Boise State University’s Athletic Department will start selling stock

From Professor Rick Karcher at the Sports Law Blog:

USA Today is reporting today that Boise State has officially formed a non-profit corporation and will begin selling shares to the public at $100 per share in hopes of raising $20 million (Boise State Athletic Department Hopes Stock Offering Raises $20 Million). AD Gene Bleymaier said, “If we are to continue the success we are enjoying now we must generate new revenues to pay for coaches’ salaries, scholarships and facilities.” The shares will not pay dividends, but shareholders can vote on members of a 12-person board at an annual meeting and the board will determine how money raised through the offering would be spent. Bleymaier also said this fundraising program mirrors the offering made by the Green Bay Packers when they raised $24 million in the sale of more than 105,000 shares back in 1997.

If this is true, needless to say, it’s a very interesting development. One would certainly think this has to violate some provision, somewhere, in that 437-page NCAA Bylaw manual. It also raises all kinds of interesting corporate law questions in the context of fiduciary duties, state and federal securities regulations and non-profit corporation laws, just to name a few. The more I think about it, this has to be a joke, right?

Perhaps Boise State is just trying to make a point, and if so, their point is well-taken because this is no different than what is already taking place in big-time intercollegiate athletics. The only difference is that we call them boosters, not shareholders.

This new development also relates to the topic of my article I posted on two days ago because the proceeds generated from this stock sale are earmarked to fund coaches’ salaries. Boise State along with Cincinnati and TCU are prime candidates to have their successful football coaches solicited by competitor schools, making them soon-to-be victims of both tortious interference and breach of contract. The presidents of these three schools have a choice. They can either pay their coaches more money or let them go and then proclaim that they are “powerless” to do anything about rising salaries. Or, they can exercise their legal rights and stand up for all the current and prospective student-athletes who committed to their school in reliance on the fact that their coach was obligated to be there for a period of years….the same student-athletes who, unlike their coach, are prohibited from transferring to another school.

Judge rules that the records in the Florida State Cheating Incident are Public

TALLAHASSEE, Fla. (AP) -A top official at the NCAA said a court ruling Thursday that documents dealing with cheating at Florida State are public records sets a precedent that will “rip the heart out of the NCAA” and its efforts to ensure competition is fair and equal.

David Berst, the NCAA’s vice president for Division I, said few witnesses other than school officials and employees would be willing to tell what they know about cheating, whether in recruiting, academics or other areas, without the promise of confidentiality.

“We could see copycat efforts in other states,” Berst said. “Yes, I believe that would rip the heart out of the NCAA.”

His comments from the witness stand came soon after Circuit Judge John Cooper rejected the NCAA’s claim that the documents in the Florida State case are not public.

The Associated Press and other media outlets had sued to get the records on the college athletics governing body’s plan to strip coaches and athletes of wins in 10 sports.

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That includes football coach Bobby Bowden, who could lose 14 victories. Bowden’s chances of overtaking Penn State’s Joe Paterno as major college football’s winningest coach would dim if the NCAA rejects an appeal of that penalty. Paterno has 383 victories – one more than Bowden.

Florida law says records are public if they are “received” by a state agency. The NCAA claimed the Florida State documents were not because the school never physically possessed the documents in paper or electronic form.

Instead, the NCAA posted them on a secure read-only Web site that could be accessed by the law firm Florida State had hired for its appeal. School officials also could have gone to NCAA headquarters in Indianapolis to take a look at the documents.

Cooper rejected the argument.

After Berst’s testimony, he rejected the NCAA’s claim that even if the documents are public records they should not be released because that would violate free association, contract and interstate commerce rights under the U.S. Constitution.

The judge also found that making the documents public would violate neither state nor federal laws guarding the confidentially of student academic records. He made that ruling after privately reading copies of two documents being sought that had student names blacked out.

Media lawyer Carol Jean LoCicero in arguing to obtain the Florida State records cited a 1990 appellate court ruling that St. Petersburg and the Chicago White Sox violated the public records law through a scheme to hide documents on the team’s possible move to Florida. The papers were sent to a local law firm where they could be viewed by city officials and attorneys.

That was little different from what the NCAA and Florida State did, LoCicero said.

“Everything was done except touch a piece of paper,” she said. “You don’t have to touch a piece of paper to receive a document.”

Cooper agreed, ruling that viewing the NCAA documents on a computer screen was the same as receiving them.

Article located here.

The case referred to in the article involving the Chicago White Sox is Times Publishing Company, Inc. v. City of Saint Petersburg, which can be found at 558 So. 2d 487.

Former College QB takes on the NCAA and EA Sports

More than 18 months after taking his final snap as a Nebraska quarterback, Sam Keller is choosing to challenge more formidable opponents: The NCAA and EA Sports.

Keller has filed a lawsuit against the two entities for, “blatant and unlawful use of [NCAA] student likenesses” in a number of EA Sports’ college football games during his time at Arizona State and Nebraska without paying him for it. The “NCAA 08” game, for example, lists Keller at his approximate height and weight.

“With rare exception, virtually every real-life Division I football or basketball player in the NCAA has a corresponding player in Electronic Arts’ games with the same jersey number, and virtually identical height, weight, build and home state,” the lawsuit said. “In addition Electronic Arts often matches the player’s, skin tone, hair color, and often even a player’s hair style.”

