December 13, 2022 • 27 mins
Renowned sports attorney and friend of the show Darren Heitner returns to give his take on why Stephon Curry is the athlete who appears most at legal risk after the recent FTX crypto cataclysm. The crew also discuss the Aaron Judge's new $360 contract, as well as the rise of pickleball, the difficulties facing Draft Kings & other gaming companies because of higher than anticipated operating costs. Finally, we hear an insightful analysis of why Darren thinks that NIL regulations should remain at the state level, and how the NIL transfer portal is poised to make college sports indistinguishable from professional sports.See omnystudio.com/listener for privacy information.
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Episode Transcript
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Speaker 1 (00:00):
Never No, Never good big. Hey guys, welcome to another
episode of Sports Illustrated and I Heart Radios back with
(00:21):
me Lundy McCormick and my co host Sean Jennings. The
Bag sits at the intersection of sports and business, delving
into the headlines and behind the scenes of athletes, entrepreneurship
and enterprise. And today we have an amazing guest with us.
We had such a fun time when Rashad was out
of town uh speaking with Darren Heitner about in I L,
(00:42):
that we thought we would bring him back again. So Darren,
thank you so much for coming back. I had so
much fun picking your brain about the n I L.
And you recently wrote a post about your five predictions
for athletes in the sports industry for two thousand and
twenty three that we're going to dive into for a
minute um in the second But before we get to that,
(01:06):
we had some breaking headline news this past week with
Aaron Judge signing a new three hundred and sixty million
dollar contract agreement with the Yankees, which will pay him
on average forty million per season for the next nine years.
It's the richest deal in Yankees history and the highest
(01:26):
salary ever for a position player Aaron Judge. They offered
him before the season a contract offer of thirty point
five million per year for seven years, and he flat
out turned it down. In my opinion, it's the best
example of betting on yourself as a player. He took
a massive risk because if he was injured then he
(01:48):
would have lost out on millions, but he had, I mean,
an iconic season and ended up getting a pay day. So, Darren,
your take on this, would you ever recommend doing that
to any of your clients? Thanks for the return invite,
It's good to be back, And the answer to your
question is absolutely, But on a case by case basis,
(02:12):
as an agent or a lawyer or anybody providing a
service in a fiduciary capacity to an athlete, you always
have to put the interests of the athlete above your own.
And no two athletes are the same. No two athletes
come from the same situations, save the same or have
(02:33):
the same goals. So I think what's most important is
having those very thorough tough conversations with athletes in fact,
well in advance of someone like Aaron Judge being in
a position to sign a multi year deal worth hundreds
of millions of dollars and determine make that determination with
(02:54):
the athlete, but obviously the athlete making that final decision
as to whether or not it make sense to take
the more conservative route and ensure ensure wealth for the
rest of his or her life and probably giving their
families generational wealth. Um or taking a risk. And if
(03:16):
taking a risk is the choice, doing whatever you can
to best insulate yourself, maybe that means you can actually
take out an insurance policy if there is a worse
case situation. So I love the the idea of betting
on yourself. Aaron Judge obviously benefited from doing it, but
there are certainly situations where an athlete will do so
(03:39):
and end up getting less money than what he or
she could have gotten if they if that person took
the conservative route. Yeah, I agree with you. It's a
tough one. I'm I'm obviously overpay the players, because if
you overpay them, you'll probably get close to what they
actually value for I think all players are underpaid. But
um I I'm glad to see an athlete betted on
(04:01):
himself and and succeeded. I'm just happy it turned out
the way it did. For him, and it was fun.
Being someone who's not a Yankees fan, it was it
was fun rooting him on throughout the season, especially as
it got down to the end and he was going
for for that final home run. Um Darren, So you
wrote this this piece five predictions for athletes and the
(04:22):
sports industry in two thousand twenty three, and your five
predictions are we'll we'll get into the nitty gritty with
some of these and pick your brain on them. But
one athletes, teams, leagues, and events will spend more time
conducting diligence on brands. They won't simply sign deals with
(04:42):
the highest bidders. The collapse of some cryptocurrency behemoths c
fd X is a lesson that what is written on
paper doesn't always matter. What athlete or sports organization came
out looking the worst after the ft X collapse. In
your opinion, I think it's really hard to say. Right now,
(05:04):
we're really in the infancy of litigation against sports franchises
and athletes, and I'd say, since I wrote that piece
roughly a week ago in early December, one athlete actually
stands out more than others, and that's Steph Curry because
(05:25):
he wasn't only named as a defendant in the ft
X class action lawsuit that is now pending in federal
court in Florida, but there was a new cryptocurrency related
lawsuit that was filed out in California that also names
Steph Curry as a defendant. I think he's the only
(05:46):
athlete or celebrity from what I've seen, who has the
unfortunate consequence of being named in both of those lawsuits.
