Insurance Coverage For Your High-Profile Clients: Perception vs. Reality

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By Jim Convertino

Very few days go by when we don’t see a celebrity or professional athlete have a large jewelry loss, an accident with a high value automobile or possibly get sued for simply being a high- profile individual once someone recognized them after an accident or chance encounter. The cell phones come out, the video recording begins or 9-1-1 calls are released to the public.

While many of these individuals have the financial means to pay for these incidents out-of-pocket, what often goes unnoticed or discussed is whether they have the proper insurance in place to cover their losses and defense expenses.

Unfortunately, we are often approached by sports advisors or celebrity managers after a loss has not been covered properly or their clients did not have any insurance in place. The phrases “They get it now,” or “This scared him straight,” are commonly used only after something has happened to needlessly affect their client’s wealth or reputation.

Many celebrities and professional athletes have the same coverages they had when they were in high school or college or are still on their parents’ insurance policies. Advisors, in many cases, do not discuss insurance as part of their clients’ wealth management portfolios simply because they do not have confidence in any insurance broker to provide the same level of service they expect and deserve. Realistically, if your client is involved in a lawsuit and does not have adequate liability coverage, there could be little money left to manage.

For example, we often see many celebrities and professional athletes (as well as team owners and coaches) include family members on their insurance coverages by purchasing homes and/or automobiles for them as a matter of convenience. This creates significant additional liability exposures even though they and their advisors may not recognize it. Liability firewalls can be created by a knowledgeable insurance broker who specializes and understands the needs of these high profile individuals. Additionally, if your clients are involved in any commercial endeavors, including any businesses, charities, camps or foundations, specialty insurance coverage is needed to protect their unique exposures that are very different from their personal insurance coverages.

Having the proper insurance broker who knows how to insure celebrities and professional athletes makes a huge difference in how claims are handled. Many financial advisors, attorneys, accountants and sports agents still see insurance as a commodity and something they grudgingly know is needed, but don’t see the difference between on-line insurance companies and using an expert in this area.

The primary goal of a celebrity insurance broker is to educate your clients and simplify their entire personal and/or commercial insurance programs. Your clients’ insurance coverages can be quite complex. This eliminates any surprises in coverage issues during a claim and protects your clients and you.

It is important for an insurance broker to be an asset rather than simply an added service. This ensures your clients have the proper insurance program in place as part of their wealth management portfolio, saves you time in dealing with insurance issues and distinguishes you from your competitors.

A knowledgeable celebrity insurance broker is part of your clients’ wealth management team, understands the liability exposures your clients face every day and appreciates they are representing you to your clients as an extension of your service model.

“Clicking for coverage” with carriers that specialize in comedic commercials versus properly protecting high profile individuals is a short cut solution. This is when you see the difference in service. Are they or you calling an 800 number or service center with a claim or is that urgent call made directly to the insurance broker at any time, including evenings or weekends?

Our insurance industry has trivialized the value we offer to our partners and clients, which has done a great disservice to the financial protection we provide. It’s imperative all advisors see insurance as an integral part of any wealth management portfolio and offer it as part of a comprehensive financial plan to protect these unique clients and their significant exposures.

Jim Convertino is the Director of McGowan PAE, specializing in Professional Athletes and Entertainers Insurance Solutions. His email address is jconvertino@mcgowanpae.com

St. John’s University Sports Law Professor Robert J. Romano Receives Best Paper Award

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Robert J. Romano, JD, LLM, Assistant Professor of Sport Management at St. John’s University, was recognized this summer for having the “Best Paper” by the participants to the 14th Annual GBRS Conference in Valencia, Spain and selected for publication in a future issue of The Review of Business Journal published by the Peter J. Tobin College of Business.

An abstract of the paper entitled “The Value of a Division I Men’s Basketball Player: Is the Student-Athlete Scholarship Fair Value for Athletic Participation at the Highest Level?” follows: “On April 22, 2010, the National Collegiate Athletic Association (NCAA) reached a fourteen-year agreement, worth $10.8 billion (approximately $770 million annually), with CBS and Turner Broadcasting System wherein the two media companies received joint broadcasting rights to the NCAA Division I Men’s Basketball Tournament known as March Madness.  In April of 2016, the NCAA and CBS/Turner extended their agreement for an additional eight years, through 2032, while increasing the payment from CBS/Turner to the NCAA by an additional $8.8 billion, averaging now more than one billion dollars per year. While the NCAA collects its annual billion-dollar broadcasting rights fee, its member institutions, approximately 1,115 colleges and universities located throughout the United States, separately and individually award nearly $2.55 billion in Division I athletic scholarships.  Of the 1,115 member institutions, 351 support a Division I men’s basketball program.  These programs grant over $174.5 million in annual scholarships, with the typical Division I men’s basketball player receiving, on average, a scholarship valued at approximately $38,250.00 per year. Since the NCAA receives roughly one billion dollars per year from CBS/Turner solely for the broadcasting rights to March Madness, (this dollar figure does not include ticketing, merchandising and branding, sponsorship, and other revenue generators associated with the event), how much and through which means does it distribute said monies to its member institutions?  Should the NCAA be responsible for the cost of a Division I men’s basketball scholarship and relieve its member institutions from the financial burden?  Are the approximately 4,500 young men who receive Division I men’s basketball scholarships receiving a fair value for their skills to participate at the highest level of college sports?  If not, what would be a fair value for the student-athlete?”

