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Topical Discussion

General note: This is part of a series of topical discussions written for the public, with special attention to the sports media. Feedback from reporters are particularly welcome directly to Steve Ross at sfr10@psu.edu.

Institute Director Debates Challenge to European Soccer Contract Rules

The association representing European soccer players, FifPro, recently filed a complaint with the European Commission alleging that the FIFA rules governing signing players under contract to other clubs violates European treaty provisions relating to restraint of trade and free movement of labor.  To bolster their argument, FifPro retained one of the world’s leading sports economists, Professor Stefan Szymanski of the University of Michigan (perhaps best known as co-author of the best seller, Soccernomics).  In the following blog, Szymanski sketches the critique of the current FIFA rules.


Institute Director Stephen F. Ross comments on Szymanski’s critique here.  Ross largely agrees with the argument that FIFA rules make it unreasonably difficult for most players to terminate contracts.  However, he calls for European officials to “mend, not end” the transfer system, and indeed tighten rules so that “near dominant” clubs seeking to compete with the Champions League members can sign good players to long-term contracts and not have the players lured away by the Real Madrids and Manchester Uniteds of Europe.


Institute Issues White Paper Calling for Legalized Sports Gambling Under Successful Australian Model

The Penn State Sports Law Institute has been studying the problems of legalized gambling for the past few years, culminating in the following White Paper drafted by Professor Ross and Institute Research Fellows James Gorman III ’16 and Ryan Mentzer ’16.  The work arose out of conversations between Ross, a Senior Fellow in the University of Melbourne Sports Masters Program, and a prominent Australian sports lawyer and former Australian Football League executive, Adrian Anderson.  Comparing Australia’s regime of regulated and legalized gambling to problems in China and India where gambling is completely outlawed, Ross and Anderson then collaborated on a Sports Business Journal op-ed column advocating that the United States borrow from the regime in the Australian state of Victoria that features active cooperation between gambling regulators, law enforcement, bookmakers, and sports leagues.  (The piece can be read here)

Anderson then participated via videoconference in a program held in February 2015 including Penn State Professor Mike Ahlgren, an expert on the gambling industry from the Department of Hospitality Management, and John H. McNally III and Douglas Sherman from the Pennsylvania Gaming Board.

The White Paper is a culmination of this work.  Ross, Gorman and Mentzer build upon Anderson’s work in Australia to law out existing U.S. law that effectively precludes legalized sports gambling outside of Las Vegas, how the Australian regime would likely deter integrity-challenging episodes like the Pete Rose and Tim Donaghy scandals, and support recent efforts by NBA Commissioner Adam Silver to consider regulatory legislation.

The paper is available here .  Comments are invited to Prof Ross at sfr10@psu.edu.      

Current Research on Law and Policy Issues Related to Intercollegiate Sports

Professor Ross’ research has focused on the current issues affecting intercollegiate sports recently, resulting in a number of articles and presentations, which are collected for your convenience below. 

  • Radical Reform of Intercollegiate Athletics: Antitrust, Title IX, and Public Policy Implications, 86 Tulane L. Rev. 933 (2012), Ross proposes that universities operate with greater financial prudence by limiting men’s Division I sports to those that are financially self-sustaining, limiting women’s Division I sports to equal the scholarships for male athletes, operating other sports on a Division III basis, and cutting football costs by making the sport an “equivalency” sport where the coach can allocate 55 scholarships among the squad.
  • A Regulatory Solution to Better Promote the Educational Values and Economic Sustainability of Intercollegiate Athletics, 92 U. Ore. L. Rev. 837 (2014), Ross and Matthew J. Mitten (Director of the Sports Law Institute at Marquette) propose that antitrust law is not an appropriate way to regulate commercial issues in big-time college sports, and promotes an antitrust immunity coupled with regulation to permit socially-worthy objectives.
  • A Rapid Reaction to O’Bannon: The Need for Analytics in Applying the Sherman Act to Overly Restrictive Joint Venture Schemes,  119 Penn St. L. Rev. Penn Statim 43 (2015), Ross and Wayne S. DeSarbo, the Smeal Chair of Sports Marketing at Penn State’s business school, critique the trial court decision permitting big-time football programs to cap player compensation at $5,000/year in trust, and apply a well-regarding sports marketing analytics technique to answer the relevant antitrust question of how much college athletes can be paid without driving fans away from the distinctive nature of “college” sports.
  • The Contested Values of College Sport: How Economists and Other Social Scientists Can Help Lawyers and Policymakers, is a presentation given by Prof. Ross at a conference on the Values of College Sports at the University of Michigan in November, 2014.

