00;00;00;00 - 00;00;38;02
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur, and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as Professor of Law and Ethics and the Director of the Sports Business Initiative. The NCAA is the legal gift that keeps on giving.

00;00;38;04 - 00;01;25;27
Mark Conrad
If betting on the outcome in any of the myriad legal challenges against its authority was allowed, it is almost a sure thing to wager against this beleaguered organization. One court grants, class action certification to student athletes challenging its compensation restrictions. Another court grants a preliminary injunction preventing enforcement of its name, image and likeness rules. A Supreme Court justice calls its business model illegal in just about any other business in America. It is likely that student athletes will be considered employees in the next year or so, and after that, look for team athletes to unionize to negotiate compensation and benefits.

00;01;25;29 - 00;02;03;06
Mark Conrad
How could things go so badly so fast for this venerable organization? How did it stay stuck in the ground until it was too late? These are questions we can all ask, but at the core, is its flawed conception of its mission or its credo, not a business, but a bastion of amateurism. The notion is nonsensical in today's age of multibillion dollar TV contracts, merchandising, brand identity, and conference realignment. The big time schools use athletic success as a recruitment tool.

00;02;03;08 - 00;02;39;26
Mark Conrad
Many other institutions tout the achievement of their athletes as a way to entice alumni to shell out money to subsidize these programs and to help students get NIL deals. Finally, top tier college coaches are highly paid for their services, even in schools that are not vying for national titles. So who are we kidding? But the NCAA waives its tattered flag of amateurism to judges, labor regulators, and the halls of Congress to little avail and increasing mockery.

00;02;39;28 - 00;03;16;14
Mark Conrad
At the same time, it takes tentative steps to a semblance of reality. When it recently proposed a compensation system for athletes in certain top programs. The latest nail in the coffin of amateurism was the recent vote by members of Dartmouth College's men's basketball team to unionize. That vote - 13 to 2 - comes shortly after the regional director of the National Labor Relations Board concluded that these students fit the definition of employees under the labor laws.

00;03;16;16 - 00;03;56;14
Mark Conrad
While this determination will be appealed to the entire National Labor Relations Board - and possibly endure court challenges after that - the vote by a group of Ivy League students who don't receive scholarships and play on a team that is not one of the powerhouses of college sports is significant. The seismic changes put college sports at a crossroad. Schools can go one of two ways - embrace a professional system of compensation and unionization, or continue a path of litigation and more litigation and attempts to lobby Congress to save the NCAA’s

00;03;56;17 - 00;04;31;15
Mark Conrad
butt by creating an exemption from antitrust laws. But there's another approach. For some college athletic programs. It may make more sense to abandon this NCAA system for a system of home grown club sports. No big money, no pressure, no alumni base NIL collectives, just the experience of playing on an athletic team for the joy of doing so. An alternative that meets the more virtuous goals of amateur college sports.

00;04;31;17 - 00;04;57;03
Mark Conrad
Any thoughts? Send them to me at [email protected]. Thank you for listening. Until next time, this is Prof. C for the Gabelli School of Sports Business Initiative.

00;00;00;00 - 00;00;47;03
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur, and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as Professor of Law and Ethics and the Director of the Sports Business Initiative. After a two-year saga, the Court of Arbitration for Sport rendered its verdict in the case of Russian Olympic figure skater Kamila Valieva. International sport’s

00;00;47;03 - 00;01;24;00
Mark Conrad
leading adjudicative body concluded that she violated anti-doping rules and banned her from competition for four years. For Russia, it is the latest chapter in its decade long series of doping violations in its Olympic sports program. The result is that U.S. and Japan, originally the second and third placed teams, will now receive gold and silver medals. But the bronze medal winner is still uncertain, meaning that the conclusion of this sordid saga remains months away.

00;01;24;03 - 00;01;57;02
Mark Conrad
For Valieva, this is a scarlet letter on her short but storied career. Despite all the propaganda heard from the Russian sports establishment. Coming into the 2022 Olympic Winter Games, Valieva was the lodestar among a highly talented and dominant Russian women's figure skating group. During the team event in Beijing, Valieva, at age 15, became the first woman in history to complete a quadruple jump.

00;01;57;04 - 00;02;24;08
Mark Conrad
She helped lead her team to a gold medal with a point total considerably higher than the U.S. team, which placed second. But right after that team skating event, and just as the individual skating competition was to begin, it was revealed that Valieva tested positive for the prohibited substance trimetazidine, a drug normally used to treat heart related conditions.

00;02;24;11 - 00;02;54;29
Mark Conrad
She claimed she ingested it after her grandfather prepared a strawberry dessert on the same chopping board that he used to crush his medication. In other words, it was accidentally taken by her. The substance was discovered in a lab test administered five weeks before the Olympics after the Russian National Championships. But for some reason, the lab, located in Sweden, failed to report the finding until the Beijing Games were underway.

00;02;55;02 - 00;03;21;28
Mark Conrad
Valieva did not contest the fact that the substance was present, but argued that she did not intend to take it. It was no surprise that the Russian Anti-Doping Agency, with a history of utilizing methods to evade doping rules, cleared her to continue competing. That decision was appealed by the International Skating Union and the World Anti-Doping Agency, known as WADA.

00;03;22;00 - 00;03;52;12
Mark Conrad
An arbitration hearing occurred in Beijing on the question of whether she could compete before a final determination could be made. The panel concluded she could, in large part because she was only 15 and deemed a quote, “protected person” unquote, due to her young age and the potential adverse effect of her not competing for a medal before a final adjudication of her appeal was made by the panel.

00;03;52;14 - 00;04;18;23
Mark Conrad
Indeed, she did compete, and what the world witnessed was a disastrous final skate with the presumptive gold medal favorite falling and stumbling. The result was a fourth place finish and a shocking putdown by her coach for everyone to see. When she left the rink in tears, her coach, Eteri Tutberidze, reprimanded her. “Why did you let it go?”

00;04;18;26 - 00;04;45;19
Mark Conrad
the coach was quoted as saying in an English translation. “Why did you stop fighting? Explain it to me, why?” One of those who was shocked was International Olympic Committee President Thomas Bach. “It was chilling to see this,” he said. Months later, the hearing on the merits of her claim was held and almost two years after the incident, the Court of Arbitration for Sport rendered its decision.

00;04;45;21 - 00;05;18;16
Mark Conrad
The panel rejected Valieva’s argument that she was not at fault. “Too many shortcomings in the evidence and too many unanswered questions,” said the ruling. The panel also rejected an argument by the Russian doping agency that her penalty should be less than the required four year ban for doping violations because of her age. Therefore, she is prohibited from competition for four years, retroactive to the date of the test, which was December 25th, 2021.

00;05;18;18 - 00;05;58;11
Mark Conrad
So theoretically, she could compete in the next Winter Olympics in Milan-Cortina, Italy in 2026. Logically, one would think that the countries originally placed second, third and fourth would be bumped up and would receive medals for the team competition, with the U.S. winning the gold. A happy moment for the U.S. team, which includes men's singles skaters Nathan Chen and Karen Chen and Vincent Zhou; the pair team of Alexa Knierim and Brandon Frazier, and the ice dancing team's Madison Chock and Evan Bates, along with Madison Hubbell and Zachary Donohue.

00;05;58;14 - 00;06;30;13
Mark Conrad
But not so fast. Canada, which originally placed fourth, seeks to receive a bronze medal, claiming the violation disqualified the entire Russian team. The International Skating Union, instead of eliminating Russia entirely, simply deleted the points Valieva earned in that team event, which meant that Russia barely edged Canada for that bronze. This decision by the Skating's International Federation may have violated its own rules regarding doping penalties.

00;06;30;15 - 00;06;57;27
Mark Conrad
One specific provision states, “An anti-doping rules violation committed by a member of a team, occurring during or in connection with an Event may lead to disqualification of all the results obtained by the team in that Event with all Consequences for the team and its members, including forfeiture of all medals, points and prizes.” But note the word “may” rather than “must”.

00;06;58;00 - 00;07;26;08
Mark Conrad
So Canada is appealing the Skating Federation's determination in that same arbitral body, and who knows how long it's going to take. The result of this mess means that the teams from the U.S., Japan and possibly Canada were robbed of their Olympic moment. Who knows when they will get their medals? The U.S. athletes, in particular, missed out on significant endorsement opportunities that come from the notoriety of winning the gold medal.

00;07;26;10 - 00;07;51;04
Mark Conrad
There was talk of awarding the medals at the Paris Olympics, but due to the Skating Union’s decision to give Russia the team bronze and Canada's subsequent appeal, all this is up in the air. At the very least, the U.S. and Japan teams are guaranteed of the gold and silver medals. So even if Canada's appeal is not determined by July, the U.S. athletes should not wait any longer.

00;07;51;11 - 00;08;17;24
Mark Conrad
Give them the medals in Paris. Finally, a word about the Russian Olympic Committee's reaction to Valieva’s suspension. Among other rants, it said, “War has been declared on Russian sports.” An ironic statement coming from a committee representing a government that started a real war in Ukraine. After this sad saga, can these coaches and officials be proud of what happened?

00;08;17;26 - 00;08;57;19
Mark Conrad
Why weren't they punished but only Valieva? And like in the battle days of Soviet sports, are these young athletes indispensable as cogs in a state sponsored system that extolls the glories of Vladimir Putin's government? Any thoughts send them to me at [email protected]. Thank you for listening. Until next time, this is Prof. C for the Gabelli Sports Business Initiatives.

00;00;06;29 - 00;00;36;27
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur and Olympic Sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as Professor of Law and Ethics and the Director of the Sports Business Initiative, Technology and Sports - can there be one without the other?

00;00;36;28 - 00;01;05;12
Mark Conrad
to paraphrase the old Sinatra song. Throughout the last century, sports has utilized present and new technologies as a way to draw fans and to monetize the product. From the early days of radio, to over the air television, then to cable, then digital, and now streaming, teams and leagues have had a symbiotic relationship to their media delivery systems to find and keep their audiences.

00;01;05;14 - 00;01;34;27
Mark Conrad
Today, we are in the midst of a technological transformation, as the traditional over the air and cable methods are giving way to the streaming universe. How will this affect the viewer? How will it affect the economics of sports? Will social media change and continue to be a large part of the media universe? With me to answer these and other questions is Greg Butler, the CEO of ZuCasa.

00;01;34;29 - 00;02;03;14
Mark Conrad
Greg came from a music background and before moving into technology, worked in the music industry, in record and TV production and then transitioned into computers and technology. He has led multiple startups in the U.S. and the European Union. He founded ZuCasa, a company that provides video streaming and social engagement solutions in the OTT gaming and medical space.

