. . . Off Court, It’s a Marketing Era : Players Often Pitted Against Own Teams in a New Game

In Portland, Darnell Valentine signs to do commercials for a local Ford dealer. The Trail Blazers, claiming to have a better idea, already have a radio contract with Chevrolet as a sponsor. Team management is so angry, it takes Valentine to arbitration.

In Indianapolis, for the first time in NBA history, a player is a holdout because neither Wayman Tisdale nor the Indiana Pacers can agree on who gets his marketing rights.

In New York, the head of the NBA players’ union predicts a major battle if the league does not back off its player-marketing stance. The lawyer for the league maintains that there’s nothing wrong with that stance.

Welcome to what may very well become the issue of the ‘80s, brought to you by the league that bills itself as the game of the ‘80s.

Already, skirmishes have broken out all over, a full two years before the collective bargaining agreement is due to expire, as the NBA and the NBA Players Assn. hunker down in their foxholes lined with bank notes.

They are poised for what may be one of the last battles remaining in professional sports--where the fight is not over hearts and minds, but over dollars. At stake: the right to control the marketing of players and teams.

The problem can be traced to Paragraph 18 of the standard NBA contract. Paragraph 18 prohibits players from commercial endorsements without written approval from their teams, which cannot withhold that approval without reasonable grounds.

NBA teams, however, are becoming more aggressive in their marketing techniques and are exercising their rights and denying approval to players’ commercial ventures under Paragraph 18.

“There will be an ever-growing body of problems in that area,” predicted Larry Fleisher, general counsel for the players’ union. “That will create a major battle.”

Charles Grantham, executive director of the union, believes that the NBA and its teams are claiming rights they do not have.

“What the individual teams are saying is that there are certain sponsors that are in line with them on certain products,” Grantham said. “If a player goes out and makes a deal with one of the other companies, they are saying the player doesn’t have that right. We are saying the player definitely has that right.”

Some agents, like Tom Collins, often negotiate player contracts that eliminate Paragraph 18 altogether, which is how Collins finally settled Tisdale’s contract with Indiana. But in most player contracts, Paragraph 18 is not deleted. It has been largely ignored by the players, however, and now the teams are waking up to it. The Valentine case is a good example.

Jon Spoelstra, vice president of marketing for the Trail Blazers, said that no Portland player has ever requested approval from the club before accepting an endorsement deal, but he was stunned when he saw Valentine appearing on television commercials for a Ford dealership. Since Chevrolet was already a corporate sponsor on radio, Valentine had put himself in direct commercial competition with the team, said Spoelstra, who fell back on Paragraph 18.

“The language is pretty simple, but the question is what are reasonable grounds to withhold approval,” Spoelstra said.

Apparently, the Trail Blazers considered money to be a reasonable ground. They are only 1 of 18 NBA teams who handle their own radio and television rights, instead of selling them. Since the Trail Blazers have corporate commercial sponsors on their broadcasts, they want to protect those sponsors.

“We could be in competition with our own players for media dollars,” Spoelstra said.

Until the Valentine case is settled, the Trail Blazers have declared a moratorium on player appearances in team promotions. Four individual and four team appearances are required in the basic player agreement. In return for the moratorium, Portland players are not supposed to enter into any endorsements. But Spoelstra said that Mychal Thompson closed a deal with Jeep last week.

“We’re going to be very bullish on this issue,” Spoelstra said.

That is also how the Pacers felt when negotiating Tisdale’s rookie contract. Ted Steinberg, who works with Collins and other agents, is Tisdale’s lawyer. Steinberg said that a proposed deal fell apart over the marketing issue.

The Pacers would have split with Tisdale whatever the club earned in local marketing above $150,000, an extremely high figure that would probably not be reached, but the deal would still allow Tisdale to seek national corporate spots. In return, the Pacers could use Tisdale in a certain number of personal appearances and promotions.

Steinberg said that when he asked how many times Tisdale would be used and in what context, the Pacers claimed the right to use him however they wished, even if it interfered with national endorsements. Tisdale’s national commercial endorsement with Ford would be compromised, Steinberg said, because Chevrolet was a Pacer sponsor.