A modified version of the full article will appear in Sports Litigation Alert next month.

Dallas Sidekicks Have New Legal Counsel

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The Dallas Sidekicks have promoted Alex S. to Legal Counsel and Manager of Marketing. She has been with the organization for eight months and has been handling all matters legal, marketing, and public relations, among other areas.  Alex is a graduate of Texas A&M University School of Law class of 2014 and graduated, with honors, from Texas A&M University in 2011 with a B.B.A. in Marketing. Her background includes working on behalf of the FC Dallas Foundation to lobby the Texas legislature, and working for BYA Sports Group in NFL and NBA player agency, which afforded her the opportunity to negotiate with the NFLPA.

“This opportunity is such a blessing and is a culmination of hard work and dedication over many years,” she said. When I was in law school, I concentrated my studies in sports law and alternative dispute resolution with the goal of being hired by a sports franchise and eventually becoming the General Counsel. This promotion takes me one step closer to realizing that goal and I couldn’t have done it without my mentors, my parents, and above all God. The world of sports is a difficult industry to break into especially in the area of law, so I want to thank the Dallas Sidekicks for realizing my potential and rewarding my hard work.”

Sports Lawyer Jeremy Evans To Give Presentation About eSports Dealmaking for CLE Companion

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Jeremy M. Evans, the founder and managing attorney at California Sports Lawyer® – a firm that represents entertainment, media, and sports clientele, will give a CLE presentation entitled Title: E Sports: The Differences between Entertainment and Sports Dealmaking for CLE Companion, a legal technology company that is changing the CLE industry by offering an affordable and easy way for attorneys to satisfy their CLE requirement.

Evans, an award-winning attorney and community leader based in Los Angeles, will present the course in live-stream fashion on July 18, 2019 at 12 noon PT. Participants can sign up at the CLE Companion. The talk will be available on-demand thereafter.

The presentation will center on the story of Turner “Tfue” Tenney, a popular eSports gamer who was represented by Faze Clan, an eSports organization and digital, social, and streaming content network.  As part of the relationship, Faze Clan would take a percentage of Tenney’s endorsement deals and winnings from tournaments on Twitch (owned by Amazon/AMZN), which does not seem much different from a sports agency model for an athlete or an entertainment agency like WME/Endeavor or CAA for entertainment, media, and sports talent.

“The question is what rules apply to Tenney and Faze Clan?” said Evans. “Is Tenney an athlete, entertainer, or an influencer in the media space?  Is Tenney all three designations in one under the law?  The focus will be on California since the Golden State is where this author is licensed to practice law, but also because California like New York state have robust laws and regulations for the broad-based field and term of talent representation, which includes varying legislative acts for entertainment, media, and sports individuals and business firms (agencies and attorneys, etc.) in the space.”

Evans holds a Master of Laws (LL.M) in Entertainment, Media, and Sports Law from Pepperdine University School of Law, a Juris Doctor (J.D.) from Thomas Jefferson School of Law, a Bachelor of Arts (B.A.) in Political Science with an emphasis in American Politics from the University of California, Los Angeles (UCLA), and is currently a Master of Business Administration (M.B.A.) candidate at the Pepperdine Graziadio Business School. His client’s range from Fortune 500 companies to athletes, entertainers, models, television and film producers, studios, entertainment, media, and sports businesses in contractual, intellectual property, formation, distribution, negotiation, and dealmaking matters.

Prior to opening California Sports Lawyer®, Evans worked as a Graduate Law Clerk at the Superior Court of California, advising judicial officers in civil and criminal law and motion matters. Prior to law school, he worked in accounting and finance for the number one business-only litigation firm in the world, Quinn Emanuel Uquhart & Sullivan LLP, in Los Angeles. He has also worked as a legislative aide and field representative in the California State Legislature and continues to work on local and national campaigns.