Player ratings tend to be tied the presumed skills of an athlete before the beginning of the season.

The lawsuit also contends that the NCAA looks the other way when gamers download rosters names from the Internet. On the most recent Playstation 3 version of the college football game, EA provides an option to download rosters created by other users.

Here’s a copy of the lawsuit. You have to admit…it’s compelling.

Article located here.

Six ex-Toledo players charged with point shaving

University of Toledo officials have known for two years the bad news was coming. It finally struck Wednesday when six former players — three each from Toledo’s basketball and football programs, as well as two Detroit-area businessmen — were charged with conspiracy to commit sports bribery in an indictment filed in U.S. District Court in Detroit.

The 20-count indictment charges that between December 2004 and December 2006, Ghazi “Gary” Manni, 52, and Mitchell Karam, 76, paid money and other things of value to the athletes in order to influence, or attempt to influence, the final score of both football and basketball games. Though the money paid players was at times as little as $500, this is believed to be the first major gambling case involving two sports on a college campus.

Nothing in the indictment, however, details Manni and Karam placing wagers on football games. Instead, the indictment lists 17 specific games in which they placed bets on Toledo basketball contests, including the amounts wagered. The indictment also details 133 phone calls between Manni and those charged in the case.

Charged in the indictment, in addition to Manni and Karam, were Harvey “Scooter” McDougle Jr., 24, a former running back from Cleveland; Adam Cuomo, 31, a former running back from Hagersville, Ontario, Canada; Quinton Broussard, 25, a former running back from Carrollton, Texas; Keith Triplett, 29, a former basketball player from Toledo; Anton Currie, 25, a former basketball player from Okemos, Mich; and Kashif Payne, 24, a former basketball player from Chester, Pa.

“Today’s charges shine a light into the dark corner of illegal sports bookmaking and reveals the unfortunate consequences that the influence of money from betting can have on the integrity of both athletes and athletic contests,” said U.S. Attorney Terrence Berg in announcing the indictment.

Article located here.

NCAA to combine USC probes

The NCAA has combined its investigations of two former USC star athletes into a single probe of the Trojans’ athletic program, the Los Angeles Times reported.

In separate investigations, the NCAA has been looking into allegations that Heisman Trophy winner Reggie Bush and NBA lottery pick O.J. Mayo both received improper benefits while at USC.

The attorneys for Louis Johnson, a former associate of Mayo, said that in a meeting with a Pacific 10 Conference executive, they were told that the NCAA had combined the two probes into a larger investigation of whether USC had shown a lack of institutional control, according to the Times.

“It makes sense,” attorney Anthony V. Salerno said, according to the Times. “The NCAA looks at the program as a whole, and you may be talking about systemic problems in these cases of payments by agents. Yes, these were different teams and coaches. Rather than do it piecemeal, look at the institution.”

Salerno and David Murphy represent Johnson, a former associate of Mayo and Rodney Guillory, who Johnson says received more than $200,000 in cash and gifts from a representative of the BDA Sports Management agency and passed along some of those gifts to Mayo.

Bush is alleged to have accepted thousands of dollars in benefits for himself and his family in the form of rent owed on a home owned by a would-be sports marketer.

Both athletes have said they did nothing wrong.

The NCAA and a Pac-10 investigator declined to comment, while Pac-10 commissioner Tom Hanson could not be reached for comment, the Times reported.

USC basketball coach Tim Floyd said he hasn’t talked to the NCAA since May and has “never, ever heard” that the investigations were being combined, the Times reported. Football coach Pete Carroll could not be reached for comment, according to the report.

Article located here.

Congress to probe BCS antitrust issues

Article located at: http://sports.espn.go.com/ncf/news/story?id=4015667

Everyone from President Barack Obama on down to fans has criticized how college football determines its top team. Now senators are getting off the sidelines to examine antitrust issues involving the Bowl Champion Series.

The current system “leaves nearly half of all the teams in college football at a competitive disadvantage when it comes to qualifying for the millions of dollars paid out every year,” the Senate Judiciary’s subcommittee on antitrust, competition policy and consumer rights said in a statement Wednesday announcing the hearings.

Under the BCS, some conferences get automatic bids to participate in series, while others do not.

Obama and some members of Congress favor a playoff-type system to determine the national champion. The BCS features a championship game between the two top teams in the BCS standings, based on two polls and six computer ratings.

Behind the push for the hearings is the subcommittee’s top Republican, Sen. Orrin Hatch of Utah. People there were furious that Utah was bypassed for the national championship despite going undefeated in the regular season.

The title game pitted No. 1 Florida (12-1) against No. 2 Oklahoma (12-1); Florida won 24-14 and claimed the title.

The subcommittee’s statement said Hatch would introduce legislation “to rectify this situation.” No details were offered and Hatch’s office declined to provide any.

Hatch said in a statement that the BCS system “has proven itself to be inadequate, not only for those of us who are fans of college football, but for anyone who believes that competition and fair play should have a role in collegiate sports.”

In the House, Rep. Joe Barton of Texas, the top Republican on the Energy and Commerce Committee, has sponsored legislation that would prevent the NCAA from calling a football game a “national championship” unless the game culminates from a playoff system.