Accountability for Problems in College Sports: Michael Granof, a professor of Accounting at the University of Texas suggests that the theories behind Sarbanes-Oxley should be used to hold university presidents responsible for the athletic scandals occurring in their schools.

The key to the law is accountability. Directors and senior executives must be answerable for what goes on in their organizations. The usual defense of being oblivious is no longer acceptable: senior executives must not only certify to the accuracy of their firm's financial statements, but they must also show that a system is in place to track and control costs.



Big-time athletic programs are often the most visible and high-risk activities of a university. Whether the president of a scandal-ridden college actually knows about any charges of rule violations is beside the point. He should know. Basketball and football programs, after all, are more likely to embarrass a university than its art history department.

I am not sure if this is the answer, but Granof is absolutely correct: there must be greater accountability for scandals that rock college sports. Too many times, athletic directors and coaches are given a free pass, so long as they continue to win. Sarbanes-type regulations may be an over-reaction, but they may be exactly what is needed to ensure the integrity of college athletics.

Catching Up: Let me tell you, there is nothing more depressing than returning from a week in Texas (sunny, 70s) to cold, rainy Boston (highs in the 40s). After a week off, I will be catching up and posting interesting stories throughout the day. The most exciting news from the break may be the Second Circuit appeals court agreeing to hear the appeal in the Clarett case five days before the NFL draft. More on this and other stories throughout the day.

More on Legal Liability and On-Field Actions: A number of people have weighed in now on the issue of legal liability for actions that occur during a sports contest. Most of the arguments center on the fact that the actions are not part of a "civilized society" and would be prosecuted if they did not occur in a professional sports setting. But what is being missed is that these professional athletes assume much of the risk of their particular sports, often including violent acts that are outside the realm of normally-accepted behavior.



The Uncivil Litigator, one of those outraged, writes:

When I play touch football or hoops at the local basketball court with my friends, do all of us have license to assault, maim and injure one another intentionally because of the "sports exception"? I doubt it. If I decided to charge someone during a softball game and knocked their teeth out, do you think the police would refuse to arrest me? I doubt it. Why, then, should professional athletes get away with these actions? Because they're rich?

The answer to this question is that for the professional athletes, it is part of the game. The assumption of risk doctrine states that a participant in an activity in which there is contact or a chance of injury assumes the risks normally associated with that activity. Now, in little league and recreational sports, fighting is not normally associated with the activity. In fact, fighting is strictly prohibited and in many cases results in banishment from the league. Thus, someone injured in a fight could most likely bring suit, claiming that he did not assume the risk of being hurt in that manner.



However, in professional hockey, fighting is considered part of the game. Teams have enforcers, referees allow players to brawl for a minute or so before interfering and fighting in most cases is met with only a minor penalty (the same as tripping). In very few cases will a fight result in a player's ejection from a game, and in even fewer instances will it result in a suspension. This means that the league sanctions the practice, and in some cases, even encourages it (as it puts people in the seats). Thus, when professional hockey players skate onto the ice, they assume the risk of certain injuries associated with fighting, hard checks and other similar conduct.



OK, but even if you buy this, Bertuzzi's hit was clearly outside the bounds of normalcy, even for hockey, right? The Sports Litigation Alert, Vol 1, issue 3 states:

"Although hockey players might be said to assume the risk of violent contact, there may be a difference between the violent contact that is ordinarily expected in the sport, and what might be considered a premeditated assault with the intent to cause serious injury," said Richard T. Boyette, First Vice President of the Defense Research Institute. . . Attorney Carla Varriale of Ohrenstein & Brown in New York City added that while professional athletes do assume the ordinary risks of the game, they "don't assume the risk of intentional conduct that is designed to injure."

But how outside the norms of hockey is it, even if there is intent to injure? Hockey players routinely hit one another in a manner that can only be seen as intending to injure, even if only to cause temporary pain. Even in the Bertuzzi case, the punishment the NHL handed out, while severe, was not what one might expect from an incident so outside the bounds of normalcy. And let us all be honest with ourselves. If the punch had just resulted in a broken nose, would anyone even be discussing this hit? In a game earlier this week, Dallas goaltender Marty Turco hit Edmonton player Ryan Smith in the face with his stick. This was not a poke, either -- it was a swinging motion that looked directly aimed at Smith's face. Turco's suspension for this "assault with a deadly weapon" -- 4 games. When hockey players go onto the ice, they assume the risk of many violent acts because they are part of the game. The NHL has all but said so through the meager punishments it hands down for those few hits that actually do cause injury.



