans find just as boring as a 0-0 tie in soccer (football for our international readers) and adding two meaningful ones, equals more money for the NFL from television networks, more money for teams from ticket sales, and additional food and beverage consumption at games…and two more weeks to have something interesting to write about for SportsAgentBlog.com!  What could be better?  On the other hand, players make a good point when they argue the safety side of the issue.  With only one week off for the season, the immense pressure that an NFL athlete’s body goes through is painstaking.   Growing up in South Florida, I’ve heard countless times the horror stories of Miami Dolphins great Zach Thomas, who takes an hour and a half to get out of bed every morning just because his body is that damaged from 13 seasons in the league.  Creating more games is just adding to the future pain.  However, NFL executive vice president Jeff Pash insists that the league has taken this into account and is looking into how to handle “offseason workouts…practice regiments, roster sizes, injured reserve rules, a whole host of things that could be part of an overall restructuring of the football calendar to address the injury concerns.”

Winner:  League (and fans!)

Rookie Wage Scale

This could be the toughest issue argued between players and the league, but interestingly enough, at the 2010 Annual Rookie Symposium in Carlsbad, California, not one player raised his hand when the floor was open for financial questions.  I guess that’s what agents are for.  The league wants to create a competitive balance, instituting lower salaries for rookies and a chance for teams to plan to build for the future, paying the proven veterans more money.  However, players want to score as much cash as quickly as possible, fearing that first or second year career-ending injuries could leave them not only jobless, but poor.  As of last Wednesday, the Players Association said that players would be open to taking $200 million out of the rookie wage pool and redistributing half to established veterans and the other half for retiree benefits.  However, instead of the current four season requirement before players are eligible for unrestricted free agency (and most first round picks usually go for a fifth), the players want to shave one year off.  I think coming to such a compromise is important, and what will eventually happen regarding this issue.  Also, I’d like to point out that this could affect whether or not college players declare early for the NFL, and if they play as hard in college as they do now.  Making money is the most important aspect of getting to the NFL, and preserving your career (especially if there are 18 game seasons) is how you make the most of it.  If there is less money guaranteed when coming in as a rookie, there will be little incentive for guys to stick around in college and endure the wear and tear that they will see in the NFL.  Leave school early and try to make it to the next salary level or stay in school and risk shortening your years as a professional….hmmmm.  Goodell the other executives need to think about how school and education will be affected before making a rookie wage scale decision.

Winner:  Both players and the league when a compromise is reached

The NFL and NFLPA will continue to go back and forth more times than heads in the stands at Wimbeldon.  But Mike Ditka made an excellent point on ESPN radio regarding the possibility of a lockout and the CBA:  “Don’t be greedy.”  Players and owners must realize that one cannot exist without the other, and if they do not come to a compromise, there will be no football in 2011.  Please, for the sake of die-hard fans and fantasy owners worldwide, do not let that happen.

Winner/Loser Predictions Re: NFL CBA Negotiations from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

With Condon making his final preparations for the NFL Draft, he found the time to chat with Forbes.com about the NFL’s collective bargaining agreement issues and the NFL Draft process.  Here is one Q&A between Condon and Forbes.com:

Forbes: How does the expiration of the collective bargaining agreement in March 2011 affect contracts for this year’s draft class?

Tom Condon: The expiration of the collective bargaining agreement gives us more flexibility with the contract structure because we have two more years to guarantee for skill, injury and cap. Additionally, we do not have to deal with the 30% rule restriction which applies to contracts under the current CBA. [Rookie contracts previously were restricted to a 30% annual salary increase.]

Tom Condon Talks CBA & NFL Draft from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules