Part 1: Consists of scenario with 14 issues (each worth a maximum of 5 points). Total for Part 1: 70 points.
Part 2: Consists of 4 multiple choice and 2 true/false questions (each worth 5 points). Total for Part 2: 30 points.
I hope that you enjoyed this class. Have a great summer. Steve Baker
Part 1: Short answer (one paragraph per question) (70 points total - 5 points each)
Joe Superstar is drafted by the Oakland Raiders with the 1
S`
Pick of the 2001 NFL draft, the New
York Yankees with the 1st pick of the 2001 Major League Baseball draft and the Miami Heat with the
15`
pick of the 2001 NBA draft.
Joe has loved the Raiders all of his life and very badly wants to play for them. Joe's uncle and agent,
Leonard Dawson ("Len"), has been a Kansas City Chiefs fan his entire life and does not like the
Raiders because of a bad experience he had at the Oakland airport as a child. Len lives with Joe at
Joe's parent's home in Miami, Florida. Joe's parents have lived in Florida for the past 20 years because
they love alligator wrestling and because Florida has no state income tax.
While Len is a former professional bowler, he has no legal training and has had Joe hire your law-firm
to act as Joe's co-agent, conduct Joe's negotiations and act as Joe's legal counsel. You have
determined in discussions with the Raiders that Joe could sign the following deal with the Raiders.
Signing Bonus: $20,000,000
2001 Salary: $200,000
2002 Salary: $200,000
2003 Salary: $200,000
2004 Salary: $200,000
2005 Salary: $200,000
There would also be a $1,000,000 incentive for any year that Joe throws for over 4,000 yards.
The Yankees have told you that they would, subject to meeting with their legal counsel to okay the
deal, offer Joe $10,000,000 to sign, the same salaries as the Raiders have offered and an incentive that
if Joe hit 5 homeruns in any season (Joe hit 75 homeruns last year in college) of an additional
$20,000,000. Joe feels confident he can hit at least 20 homeruns by his second year but is aware the
pitching will be much tougher to hit in the major leagues.
The Heat has yet to begin negotiations.
Len and Joe are very demanding and have chosen your firm for its reputation both for understanding
legal issues and for its ability to explain the basis of its analyses in a short and well-organized fashion.
In fact, Len and Joe are not interested in reading any answers that are more than one paragraph.
They have asked you to resolve the following issues:
1) Len is a big believer in free market capitalism and would prefer that a salary cap not limit Joe's contract. How would the rules relating to a "salary cap" on Joe's first contract differ in negotiations with the 3 different teams that drafted him?
2) Since Len knows that Joe only wants to play football and Len does not want him to play for the Raiders, Len decides to have your law-firm sue the National Football League on Joe's behalf claiming that the NFL's draft is an illegal restraint of trade. Could you advise Len what arguments you and the NFL would make and the likely result of the litigation? Are there any other factors relating to Joe that are relevant in your role as advisor to Joe in his negotiations?
3) Would the NFL have any other defense to such an antitrust lawsuit if its business structure were like the XFL?
4) If you go forward with the Raider deal as proposed, what would the 2001 cap number be? Would the 2001 cap number be any different if the 2004-year were guaranteed?
5) Please analyze and contrast the Yankees' contract offer with the Raiders' offer. Which deal is better?
6) After Joe's contract expires five years from now, would Joe's negotiating position with the Raiders be any stronger or weaker if the NFL adopted the free agency and salary cap system used by the NBA?
7) Suppose Joe signs the contract with the Raiders and plays out the entire 5-year deal. At the time of the end of the deal, the NFL adopts the arbitration and free agency system used by Major League Baseball for players of Joe's experience. Would Joe's negotiating leverage to pick his team as a free agent and maximize his contract leverage be any better under the baseball system?
8) Would Joe's negotiating position be any stronger in the NFL if there were no collective bargaining agreement in place? What about in the NBA? What if the NFL Player's Association also decertified?
9) If Joe were a high school senior and was considering signing with the Yankees or going to a four year college, is there any limit on when he could sign with the Yankees?
10) What kind of tax planning would you recommend to Joe as he considers his options?
11) What regulations govern Len's representation of Joe, are there any other regulations or rules that govern you in your representation of Joe? Would any of these regulations or rules "bar" you from representing him?
12) The Major League Baseball Players Association brings an action against Len to decertify him as an agent claiming that Len has hurt the cause of professional baseball players by encouraging star athletes to become bowlers, will they be able to decertify Len? What would you cite in his defense?
13) Bill Bixby, owner of "My Favorite Auto Mall" in Oakland, California, wants to capitalize on Joe's fame by filming a television commercial using a Joe Superstar look-alike as an endorser. In the commercial Joe is never mentioned by name. Will Joe have any valid cause of action to file a suit to prevent this commercial? What if you were able to negotiate a deal for Joe with Mr. Bixby, what contract terms would be most important to you in negotiating Joe's contract?
14) Joe's celebrity has brought attention to his college, Harvard, for their great opportunities in football, baseball, and basketball. It also leads to a huge protest that the same opportunities are not available for women. What three defenses would Harvard likely raise if the Office of Civil Rights investigated the school for non-compliance with Title IX?