00;02;03;17 - 00;02;16;00
Mark Conrad
As an interesting bit of background. Greg's rock band opened up for Duran Duran. Greg, welcome to the Sports Business Podcast. And tell me, what was it like to open for Duran Duran?

00;02;16;03 - 00;02;51;27
Gregory Butler
Well, thanks, Mark, for having me on. And one of the weirdest things about the Duran situation is that it was actually 30 years ago last month that that tour started. And, you know, it's always funny because it was really at the very beginning of my career, but it did give me one of my most memorable moments because at when we played Wembley Arena before the show starts, all of the staff in their uniforms cover the entire floor and it looks like a military gathering.

00;02;52;00 - 00;03;13;14
Gregory Butler
And I was up on stage doing the soundcheck, and Simon LeBon walked in front of me, turned and saluted and then walked away. And it really just kind of changed my whole mood because I realized how absurd the whole thing was instead of being really tight about, you know, playing in front of a bunch of people and all that.

00;03;13;19 - 00;03;21;18
Gregory Butler
It was a really fun experience. And I'm I'm grateful for having that be part of my life.

00;03;21;20 - 00;03;31;21
Mark Conrad
And certainly you remember it 30 years later. So now moving to the present, can you describe what ZuCasa does and what is the sports connection?

00;03;31;23 - 00;03;56;08
Gregory Butler
Sure. At the heart of what we do is we have a compression called EVE that reduces video file size by two thirds without needing new codecs or anything like that. So it's pretty revolutionary. It's a proprietary thing for us and it allows us to, you know, in making the file size smaller, to reach a lot more people at a lower cost.

00;03;56;08 - 00;04;21;27
Gregory Butler
And then also we can do true watch parties so we can have, you know, ten people with audio and video in HD watching, you know, an HD broadcast at about again, about one third the size of just watching a movie on something like Netflix or Apple or something like that. Where that applies to sports, of course, is that it's the watching sports is a very communal activity, as we know.

00;04;21;27 - 00;04;56;26
Gregory Butler
And we’re recording this right before the Super Bowl. People get together, people like to watch sports together. So our ability to provide a watch party, although it applies to many areas, the sports side of it is has been very popular both in Esports and more traditional sports. In fact, our biggest accomplishment to date as a company is that we partnered with Zee Entertainment in India for the ILT20 cricket tournaments, allowing you know, viewers in India to be able to watch cricket on their phones or on their televisions or computers at a distance,

00;04;56;26 - 00;05;11;11
Gregory Butler
but together. And as you may know, you know, India, although it has, you know, good bandwidth in some areas, it's not quite as developed as other network. So the fact that we can do this in India is a pretty big deal.

00;05;11;13 - 00;05;33;09
Mark Conrad
Great, and it, you know, when you talk about this idea about watch parties and basically streaming issues and connectivity issues, we know that the sports industry is going through many changes in a landscape that opens opportunities, but it also poses challenges. What do you think are the major opportunities for technology companies in sports right now?

00;05;33;11 - 00;06;08;07
Gregory Butler
Well, I think, you know, when it comes to sports opportunities, it's the fact that there are so many sports at so many levels that didn't have exposure before. And we've seen of course, and I think maybe accelerated over the last five years, you know, seeing different kinds of sports and obviously ESPN and many of the other sports broadcaster started doing sports that maybe weren't the, you know, first tier NFL NBA or, you know, Premier League soccer.

00;06;08;10 - 00;06;30;15
Gregory Butler
So you see more people being able to enjoy more diverse sports and where the technology portion of that comes in and not to be so specific to software technology, but the simple fact that the technology is good enough to broadcast from just about anywhere to capture these sports at a high enough quality that then they can be spread with other people.

00;06;30;15 - 00;06;59;08
Gregory Butler
I mean, we're having conversations about everything from, you know, drone racing to high school football for the use of our technology, speaking with, you know, groups in countries all over the world. So I think the opportunity is to be able to deliver sports that may not have gotten a chance to fans that already exist. You know, if you've got, you know, 8 billion people on the planet, you don't need 8 billion people to watch it.

00;06;59;08 - 00;07;09;23
Gregory Butler
You just need to have enough people that it makes sense and that's it. You know, on whatever metric that may be for the people who are capturing it.

00;07;09;26 - 00;07;14;10
Mark Conrad
What do you think are some of the rising new sports that could take advantage over this?

00;07;14;12 - 00;07;40;25
Gregory Butler
That's a great question. And you know, I guess, you know, one thing you could look at, I haven't played it. We all know it's taken over the mind share. But you know, pickleball I've noticed that, you know, there are now former pro tennis players doing tournaments. We've seen, you know, the big three basketball, you know, that started I think that you're just going to see lots of new sports as part of it.

00;07;40;27 - 00;08;13;26
Gregory Butler
And then if you know, you're talking about traditional, I think that maybe is more regional, but you'll see, you know, maybe sports that are popular in one section of the world coming to another country. And again now, you know, cricket, which is enormous in India really doesn't have much of a foothold in the U.S.. The tournament that we're helping to broadcast is a shortened version of cricket, because I'll be honest, I lived in England for quite a while and, you know, watching a sport that the game has played for multiple days is probably challenging for Americans.

00;08;13;28 - 00;08;39;12
Gregory Butler
But the ILT20 is a version of cricket that's only two or three hours, you know. So I think you're just going to see lots of modifications. I think you're going to see new sports developing. Come back to even when I lived in England, I used to watch Sumo Wrestling and Australian Rules Football because those were things that were broadcast there that you wouldn't see in the U.S.. And I think that it's just going to be more of that, more of things moving around.

00;08;39;14 - 00;08;42;24
Mark Conrad
And what do you think are the major challenges?

00;08;42;27 - 00;09;08;15
Gregory Butler
Well, you know, part of the problem, which, you know, we all have seen in within the growth and expansion of of everything from cable to streaming is that there's too much content. So how do you find the content that you want at the quality you want? And then for those who are streaming that content, how do you kind of manage this content in a way that is, you know, kind of best practices?

00;09;08;18 - 00;09;30;14
Gregory Butler
Obviously, there's also the licensing and payment aspect of it. So I think that there are a lot of challenges within this, but they’re more business challenges. I think what we - where we are is that the technology challenge is starting to fade away again. I would hope to think we're part of that solution, you know, and it's not gone.

00;09;30;14 - 00;09;40;07
Gregory Butler
Things will keep changing and growing, but I think they're more business challenges than they are technology based. And when I say business of course from your perspective, that's also legal, right?

00;09;40;11 - 00;09;58;27
Mark Conrad
Indeed it is. So when you back to the point about content, hasn't the history of [...] dissemination of sports, whether it's even on cable or stream, been not enough content that channels are desperate for content. So when you say there's too much content, I wonder how you come up with that conclusion.

00;09;59;00 - 00;10;23;05
Gregory Butler
Because we have to look at it through a few different lenses. There's not too much content if you're a person sitting there who wants to watch, you know, this game that might be happening in Sri Lanka and there happens to be someone streaming it on their, you know, Facebook Live channel. Okay. So there can never be enough content because somebody is watching it on that side.

00;10;23;09 - 00;10;49;19
Gregory Butler
But from a business perspective, it is an enormous challenge because if you are the one trying to stream that content out, you have to reach an audience, you have to monetize that audience. You have to you have to navigate so many things and you can reach a point where, look, I mean, this is, you know, this will go into more of my music and television side of this,

00;10;49;19 - 00;11;15;00
Gregory Butler
but the the ultimate challenge that has come up is we thought technology or at least the the story that was pitched about it, was that it was going to increase the size of the middle class of four creatives. Right. More people would have access. There would be more ways to have a distribution of funding that could reach lots of people.

00;11;15;02 - 00;11;42;13
Gregory Butler
But what actually happened was there was so much content that the the public is gravitating towards the biggest thing and what it's kind of destroyed the middle class. And I could see the same thing happening within sports. It's a little different, but it's not too far off, you know. So you have again, let's go back to the NFL's the Premier League's the things like that, you know, they're going to be giant behemoths that are moving around.

00;11;42;16 - 00;11;55;25
Gregory Butler
But how do you ultimately find and keep an audience when there's so much content and they're so rabid for that content that you can't create the consistency that is required to build a business?

00;11;55;27 - 00;12;21;07
Mark Conrad
And do you note that at this time, this issue of streaming in the last decade, it's become more ubiquitous both in the US domestic sports side and in international sports, as certainly you're doing, and streaming rights have challenged the more traditionally dominant cable TV structure, which has suffered consistent loss of subscribers. Do you think this trend is going to continue?

00;12;21;09 - 00;12;52;23
Gregory Butler
Yes, you know, but I also think that, like it's just a shift in model, you know, just as there have been shifts and models going along, I think it's very easy. And, you know, not to spend too much going back to my music days, but I was on the front line of that shift, you know, of watching people transition from purchasing a physical item that we had all become very used to in a business model we had all become very used to, and it really shifted truly overnight.

00;12;52;25 - 00;13;14;21
Gregory Butler
And you can see it now developing into a new model. It doesn't look financially like the old model, but it is a thing. And you could argue that prior to that. And this also equates to sports. There was no model at all. It was just something you did. You know, and it may have been a profession or it may not.

00;13;14;23 - 00;13;36;16
Gregory Butler
So I think we're we're seeing this movement away from the big dollars of cable TV when things could be kind of again managed, restricted. And if I look at it, you know, through the eyes of a of a lawyer, it was a golden age of being able to control IP and copyright because you only had so many means of distribution available to you.

00;13;36;18 - 00;13;58;25
Gregory Butler
And now as sports moves out into as everything that has to do with content moves out into a much more challenging space when it comes to copyright and containment, you know, the end user wants the content. It's not about the means of distribution. They're just going to go to the place that it is easiest and best to get it and that's it.

00;13;58;28 - 00;14;02;06
Gregory Butler
So there's no choice. But it took for it to move.

00;14;02;09 - 00;14;15;27
Mark Conrad
But do you find that copyright holders are going to start pushing back and seeking more enforcement in a situation where maybe they think it's more of a wild west of copyright distribute, of copyrightable material distribution?

00;14;16;00 - 00;14;46;24
Gregory Butler
Yes, but where the issues are there is that trying to hold on to a model that because it's how it worked before and how you made your money, is to ignore what is actually happening. And you can only do that for as long as people care about what the product is. I can go on at any time and find any NFL game streaming online for free.

00;14;46;27 - 00;15;10;22
Gregory Butler
The quality won't be there right now, but it will. You know, people are always working to find their way around it. And I'm not saying they should. I'm not saying that's how it should work. But the other portion of that is as new sports take hold, as things grow, you know, the best way to innovate is to be aggressive about how the payment structure works.