The outrage is understandable, especially when a tragedy occurs. But the blame, and the liability, should not rest with the players. The league, in permitting this violence to occur, has created an environment where players assume the risk of being involved in a fight, violent check or retaliatory strike that would be deemed criminal or tortious in any other environment. If legal liability is to occur, the activity must first be shown to be outside what is expected, and in some cases even anticipated, in the sport.



Update: In the comments section, the Uncivil Litigator correctly points out that the assumption of risk doctrine applies only in tort law, and not for criminal prosecutions. My argument is not premised on actually applying the assumption of risk doctrine, but rather that the doctrine helps determine what should be criminalized and what should not be on the field of play. Tackles in football are not assault because they are "part of the game." Assumption of risk helps determine what is "part of the game" and what is not.

Tax Law and Sports: This is an area of the law I do not cover much, despite the fact I am currently learning a great deal on the subject. But a good friend sends this along from her tax textbook:

Allocation issues have been particularly contentious when a professional sports franchise is purchased. For example, in Laird v. United States, 556 F.2d 1224 (5th Cir. 1977), cert. denied, 434 U.S. 1014 (1978), the Atlanta Falcons professional football team was acquired for about $7,750,000. The purchaser allocated $50,000 of the cost to the National Football League franchise and $7,700,000 to the players' contracts. Under IRS rulings, the franchise was treated as a nonwasting asset, but the players' contracts were wasting assets with an estimated useful life of 5.25 years. The court held that $3,500,000 should be allocated to the players' contracts and $4,250,000 to the franchise. See also Section 1056(d), which now establishes a presumption that no more than 50% of the price of a sports franchise is allocable to players' contracts.

Why is this important? Well, it is pretty complicated and has to do with Section 197 of the Tax Code. Eric A. Thornton of Williamette Management Associates explains it best:

Section 197 provides that the franchise agreement intangible asset acquired in the purchase of a professional sports team is not amortizable for income tax purposes.



However, other intangible assets acquired with the purchase of a sports team (but not components of the national franchise agreement) may be amortizable for income tax purposes. These acquired intangible assets may be amortized if the intangibles (1) have an identifiable value separate from any acquired goodwill, going-concern value, and the franchise agreement intangible asset and (2) have a determinable remaining useful life ("RUL").

Thus, the value of the franchise itself is not amortizable (meaning it cannot be depreciated over time for the tax benefit), but other intangible assets, such as player salaries, television rights and sponsorship agreements, can be amortized. Of these, the most valuable by far are the player salaries. As a result of this rule, purchasers of sports franchises have an incentive to allocate as much of the cost as possible to other intangible assets and not to the value of the franchise itself. The IRS knows this as well and closely scrutinizes acquisitionsions of professional sports teams.



Perhaps the most fascinating part of the textbook excerpt is that the Falcons were sold in 1975 for $7.5 million. Adjusting for inflation, this is $26 million in 2002 currency. Coincidentally, that is the year Arthur Blank bought the team for $545 million.



See, even tax law can be interesting when it deals with sports.

Big Verdict For Former High School Athlete: A jury awarded a former female high school basketball player $1.5 million in punitive damages, after finding that her former coach caused her to develop an eating disorder. The plaintiff claimed that the coach's verbal abuse and requests that she lose ten pounds caused her to contract the disorder, which she fights to this day. The school district, which is liable for the damages, has not decision whether to appeal.

More on Colorado Scandal: A new allegation of rape and a question: Did the first accuser have revenge on her mind? Should that even matter?

Why Sports Matters in Law: ESPN reports that Kobe Bryant's accuser has asked the judge to set a trial date as quickly as possible if the state's case against the basketball star. Her mother, in a letter to the judge, describes the horror her daughter has gone through, receiving death threats, being hounded by the media and having to move to four different states.



Obviously, all of this attention stems from Bryant's status as a basketball star and this provides a clear example of how sports can impact the law (and not vice versa). More Americans have learned about the criminal justice system through this case than in any proceeding since the OJ trial. In addition, new terms such as "rape shield law" have entered the discourse of sports fans and ESPN commentators. In a way, this is good, because the public is learning of the plight of rape victims, and the potential dangers to those accused of rape. However, even with rape shield laws, the public and the media have managed to ascertain the identity of the accuser, making her life a living hell. Could this prevent other victims of rape at the hands of sports stars from coming forward? Absolutely. Call it the "rape sports law" but this case could really make true victims hesitant to voice complaints. And in the long run, this is clearly bad for the interaction of sports and the law.