And as I've mentioned, I think we're only touching the
surface right now in terms of the number of loss
suits that are going to be filed by disgruntled consumers
who have lost, whether it be their fortunes or their
(06:07):
little money that they had trusting that this was basically
going to be a gold rush, that being cryptocurrency and
the many outfits that are selling and allowing transactions to
occur in the reubl of cryptocurrency, and we've seen prices
dropped tremendously, not just with Bitcoin, and we've also seen
(06:27):
the collapse of these facilities like an f t X
so um. Again, I think any athlete who has been
involved in n f t S and cryptocurrency and has
benefited from it and not necessarily disclosed Number one, whether
they were compensated for the promotion or two if in
(06:49):
fact it is deemed to be a security the amount
of the compensation. There at at a minimum going to
be spending a lot of money on lawyers to defend themselves,
and they don't want to be doing that. But worse,
not only may they may they not get the payments
that they believed they were going to get under the
terms of compensation in their agreements. They may end up
(07:10):
having to pay out if they lose these cases. So
it's a it's a tough lesson for a lot of
these people to learn. I doubt any of them, or
at least many of them, thought about this when they
got into these deals. So that that leads me to
my next question. Could Tom Brady or Steph Curry actually
face civil punishment? Well, that's what these lawsuits are all about.
(07:34):
It's not about any sort of criminal penalties. These are
lawsuits that have been brought by consumers on behalf of classes.
The class needs to be certified by the federal judges
in the respective cases. But what the consumers are seeking
our monetary damages, It's there's no at this point in
(07:56):
time there's no potential jail or prison consequence it is
attached to it. If the Wild West of Crypto just
ended with the ft X collapse and the wild West
of n I L is just beginning, when will we
see firmer regulations and the end of the wild West
and the n I L Oh that's a tough question,
(08:18):
um oh. From my perspective, I think the best case
scenario is one in which we're actually going to shed restrictions.
What we've seen since July one is that you've had
actually even predating that, states passing legislation with specific restrictions
put in place, and then the n c A July
(08:40):
one adopting their own interim and I ALL policy, which
a year and a half later remains the policy that
has very basic restrictions. The issue is whether it be
the States or the n c A. There has not
been a single instance of a law and an ill
law or the interim and I'LL policy being enforced against
(09:05):
those individuals who I suppose you could claim to be
the bad actors. So I don't know if or when
that is ever going to be reined in by the
n c A or the respective states. Um and I
don't think that the federal government, at least to this point,
has any interest in getting involved, despite the fact that
(09:26):
you've had the President of the n c A. Mark Emmert,
consistently begged Congress to involve itself, and more recently even
the a c C Commissioner make a point that it's
hoping that Congress will get involved. There's been no less
than ten pieces of legislation proposed on the national level.
Not a single one of them has gotten outside of
(09:47):
committee and onto the floor for debate. And I don't
think that's going to change your Your number two point
on this prediction list is the n i L and
the trans reportal will make college sports look like professional
sports on stair roids, which I know is particularly interesting
to a shot. Essentially, college sports are trending toward a
(10:07):
professional model without any salary caps or employment at all.
Can you can you expand on that, Darren? Sure? So.
The situation that we find ourselves in with regard to
college athletes is that for decades has fought against the
theory and the concept that college athletes were employees. That's
(10:30):
why we've heard the usage of the phrase student athletes
over and over again. And we've constantly had the term
amateurism hammered inside of our brains because of that. With
n i L becoming an opportunity for college athletes as
well as the transfer portal, my point is that it
(10:52):
looks and feels like free agency, except for the fact
that there really are no restrictions on movement. Whereas when
we're talking about the NFL, the NBA, MLB, these athletes
are signing contracts with teams. They are employees. They are
bound to play for that team. Take Aaron Judge as
(11:12):
an example for multiple years and can't just decide they're
going to pick up and play for a different team.
But that's not true in the n c A. Right now,
with the transfer portal, a player can decide that he
would rather explore what's out there on the open market
and really see what hundreds of other colleges are willing
(11:34):
to put on the table and perhaps even go to
whomever is making the highest offer. And again my point being,
thank the n c A for that, because if they
were employees, if they were signed to employment agreements, they
wouldn't necessarily have those rights. Isn't that great to me?
I love it? As an advocate for athletes. I love it.
(11:56):
But there's those out there who have said since July one,
and even before that, that this is going to cause
the end of college sports as we know it. Maybe
as we knew it, but the interest of college sports
in my estimation, and when I look at the numbers,
it's never been higher. So I don't think there's any
(12:20):
losers in this, other than perhaps the universities that have
been making money off the backs of these athletes for
decades and improperly holding it from them. I mean, these
individuals have contributed hundreds of millions of dollars to these
programs and gotten nothing besides a scholarship and an opportunity,
(12:40):
but not the opportunity to get their true value. And
so I'm a big proponent of it. I've said these things.
I've had these conversations in in in many of locker
rooms with coaches players eighties. I'm not going my eighties doors.
I listen, I want to see the bank account, how
much money we bring you all? In thank they thought
(13:00):
I was crazy, right and so, but like Lindsie, it
goes back to what I've been saying this whole time.
They demanded smarter athletes and this is what you get, Darren.
