Adjunct Professor Foley December 9, 1997


Greetings beloved students. I'll keep this short, but please read these instructions and the exam questions, carefully.

The exam consists of one Essay Question and three Short Answer Question. There is also a 5 point extra-credit question for your enjoyment.

Feel free to refer to your casebook and statutory materials, as well as any notes you took in class or in preparation for this exam. The essay fact pattern, alone, contains sufficient information for you to respond to the essay question. lf you feel it is necessary to assume any additional facts to respond, please identify all such assumed facts.

Question #1 is valued at 85%.

Question #2 is valued at 15%.

Write your responses in the bluebooks provided. Don't forget to write your exam number on each bluebook. You may write as much as you wish on the essay question but you will receive no credit for mere verbosity. Your essay response will be evaluated based upon:

1. Your demonstrated ability to identify and analyze disputed issues (including providing "major" case and statutory citations where appropriate); and

2. Your demonstrated knowledge of the legal processes to be used to resolve these disputes or otherwise protect the interests of the parties.


1. The Facts

The League Great American Soccer, Inc. ("GAS") is the only "major" soccer league in the United States. GAS was founded by a small group of investors in January 1990 and quickly sold the exclusive rights to 10 GAS soccer Clubs to individual owners in 10 strategically chosen U.S. cities. Prices ranged from $2 million to $4 million per Club. GAS used part of this money to sign one year contracts with 200 soccer players from around the world. With the agreement of all Clubs, and in accordance with the terms of GAS's Uniform Player Contract, GAS then allotted 20 players to each Club. Under the GAS Constitution, once a Player is allotted to a Club, that Club becomes responsible for that Player's contracted-for salary. GAS opened its first season in April 1991, playing a 50 game schedule plus playoffs. After every season GAS would negotiate 200 Player contracts and allot those contracts to GAS Clubs.

GAS has numerous profitable private licensing agreements with a number of sports apparel manufacturers. Clubs can and do enter into their own licensing agreements but can not have an agreement with any business competitors of GAS's licensees. GAS and the Clubs each keep. 100% of their respective licensing revenue.

GAS has a national television contract but no radio deal (Nobody listens to soccer!). 50% of all national TV revenue goes directly to GAS. The remaining 50% is divided unevenly between the League's Clubs, based upon the Club's initial purchase price (The more an owner paid for a Club the higher that owner's share of national TV revenue). Each Club has a local TV contract, the revenues from which are the sole property of each Club. 50 % of all ticket revenues go directly to GAS. The remaining 50% is divided evenly among all the Clubs. In addition, each Club gets to keep all the revenue it receives from leasing luxury suites.

In each year that GAS has been in operation there have been significant differences in gross revenue and profits among the 10 GAS Clubs. Although still a "small time" economic force in the world of sports, marketing surveys indicate that GAS has each year attracted increasing numbers of fans away from more established U.S. sports like pro baseball and football. Many fans like GAS because they feel they can "identify better" with the average GAS Player.

The Agreement

In 1993 the "Great American Soccer Players Association" ("Players Association"), became the authorized bargaining representative of GAS players and entered into a collective bargaining agreement with GAS. As a fledgling union in a fledgling League, the Players didn't have much bargaining power. The Agreement adopted GASs Playerallotment system "as-is" and the Players considered themselves lucky to include a minimum salary of $25,000 per season and a provision that Players could "individually negotiate" the compensation to be received under their Uniform Player Contracts. This Agreement expired on October 1, 1995.

During the 1997 season the highest paid Player in GAS was JoJo Striker, receiving a salary of $300,000. In addition, in 1997 the 20 highest paid GAS Players (that's 10% of 200 for you non- math majors!) received an average salary of $200,000 - 50% of all Player salary money. And half of all GAS Players received the GAS minimum Wary of $25,000.

The Negotiations Since October 1, 1995, negotiating committees for GAS and the Players Association have held monthly meetings at which they have attempted to agree upon a new collective bargaining agreement. No agreement has been reached, however, primarily because GAS negotiators have insisted that any new agreement contain a Salary Scale provision - where a Player's Salary would be determined solely by the position he played and the number of years of GAS experience, For example under GAS's most recent proposal a Player who was a "starting" Goalie and had 3 years GAS experience would be paid $100,000. The GAS Salary Scale also provided for a maximum salary of $150,000 per season. GAS's negotiator told the Players Association a Salary Scale is a good idea because, "Over the long run the high salaries GAS pays to star Players will raise everybody's salary so much that we'd eventually lose our shirts - just like those fool Baseball owners!"

For 1 year Players Association negotiators unqualifiedly rejected any type of Salary Scale but they had other issues to work out with GAS. The Players played the 1996 season while they negotiated. As of October 1, 1996, "Player Compensation" was the only issue left to resolve but no progress was made over the next year. On October 1, 1997 the Players Association elected a new 3-Player negotiating committee. During the 1997 season all of these Players had been paid the League minimum salary.

Last month, the Players negotiating committee told GAS that they were "skeptical" of a Salary Scale but would have their economic consultant "evaluate" GASs proposal if the Players could also see what GAS's revenue numbers were - especially the value of its private licensing deals. The Players negotiators also told GAS that their priority was to get a substantial increase in the GAS minimum salary.

GAS negotiators said they "had waited long enough for a deal" and told the Players that no licensing information would be disclosed and that all 1998 contracts would Mow GAS's proposed Salary Scale plus be subject to a "new idea" for an aggregate GAS Salary Cap of $8 million. The GAS negotiators added: "By the way tell your Players that the 1998 season is going to start a month earlier because we're adding two expansion teams and increasing the schedule by 5 games per Club".

II. Your Task

It is January 1, 1998. Current GAS Players Association Executive Director and former GAS Player, Hans Foote, calls you at home wondering if there is "anything we can do legally to fight all this?"

A Player strike is out of the question so write a memo (with appropriate case and statutory cites) in response to Executive Director Foote advising him, in detail, of the following:

1. What legal action or actions could the Players Association take against GAS?
2. What arguments could the Players Association use in support of its legal action or actions?
3. What arguments could GAS use in its defense?
4. What would be the likely outcome of the Players Association's legal action or actions?


(answer in one or two sentences - maximum

Question 1

Assume all of the same facts of the above essay question except that the Players agree to the GAS Salary Scale. What additional legal action could arguably be asserted on behalf of GAS star player JoJo Striker?

Question 2

Assume a League has a long-term, *ongoing collective bargaining agreement which includes the right to terminate the agreement and reopen negotiations. What is the legal reason that Leagues are more likely to exercise this right than they used to be?

Question 3

Explain how the decision in Flood v. Kuhn impacted the decision of Major League Baseball Players to call a strike during their recent collective bargaining negotiations with Major League Baseball owners.


Fill in the blanks: The basic principle of antitrust law is _________________ is ______________.