Kristin Davidson, the founder and Executive Director of CLE Companion, said Evans is a recognized leader in the sports law field, whose cutting-edge perspectives are widely respected.

“To have Jeremy come in and speak on an emerging topic like this is quite a coup for CLE Companion,” said Davidson. “He has much to offer, especially to those attorneys considering expanding into the eSports arena.”

CLE Companion’s mission is to start every day with a simple mission statement: “To be the easiest, most cost-effective and complete resource to complete your MCLE online.” With a multitude of offerings in both Live Stream and On Demand formats, CLE Companion’s intent is to “set the bar for Continuing Legal Education in all areas of practice.”

Goldberg Segalla Sports Lawyer Named to Federal Mediator Panel for the Western District of New York

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Joseph M. Hanna, a partner in Goldberg Segalla’s Buffalo office, has been named to the Mediator Panel for the U.S. District Court for the Western District of New York (WDNY). Chief Judge Frank P. Geraci, Jr. announced the new mediators for the WDNY on Wednesday, June 19.

This marks the first expansion of the court’s Mediator Panel since 2012. “A hallmark of mediation is its capacity to go beyond traditional settlement discussions and explore creative outcomes responsive to the participants’ needs and interests,” according to the WDNY website. Beyond their exceptional ethics and abilities, and the extensive training they must undergo, mediators must also demonstrate a commitment to creative and effective solutions that equitably serve the interests of all participants.

Hanna is chair of Goldberg Segalla’s nationwide Sports and Entertainment and Retail and Hospitality practices, and has extensive experience representing both individuals and major corporations and franchises in mediation over a wide range of issues. He is also a member of the International Institute for Conflict Prevention and Resolution’s Panels of Distinguished Neutrals, a group of global leaders in providing and promoting alternative dispute resolution.

“Creativity, cost-efficiency, and focus on solutions are core values at Goldberg Segalla, and have been central to my practice as an attorney,” Hanna said. “I am incredibly honored to join this distinguished group of lawyers and judges in serving the WDNY as a mediator.”

10 Years and Running – Sports Litigation Alert Is Being Used More Than Ever in Sports Law Classroom

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With the fall semester, Sports Litigation Alert celebrates its tenth year of being a staple in the Sports Law classroom, where professors and instructors use it as a replacement for expensive textbooks, or at least a supplement for the textbook, which is frequently dated by the time it is published.

For background purposes, the Alert publishes every two weeks and includes 5 to 6 case summaries and 7 to 10 articles. Subscribers have access to approximately 2,500 case summaries and articles, more than 2,000 on which are original articles. Here is a sample.

For professors and or their universities, we offer a few different subscription programs.

First, we offer a library subscription in which the Alert is made available to everyone on the network, which is $450 a year.

Second, we offer an academic subscription, which is $195, and is available here.

Third, we offer a complimentary subscription, where professors receive a free subscription when they require students to subscribe at a greatly reduced $15 a semester rate.

Over the years, we have launched a couple initiatives to make the Alert more usable with students. First, we provide questions and answers per case summary to ensure students are reading the material. Second, some professors prefer an SLA light edition for their undergraduate classes, where we take only the top two summaries and articles and create an edition for students that is less daunting.

In addition, professors that subscribe receive a couple things:

First, they receive ten subject matter compendiums at the beginning of the semester, in which we pull articles from the past six months of Alerts about a particular area, like Title IX or Antitrust. Professors find that these compendiums, which can be distributed to students, serve to update the text they are using with the most current developments.

Second, professors also have the option of being included in the Expert Witness Directory, which is the number one entry in google when someone searches sports law expert.

If you want some inspiration on how to use the Alert, check out the following article about how professors use the Alert.

In sum, the Alert is tailor-made for the sports law classroom, which is why we are completing a decade of service to the industry, and excited about the next one.

Drake Group Says the NCAA Changing Transfer Waiver Provisions Is Not Fair to the College Athlete

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(Editor’s Note: The following is shared by the Drake Group, an advocacy group for reform of the NCAA)

Last week the NCAA Division I Council approved new, more stringent criteria to determine whether athletes in five sports (football, men’s and women’s basketball, ice hockey and baseball) can transfer with eligibility waivers to compete immediately upon arriving at their new schools. To be clear, The Drake Group (TDG) has long advocated for relaxing transfer restrictions and giving college athletes essentially the same rights as the general student body possesses. The Drake Group has supported recent changes such as prohibiting coaches and administrators from restricting athletes from transferring and/or going to certain institutions. Until last week, transfers in the aforementioned five sports had reasonable waiver opportunities to obtain immediate eligibility.