I want to go back to something you said a
minute ago. You talked about Congress getting involved. It seems
it seems like the n C double A has seems
(13:20):
so weakened and disreputable at this point. Are there any
other organizations that could step in and provide some boundaries
other than Congress, And what are the chances in your
opinion that Congress will eventually get involved. Well, first of all,
addressing the latter part of your question, you know, Congress,
(13:41):
I suppose has gotten involved. Congress has held multiple committee
hearings where I mean I've very painfully listened through some
of them, and you hear congressmen talking about how they
played a specific sport when they were in school, or
talking about their alma mater and how great it was.
I mean, it's a waste of time, but I guess
(14:04):
a lot of politics really is um you know. So,
you've had, as I mentioned before, over ten pieces of
legislation being introduced, but none of them ever reached the
floor of the House or the Senate for debate. And personally,
I think that Congress and the federal government have bigger
fish to fry, and this is not something that they
(14:24):
feel compelled two get themselves involved with. I don't. I
don't think that's going to change. I think this is
an issue that has and should be left to the states.
So you asked, is there an entity or a governing
body other than Congress that can or should produce regulations
(14:46):
or restrictions and enforce them? And you know, my personal position,
as I mentioned before, is no. I I don't think
that there is the necessity of added restrictions. I think
a free market is what's best for the athletes and
best for sport as a whole. And outside of that,
leave it to the states. You have had states past
(15:07):
laws which actually pushed the n C as hand in
the first place, going back to July, if states want
to be more aggressive in the way that they regulate
n I l take Texas as an example, which in
its law actually says no high school athletes can do
an I ll deals, well, I disagree with that. There's
an example of a state deciding that it wishes to
(15:28):
be a bit more restrictive than others, and it's their
right to do so absent any challenge to the contrary.
So I think you leave it to the states. Uh,
the n c A obviously has has shown its inability
to enforce its own rules. Perhaps the conferences, as we
accumulate power in two conferences, in particular that being the
(15:50):
big ten in the SEC, maybe the conferences decide that
they want to institute their own measures. But I don't
think that's really where we're going to be honest. I
think where we're going is the cop princes the big
conferences decide we need to get a grip on this,
and the way that we do it is let the
athletes become employees, pay them salaries, allow for collective bargaining,
(16:12):
and then maybe we diminish the empowerment of the transfer portal.
I think the transfer portal at this point is a
much greater concern for athletic directors and college presidents and
n I L s. I mean, we saw this past
week how many kids entered the portal and it it's astounding,
(16:36):
how I mean, people saw the benefits just like we did,
not just for normal college athletes that would have transferred
to the past, but if they could use it as leverage,
like Darren you were talking about the last time we
spoke about if a guy knows for a fact he's
going to go back to his team, but he goes
(16:56):
in there for Leviage just to see his options, but
also that his team has to bid on him again.
And we saw with how many players went this week,
just how many are utilizing that. But so, Darren, you
don't think that there's going to end up being some
kind of players union that decides, for instance, that there
can only be so much of a pay gap between
(17:17):
the lowest and the highest paid player on a college
football team. So I actually do believe that it's where
we're trending, if it won't take time. In fact, very recently,
the National Labor Relations Board decided that it was going
to take a look at a claim made against the
University of Southern California based on improperly classified classifying college
(17:44):
athletes as not being employees. If you look back to
over the past year, the current general counsel for the
n l RB actually even went as far as to
say in an advisory opinion that she believed college athletes
have been misclassified as not employees and she looked forward
to supporting any challenges to that. And so that's what's
(18:05):
happening right now, and that's what's playing out ultimately, I
think it'll either be a decision made by the NLRB,
decisions made by courts of law, or even conferences voluntarily
deciding that they're willing to treat athletes as employees. And
at that point in time, once these college athletes are employees,
(18:26):
then they can absolutely unionize and collectively bargain for specific rights.
It may be amounts of money, salaries, caps on those salaries,
the amount of time that they have to commit, or
that schools can't have them practicing at certain times, there's
has to be a certain amount of time sent aside
for studies, etcetera. Um, just basically the conditions of their employment.
(18:50):
And I do think that's where we're trending, but I
do think it may take some time. Is a college
athlete not an employee but not legally but by definition
that's the point, right, So the n LRB General Council,
the higher the lawyer who is at the highest position
of the National Labor Relations Board says yes, that these
are for all intents and purposes, employees who have been
(19:12):
misclassified as student athletes and not being employees. And you
can even look to the Supreme Court decision in Austin v.