00;15;10;22 - 00;15;30;21
Gregory Butler
Right? So you're going to see that coming from the outside, that kind of pressure. And then the other portion of it is if you look at, you know, I'm, you know, based in Los Angeles, but I'm also very specifically a Clipper fan. And you have someone like Steve Ballmer who really wants to push how technology is used with sports.

00;15;30;23 - 00;15;54;29
Gregory Butler
You know, and I say that across the board from the new arena that he's building, to the way he approaches streaming. And I think the only thing holding him back and I say this completely as an outsider just looking at it, is, of course, the rules of engagement. I think if he wasn't beholden to the NBA, you would see incredible innovation coming out from the Clippers side of this.

00;15;55;01 - 00;16;01;23
Gregory Butler
And once things are hit on that people like, that's the direction it moves. You just you cannot hold it back.

00;16;01;26 - 00;16;28;14
Mark Conrad
You know, you raise a really good point and let me throw a hypothetical out to you. You're now the owner of a team in a professional league. And let us assume there is no league wide TV deal. There's no cable deal. In other words, you can be Steve Ballmer and say, hey, I want to utilize technology the way I want to for my team could be, let's say, a soccer team, it could be a badminton team or whatever.

00;16;28;14 - 00;16;46;09
Mark Conrad
So what would you do? You know, you just bought the team, you paid for the team, you have a venue that's state of the art. So tell me, what would you do if you had the fantasy of coming up with a new series of technological distribution issues and methods? What would you do?

00;16;46;12 - 00;17;08;26
Gregory Butler
You know, I have to look at everything through the lens of a fan, and I am a fan as well. And you know what it all comes back to is, is community and the ability to access what I want when I want it. Part of the technology that we've built is based on the idea of being a fan and wanting that.

00;17;08;26 - 00;17;33;12
Gregory Butler
So it would all be about connection with the players and coaches kind of access. You know, I think that a lot more could be done with access in a in a respectful way. And really what I want and I believe this is what almost every fan would want, if not all, is just to be able to watch a sport in the mode that I want it with my friends or family.

00;17;33;14 - 00;17;59;00
Gregory Butler
And that would be my focus. You know, you have the multi-cam stuff, you have these sorts of choices, but it's, you know, we could go as far as looking at VR, which, you know, VR and AR will have their time. You know, right now we're still on the very edge of the beginning of it, even though I think, you know, we're in a cycle where people feel like if something's been around for ten plus years that it's old and it's not, we're just barely touching on it.

00;17;59;02 - 00;18;17;28
Gregory Butler
But I think that that's what it'll be about. I think it'll be, you know, if I could cut past all of it, I want to be on the court. I want to be on the floor. I want to be able to virtually put myself in a game. I want to be able to do all of those things. So if you took off all the barriers, you know, again, I think it can become overwhelming.

00;18;18;01 - 00;18;39;27
Gregory Butler
We're going to cross a lot of lines that will be, I think, confusing for our own brains. But it's about that access. It's just about being in it because at the end of the day, you watch a sport as part of your own, you know, hero's journey, right? It's like this is my army, this is my kingdom, this is this is that thing.

00;18;39;27 - 00;18;56;28
Gregory Butler
That's what you're attaching psychologically to it. And I think the more we pursue that idea of turning ourselves into that, just as we do in a video game where we create a character and and hit the shot, you know, that's that's what this is about. It's it's going to be a blending of worlds.

00;18;57;00 - 00;19;30;00
Mark Conrad
We have a battle going on, if you will, for the future of cable and streaming. And that centers on the Diamond Sports case. And for those of you do not know, Diamond Sports had a series of regional sports networks that covered a lot of baseball, basketball and NHL teams, hockey teams. And it's been in bankruptcy. And the major leagues, at least in baseball, want to take back the broadcast rights that have existed from Diamond and try to take control over those rights like the NFL does.

00;19;30;02 - 00;19;50;01
Mark Conrad
But Amazon is now willing to invest in a reorganized company and the latest is that the settlement seems to be that they will keep a lot of their sports properties, at least for the time being. But do you think that Amazon's investment in the traditional cable firm could lead to greater streaming opportunities?

00;19;50;04 - 00;20;14;24
Gregory Butler
I think that Amazon at the end of the day can do whatever it wants, the same as Apple or Google. And it's, you know, when it comes to streaming opportunities, I mean, the short answer is yes, but the long answer is every decision that is ever made is based more on controlling the IP and the flow of money.

00;20;14;26 - 00;20;40;27
Gregory Butler
So I don't know what the impact is to the end user, you know, and that's that's what it comes back to for me. So yeah, it'll be streaming, but I don't know what that means anymore because everyone, almost everyone is watching something streaming at this juncture, you know, So it's not as much about broadcast versus streaming as it is what you're watching, right?

00;20;41;00 - 00;21;09;07
Gregory Butler
Because am I watching Netflix or do I have, you know, Comcast? But if I have Comcast or Spectrum or what have you, they're also delivering my my Internet. No difference to them. It's just stuff they're shoving down a pipe. So I think we're going to lose this notion of is it linear or not? Because especially when it comes to sports, that that becomes even less relevant because all sports is linear.

00;21;09;14 - 00;21;24;04
Gregory Butler
You know, it's all appointment viewing. If you look at all the statistics on it and it's only obvious people watch it in real time. They're not watching, you know, sports a day later unless they have to.

00;21;24;06 - 00;21;50;04
Mark Conrad
But do you see a day when cable will be extinct and it'll go to à la carte streaming services where people can choose what they want, as opposed to being handed a series of channels which one pays for that one doesn't usually watch, but helps subsidize the sports stream or the sports bundle, because the sports bundle tends to be the most expensive portion of cable TV rights.

00;21;50;06 - 00;21;50;14
Gregory Butler
Well, I

00;21;50;14 - 00;22;02;29
Gregory Butler
don't, I don't know if you saw that. You know, it was announced that I think it's it's all of the majors are, you know, trying to group now to just do a sports streaming. You know. Indeed.

00;22;03;02 - 00;22;04;05
Mark Conrad
I'm going to ask you about that.

00;22;04;05 - 00;22;35;27
Gregory Butler
Yeah. So I think look, I think that's what the end user wants, right? I think that's what the person who's watching wants. They want to pay an amount and just watch what they want to watch When we talk about it in terms of broadcast and streaming, for me, taking the economics and the companies out of the picture in terms of I know that DirectTV wants streaming or, you know, broadcast to continue because that's their business, right?

00;22;36;00 - 00;23;09;17
Gregory Butler
But the real question is, do users want to turn on something, to turn on a device and have a list of things that are playing in real time versus only having a choice of things that they have to select? And it is kind of you know, it goes back to a psychological thing like I've noticed, so you know, like if you you know, Samsung TV, it comes with their Samsungs, you know, kind of linear broadcast is going on in it and that's what turns on when it happens.

00;23;09;20 - 00;23;36;16
Gregory Butler
And I found that I'm a fan of watching Gordon Ramsay tell restaurant owners that their food isn't good. Right? And so when my TV comes on, it's one of his shows and I might sit there and watch for half an hour when I didn't plan on it. And there's a thing about that, of not having to make a choice, that is kind of refreshing because I think everyone can go online and actually get paralysis.

00;23;36;16 - 00;23;56;13
Gregory Butler
It's a known thing that you will spend half an hour clicking through, looking at things to watch and then never end up watching anything. You know, sports has a different dynamic to it because you get an appointment viewing. You know, last night, it's like the Clippers are on. I'm going to put on the Clippers, right? And just watch the game.

00;23;56;16 - 00;24;10;21
Gregory Butler
But in most you know, at the same time too, like that's kind of telling us that we do like just turning on and having something be on. There's plenty of times if, you know, the family's doing something else and I turn on, I just see a game is on, I just watch it just to go see what it's about.

00;24;10;21 - 00;24;38;06
Gregory Butler
And that that linear notion, regardless of who's the one delivering it or how they're delivering it, I think does matter to us. I think it is a thing. So I think it will continue to exist is the long version of that answer. I don't know who's delivering it or if they're delivering it via satellite or this or that, but I think there's something to just turning on and being served content and going, I'm just going to sit here and watch.

00;24;38;08 - 00;25;04;15
Mark Conrad
And with younger people less interested in traditional linear media, do you think that there'll be more of a shift to mobile devices to watch sports? It certainly happens now, but do you think that will become even more dominant simply because smartphones have been part of the, you know, media enterprise for about 15 years and so younger people like my students, use them and almost live with them.

00;25;04;15 - 00;25;09;17
Mark Conrad
So do you think that that's going to be even more dominant, say, in the next decade?

00;25;09;19 - 00;25;33;18
Gregory Butler
Yeah, there's no question. And I think that there's a few things about the technology as well to to look at as it evolves around that. I mean, my 14 year old will sit there studying for school on her iPhone with her computer sitting in front of her unopened. I find it, you know, kind of fascinating because there is it's about like a comfort level where this is what you operate on,

00;25;33;18 - 00;25;54;22
Gregory Butler
right? And so she is more likely, both of my kids are more likely, to watch something on their phones and not necessarily, you know, do a television at the same time. You know, I have a Samsung Fold, which when it's folded out, is basically an iPad mini. And, you know, we see all of these screens that are being developed.

00;25;54;22 - 00;26;19;24
Gregory Butler
There's the roll up screens, the fold up screens. There's plenty of projection bases. And I think that you'll see more of a merger or an adapted version of devices that can give you more real estate to watch on. You know, and again, I'm but obviously, you know, older. So for me it's kind of like I would rather have this large screen.

00;26;19;24 - 00;26;46;09
Gregory Butler
But we also know, too, that these things move back and forth, right? I think we're going to see this weird combination of very small devices, but it wouldn't surprise me as we see the price drop continually on, you know, 100 inch LCDs and stuff. I do think we're going to move towards the future where your wall is just a screen and you walk in and the wall picks up from where your phone left off.

00;26;46;12 - 00;27;03;14
Gregory Butler
I think it's going to be more of a bizarrely seamless. And I say bizarre because you could be looking on a screen that's very small and we're not even touching on the idea of what's going to happen with headsets or glasses. So I just think we're going to have a future where people don't really think about the device that much.

00;27;03;14 - 00;27;06;28
Gregory Butler
I think it's just going to be you're taking in the content.