Institute Director Participates in Analysis of New Controversial Rules for European Soccer Clubs

The governing board for European soccer, UEFA, has recently promulgated “Financial Fair Play” rules for clubs seeking to participate in the lucrative Champions and Europa Leagues. Most controversial are requirements that clubs’ expenses match revenues over a three-year period, and even more controversially that subsidies from wealthy owners not be included in “football revenue” for purposes of the break-even requirement.

The rules are briefly summarized and introduced by Stefan Szymanski, a leading British sports economist who now teaches at the University of Michigan: http://www.soccernomics-agency.com/?p=464.

Szymanski’s more detailed critique of the FFP rules can be found at http://www.soccernomics-agency.com/?p=389 and http://www.soccernomics-agency.com/?p=287.

Institute Director Stephen Ross offers an American legal perspective: http://www.soccernomics-agency.com/?p=466, raising questions about what problems the FFP rules solve, but offering a less critical view about the non-economic “fairness” concerns about wealthy “sugar daddies” who subsidize certain clubs.

Stephen Weatherill, a leading European sports lawyer who teaches at the University of Oxford, offers his views:http://www.soccernomics-agency.com/?p=469.

Professors Ross and Weatherill exchange further views. View the discussion

The general blog, sponsored by Professor Szymanski, offers readers an opportunity to comment.

Sports Law & Policy Institute Offers Analyses of NFL Labor Dispute

As NFL owners have locked out players, and players have gone to court to seek an injunction barring the lockout, the Institute offers two White Papers providing background on the issue. This website provides a number of resources for interested media, scholars, and members of the public. 

Penn State Institute for Sports Law, Policy, Offers Analysis of Player Recruitment Scandal

“The whole process of recruitment of talented student-athletes by agents in the shadow of NCAA rules creates many opportunities for young men to be exploited by adults seeking their own financial gain and often leads to unwise decisions on agent selection at critical points in young careers,” said Stephen Ross, law professor at Penn State and one of the paper’s authors.

“Exploiting Kids: The Scandal in Agent Recruiting of Athletically-Gifted Teens” details the conflicting pressures on O.J. Mayo, a young athlete of professional basketball promise who played collegiate basketball for one year before his NBA career. Published today on the Institute’s website, the analysis details the potential liability under state and federal law of individuals and organizations that may have exploited Mayo before and during his collegiate career. The authors suggest reforms to the NCAA Rules that would reduce exploitation of young athletes.

The analysis was co-authored with Raynell Brown, associate director of student services at Penn State Law and licensed National Basketball Players Association agent , and Penn State Law student Douglas Webster ’10.

Access the paper.

Federal Judge Issues Injunction Blocking NFL Discipline in Positive-Drug Test Case

Last year, Judge Paul Magnuson of the United States District Court in Minneapolis issued an injunction barring the NFL from disciplining five players who had tested positive for the diuretic bumetanide and who were suspended pursuant to the NFL's Policy on Anabolic Steroids and Related Substances. (The drug itself is not performance-enhancing, but has been found to mask the presence of performance-enhancing steroids). The court concluded that the balanced of equities favored the players because the NFL's own drug officials were aware that the over-the-counter supplement ingested by the players contained the banned substance, but failed to disclose this to the players, several of whom had called the NFL Hotline set up precisely for this purpose. The court further concluded that the NFL's chief lawyer, Jeffrey Pash, who decided the case as provided for in the labor agreement with the players' union, showed bias in adhering to a policy of strict liability for all positive drug tests. 

This decision has far-reaching legal and policy implications. 
Read the background paper.
Read Judge Magnuson's opinion.
Read the follow-up opinion of Professor Abrams.

Empirical Research on Racial Bias in NBA Referree's Calls Sparks Debate


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