N C A A which came out in the summer
of where Justice Kavanaugh, in his concurring opinion went as
far as to state that while the case itself didn't
(19:34):
revolve around it, he believed that that is where we
are trending that ultimately these are rights that college athletes
will receive, whether it be through the judicial process, through
courts of law, or otherwise. And I I'm in firm agreement,
I just with with anything. Um, it takes time. So
(19:56):
your final three points on this predictions list are that
number three, there will be some significant M and A
in this sports gambling space for that pickle ball will
continue to be in the spotlight as more people play
the sport. And five that the n C Double A
will finally take action to enforce its n I L policy. So,
(20:18):
in terms of the pickle ball, I've had this fascinating
what will it take behind the scenes for a brand
new sport like pickle ball to truly take off as
a spectator sport. Well, we've already started to see it,
which is those who have a lot of wealth and
have already enjoyed success in other sports getting involved and
(20:38):
putting their money where their mouths are. So We've seen
owners of professional sports teams, UH decide that they're going
to put their money invest in franchises in various pickle
ball leagues and teams. Um. Right now, I believe there
are a few that are in the process of even urging,
(21:00):
and ultimately there will be an effort obviously among these
individuals to try to commercialize it. And so we're talking
about everything from merchandise to live spectator events too. I'm
certain broadcast rights, media rights streaming it likely on TV
and so that you can get it on your tablet
(21:21):
and your mobile phone. Um. And so it's coming. I
just don't know whether the consumer will be interested in
watching that over competing content. I know that pickle ball
has caught on across the United States, UM, but that's
(21:42):
with regard to participation. Do I really want to kick
back in the comfort of my home and watch people,
whether they be random or celebrities that I've seen before,
play a pickle ball match? Personally, I don't think so.
But I guess we'll see how successful has cornhole been,
(22:02):
because that seems like a similar sport where you play
it at a barbecue with your friends. You have a
lot of people playing it it seems like pickleball is
a little more active and more of a workout than cornhole.
But you see a lot of celebrities catching on like
my friends Shim are more um and playing cornhole, and
(22:22):
you see broadcast on ESPN. So how many people are
actually watching It's a great question. I don't know the numbers,
and you've seen corn hole as a sport actually do
quite well and even attracting sponsorships. Um. I think also
it's it's the beneficiary of the fact that there are
(22:43):
so many networks out there now who need to fill
twenty four hours a day unless they're just regurgitating content,
and so by having something unique like that, you you're
able to place it now. Again, I don't know what
the terms are of the deal between whomever it is
(23:04):
that is the event sponsor of cornhole and ESPN, but
obviously it's being broadcast and obviously there's some money being
made from sponsorships and advertising. Whether that's sustainable based on
the number of people who are watching, I have no clue. Ultimately,
pickle ball is going to try to do the same thing,
but do it better. Darren, one last question for you
(23:26):
before we let you go, because I know you're extremely busy.
Are there any other predictions that you have for for
the sports world? Well, I I touched on one other
one that I think you brought up briefly before, which
is UM consolidation, UM and and M and A. In
the sports gambling space, we've seen in that area a
(23:51):
big Supreme Court decision within the past decade strike down
a prohibition that did not allow anyone to enter outside
of navare UH for full fled sports betting. And what
we've seen since then is state by state going through
their processes as to determine whether or not sports gambling
should be allowed. In my own state of Florida, we
(24:12):
actually had sports betting for like two weeks before there
was a legal challenge, and now there's no legal sports betting.
And from my position, what I've seen, particularly because we're
blessed with a lot of data from companies that are
publicly traded, is that while there's so much interest in
(24:34):
sports betting and a lot of revenue, the profits aren't
there yet. There's just there hemorrhaging money in the promotions
that they provide to onboard new users, and then the
advertising that they spend to attract new users. And to
compete against others. There's just so many different platforms that
(24:54):
are competing for the same people, and there's not a
lot of innovation when you're talking about adding on one
side or the other. So what I think is going
to have to happen for many of these platforms to
survive and perhaps flourish, is that they're going to have
to combine forces and make it so that they're they're
(25:15):
bettering their margins and not needing to spend so much
money to compete against those that are trying to attract
the same eyeballs in the same dollars. Do you think
we'll ever see the day where a collegiate player denies
going to the NFL and says he doesn't want to
take a pay cut. Absolutely, I do. I I don't
(25:37):
think that we're going to necessarily see it. For the
individuals who received first round grades, I think going pro,
getting those guaranteed dollars for multiple years and still having
the capacity to earn money off the field is advantageous,
(25:59):
better than taking the risk of playing in college getting
that nil doll money, but perhaps also risking injury and
losing out on a lot of guaranteed money. Ultimately, I
think anyone and you can speak to this better than
I can, Rashod, but these players their goal remains playing
at the highest level and and accomplishing at that level.
(26:22):
So I think when you're talking about maybe somebody who's
projected to go anywhere between the third and sixth round
of the NFL draft, who has a lot of money
on the table to stay at college and perhaps enhance
his draft grade, absolutely, I think that we're already seeing
it where a player will decide not to go pro.
(26:43):
Whereas years passed without an i L, that player may
have taken a chance and left early. UM, and we've
heard of terrible situations, unfortunately, where that players should have
stayed but either got bad advice or just decided it
was in his best interest to leave. UM, we're probably
gonna see a lot less that now, which is a
good thing. So thank you so much for taking the
(27:03):
time to come on here and break things down for us.
Because Shad and I are not lawyers. We this is
all new to us, and the wild wild west of
the n i L is so fascinating, and you have
so many people that are interested and don't know a
lot about it. So I appreciate you taking the time,
I appreciate you having me back and uh and thanks
to the shoutouts Rashad for engaging with me on Twitter
(27:25):
after the last episode, so hopefully we keep that banter going.