While the earlier decision to loosen transfer restrictions was a somewhat positive development, it has now been gutted by new language where a waiver request must now have, “documented extenuating, extraordinary and mitigating circumstances outside of the athlete’s control that directly impacts the health, safety or well-being of the student-athlete” to be approved. What has been added is the terms “extenuating” and “extraordinary”. In essence, this is a tacit way to restrict transfer freedom, most especially in the revenue generating sports of football and men’s basketball. The Drake Group first called for a one-time transfer exemption for all college athletes in 2014, and more recently called for elimination of all restrictions on transfers whatsoever [1].  This is the only fair solution.

The NCAA D1 Council approved this new reactionary measure as a way to pacify powerful coaches who have loudly complained about a perception of too many of these waivers being approved, reflecting their fear of losing control of rosters leading to the dreaded so-called imbalance of competitive equity. The larger question is why do some sports have an existing one-time transfer exemption and others like football and basketball do not? It is simply about control of the athlete. In other words, the NCAA wants to limit freedoms for football and men’s basketball players because it can hurt their business models.

This is patently unfair and treats the college athlete as an employee and a commodity, not a student who has control over his or her own body and education. Changing transfer procedures in all sports to mirror treatment of non-athlete students is the best thing that the NCAA can do lest it find itself again in legal and legislative trouble by failing to properly designate college athletes as students and not employees, which current transfer restrictions does. TDG rejects any misplaced concern about multiple transfers and/or roster management. If college athletes are indeed students, they should be allowed same rights. Multiple transfers are typically checked by academic eligibility and any claims of a “wild west” of player movement is simply fear mongering and hyperbole.

National governance associations, institutions of higher education and athletic departments routinely impose restrictions on college athletes that are not imposed on non-athlete students.  These restrictions are not limited to transfer rules.  These restrictions (along with an absence of protective rules) serve the interest of the institution and its athletic program rather than the interest and protection of the college athlete.  The Drake Group believes that the NCAA must promulgate a clear, educationally sound statement of the rights of college athletes including greater freedom of movement [2].

[1] See D. Lopiano, G. Gurney, M. Willingham, B. Porto, D. B. Ridpath, A. Sack, A. & Zimbalist, A.. The Drake Group Position Statement: Rights of College Athletes. (revised August 14, 2018). Retrieve at: https://drakegroupblog.files.wordpress.com/2018/08/tdg-athletes-rights-final-august142018.pdf

[2] Ibid

Nona Lee Presented with Outstanding In-House Counsel of the Year Award by Arizona Bar

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Established in 2015, the Outstanding In-House Counsel of the Year Award is presented by the Arizona State Bar Association Board of Governors to an Arizona in-house counsel that “has made outstanding contributions to the in-house counsel practice and the community at large.”

Nona Lee, Executive Vice President & Chief Legal Officer for the Arizona Diamondbacks, has been named the recipient of this year’s award. Since January 2000, Lee has served in legal roles for the Diamondbacks, Phoenix Suns, Phoenix Mercury, Arizona Rattlers, Chase Field, US Airways Center and Dodge Theater.

Along the way, she assisted in the negotiations of several significant transactions, including negotiations with FOX Sports Arizona on a 20-year extension that began in 2016, and is the largest financial transaction in franchise history.  She also assisted with negotiations for the building and use of Salt River Fields at Talking Stick, the Arizona Diamondbacks Spring Training home.

Lee has also held several leadership positions in sports, including serving as President of the Sports Lawyers Association, Founder of the Phoenix Women’s Sports Association, Member of the Trustee Emeritus Group for the Women’s Sports Foundation, Advisory Board Member for the Arizona State University Sports Law and Business Program, and Member of the Board of Advisors for the National Sports Law Institute at Marquette School of Law.   She is also a member of the commercial and sports law panels of the American Arbitration Association.

HHPR Faculty Member Josh Lens Publishes Two Sport Law Articles in Top Journals

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Josh Lens, a clinical assistant professor of recreation and sport management in the Department of Health, Human Performance and Recreation at the University of Arkansas, wrote an article recently about the ramifications of agents who represent college coaches and recruit student-athletes from the coaches’ programs.

The Jeffrey S. Moorad Sports Law Journal published the article last spring.

The article, titled “When a College Coach’s Agent Recruits the Coach’s Players: Potential Legal and NCAA Ramifications,” argues that the recruitment practice constitutes a conflict of interest when the player is a draft-eligible underclassman with remaining eligibility and should not be permitted.

Lens’s article also notes that college coaches and their agents must recognize that a coach’s involvement in an agent’s player recruiting can result in NCAA violations.