00;27;07;00 - 00;27;39;02
Mark Conrad
Although if you're on the legal side negotiating rights and in negotiating your real estate that has a value, that side may still be concerned about the various ways you chop up those rights, whether it is going to be over the air or it's going to be cable. I mean, that's what's happening with the whole Diamond Sports issue, that, you know, who's going to control this in the future and how. We also are going to think about and see what the NBA's going to do with their future broadcast rights, because they're negotiating that this year, I believe.

00;27;39;09 - 00;27;57;25
Mark Conrad
And how much of that will be going to stream and how much the Netflix of the world, the Amazons of the world, are going to, the Apples of the world will take heed. Now, on the one issue, though, let's actually talk about, since you brought this up, MLS and Apple - Major League Soccer and Apple - which has a pretty exclusive deal.

00;27;57;27 - 00;28;08;06
Mark Conrad
Isn't that sort of counterintuitive to what you've been saying? Because you really have to have Apple+ to watch most of the games. Well, it doesn't make it that fluid.

00;28;08;08 - 00;28;30;07
Gregory Butler
I think it's it's actually exactly in line with the control of IP, right? I mean, what we're going to see that I think is - I don't know if I'll call it the great unknown, but it's more how the challenge is going to be handled that I still feel is a little unknown - is that the groups that can pay and in some cases overpay.

00;28;30;07 - 00;28;52;24
Gregory Butler
Again, if you look at cricket in India and I think, you know, I know the what's the the NFL, the direct NFL one that YouTube has now - anyway that package, right, where you can get any NFL game. You look at all these things and you say right now major corporations are overpaying for sports because it can be a loss leader.

00;28;52;24 - 00;29;19;22
Gregory Butler
They can look at it and say, well, if you want access to this, we can lose some money on it, right? And that's not what the fan wants. The fan doesn't want it that way. They just want access to it. And Apple, YouTube in India, you know, I'll call out Disney ultimately, but the it's not just them. You know, they're willing to overpay because they're fighting against the broadcast notion.

00;29;19;22 - 00;29;42;24
Gregory Butler
They want subscribers and they're using sports to get it because they know, again, sports is - what do you call it - you know, it is that kind of destination. It's a thing that people have to watch as it's happening. If you love a team, you'll do it. I personally got Hulu specifically to watch the Clippers and then they they lost the rights.

00;29;43;00 - 00;30;01;21
Gregory Butler
So it was immediately like, “oh” and then it's like, okay, well then do I switch to YouTube so that I can then, you know, it's like you will chase your team and that's why they do it. But back to that, that monetary issue, I don't know how much more the NBA can charge. I don't know how much more the NFL can charge.

00;30;01;21 - 00;30;27;19
Gregory Butler
They currently can. But there's a day coming back to your whole point about broadcast. They're able to to do that because there is competition. They're able to do that because they're building a market. We're still in, theoretically, in transition At some point, the ad dollars, the subscription dollars, all of these dollars are not going to add up to being able to overpay for these things.

00;30;27;21 - 00;30;39;01
Gregory Butler
Again, we've seen it in every portion of media and sports, too, will have their day, which is why they're all chasing international so badly. The NFL has to play these games.

00;30;39;04 - 00;31;02;08
Mark Conrad
Well, it's true. And one thing, though, that the traditional networks had to deal with is building their audience for programing after the sporting event or before. Yeah, this is why Fox got the NFC in the mid nineties, overpaying from CBS, which had it for many years. And CBS thought like, “Hey, we don't want to lose money on it.” Fox said,

00;31;02;08 - 00;31;18;24
Mark Conrad
“We're willing to lose money on the Sunday afternoons to make us a viable network.” And the other thing was that CBS lost affiliated stations to boot. So many thought that even though it was overpaying, it becomes a subjective definition of what's overpaying.

00;31;18;24 - 00;31;19;08
Gregory Butler
That's right.

00;31;19;14 - 00;31;33;04
Mark Conrad
The speculation is now that the NBA is going to get three times the television deal they just had. So the question is, when are we going to get to the point of no return? And so far we have not at least in the major sports.

00;31;33;10 - 00;32;01;04
Gregory Butler
That's right. Yeah. I don't I think right now sports as a as a general thing is going to benefit greatly from this battle. And this battle is a worldwide battle. It is no longer about, you know, the U.S., Netflix, Prime, Apple+, all of these. They're fighting for the entire planet. And that's a, you know, a very broad reach.

00;32;01;07 - 00;32;26;11
Gregory Butler
You know, but the question becomes at some point, you know, back to, you know, viewership, if cricket doesn't expand where, you know, it's India, England and a little bit else, New Zealand or what have you feel like it's a huge sport, but at some point you have your last viewer. And by the way, you know, you know, let's talk about MLB and their challenges for younger viewership.

00;32;26;13 - 00;32;48;03
Gregory Butler
Not that, you know, other sports don't have it as well, but we know that MLB is is maybe in a more desperate position while they're, you know, giving people, you know, half billion plus dollar contracts. You mentioned younger viewers. It's like how many 18 year olds are turning on their phones to watch the Arizona Diamondbacks? I don't know.

00;32;48;06 - 00;33;08;11
Gregory Butler
I don't think it's, you know, it isn't like, you know, watching the Mets in the fifties when there was, you know, less going on. But nonetheless, you had a very captive audience. So there is a day, there is a day out there. That's all it is. You know, I think we'll still get to see the heyday. We're still going to get a lot of exciting sports and a lot of things happening.

00;33;08;14 - 00;33;13;24
Gregory Butler
But diversification and this this battle will eventually run its course.

00;33;13;26 - 00;33;19;03
Mark Conrad
Now, do you think there are some areas of growth that are untapped in sports media?

00;33;19;06 - 00;33;45;07
Gregory Butler
I think if I roll back this conversation to the AR, VR kind of more tech side of it, I think there's an enormous amount untapped. But, you know, that is also going to take time for that, for both the proliferation of the technology and the, you know, the kind of openness to the the ways the IP is approached.

00;33;45;09 - 00;34;12;18
Gregory Butler
So so it boils down to at the end of the day, the rights holders. I think if the more interested the rights holders are in moving things around, I mean, again, if you had looked at, you know, when Mark Cuban had the Mavs, obviously a much more forward looking owner in the space, you know, again, back to the Ballmer, I mean, people who will look at it in a different way, those are the ones who will push that and find it.

00;34;12;21 - 00;34;41;13
Gregory Butler
I simply don't know what's happening around the edges in sports enough to say, this sport or that sport, as we know, that can also change on a dime by just having the right superstar too. The NBA wasn't the NBA that we know today until Michael Jordan. And you know, and I can love, you know, Bird and Magic dueling and all the greats from the past but he completely changed it from a superstar perspective.

00;34;41;16 - 00;35;07;22
Gregory Butler
And, you know, is there a superstar in some sport? You know, which again, could be MLS, could be anything. They've certainly tried. But it's it's going to be that, you know, could be a dynamic player. You know, I think the WNBA hasn't had its day yet. It's been great to survive through challenges and it's had some superstars. But will it have that player that transforms the game that you just can't ignore?

00;35;07;24 - 00;35;14;06
Gregory Butler
You know, and I think, by the way, I mean, just women's sport in general has enormous growth potential.

00;35;14;09 - 00;35;40;04
Mark Conrad
I was just going to ask you that question. Given the popularity of the National Women's Soccer League, the new rights fee agreement, the cost of new teams coming in, you know, we definitely have that possibility of expansion there as a challenge and interest and people are going to these games. So I think one area to look in the future is indeed going to be on the women's sports side.

00;35;40;06 - 00;36;04;23
Mark Conrad
Yeah, women's golf as well could be, which used to have the deals they were time by deals in many, many respects for the LPGA and that could be changing, too. So there could be some real optimism expanding women's sports and actually, I was curious, moving on, what opportunities are there for those who have tech backgrounds who wish to enter into the sports industry?

00;36;04;26 - 00;36;33;11
Gregory Butler
Look, we can talk about gaming. And by gaming I mean, you know, video games as opposed to betting. You know, there's obviously, again, AR VR. And, you know, one of the things that happens in tech, of course, is rule breaking. Right? So I'm not suggesting rule breaking as much as kind of saying if you have an idea that hasn't been tried or done, I think that's a place if you can code or do that.

00;36;33;11 - 00;37;01;12
Gregory Butler
I think that's a part of the process. I also think that being able to really just dive into how people want to interact with sports and come from from that perspective, from a more standard side of it. Look, I mean, actually being able to capture, stream, move sports around, innovate around, you know, on the Ballmer side, you know, it's it's the camera angles.

00;37;01;14 - 00;37;37;09
Gregory Butler
I mean, is it not Let's put it this way. It is fascinating to me to see the NFL adopting stylistic choices from the Madden game, starting to put bokeh around players so that, you know, you have a focus and using camera angles that are have become popular in video games. And I just think that, you know, as people entering this space or looking for jobs and doing things like that, I, you know, I think it's just about the melding of the technology with the experience is is where the opportunity is.

00;37;37;11 - 00;37;40;29
Mark Conrad
And what future do you see for your firm ZuCasa?

00;37;41;02 - 00;38;14;18
Gregory Butler
Well, if I break it down, it it all comes back to community for us. And, you know, maybe it's it's a it's a buzz word thing, but we love seeing people being able to access video and each other in a way that is different. You know, when we started the company, our kind of thesis was, hey, we've done as a tech society a great job of replicating eyes and ears and a horrible job of replicating the experience of being with other people.

00;38;14;20 - 00;38;46;17
Gregory Butler
So what can we do to improve that? And, you know, we're working very closely with a company called the debut Group Neuroscience Group out of Canada, and we found a lot of common ground with them about how we had been doing this and their research. And what we want to do is look, you know, the compression as a widget, it makes it so that we can reach more people at a lower cost with more stability and have features that others don't have.

00;38;46;17 - 00;39;10;24
Gregory Butler
And we don't do this like we're a platform like Facebook. We provide this as technology to other companies for them to do this. So when I look at our future, I just see us growing that experience and trying to find more ways to deliver a better experience to people. You know, for us older types, you know, it's 3M, it's the old 3M commercial.

00;39;10;27 - 00;39;35;23
Gregory Butler
You know, we don't make the things you use, we make the things you use better, you know, to paraphrase. And that's what we're out there doing. And my hope, especially because, you know, although we're doing business in the U.S. and, you know, North America, whatnot, it's also about, you know, where we're working in India and doing things in Africa and making it so that people can just have this video experience with each other. That's our future.

00;39;35;23 - 00;39;37;13
Gregory Butler
That's what we do.

00;39;37;15 - 00;40;05;25
Mark Conrad
Well, on that note, we do have to come to a close on behalf of Fordham University, the Gabelli School of Business and the Sports Business Initiative. Thanks to Greg Butler for an engaging and informative and clairvoyant discussion on the future of technology, media and sports. And thanks to my producer, Victoria Ilano for her great work. And thanks to all of you for listening in. For the Sports Business Podcast with Prof.