Thank you, guys for listening to Sports Illustrated I Heart
Radios the Bag. For more podcasts from my heart Radio,
visit the I heart Radio app, Apple Podcasts, or wherever
you get your podcasts.
Never No, Never good big. Hey guys, welcome to another
episode of Sports Illustrated and I Heart Radios back with
(00:21):
me Lundy McCormick and my co host Sean Jennings. The
Bag sits at the intersection of sports and business, delving
into the headlines and behind the scenes of athletes, entrepreneurship
and enterprise. And today we have an amazing guest with us.
We had such a fun time when Rashad was out
of town uh speaking with Darren Heitner about in I L,
(00:42):
that we thought we would bring him back again. So Darren,
thank you so much for coming back. I had so
much fun picking your brain about the n I L.
And you recently wrote a post about your five predictions
for athletes in the sports industry for two thousand and
twenty three that we're going to dive into for a
minute um in the second But before we get to that,
(01:06):
we had some breaking headline news this past week with
Aaron Judge signing a new three hundred and sixty million
dollar contract agreement with the Yankees, which will pay him
on average forty million per season for the next nine years.
It's the richest deal in Yankees history and the highest
(01:26):
salary ever for a position player Aaron Judge. They offered
him before the season a contract offer of thirty point
five million per year for seven years, and he flat
out turned it down. In my opinion, it's the best
example of betting on yourself as a player. He took
a massive risk because if he was injured then he
(01:48):
would have lost out on millions, but he had, I mean,
an iconic season and ended up getting a pay day. So, Darren,
your take on this, would you ever recommend doing that
to any of your clients? Thanks for the return invite,
It's good to be back, And the answer to your
question is absolutely, But on a case by case basis,
(02:12):
as an agent or a lawyer or anybody providing a
service in a fiduciary capacity to an athlete, you always
have to put the interests of the athlete above your own.
And no two athletes are the same. No two athletes
come from the same situations, save the same or have
(02:33):
the same goals. So I think what's most important is
having those very thorough tough conversations with athletes in fact,
well in advance of someone like Aaron Judge being in
a position to sign a multi year deal worth hundreds
of millions of dollars and determine make that determination with
(02:54):
the athlete, but obviously the athlete making that final decision
as to whether or not it make sense to take
the more conservative route and ensure ensure wealth for the
rest of his or her life and probably giving their
families generational wealth. Um or taking a risk. And if
(03:16):
taking a risk is the choice, doing whatever you can
to best insulate yourself, maybe that means you can actually
take out an insurance policy if there is a worse
case situation. So I love the the idea of betting
on yourself. Aaron Judge obviously benefited from doing it, but
there are certainly situations where an athlete will do so
(03:39):
and end up getting less money than what he or
she could have gotten if they if that person took
the conservative route. Yeah, I agree with you. It's a
tough one. I'm I'm obviously overpay the players, because if
you overpay them, you'll probably get close to what they
actually value for I think all players are underpaid. But
um I I'm glad to see an athlete betted on
(04:01):
himself and and succeeded. I'm just happy it turned out
the way it did. For him, and it was fun.
Being someone who's not a Yankees fan, it was it
was fun rooting him on throughout the season, especially as
it got down to the end and he was going
for for that final home run. Um Darren, So you
wrote this this piece five predictions for athletes and the
(04:22):
sports industry in two thousand twenty three, and your five
predictions are we'll we'll get into the nitty gritty with
some of these and pick your brain on them. But
one athletes, teams, leagues, and events will spend more time
conducting diligence on brands. They won't simply sign deals with
(04:42):
the highest bidders. The collapse of some cryptocurrency behemoths c
fd X is a lesson that what is written on
paper doesn't always matter. What athlete or sports organization came
out looking the worst after the ft X collapse. In
your opinion, I think it's really hard to say. Right now,
(05:04):
we're really in the infancy of litigation against sports franchises
and athletes, and I'd say, since I wrote that piece
roughly a week ago in early December, one athlete actually
stands out more than others, and that's Steph Curry because
(05:25):
he wasn't only named as a defendant in the ft
X class action lawsuit that is now pending in federal
court in Florida, but there was a new cryptocurrency related
lawsuit that was filed out in California that also names
Steph Curry as a defendant. I think he's the only
(05:46):
athlete or celebrity from what I've seen, who has the
unfortunate consequence of being named in both of those lawsuits.