“The recent FBI investigation into corruption in men’s college basketball, while unfortunate, provides a prime example,” his abstract notes. The article offers parameters that college coaches should put in place to mitigate the likelihood of NCAA rules violations.

Another of Lens’s articles — “Application of the UAAA, RUAAA, and State Athlete-Agent Laws to Corruption in Men’s College Basketball and Revisions Necessitated by NCAA Rules Changes” — will be published this winter by the Marquette Sports Law Review. Lens presented the article at the inaugural academic paper session at the annual Sports Lawyers Association conference in May.

This article also touches on the federal investigation and subsequent criminal charges against men’s college basketball assistant coaches, individuals associated with Adidas, and athlete advisors for their involvement in two illicit schemes taking advantage of elite men’s basketball student-athletes.

The abstract notes that most states have laws prohibiting some of the defendants’ activities, but despite their application, no state authorities used them to discipline the involved individuals. Lens’s article describes the NCAA’s swift response to the federal investigation, which included radically revising some of its longstanding rules regarding agents.

However, due to these changes, several state laws no longer align with NCAA rules, the article notes. Lens suggests specific revisions to state laws, which are largely based on the Uniform Athlete Agents Act and its revised version, to align them with these new NCAA rules.

Matt Ganio, department head of Health, Human Performance and Recreation, noted, “We are excited to have Josh as part of our faculty. His scholarship in top sport law journals is evidence of his expertise and passion for sport law. Further, the classes he teaches get students excited about the operational and management aspects of sports in the context of rules and regulations.”

Lens earned his law degree from the University of Iowa College of Law and a bachelor’s degree from the University of Northern Iowa. Prior to entering academia, Lens practiced law for five years in St. Louis before spending seven years on Baylor University’s athletics compliance staff, where he oversaw the university’s agent administration program. He lives in Fayetteville with his wife, law professor Jill Lens, daughters Hannah and Gretchen, and an infant son, Brandon.

Hanley vs. Tampa Bay Sports and Entertainment LLC: Putting the Telephone Consumer Protection Act on ‘Ice’?

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(Editor’s Note: The following article appeared in full in Sports Litigation Alert. To see the full article, please subscribe to the Alert.)

By Kevin Brown, of Waller Lansden Dortch & Davis LLP

The sports world is under attack again for its text marketing tactics directed to consumers. This time the target is Tampa Bay Sports & Entertainment, LLC, the owner of the National Hockey League team, the Tampa Bay Lightning. In a federal class action lawsuit filed in March 2019 (Bryan Hanley vs. Tampa Bay Sports and Entertainment LLC, Case No. 8:19-CV-550-CEH-CPT (M.D. Fla), plaintiff Bryan Hanley alleges that the Lightning’s owner violated the Telephone Consumer Protection Act (TCPA) by sending more than a dozen marketing text messages to Mr. Hanley’s cellphone without his consent. Such TCPA class actions are nothing new to sports franchises seeking to engage their fans with omnichannel marketing. But what is relatively new is that TCPA defendants (like the Lightning’s owner) are striking back with sweeping constitutional challenges predicated on the First Amendment.

The TCPA (47 U.S.C. § 227) was enacted in 1991 to protect consumers from receiving unsolicited telemarketing messages. Its reach now includes messages sent by telephone, fax or text. In 2015, Congress exempted from this restriction messages made by government officials or private entities to collect a debt owed to or guaranteed by the United States, such as a student loan. That amendment (generally known as the Government Debt Exception), coupled with the Supreme Court’s decision in Reed v. Town of Gilbert, 135 S.Ct. 2218 (2015), has spawned a series of challenges to strike down the TCPA (in its entirety) as violating the First Amendment. Proponents of these challenges argue that the TCPA has steadily become a full-throttle restriction on speech— broadly and categorically restricting purportedly “unwanted speech” to consumers under the guise of a content-neutral regulation.

The Lightning’s owner (Tampa Bay Sports) has recently made similar arguments. On April 29, 2019, Tampa Bay Sports filed a Federal Rule 12(b)(6) motion to dismiss Hanley’s complaint on grounds that the TCPA is an unconstitutional restriction on speech. In doing so, Tampa Bay Sports argued that the TCPA unlawfully discriminates based on the content of the speech— citing the Government Debt Exception and certain healthcare-related calls (exempted by the Federal Communications Commission). In other words, according to Tampa Bay Sports, the TCPA discriminates in favor of governmental speakers and government-authorized speech over all other speech (including that of private businesses like Tampa Bay Sports). As such, Tampa Bay Sports argued that …

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