Tisdale was ready to show up at the Pacer training camp, but when the issue could not be resolved, he went home instead, thereby becoming the NBA’s first marketing-rights holdout. He finally came to terms when the Pacers agreed to strike Paragraph 18.

Collins said that the Tisdale case may be only the tip of the iceberg in the battle for marketing rights.

“It used to be you’d just negotiate basketball contracts and argue whether a guy can or can’t play,” Collins said. “Now, Wayman is out of camp for almost two weeks over a marketing issue. It’s all changing.”

Steinberg believes that the players must stand firm.

“Marketing rights are historically reserved by the top players,” he said. “Many clubs want to usurp this time-honored right and market the players’ name and likeness. What has happened in the various sports is that teams are trying to restrict rights that are undefined.”

Grantham said that although the union does not oppose appearances to promote a team, he fears a trend toward using the players in a commercial role that would be similar to endorsing a product.

In that instance, Grantham said, illustrating his point, a sponsor buys into a team and then expects players to make appearances on his behalf.

“That is not the spirit of what we agreed to,” Grantham said. “We agreed to a spirit that to promote, say, Laker basketball and Laker games, players would do appearances to enhance or create ticket sales.

“That’s totally different than going and signing autographs at a local automobile dealership or whatever, signing on behalf of the sponsor who is sponsoring games, but also helping sell his automobiles. That’s not really the intent of what we agreed to.”

Even though Grantham used the Lakers as an example, they need no help selling tickets. Nor have they had any problems getting players to do public appearances, according to Lon Rosen, promotions director. Laker players are usually sent to make charitable appearances and never to team sponsors, he said.

If a Laker player is requested to make an appearance and sign autographs at a noncharity event, the player is paid a minimum of $500, Rosen said. Someone like Magic Johnson commands a higher fee, from $2,000, Rosen said.

Laker attorney Jerry Fine said he has no knowledge of the personal appearance issue ever being in conflict between Laker players and the team.

“The interests of the club and the players are pretty parallel there, it seems to me,” Fine said.

Fine’s opinion is shared by Gary B. Bettman, general counsel for the NBA. Bettman conceded that the player marketing issue, as it relates to public appearances, is sure to become part of the bargaining when the league negotiates a new contract with the union after the 1986-87 season.

“That will be an issue for debate, but we feel that we’re dealing with appropriate activities,” he said. “Let’s say John X is a commercial sponsor for a team and he buys television time. A player makes a public appearance for that sponsor, but he isn’t endorsing that product. He’s just helping the team. I see nothing wrong with that. But then again, maybe I don’t see eye to eye with the players’ union on that issue.”

There is another one they aren’t seeing the same way.

Look what’s happening to hockey uniforms. Maybe you haven’t noticed, but everybody in the NBA certainly has. The Edmonton Oilers wear Nike logos on the backs of their jerseys. The jerseys are manufactured by another company, since Nike does not make hockey jerseys, but it is the licensee.

Is this advertising?

How about the Chicago Black Hawks and the Minnesota North Stars? They have the name of the same sporting goods store on their jerseys, which are made by the same company that makes the Oilers’ Nike jerseys. Is this also advertising?

The North Stars say that the sporting goods outlet is the supplier of the jerseys and the logo is not out-and-out advertising, but a club spokesman could not explain the difference.

The Black Hawks had no such problem. “Sure, it’s an ad,” said Jim De Maria.

De Maria said the name ‘Gunzo’s’ that appears on the jerseys is the nickname of Walter Humeniuk, a former Black Hawk goalie who owns the sporting goods store.

Mike Barnett, Wayne Gretzky’s marketing agent, has been watching with interest. Gretzky has an endorsement deal with Nike, so there’s no conflict now. But what would happen if some other company became the official sponsor of the team’s uniforms?

Gretzky couldn’t play in another sponsor’s uniform or he would violate his own sponsor’s contract. He would probably have to skate with no logo at all.

“From our own position, it’s accurate to say that Wayne would be the player that would take a leading step in that direction,” Barnett said. “But at this point, it certainly is not in his interest to want to take that step. He’s aware of some of the things going on, such as in the NBA now.”

And what is happening in the NBA actually started with baseball, in the battle over wristbands. In the escalating war over player marketing rights, it was a landmark battle.