And as I've mentioned, I think we're only touching the
surface right now in terms of the number of loss
suits that are going to be filed by disgruntled consumers
who have lost, whether it be their fortunes or their
(06:07):
little money that they had trusting that this was basically
going to be a gold rush, that being cryptocurrency and
the many outfits that are selling and allowing transactions to
occur in the reubl of cryptocurrency, and we've seen prices
dropped tremendously, not just with Bitcoin, and we've also seen
(06:27):
the collapse of these facilities like an f t X
so um. Again, I think any athlete who has been
involved in n f t S and cryptocurrency and has
benefited from it and not necessarily disclosed Number one, whether
they were compensated for the promotion or two if in
(06:49):
fact it is deemed to be a security the amount
of the compensation. There at at a minimum going to
be spending a lot of money on lawyers to defend themselves,
and they don't want to be doing that. But worse,
not only may they may they not get the payments
that they believed they were going to get under the
terms of compensation in their agreements. They may end up
(07:10):
having to pay out if they lose these cases. So
it's a it's a tough lesson for a lot of
these people to learn. I doubt any of them, or
at least many of them, thought about this when they
got into these deals. So that that leads me to
my next question. Could Tom Brady or Steph Curry actually
face civil punishment? Well, that's what these lawsuits are all about.
(07:34):
It's not about any sort of criminal penalties. These are
lawsuits that have been brought by consumers on behalf of classes.
The class needs to be certified by the federal judges
in the respective cases. But what the consumers are seeking
our monetary damages, It's there's no at this point in
(07:56):
time there's no potential jail or prison consequence it is
attached to it. If the Wild West of Crypto just
ended with the ft X collapse and the wild West
of n I L is just beginning, when will we
see firmer regulations and the end of the wild West
and the n I L Oh that's a tough question,
(08:18):
um oh. From my perspective, I think the best case
scenario is one in which we're actually going to shed restrictions.
What we've seen since July one is that you've had
actually even predating that, states passing legislation with specific restrictions
put in place, and then the n c A July
(08:40):
one adopting their own interim and I ALL policy, which
a year and a half later remains the policy that
has very basic restrictions. The issue is whether it be
the States or the n c A. There has not
been a single instance of a law and an ill
law or the interim and I'LL policy being enforced against
(09:05):
those individuals who I suppose you could claim to be
the bad actors. So I don't know if or when
that is ever going to be reined in by the
n c A or the respective states. Um and I
don't think that the federal government, at least to this point,
has any interest in getting involved, despite the fact that
(09:26):
you've had the President of the n c A. Mark Emmert,
consistently begged Congress to involve itself, and more recently even
the a c C Commissioner make a point that it's
hoping that Congress will get involved. There's been no less
than ten pieces of legislation proposed on the national level.
Not a single one of them has gotten outside of
(09:47):
committee and onto the floor for debate. And I don't
think that's going to change your Your number two point
on this prediction list is the n i L and
the trans reportal will make college sports look like professional
sports on stair roids, which I know is particularly interesting
to a shot. Essentially, college sports are trending toward a
(10:07):
professional model without any salary caps or employment at all.
Can you can you expand on that, Darren? Sure? So.
The situation that we find ourselves in with regard to
college athletes is that for decades has fought against the
theory and the concept that college athletes were employees. That's
(10:30):
why we've heard the usage of the phrase student athletes
over and over again. And we've constantly had the term
amateurism hammered inside of our brains because of that. With
n i L becoming an opportunity for college athletes as
well as the transfer portal, my point is that it
(10:52):
looks and feels like free agency, except for the fact
that there really are no restrictions on movement. Whereas when
we're talking about the NFL, the NBA, MLB, these athletes
are signing contracts with teams. They are employees. They are
bound to play for that team. Take Aaron Judge as
(11:12):
an example for multiple years and can't just decide they're
going to pick up and play for a different team.
But that's not true in the n c A. Right now,
with the transfer portal, a player can decide that he
would rather explore what's out there on the open market
and really see what hundreds of other colleges are willing
(11:34):
to put on the table and perhaps even go to
whomever is making the highest offer. And again my point being,
thank the n c A for that, because if they
were employees, if they were signed to employment agreements, they
wouldn't necessarily have those rights. Isn't that great to me?
I love it? As an advocate for athletes. I love it.
(11:56):
But there's those out there who have said since July one,
and even before that, that this is going to cause
the end of college sports as we know it. Maybe
as we knew it, but the interest of college sports
in my estimation, and when I look at the numbers,
it's never been higher. So I don't think there's any
(12:20):
losers in this, other than perhaps the universities that have
been making money off the backs of these athletes for
decades and improperly holding it from them. I mean, these
individuals have contributed hundreds of millions of dollars to these
programs and gotten nothing besides a scholarship and an opportunity,
(12:40):
but not the opportunity to get their true value. And
so I'm a big proponent of it. I've said these things.
I've had these conversations in in in many of locker
rooms with coaches players eighties. I'm not going my eighties doors.
I listen, I want to see the bank account, how
much money we bring you all? In thank they thought
(13:00):
I was crazy, right and so, but like Lindsie, it
goes back to what I've been saying this whole time.
They demanded smarter athletes and this is what you get, Darren.
I want to go back to something you said a
minute ago. You talked about Congress getting involved. It seems
it seems like the n C double A has seems
(13:20):
so weakened and disreputable at this point. Are there any
other organizations that could step in and provide some boundaries
other than Congress, And what are the chances in your
opinion that Congress will eventually get involved. Well, first of all,
addressing the latter part of your question, you know, Congress,
(13:41):
I suppose has gotten involved. Congress has held multiple committee
hearings where I mean I've very painfully listened through some
of them, and you hear congressmen talking about how they
played a specific sport when they were in school, or
talking about their alma mater and how great it was.