00;40;05;25 - 00;40;11;13
Mark Conrad
C at Fordham's Gabelli School of Business, I’m Mark Conrad. Have a great day.

00;00;14;09 - 00;01;04;13
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University’s Gabelli School of Business, where I serve as Professor of Law and Ethics and the Director of the Sports Business Initiative. On a recent podcast, we discussed taxes with Robert Raiola, an expert in this field who has worked with over 100 professional athletes in the five major sports to give us some of the ins and outs dealing with the numbers, rates and different types and scales of taxes that athletes pay.

00;01;04;15 - 00;01;36;03
Mark Conrad
As some of you may recall, Mr. Raiola is the director of the Sports and Entertainment Group in the firm of PKF O'Connor Davies in Cranford, New Jersey. He has more than 20 years of experience in both the public and private sector. That episode was recorded before Shohei Ohtani signed a ten year deferred $700 million contract with the Los Angeles Dodgers.

00;01;36;05 - 00;01;49;19
Mark Conrad
Mr. Raiola has graciously agreed to join us again to discuss the tax implications of Ohtani’s unusual contract. Robert, welcome back to the Sports Business Podcast.

00;01;49;21 - 00;01;52;06
Robert Raiola
Thank you for having me, Professor.

00;01;52;09 - 00;02;10;07
Mark Conrad
Okay, let's let's review this contract between Ohtani and the Dodgers, a ten year contract totaling $700 million, but how the money is paid is what makes it unusual. Could you explain what makes this so unusual?

00;02;10;09 - 00;02;43;25
Robert Raiola
Sure. This contract is most unusual because of the amount of deferred compensation in the deal without having any interest paid on the deferred money. So the total deal, as Walker alluded to, will be with $700 million for ten years in the...from 2024 to 2033, Ohtani will receive $2 million per year. From 34, from 2034 to 2043. He will receive a whopping $68 million a year for each of those years.

00;02;44;02 - 00;03;06;19
Robert Raiola
He does not receive any signing bonus, but the whole [...] here for him is that it is entirely possible that the deferred money he would not have to pay California tax on. So California has asked the IRS to help them out with changing some coding in their law in order to get this income to not to be taxable in California.

00;03;06;22 - 00;03;13;28
Mark Conrad
Now, do you think that that was a factor in the negotiations for this kind of deferred compensation deal?

00;03;14;00 - 00;03;42;16
Robert Raiola
I think what happened, Mark, they’re trying to get around for the team, around the the luxury tax. And by taking only $2 million a year, let's not feel bad for him - he's making 230 million endorsement money - so he can afford to live on the $2 million a year because in fact, he's got a lot more endorsement income. So I think that they knew what they were doing and they had a really good accountant who figured out this might work for them.

00;03;42;19 - 00;03;54;10
Mark Conrad
Well, let's talk about California's tax rate now. It's up to 14.4%. And that would be an awful lot of money if he was getting paid the 70 million every year.

00;03;54;13 - 00;04;29;15
Robert Raiola
Yes. What it is, Mark, is the the first couple of years is 2 million, and on the side, whatever he gets in endorsements, too, it's not really a factor. And then he gets the $68 million a year. So it wouldn't be 70. He'd be getting $68 million a year deferred. Most unusual that there's no interest here. But if he could, if the law as it was just now, would say that if he became a nonresident after the deferral period, he would pay no tax to California, which obviously, as you alluded to, is huge because the rate now on wages is up to 14.4%.

00;04;29;18 - 00;04;34;08
Mark Conrad
But what is the Internal Revenue Service or Internal Revenue Code say about this issue?

00;04;34;11 - 00;04;52;14
Robert Raiola
They say if it's a retirement income and deferred comp meets that, that he would be able to exclude it from income as long as the payments were over a certain myriad of time. And I think that they said to the effect that the payments are equal in renumeration that he would receive.

00;04;52;16 - 00;05;14;21
Mark Conrad
But is it really retirement income? It's deferred income. So it's not the same as a pension where someone moves to Florida and say, okay, they're not in California anymore, but it's really part of his employment contract. So couldn't California say simply say like, look, it's part of your payment, your compensation. We're delaying it.

00;05;14;24 - 00;05;26;00
Robert Raiola
They could. And, you know, I can tell you this, that in ten years from now, there'll be a battle between California and Ohtani's representatives as to which way they should go.

00;05;26;03 - 00;05;34;04
Mark Conrad
And do you think that'd be possible to amend the law on California's side, either through Congress or through Sacramento?

00;05;34;06 - 00;05;48;02
Robert Raiola
It's possible you hit the nail on the head that they would have to go to Congress to change the law. But it's a lot of money to California's court rules. And I you you can bet your bottom dollar that they're going to go after this and try to recapture this one.

00;05;48;04 - 00;06;08;26
Mark Conrad
So let's say Ohtani plays ten years with the Dodgers and quote unquote, doesn't play anymore or may go to another team, in fact, and resides in Florida, which has no state income tax. So the position that Ohtani would say is that, you know what, I don't have to pay tax on $0.01 of the $68 million in the next ten years.

00;06;08;26 - 00;06;09;22
Mark Conrad
Is that correct?

00;06;09;25 - 00;06;11;07
Robert Raiola
That is correct, Mark.

00;06;11;10 - 00;06;23;11
Mark Conrad
And then what happens if he goes to live in Japan? Or let's let me ask first the question, does he still have a residence in Japan? You know, does Japanese tax law have anything to do with this at this point?

00;06;23;14 - 00;06;52;14
Robert Raiola
We believe that he is he's gotten he’s dotted his “I”s and crossed his “T”s in, I guess in a number of years he was with the Anaheim Angels that he’s faced this issue and resolved it by getting out of Japan. The problem with Japan is that they have a 35% tax rate plus a 10% consumption tax, so he'd pay 45% over there, whereas over here he'd only be paying the 37%, especially if he is able to get the money not taxed in California.

00;06;52;21 - 00;07;02;04
Robert Raiola
But for purposes of what we did in an article, we figured that he would not be subject to any tax in Japan at all. all.

00;07;02;07 - 00;07;05;12
Mark Conrad
Now, is there a tax treaty between Japan and the United States?

00;07;05;15 - 00;07;07;02
Robert Raiola
Yes, there is.

00;07;07;04 - 00;07;14;25
Mark Conrad
And what does [...] say that there is an exclusion for taxes earned in the United States by a Japanese national?

00;07;14;28 - 00;07;31;15
Robert Raiola
I'm not sure as it alludes to that. Well, like I said, we're on the phone with our Japanese office and we asked them and they said the feeling was that he wouldn't be a Japanese resident for purposes of this tax situation. [...]

00;07;31;18 - 00;07;38;27
Mark Conrad
So even if he moves back to Japan, the position would be that he may not have to pay any taxes in Japan.

00;07;39;00 - 00;07;44;07
Robert Raiola
That's a possibility. I think he'd be better off staying in the U.S. and occasionally visit Japan.

00;07;44;10 - 00;07;52;24
Mark Conrad
So now let's say he wants to stay in California. If he stays in California during those ten years, then there's really no issue. He would pay it anyway. Correct?

00;07;52;24 - 00;07;53;24
Robert Raiola
That is correct.

00;07;53;27 - 00;08;02;21
Mark Conrad
So what do you think motivated him to have so much deferred income? You know, the endorsements only last so long.

00;08;02;24 - 00;08;26;05
Robert Raiola
That's a great question, Mark. I mean, I could see him wanting the Dodgers to get other really good players and opening up some more money to spend in free agency, which they did by getting Yakamoto. They signed him after subsequently signing Ohtani. But that's an awful lot and without interest to say I guess he's living off those endorsements, like you said, that could dry up.

00;08;26;07 - 00;08;33;17
Robert Raiola
But if that's what he chose, his people chose to do. I don't think he had to do it to that extremity. But he went ahead and did that.

00;08;33;19 - 00;08;45;14
Mark Conrad
Well, does this create a precedent for other players to do something like this? Because in baseball, obviously, it's allowed. So do you think this could be a attractive to some other players in the future?

00;08;45;17 - 00;09;03;22
Robert Raiola
No doubt about it. You know, if he was to get the money equally over the ten years would be a lot more than 2 million a year. But the players are going to look at this and say, if Ohtani did it and he's at the end of the day, he's getting $700 million, no matter how he gets the money, it would be 700 million.

00;09;03;28 - 00;09;14;18
Robert Raiola
But if he was to get equal payments over the ten years, the present value of the contract would be a lot more than it is the way he structured it now because he would have [...]

00;09;14;20 - 00;09;23;24
Mark Conrad
Right, and that's it with inflation and other things. So he’s in a sense sacrificing money he could earn right now for banking on the future.

00;09;23;26 - 00;09;40;25
Robert Raiola
Right. And again, I'm not saying that he did it only for the Dodgers benefit. Obviously, he got a lot of money, but the Dodgers will benefit. And they did benefit by saying signing Yakamoto and they had the money to play with the luxury tax because Ohtani took less money in the first ten years.

00;09;40;28 - 00;10;01;05
Mark Conrad
But from the Dodgers point of view, the team has the luxury, if you will, of creating a deal like that that some poorer teams may not. You know, just for listeners who may not know, the Dodgers have a very lucrative cable deal that extends for many, many years and that could fund this sort of thing. But say the Milwaukee Brewers may not be able to do that.

00;10;01;05 - 00;10;09;00
Mark Conrad
So is this technique or tactic going to be limited to the few wealthy teams in baseball?

00;10;09;02 - 00;10;29;20
Robert Raiola
That's a good point. It could be limited, but they could always try to take some [...] compensation structure and, you know, try to iron it out that would work for them, maybe not to the extreme that Ohtani got, but maybe on a smaller scale, it would it would work for the team. They like the fact that there's no interest on the payments.

00;10;29;22 - 00;10;41;24
Mark Conrad
And you would say that's a concession by Ohtani because of the [...] rate and that the Dodgers could be arguably. So arguably by today's dollars it's not 700 million, it's maybe 500 million.

00;10;41;26 - 00;10;52;22
Robert Raiola
Right. I agree with your point. Let's not feel too bad for Ohtani because with the endorsement income and the 700 million, he's in great shape no matter how he decided to take the money.

00;10;52;25 - 00;11;07;08
Mark Conrad
Well, I think that's true. Most of the people would feel like even the $2 million a year would be fine. And he's certainly made good amounts of money when he was with the Angels, too. You know, we can't forget that. So indeed. But anything else that struck you about this deal?