A number of major league players, athletes such as Steve Garvey, Bill Madlock, Wade Boggs, Buddy Bell, Darryl Strawberry, Ozzie Smith and Gary Carter, decided to wear wristbands for the Ronald McDonald House, a charity for children. But the wristbands had golden arches on them, so major league baseball banned them.

In effect, for the first time, wristbands were declared part of a team uniform.

That soon became important in basketball. At last season’s All-Star game in Indianapolis, Kareem Abdul-Jabbar, Ralph Sampson, Terry Cummings and Alex English were warned by the NBA that they would not be allowed to play if they wore the wristbands they wanted to wear.

Those wristbands had advertising on them. The players, all represented by Collins, own a company called All-Pro Enterprises, Inc. That company has distribution rights to a product called Heavy Rope, which is a weighted jump rope.

When the NBA learned of the plan to wear the wristbands in the All-Star game, it acted quickly. Scotty Stirling, the NBA’s vice president of operations, and Russell T. Granik, executive vice president, met the four players in the locker room and told them they could not wear the wristbands.

That sent Collins, Steinberg and the four players into a conference of their own, held at midcourt on the floor of the Hoosierdome. They talked about defying the league, then decided that one player would wear the wristband.

English volunteered. The NBA took no action against him, but Stirling was certain about what would have happened had all four worn the wristbands.

“We would have stopped the game and pulled them out of it,” he said.

Stirling said it is not the players’ right to have the names or logos of commercial sponsors on their uniforms. The league said that wristbands are part of the NBA uniform, and thus under league control, in a board of governors resolution in January, 1984.

“We won’t allow players to become billboards, like in tennis,” Stirling said. “We don’t want to look like some town merchant’s team.”

Professional tennis allows players to wear logos on their clothes, with restrictions. The logos can be no larger than two square inches, they may be worn only on the chest or shoulder, and there can be no more than two.

Steinberg believes that the players are entitled to wear wristbands of their choice because wristbands have traditionally not been part of the uniform, like shoes, which the NBA doesn’t consider to be a part of the uniform.

Under the collective bargaining agreement, NBA players have the right to make their own shoe deals with manufacturers. The league has no control over the logos on the shoes, but it does require uniformity in color.

“We can’t do anything about the logos on the shoes because a precedent has been set,” Stirling said.

It is a precedent the players are certain to keep in mind when they talk about a new labor contract. Fleisher expects the NBA to ask for the elimination of the players’ shoe deals, but he said there is no way the players will yield on this issue. Too much money is at stake for the players to lose.

For instance, Steinberg said that Sampson makes $400,000 each year under his deal with Puma. Michael Jordan’s contract with Nike, part of it tied to shoe sales, could earn Jordan $1 million a year.

But what would happen if Coca-Cola or Ford started making basketball shoes? Or licensing them? The players would wear their logos on the shoes and the NBA would be helpless to do anything about it.

That would certainly be advertising. Or would it?

Who would get the money? Could the league crack down and pass an emergency resolution making shoes part of the players’ uniform and, therefore, under league control?

“We are not asserting our rights--now,” Bettman said.

And so it goes in the NBA, a league that has managed to survive problems caused by free agency, compensation, the salary cap and drugs.

“We’re not going to give ground on these marketing rights issues,” Grantham said. “The league should know that right away. Unlike football and unlike baseball, basketball players are in shorts and a shirt and you can see their faces very easily.

“So they become a real marketable kind of a project. You can identify them. They don’t have a helmet on, or a hat, to cover their faces. A player has the right to market his own name and his likeness.

“Players become a marketable quantity through what they earned through hard work. I don’t think that’s related to the ownership. In the last collective bargaining agreement, I thought we were very good employees, saying we wanted to help management get out of the bad times and we were willing to cooperate.

“As far as we’re concerned, the health of the league is back. So allow us our marketing rights. Forget about the salary cap and the right of first refusal. Forget about that action. Forget about the free-agent system. Come a new collective bargaining agreement, the players are feeling pretty strongly about what kind of a system they would like in the future.”

And what might that be? Whatever the market will bear. Just as soon as they determine their rights.