I mean, it's a waste of time, but I guess
(14:04):
a lot of politics really is um you know. So,
you've had, as I mentioned before, over ten pieces of
legislation being introduced, but none of them ever reached the
floor of the House or the Senate for debate. And personally,
I think that Congress and the federal government have bigger
fish to fry, and this is not something that they
(14:24):
feel compelled two get themselves involved with. I don't. I
don't think that's going to change. I think this is
an issue that has and should be left to the states.
So you asked, is there an entity or a governing
body other than Congress that can or should produce regulations
(14:46):
or restrictions and enforce them? And you know, my personal position,
as I mentioned before, is no. I I don't think
that there is the necessity of added restrictions. I think
a free market is what's best for the athletes and
best for sport as a whole. And outside of that,
leave it to the states. You have had states past
(15:07):
laws which actually pushed the n C as hand in
the first place, going back to July, if states want
to be more aggressive in the way that they regulate
n I l take Texas as an example, which in
its law actually says no high school athletes can do
an I ll deals, well, I disagree with that. There's
an example of a state deciding that it wishes to
(15:28):
be a bit more restrictive than others, and it's their
right to do so absent any challenge to the contrary.
So I think you leave it to the states. Uh,
the n c A obviously has has shown its inability
to enforce its own rules. Perhaps the conferences, as we
accumulate power in two conferences, in particular that being the
(15:50):
big ten in the SEC, maybe the conferences decide that
they want to institute their own measures. But I don't
think that's really where we're going to be honest. I
think where we're going is the cop princes the big
conferences decide we need to get a grip on this,
and the way that we do it is let the
athletes become employees, pay them salaries, allow for collective bargaining,
(16:12):
and then maybe we diminish the empowerment of the transfer portal.
I think the transfer portal at this point is a
much greater concern for athletic directors and college presidents and
n I L s. I mean, we saw this past
week how many kids entered the portal and it it's astounding,
(16:36):
how I mean, people saw the benefits just like we did,
not just for normal college athletes that would have transferred
to the past, but if they could use it as leverage,
like Darren you were talking about the last time we
spoke about if a guy knows for a fact he's
going to go back to his team, but he goes
(16:56):
in there for Leviage just to see his options, but
also that his team has to bid on him again.
And we saw with how many players went this week,
just how many are utilizing that. But so, Darren, you
don't think that there's going to end up being some
kind of players union that decides, for instance, that there
can only be so much of a pay gap between
(17:17):
the lowest and the highest paid player on a college
football team. So I actually do believe that it's where
we're trending, if it won't take time. In fact, very recently,
the National Labor Relations Board decided that it was going
to take a look at a claim made against the
University of Southern California based on improperly classified classifying college
(17:44):
athletes as not being employees. If you look back to
over the past year, the current general counsel for the
n l RB actually even went as far as to
say in an advisory opinion that she believed college athletes
have been misclassified as not employees and she looked forward
to supporting any challenges to that. And so that's what's
(18:05):
happening right now, and that's what's playing out ultimately, I
think it'll either be a decision made by the NLRB,
decisions made by courts of law, or even conferences voluntarily
deciding that they're willing to treat athletes as employees. And
at that point in time, once these college athletes are employees,
(18:26):
then they can absolutely unionize and collectively bargain for specific rights.
It may be amounts of money, salaries, caps on those salaries,
the amount of time that they have to commit, or
that schools can't have them practicing at certain times, there's
has to be a certain amount of time sent aside
for studies, etcetera. Um, just basically the conditions of their employment.
(18:50):
And I do think that's where we're trending, but I
do think it may take some time. Is a college
athlete not an employee but not legally but by definition
that's the point, right, So the n LRB General Council,
the higher the lawyer who is at the highest position
of the National Labor Relations Board says yes, that these
are for all intents and purposes, employees who have been
(19:12):
misclassified as student athletes and not being employees. And you
can even look to the Supreme Court decision in Austin v.
N C A A which came out in the summer
of where Justice Kavanaugh, in his concurring opinion went as
far as to state that while the case itself didn't
(19:34):
revolve around it, he believed that that is where we
are trending that ultimately these are rights that college athletes
will receive, whether it be through the judicial process, through
courts of law, or otherwise. And I I'm in firm agreement,
I just with with anything. Um, it takes time. So
(19:56):
your final three points on this predictions list are that
number three, there will be some significant M and A
in this sports gambling space for that pickle ball will
continue to be in the spotlight as more people play
the sport. And five that the n C Double A
will finally take action to enforce its n I L policy. So,
(20:18):
in terms of the pickle ball, I've had this fascinating
what will it take behind the scenes for a brand
new sport like pickle ball to truly take off as
a spectator sport. Well, we've already started to see it,
which is those who have a lot of wealth and
have already enjoyed success in other sports getting involved and
(20:38):
putting their money where their mouths are. So We've seen
owners of professional sports teams, UH decide that they're going
to put their money invest in franchises in various pickle
ball leagues and teams. Um. Right now, I believe there
are a few that are in the process of even urging,
(21:00):
and ultimately there will be an effort obviously among these
individuals to try to commercialize it. And so we're talking
about everything from merchandise to live spectator events too. I'm
certain broadcast rights, media rights streaming it likely on TV
and so that you can get it on your tablet
(21:21):
and your mobile phone. Um. And so it's coming. I
just don't know whether the consumer will be interested in
watching that over competing content. I know that pickle ball
has caught on across the United States, UM, but that's
(21:42):
with regard to participation. Do I really want to kick
back in the comfort of my home and watch people,
whether they be random or celebrities that I've seen before,
play a pickle ball match? Personally, I don't think so.