00;11;07;10 - 00;11;18;18
Robert Raiola
I find it extremely fascinating. And the next player - Yakamoto - when he signed his deal, he got a signing bonus upfront, but he didn't play any games with the deferred comp.

00;11;18;21 - 00;11;26;14
Mark Conrad
Okay. Well, thank you very much for coming back to the podcast and look forward to seeing you in the future sometime.

00;11;26;16 - 00;11;30;15
Robert Raiola
Thank you very much, Mark, and thank you, Victoria, for your assistance as well.

00;11;30;18 - 00;11;58;25
Mark Conrad
You're very welcome. Thank you for joining. On that note, on behalf of Fordham University, the Gabelli School of Business, and the Sports Business Initiative, thanks to Robert Raiola for coming back on the Sports Business podcast with Prof. C. And thanks to my producer, Victoria Ilano, for her great work. And thanks to all of you for listening in. For the Sports Business Podcast at Fordham's Gabelli School of Business,

00;11;58;27 - 00;12;02;24
Mark Conrad
I’m Mark Conrad or Prof. C. Have a great day.

00;00;00;00 - 00;00;51;21
Mark Conrad
Hello and welcome to the Sports Business podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as professor of law and ethics and the director of the Sports Business Initiative. Taxes. If there is one constant in life, it is that just about all of us have to pay taxes on our incomes.

00;00;51;23 - 00;01;36;21
Mark Conrad
Professional athletes are no exception, but given their incomes, they have to pay more and pay in many different locations because, unlike most of us, they perform their tasks in many states and many countries. How do they deal with large portions of their income going to the taxman? What can they do to limit their tax bite? With me is Robert Raiola, an expert in this field who has worked with over 100 professional athletes in the five major sports to give us some of the ins and outs dealing with the numbers, rates and different types and scales of taxes that athletes pay.

00;01;36;24 - 00;02;07;08
Mark Conrad
Mr. Raiola is a director of the sports and entertainment group in the firm of PKF O’Connor Davies in Cranford, New Jersey. He has more than 20 years of experience in both the public and private sector. He provides business management, services, tax planning and business consulting to high net worth individuals and their families in the sports and entertainment industries.

00;02;07;10 - 00;02;45;09
Mark Conrad
Robert coauthored the Winning Tax Strategies for Athletes and Entertainers, and has lectured nationally on the topic. He is a graduate of Pace University. Before we start the interview, which was recorded a few weeks ago, some updates. The first involves a change in California's tax law. As you'll hear, Mr. Raiola refers to California's top tax rate as 13.3%. It increases to 14.4% in 2024.

00;02;45;11 - 00;03;17;11
Mark Conrad
Second, this interview was recorded before Shohei Ohtani’s unusual contract with the Los Angeles Dodgers was announced. Mr. Raiola has graciously agreed to join us again in a future podcast to discuss the tax implications of Ohtani's ten year deferred $700 million contract. Now we will start our podcast. Robert, welcome to the Sports Business Podcast.

00;03;17;13 - 00;03;23;16
Robert Raiola
Thank you, Mark. Glad to be on Sports Business podcast with Prof. C. Thanks for having me.

00;03;23;19 - 00;03;35;04
Mark Conrad
My pleasure. So let's go right to the questions. So the first question is how did you become interested in developing a practice that specializes in the taxes of professional athletes?

00;03;35;07 - 00;03;58;05
Robert Raiola
When I was a kid, I was a big sports fan and then as I was growing up, I became interested in how they make money and how they keep their money. And I always say, It's not what you make, it's what you keep. So, you know, you have to be smart with the money. These athletes, I would have financial literacy be mandatory in the junior high school and in the high schools because I think that's important.

00;03;58;12 - 00;04;04;22
Robert Raiola
And a lot of times you certainly don't get to have that topic, and that's not a good thing for them.

00;04;04;24 - 00;04;14;09
Mark Conrad
And then as an adult, once you got into accounting, you were able to get into that area through people you knew or to circumstances or through to expanding a practice?

00;04;14;15 - 00;04;34;25
Robert Raiola
Sure, the accounting firm that I was with merged with another firm, and the other firm had a sports practice. The guy who was in charge wound up being very knowledgeable in tax but not so knowledgeable in sports. So we did well together. We - I worked there for a couple of years and then we went out on our own, started our own practice.

00;04;34;28 - 00;04;39;08
Mark Conrad
And right now is that the firm that has evolved from your own practice?

00;04;39;10 - 00;04;40;12
Robert Raiola
No, it's not.

00;04;40;14 - 00;05;02;15
Mark Conrad
So ultimately you joined another firm along the way and and as I said, and have expanded to 100 professional athletes, which is certainly keeps you very busy. So the next question would be, besides earning high incomes, what issues do professional athletes face that differ from many other high earning tax payers?

00;05;02;18 - 00;05;29;02
Robert Raiola
Mark, you touched on this before. The biggest issue that they face is the state allocation using two particular methods. One is the games played method, not used too often, and the other more commonly used method is the duty days method. Duty day being a practice day, a film session day, a trading day, a rehab day, anything of those nature counts as income.

00;05;29;02 - 00;05;49;18
Robert Raiola
And then within the your formula for allocating wages to estate. The other thing that's very interesting is that some of these states, the rates, if you add in the federal rate, which is 37%, max, the California rate in this question, 13%, and other payroll taxes, you losing over 50% of your income.

00;05;49;20 - 00;06;10;12
Mark Conrad
And indeed, that is really a state by state situation. And we're going to get into some hypothetical cases dealing with that and to see what difference it can make depending on the states that the athlete plays in, tours in, travels in. And and these laws by the way, are, and would you say in, most states that have state income taxes?

00;06;10;14 - 00;06;28;11
Robert Raiola
Yes, there are a few states that don't include income taxes. And matter of fact, one of those states was in the news yesterday. The Oakland A's announced that they're moving from Oakland with the highest rate, 13.3% to Nevada, no state tax. So the players will win out on the move.

00;06;28;13 - 00;06;53;15
Mark Conrad
And we're going to break down those scenarios. In fact, let's do that right now because it really can make a difference. And it's fascinating. So let's start with one example. An NFL rookie signs a contract with a $30 million signing bonus to play for the New York Giants - who do play in New Jersey. How much of that money will go to state and federal taxes?

00;06;53;17 - 00;07;22;19
Robert Raiola
Mark, the answer to that is roughly 50% will go. You have your federal at 37%. You have New Jersey at a whopping 10.75%. You have your Medicare, your Medicare surcharge. So you will be paying about 15% on that bonus. In other sports, like baseball and basketball and hockey, you can get a signing bonus. But if you have three conditions present, you will not have to pay.

00;07;22;22 - 00;07;47;14
Robert Raiola
You will not have to allocate that to the state where you receive the bonus from, and that would be payable separately from salary, it always is; not predicated upon subsequent performance; and nonrefundable would be nonrefundable. If those things are present, you don't have to allocate in this example. It would be New Jersey, but it doesn't apply to football because the contracts, mostly, are not guaranteed.

00;07;47;17 - 00;07;57;21
Mark Conrad
So let's say that it was another sport and fulfill those requirements for that tax year. The bonus wouldn't be paid in state taxes?

00;07;57;23 - 00;08;09;18
Robert Raiola
Yes, the bonus would be allocated in the duty day formula and with the state tax allocation, you would the bonuses. You've got to take the fractured and the bonuses is included in the income. Yes.

00;08;09;21 - 00;08;28;25
Mark Conrad
Okay. So let us say that the athlete and many athletes have residences in Florida and then play in New Jersey, play in New York, play in California, where Florida doesn't have a state income tax. So it would just be based on, say, the duty days that the athlete is in New Jersey?

00;08;28;27 - 00;08;50;09
Robert Raiola
Yes. And if you think about it, football’s an interesting example, Mark, because in football, you have most of the days on a road game. You're in your state for six days in the State of New Jersey, and on a home game you're there for seven days. So when the percentages come out, it's about 85% of your income is taxed in New Jersey

00;08;50;15 - 00;08;57;27
Robert Raiola
if you're a nonresident, and it would be 100% if you are a resident. But football's a tough one to get around.

00;08;57;29 - 00;09;01;17
Mark Conrad
And also, there's a paucity of games in the season, too.

00;09;01;20 - 00;09;02;06
Robert Raiola
That’s right.

00;09;02;09 - 00;09;21;25
Mark Conrad
Right. So it's not that there's one game, and we'll get to some other examples of other sports dealing with that. So let's just say I think you may have answered the question, would the athletes save a considerable sum of money if he played or she played for a team based in Florida or Arizona, which don't have state income taxes?

00;09;21;28 - 00;09;42;18
Robert Raiola
Florida does not have an income tax. Arizona does. They just lowered their rate to two and a half percent. So you would save a ton of money in Arizona and even more than that in Florida. Arizona is one of probably the only state that has a state tax which rate is that low. Most states would have higher rates of that.

00;09;42;21 - 00;10;02;14
Robert Raiola
The Florida is one of, I believe, seven or eight states that do not have an income tax. So in our example above what the bonus, if it was, let's say, was basketball instead of football, you would allocate and if you had a big bonus, you'd allocate another to New Jersey and the bulk of it would be allocated to Florida.

00;10;02;16 - 00;10;10;13
Robert Raiola
But, you know, I think New Jersey would look at that percentages and say, hey, wait a second, we don't believe it's bonus. We believe it's income. [...]

00;10;10;15 - 00;10;16;25
Mark Conrad
I have you dealt with situations where state tax authorities have contested this sort of thing with athletes.

00;10;16;28 - 00;10;39;17
Robert Raiola
Yes, we have. The two states that are most hellbent on getting your money are New York - not a surprise there - along with New York City and California. The only way you pay tax in New York City is if you're a resident. If you're a nonresident, you don't have to pay. But if you do have to pay between Fed and state, it's about 13, 14%, which is right on par with California.

00;10;39;19 - 00;10;56;13
Mark Conrad
And so it's, would you almost advise athletes that play for teams in the big states to reside in a non tax state you think would be the worst of all worlds if that athlete had it's his or her domicile, say, in New York while playing for the Mets.

00;10;56;15 - 00;11;14;22
Robert Raiola
Right. It's not as easy as you think because New York has 183 day rule. So if you spend 183 days or 184 days, you will be a de facto resident and then you're going to have to pay New York state tax and New York City tax on whatever income you have as a resident.

00;11;14;25 - 00;11;25;25
Mark Conrad
And what happens in the season’s schedules that these leagues make? Do you think they try to schedule the season less than 180 days to avoid this problem for the athletes?

