Sports and Entertainment Legal Issues 13 Sports and Entertainment Legal Issues 13.1 Laws 13.2 Labor Unions 13.3 Agents and Contracts

Winning Strategies A Perfect Match Sanders Morris Harris Group paid $5 million for a 50% interest in Select Sports Group. The combined group offers services in: salary/contract negotiations financial planning This new group has the resources to expand. Major League Baseball clients National Basketball Association clients Chapter 13

Goals Discuss how laws impact sports and entertainment marketing. Lesson 13.1 Laws Goals Discuss how laws impact sports and entertainment marketing. Explain copyright law. Chapter 13

Terms franchise broadcast flags copyright laws intellectual property royalty Chapter 13

THE LAW In 1966, Congress allowed two exemptions from the Sherman Antitrust Act to allow the formation of an expanded NFL. Congress also allowed the owners of the merged leagues to form a cartel. Chapter 13

Governing Sports and Entertainment The laws governing sports and entertainment are designed to protect: players celebrities producers promoters investors Chapter 13

franchise an authorization from local governmental agencies to sell services in a given area Competition tends to drive prices down and improve the quality of service for customers. Chapter 13

The Broadcast Flag Rule broadcast flags digital bits that can be imbedded in digital programming to prevent programs from being recorded and redistributed In 2005, a federal court ruled that the FCC could not regulate equipment, only communications. Chapter 13

The major TV networks are working to add the use of broadcast flags into pending federal laws. Chapter 13

Federal Laws Federal laws that have had a major impact on the sports and entertainment industry include Sherman Antitrust Act (1890) Clayton Act (1914) National Labor Relations Act (1935) In 1998, Congress passed the Curt Flood Act to give baseball players more protection. Chapter 13

What are two general purposes for laws governing sports and entertainment? Chapter 13

WHO HAS THE RIGHTS? copyright laws protect the unique work of the originator within the geographic boundaries to which the laws apply Chapter 13

intellectual property the unique works of writers, artists, and musicians that can be protected under copyright law royalty payment to the owner of copyrighted work for the use of their copyrighted material fixed the work must be recorded on a permanent medium Chapter 13

All material available over the Internet is protected by copyright law. Chapter 13

U.S. Laws U.S. copyright laws are not enforceable in other countries except where the U.S. is part of an international copyright convention. Countries with high levels of piracy are: China Russia Chapter 13

Legal Listening The Recording Industry Association of America (RIAA) regards file sharing as theft and has begun to aggressively prosecute violators. Chapter 13

Consumer-oriented companies like Apple Computer are helping the music industry rethink its distribution channels and find ways to please customers while protecting profits. Chapter 13

What do copyright laws protect? Chapter 13

Goals Explain the need for salary caps. Lesson 13.2 Labor Unions Goals Explain the need for salary caps. Describe the financial and public relations impacts that strikes may cause to a sport. Discuss owner-labor relations and the impacts of labor unions. Chapter 13

Terms collective bargaining collective bargaining agreement salary cap Chapter 13

ORGANIZED LABOR players’ associations collective bargaining the labor unions of athletes in professional sports collective bargaining when a group of employees join together as a single unit to negotiate with employers Chapter 13

Bargaining Rights collective bargaining agreement (CBA) negotiated by the players’ association covers all league players includes salary ranges, contract length, and operating rules Chapter 13

Topping the Salary salary cap a maximum amount that a team can spend on players’ salaries Chapter 13

How do players’ salaries influence the financing of professional sports? Chapter 13

OWNERS VERSUS PLAYERS When owners and players can not come to an agreement on contracts, strikes can result. Everyone looses out during a strike. Chapter 13

Picking Up the Pieces Congress can design laws to control the loss of wages by third-party victims. Chapter 13

Winning Back the Fans Despite assorted promotional efforts, it is often hard to win back fans after a strike. Chapter 13

Why do labor conflicts hurt the promotion of a sport? Chapter 13

LABOR RELATIONS Soccer Success Major League Soccer (MLS) owners are considered business partners structure was designed to keep teams with big audiences from dominating teams in smaller markets Chapter 13

Getting Along Labor and management must cooperate if a business is to succeed. Chapter 13

Entertainment Labor Unions that represent celebrities are: The Screen Actors Guild (SAG) The American Federation of Television and Radio Artists (AFTRA) Chapter 13

How do strikes and lockouts financially affect a sports team? Chapter 13

Lesson 13.3 Agents and Contracts Goals Discuss athlete agents, handlers, and advisers. Describe contract law. Chapter 13

Terms agent handlers advisers contracts agent contract noncompete clause Chapter 13

SHOW ME THE MONEY agent the legal representative of an athlete or celebrity Chapter 13

Legally Speaking Most agents for big-name celebrities are either attorneys or accountants. Agents are paid a percentage of the celebrity’s negotiated earnings. Most leagues require the agent to be registered with the league as an agent. Chapter 13

Handlers handlers work closely with athletes who are unable or unwilling to police themselves behavioral monitors Athletes need to have a positive public image to stay valuable to their sponsors. Chapter 13

Advisers advisers are financial and business counselors help athletes manage their newfound wealth for long-term financial security Chapter 13

What are some of the responsibilities of a sports agent? Chapter 13

LEGAL AGREEMENTS Contracts That Bind contracts agent contract agreements enforceable by law that detail the transaction of business agent contract an agreement in which an athlete allows a person or agency to represent the athlete in marketing the athlete’s ability and name Chapter 13

Contracts are enforceable by law when they involve a promise in exchange for something of value. noncompete clause prohibits a person from working in a competing business for a specific period of time Chapter 13

Whom do contracts protect? Chapter 13

PERFORMANCE INDICATORS EVALUATED Demonstrate effective communication skills. Demonstrate skills in developing a speech that includes an introduction, body, and conclusion. Chapter 13

Use appropriate tempo and pitch. Utilize nonverbal gestures as appropriate. Achieve the purpose of the speech. Chapter 13

THINK CRITICALLY Why is extemporaneous speaking a valuable skill in the business world? How are amateur, college, and professional sports business issues? Why is the introduction to a speech important? Why should the conclusion of the speech be related to the introduction? Chapter 13