But I guess we'll see how successful has cornhole been,
(22:02):
because that seems like a similar sport where you play
it at a barbecue with your friends. You have a
lot of people playing it it seems like pickleball is
a little more active and more of a workout than cornhole.
But you see a lot of celebrities catching on like
my friends Shim are more um and playing cornhole, and
(22:22):
you see broadcast on ESPN. So how many people are
actually watching It's a great question. I don't know the numbers,
and you've seen corn hole as a sport actually do
quite well and even attracting sponsorships. Um. I think also
it's it's the beneficiary of the fact that there are
(22:43):
so many networks out there now who need to fill
twenty four hours a day unless they're just regurgitating content,
and so by having something unique like that, you you're
able to place it now. Again, I don't know what
the terms are of the deal between whomever it is
(23:04):
that is the event sponsor of cornhole and ESPN, but
obviously it's being broadcast and obviously there's some money being
made from sponsorships and advertising. Whether that's sustainable based on
the number of people who are watching, I have no clue. Ultimately,
pickle ball is going to try to do the same thing,
but do it better. Darren, one last question for you
(23:26):
before we let you go, because I know you're extremely busy.
Are there any other predictions that you have for for
the sports world? Well, I I touched on one other
one that I think you brought up briefly before, which
is UM consolidation, UM and and M and A. In
the sports gambling space, we've seen in that area a
(23:51):
big Supreme Court decision within the past decade strike down
a prohibition that did not allow anyone to enter outside
of navare UH for full fled sports betting. And what
we've seen since then is state by state going through
their processes as to determine whether or not sports gambling
should be allowed. In my own state of Florida, we
(24:12):
actually had sports betting for like two weeks before there
was a legal challenge, and now there's no legal sports betting.
And from my position, what I've seen, particularly because we're
blessed with a lot of data from companies that are
publicly traded, is that while there's so much interest in
(24:34):
sports betting and a lot of revenue, the profits aren't
there yet. There's just there hemorrhaging money in the promotions
that they provide to onboard new users, and then the
advertising that they spend to attract new users. And to
compete against others. There's just so many different platforms that
(24:54):
are competing for the same people, and there's not a
lot of innovation when you're talking about adding on one
side or the other. So what I think is going
to have to happen for many of these platforms to
survive and perhaps flourish, is that they're going to have
to combine forces and make it so that they're they're
(25:15):
bettering their margins and not needing to spend so much
money to compete against those that are trying to attract
the same eyeballs in the same dollars. Do you think
we'll ever see the day where a collegiate player denies
going to the NFL and says he doesn't want to
take a pay cut. Absolutely, I do. I I don't
(25:37):
think that we're going to necessarily see it. For the
individuals who received first round grades, I think going pro,
getting those guaranteed dollars for multiple years and still having
the capacity to earn money off the field is advantageous,
(25:59):
better than taking the risk of playing in college getting
that nil doll money, but perhaps also risking injury and
losing out on a lot of guaranteed money. Ultimately, I
think anyone and you can speak to this better than
I can, Rashod, but these players their goal remains playing
at the highest level and and accomplishing at that level.
(26:22):
So I think when you're talking about maybe somebody who's
projected to go anywhere between the third and sixth round
of the NFL draft, who has a lot of money
on the table to stay at college and perhaps enhance
his draft grade, absolutely, I think that we're already seeing
it where a player will decide not to go pro.
(26:43):
Whereas years passed without an i L, that player may
have taken a chance and left early. UM, and we've
heard of terrible situations, unfortunately, where that players should have
stayed but either got bad advice or just decided it
was in his best interest to leave. UM, we're probably
gonna see a lot less that now, which is a
good thing. So thank you so much for taking the
(27:03):
time to come on here and break things down for us.
Because Shad and I are not lawyers. We this is
all new to us, and the wild wild west of
the n i L is so fascinating, and you have
so many people that are interested and don't know a
lot about it. So I appreciate you taking the time,
I appreciate you having me back and uh and thanks
to the shoutouts Rashad for engaging with me on Twitter
(27:25):
after the last episode, so hopefully we keep that banter going.
Thank you, guys for listening to Sports Illustrated I Heart
Radios the Bag. For more podcasts from my heart Radio,
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