00;11;25;27 - 00;11;49;12
Robert Raiola
You got to remember, Mark, especially in baseball, half the game, obviously have half the games on the road. So, you know, over a six month season, you're probably out half the time. You probably wouldn't, you know, jump into the hundred eighty three day rule, except when you have guys like Aaron Judge that, you know, put in his face, put up on a scoreboard of adversary at a hockey game or a Knicks game you know, these guys got to watch that days.

00;11;49;17 - 00;11;56;24
Robert Raiola
I know it's not the most important thing to them, but whatever he's making, $30 million, that's a nice piece of change.

00;11;56;26 - 00;12;20;04
Mark Conrad
And so let's just say back to our Giants player example. So let's say the Giants player’s paid a $10 million salary for the season and plays, say, about half the games on the road. So and possibly the team makes the playoffs hypothetically. But let's say two of those games are in California and one of those games would be in Illinois.

00;12;20;06 - 00;12;34;07
Mark Conrad
So what kinds of taxes would he pay from his total salary and how would they be calculated first in the NFL? And then we'll talk about other leagues as well under those jock taxes.

00;12;34;09 - 00;12;36;27
Robert Raiola
Where are we assuming that he's a resident, Mark?

00;12;36;29 - 00;12;39;08
Mark Conrad
Let's assume he's a resident of New Jersey.

00;12;39;10 - 00;13;05;03
Robert Raiola
Okay. So he would pay tax to New Jersey. The top rate in Jersey is 10.75%. He would also pay tax to California, which is, we touched on before, 13.3% and Illinois at 4.95%. He would get a credit in New York for the California tax and the Illinois tax. The California tax and the Illinois tax are calculated using the same thing

00;13;05;03 - 00;13;07;06
Robert Raiola
the duty days [...]

00;13;07;09 - 00;13;09;09
Mark Conrad
So he would get a credit to his home state.

00;13;09;15 - 00;13;10;04
Robert Raiola
That's correct.

00;13;10;11 - 00;13;18;23
Mark Conrad
Do many states do give that credit or are there states that don't? And the athlete could really be put in a very bad position tax wise?

00;13;18;26 - 00;13;41;07
Robert Raiola
Good question, Mark. Most states give you the credit. However, if you if you play in Illinois and in California, you're only getting the credit at 4.95%. You can't take the higher credit than the tax rate is in that particular state. So you got to watch out with that too. And there are some states which have a reverse credit agreement.

00;13;41;09 - 00;14;04;24
Robert Raiola
So in other words, if you're on the Padres and you play spring training in Arizona, you think you would get Arizona credits, roll the taxes paid to California? Not the case. It's a reverse agreement so that in California you would get credit for taxes paid to Arizona. So you need to watch that because if you don't, you're going to wind up with somebody owing a hell of a lot of money to one state and way over withheld in the other state,

00;14;04;29 - 00;14;07;05
Robert Raiola
and that's not going to be a good situation.

00;14;07;07 - 00;14;20;11
Mark Conrad
And so just to make clear, so for the games in California that this New Jersey resident New York Giant is playing, it'll be the percentage of the salary based on the number of days he would be in California.

00;14;20;14 - 00;14;39;11
Robert Raiola
Probably three days at least. In football, if you're with the Giants, you're probably going to want to fly out there a couple of days before because you don't want to be jet lagged and all that. So most of the West Coast teams come in a couple of days before. It's not like Little League, just travel in the car the day of the game.

00;14;39;14 - 00;14;50;26
Robert Raiola
You know, some days, if it's on the East Coast, the East Coast teams will be there for two days. But the West Coast teams will travel more and will have to pay tax for three days.

00;14;50;29 - 00;15;06;17
Mark Conrad
And here's kind of a trivia question. What is your record in state filings for particular athletes? Like what is the most states that you've had to file or the athlete would have to file taxes through your help that you have encountered? List a number.

00;15;06;19 - 00;15;26;01
Robert Raiola
Okay. I would say about 18 and 19, and that would probably be basketball, because basketball touches on a lot of states. And again, if you're a resident with taxing jurisdiction, you will get credit for taxes paid to other jurisdictions, however, limited to the rate in state where you are resident on.

00;15;26;04 - 00;15;44;12
Mark Conrad
And, you know, these athletes are W-2 employees. They're not independent business people. So they generally cannot take many business deductions. So what kind of tools do they use or you recommend they use to try to limit this very high tax bite?

00;15;44;15 - 00;16;19;19
Robert Raiola
The Tax Cut Jobs Act of 2017. They deleted a lot of the expenses, such as agent fees, union dues, spring training conditioning course, you know of that nature. All those were deleted for individuals and they were not allowed to deduct those things. So what we have to do is, what we'd like to do actually, is on the endorsement income an athlete makes if it's significant enough, will form an S Corp and will give a player a salary. In an S Corp formation,

00;16;19;25 - 00;16;48;15
Robert Raiola
and when you form and have salary, up to a certain extent, you’re gonna also have distributions. The advantage of a distribution, it's not subject to Medicare or Medicare surcharge. So you can get, you know, get a little bit of advantage that way. You also could have what's called a Loan Out Corporation. Like we have a broadcaster; he works in all over the States and he's loaning his services to the company

00;16;48;16 - 00;17;10;24
Robert Raiola
he works for, MSG, ESPN, NBC Sports, whatever it is. And then they pay. They don't pay him, they pay the corporation. The advantage of that is union dues, agent fees, conditions course - all the deductable. But as you can imagine, Mark, most of the employers, they believe you're an employee of that team, not of your own.

00;17;10;26 - 00;17;35;11
Mark Conrad
And it's interesting that you talked about S Corps because, as opposed to LLC - limited liability companies, which generally in the law field these days is the more preferred way to start a business. But are you thinking of S Corps because of the separate corporate rate of taxation, although it may not apply to S Corps or let's say the limited liability aspect that athletes could have as part of an S Corp?

00;17;35;14 - 00;17;55;17
Robert Raiola
Right. When you have a single member LLC you put that income on what's called Schedule C on your tax return. And if you have a multi-member LLC, you have a partnership, and you have to file Form 1065 which is a partnership return. We like to protect [...] liability.

00;17;55;20 - 00;18;13;02
Mark Conrad
And that makes sense. So let's move on to another example. Now we have a National Hockey League player who resides in Ontario but plays for the Boston Bruins. Does he have to pay taxes in both the U.S. and Canada? First part of the question.

00;18;13;04 - 00;18;42;01
Robert Raiola
Yes. That's very interesting, the U.S. and Canadian treaty. We see it a lot, especially with hockey players. The top rate in the province of Ontario, Canada, is 53.5%, which is whopping; huge number. However, if you get a signing bonus, Mark, that bonus is only taxed at 15%. So in other words, you get the short end of the stick if you take regular salary, but if you get a bonus, it's only taxed at 15%.

00;18;42;03 - 00;18;53;12
Robert Raiola
Some other things in the treaty would be Canada and the US., if you have less than $15,000 of endorsement income in Canada, you won't pay any Canadian tax on that money.

00;18;53;14 - 00;18;58;24
Mark Conrad
Now that's [...] the federal Canada tax at that the highest federal rate is 53%?

00;18;58;25 - 00;19;00;13
Robert Raiola
Yes.

00;19;00;16 - 00;19;15;08
Mark Conrad
Okay. And so now we get to the provinces and provincial towns. So we have Massachusetts, which has a fairly high income tax, and we have Ontario, which also has a pretty high income tax. So how would those taxes be added in?

00;19;15;11 - 00;19;54;20
Robert Raiola
I'm sorry, Mark, let's clear up something. The 53.5% is the federal and provincial tax blended together. An interesting thing about Massachusetts, they used to have one of the lower tax rate at 5% net. Last year, what they did is they built a millionaire's tax. Over a millionaire of income, [...] 9% tax. So, you know, the Red Sox players, the Celtics players, the Celtics, having two players get maxed out deals and they're going to be paid a lot of money, but they'll be out of pocket a lot of money, a lot more money in Massachusetts than if they would have signed a couple of years ago when the rate was only 5%.

00;19;54;22 - 00;20;15;22
Mark Conrad
That's obviously a big difference. And I think it's important to note that how the laws change and how, you know, you and anybody else in this business have to keep up with the changes in laws and regulations in the states and the provinces. Of course, from the IRS as well. So it becomes very complicated. And then we get to that example.

00;20;15;22 - 00;20;42;24
Mark Conrad
Let's stay with it. And I'll give this as an example of what we call the Canadian road trip. For those of you are hockey fans and follow Eastern teams, inevitably once a season, there is a Western Canada road trip where the team is going to play in Vancouver, Edmonton, Calgary, Winnipeg, maybe Toronto, maybe even Montreal. So let's say we have players that go through this regimen every season

00;20;43;02 - 00;20;54;18
Mark Conrad
that play for a team, say, in New York, Philadelphia, Washington, what have you, or even Florida. How are the taxes calculated in that way provincially?

00;20;54;20 - 00;20;58;09
Robert Raiola
Okay, so the athlete is based in Toronto, correct?

00;20;58;16 - 00;20;59;04
Mark Conrad
Yes.

00;20;59;06 - 00;21;29;14
Robert Raiola
Right. In Canada, unlike in the U.S., you only pay tax on the province of residency. So that athlete would not have to allocate his income to Vancouver, Toronto, Montreal. Also [...], in the treaty, there's a bunch of states that don't recognize the treaty, like New Jersey and California. So you can conceivably, if you're playing for Toronto team, you're not going to have to follow a U.S. return, but you will file, you know, New Jersey, California.

00;21;29;17 - 00;21;33;13
Robert Raiola
So a little unusual, a little opposite of what we do here in the States.

00;21;33;16 - 00;21;36;23
Mark Conrad
And now what if the player was a US based player for U.S. team.

00;21;36;27 - 00;21;44;19
Robert Raiola
U.S. based player, he would not pay Canadian tax, same thing holds but he would have to pay a job tax to the other states in the US.

00;21;44;21 - 00;21;50;03
Mark Conrad
So he wouldn't pay the equivalent of a job tax in Canada. So that would be a fairly free income for him.

00;21;50;06 - 00;21;59;17
Robert Raiola
That's right. I always say, Mark, it’s easy as ABC, anywhere but Canada and anywhere but California and the athletes laugh. They say it's not that easy.

00;21;59;20 - 00;22;12;08
Mark Conrad
So actually that's interesting when you first meet with an athlete, let's say a younger athlete referred to you and does he have to come in with a state of shock about how much money is being taken out of his or her paycheck?

00;22;12;10 - 00;22;14;18
Robert Raiola
Yes, they have no idea.

00;22;14;20 - 00;22;18;01
Mark Conrad
They're not [...] even by the players association?

00;22;18;03 - 00;22;31;21
Robert Raiola
One player said, I want to meet this Mr. FICA. Who is this FICA guy? The FICA is the 6.2%, which is capped at around $160,000. But everybody's got to pay. You, myself, anybody has to pay that.

00;22;31;24 - 00;22;42;09
Mark Conrad
So many don't have at least the kind of advice to say be aware that your $30 million signing bonus or your initial salary is going to be heavily taxed.

00;22;42;11 - 00;22;51;10
Robert Raiola
Like I said, Mark, it's not what you make, it’s what you keep, and on 30 million in the wrong state? He'd only take out less than $15 million.

00;22;51;12 - 00;22;54;28
Mark Conrad
But he's not prepared to see that until it's, you know, too late.

00;22;55;04 - 00;22;58;04
Robert Raiola
He will be in shock when he sees how much he netted.

00;22;58;06 - 00;23;09;15
Mark Conrad
And then my question is, don't people advise the young athletes say, just as a warning, please be aware, there is Uncle Sam or Uncle Albany or Uncle Sacramento or whatever it may be?

00;23;09;17 - 00;23;30;22
Robert Raiola
Yes, they do, but the athletes don't often listen. And look, I'm not going to say, you know, 30 for 30 show, you know, athletes go broke in this percentage of basketball player, this percentage of football players after five years or they're out of the league they go broke but they really have to be prudent with their money because they have a short frame - time frame - to make the money.

00;23;30;29 - 00;23;45;10
Robert Raiola
Most athletes don’t have ten years in the league in their sport. If you do have ten years of, for example baseball, you get an excellent pension. I think it was 100% of salary you would get your last couple of years. So that would be a good thing to have.

00;23;45;13 - 00;24;08;02
Mark Conrad
And you referred to the 30 for 30 episode on ESPN. I'll just make a note for listeners. That was an episode a few years ago about how athletes became broke and how they misspent their money. And that was a very illuminating episode where if you think you cannot spend $30 million or $15 million end up insolvent or bankrupt, think again. It's very possible.

00;24;08;04 - 00;24;28;14
Robert Raiola
So, Mark, just one note on that. I got a client who said to me, Robert, I want to buy a T-Rex. I said, The last I heard of a T-Rex was when I was a little kid a T-Rex was referring to a dinosaur. But in his world, T-Rex was a three wheel vehicle and he went out and spent $40,000 on this three wheel vehicle.

00;24;28;20 - 00;24;30;29
Robert Raiola
So not exactly good investment.

00;24;31;02 - 00;24;32;25
Mark Conrad
No. And how long did he use it?

00;24;32;28 - 00;24;34;07
Robert Raiola
Couple years. Yeah.

00;24;34;09 - 00;24;39;25
Mark Conrad
And do you see that the athletes sometimes get family pressure or you sense family pressures?

00;24;39;27 - 00;25;10;16
Robert Raiola
Yes. For sure. Some parents will be very protective over their son, and I can understand that, but they also are looking for a piece of the action. It's always a tough situation because if you give them a salary, it's going to be hard to stop giving them a salary. But if you give them a salary, you get the top deduction at a top income tax rate of 37% and they probably pick up income as a significantly lower bracket, maybe even 15%.

00;25;10;18 - 00;25;20;25
Robert Raiola
So it's very difficult and it's always one of the biggest things you try to learn at the beginning of a relationship. Do mom and dad expect to have payroll? Well, mom or dad.

00;25;20;27 - 00;25;29;16
Mark Conrad
And we've been focusing on male athletes because of the salary structure, but are you seeing an increasing number of clients who are female athletes?

00;25;29;18 - 00;25;47;28
Robert Raiola
Yes, I actually just picked up a an equestrian award. I don't know what they call the woman's name for equestrian rider. And she had worked in the U.S. but never filed a U.S. tax return. So we're going to assist her in clearing that up. She was a resident of Canada, I’m sorry, Mark.

00;25;48;00 - 00;26;09;07
Mark Conrad
And actually let's talk internationally because on more on the golf and tennis side where you have international athletes competing, coming to the U.S. and other countries and U.S. athletes competing abroad, and these athletes are not employees. They're independent contractors. So they're different. Do you represent or have you represented some of these athletes?

00;26;09;09 - 00;26;40;12
Robert Raiola
Yes, we represented, for example, football players would be on point there. Basically when the teams go over there, Germany and the U.K., the top tax rate is 45%, not as bad as Toronto, Ontario, but you would get a credit in U.S. again, limited to our top rate of 37%. But think about it, the players don't like to go there because the travel is far and they have to pay extra tax.

00;26;40;15 - 00;27;01;00
Robert Raiola
So I think that it would be interesting to think about would be, well, why not have a tax balancing situation? In other words, if they are paying more in tax, there's got to be some way we can, you know, knock that down a little bit and come up with an idea so then that's true if we're playing over the U.K., well, wherever.

00;27;01;02 - 00;27;19;05
Mark Conrad
I guess that would be up to Congress and the IRS to deal with that here. And of course, they want income. So I don't know how sympathetic they would be. But I think for the athletes, it would be certainly an interesting idea. But for the independent contractors, rather athletes more. Are there differences in how you prepare the returns?

00;27;19;05 - 00;27;29;02
Mark Conrad
Because it's not going to be be more based on 1099 income or equivalent thereof like winnings. So is there like more leeway for deductions for such an athlete than for a W-2?

00;27;29;05 - 00;27;51;02
Robert Raiola
Yes, because you're self-employed and this would also include single member LLC would also be on schedule C of your tax return and you would avail yourself the agent fees, union dues, kind of tough when somebody negotiated you a big contract and he comes in there with 4% and the player will say, I get the benefit of that.

00;27;51;08 - 00;28;02;01
Robert Raiola
The answer is no. On an employee [...] like the hockey player we dealt with before, not on the independent contractor. The independent contractor, they would be able deduct those things.

00;28;02;03 - 00;28;23;19
Mark Conrad
Right and more leeway to make deductions because they're basically running a business as opposed to being a pure employee. And so let's say we have a situation of a player was a citizen of France, and she plays in a number of tournaments in the U.S. as a tennis player. And let's say it's Indian Wells and U.S. Open and a tournament in Florida.

00;28;23;19 - 00;28;35;28
Mark Conrad
But Florida has no state income tax, so it should be clear there, but how would she deal with the Federal U.S. taxes, taxes in France, and taxes in states like New York and California?

00;28;36;05 - 00;28;49;19
Robert Raiola
Okay. The top rate in France is 45%, which is like the UK and Germany, and you would pay that income tax rate. So this is a person of french descent or an American?

00;28;49;25 - 00;28;52;06
Mark Conrad
No French citizen.

00;28;52;13 - 00;29;16;28
Robert Raiola
Okay, a French citizen. So I'm not that familiar with the laws pertaining to a French citizen, but I would imagine the treaty they talk about income and different type of income and how you tax it. I would imagine that you pay tax to Canada, sorry, to overseas in France and would pay tax in the U.S. and would definitely pay tax to New York and California.

00;29;17;00 - 00;29;35;16
Robert Raiola
It's easy to identify, Mark, with tennis player because if you go to Flushing Meadows and you spend two weeks there and you win the tournament, you don't walk away with a piece, a small piece of change. You're walking away with at least $3 million. So it's easy to identify where that income was earned because the tournament is all in New York.

00;29;35;19 - 00;30;08;26
Mark Conrad
Yes. And so the tax person will come in there. And I mean, there have been stories of athletes trying to move to other countries and other ways to try to limit the tax crunch. But it is very, very difficult. So let's move on. And from the jet setting professional athletes, let's talk about high school and college students now, because we are in the era of name, image and likeness and more and more young people are monetizing their images now that the NCAA has opened up this avenue.

00;30;08;26 - 00;30;20;20
Mark Conrad
And even in some states, high schools have. So what are the tax consequences of, you know, 19 year old basketball player for, for Fordham and gets NIL compensation.

00;30;20;23 - 00;30;49;03
Robert Raiola
So the NIL compensation would be deemed to be a 1099 income and they would be able to pick up the income, the deduct the expenses if they had any, open up what’s called a [...] plan to shelter up to 40% of their income if you count the state. And this is a really interesting situation because I don't believe...Two things: the athletes don't know that no tax was taken out on that compensation.

00;30;49;09 - 00;31;02;18
Robert Raiola
And the second thing is they may not be aware of that they have to go ahead and file a tax return. What we’re hearing is upwards of 50, 60% of the recipients of NIL payments are not filing taxes.

00;31;02;21 - 00;31;06;16
Mark Conrad
And have you had any clients in that space yet?

00;31;06;18 - 00;31;08;07
Robert Raiola
Yes, just a few.

00;31;08;10 - 00;31;19;29
Mark Conrad
And to be fair, most of the NIL deals are often influencer deals and there's really not much income. But there have been some multimillion dollar deals and I would suspect those would be the greater.

00;31;19;29 - 00;31;28;28
Robert Raiola
The better the prospect, the better the payment. They don't only get cash, sometimes they give it a car, leased a car for them as well. So you have to pay tax on that.

00;31;29;00 - 00;31;30;18
Mark Conrad
And is there a minimum on that?

00;31;30;25 - 00;31;47;03
Robert Raiola
If your income is over $400, you have to pay, you have to file a tax return. Now, a guy who got only $1,000, he's going to pay little or no tax. You'll pay some self-employment tax. You will pay any income tax and you probably will not pay any state tax.

00;31;47;05 - 00;31;50;29
Mark Conrad
So what do you think is the most satisfying part of your job?

00;31;51;01 - 00;32;17;03
Robert Raiola
We had a situation where January 7th of, I don't remember what the year was, 2015 say. We had an athlete traded from the Golden State Warriors to the Indiana Pacers. He started to get paid by the Pacers instead of the Warriors. Well, we realized a couple of weeks after he got traded there, was that he was paying Marion County tax of about 0.9%.

00;32;17;05 - 00;32;33;06
Robert Raiola
When we went to go do the return, we found out that the first year you're over there, you're not deemed to have been there for as long as he was. It's where you're resident of January 1st, not January 7th. So we got him back $75,000.

00;32;33;09 - 00;32;43;22
Mark Conrad
I'm sure he was pretty happy. Any other general ideas like how you you're enjoying this work, enjoy the people you deal with and any other satisfying aspects?

00;32;43;27 - 00;33;04;29
Robert Raiola
I like going to games, you know that that's something I like to do. Then my kids have developed a likeness with sports as well. My older son is a Red Sox fan because when he played Little League, the first team [...] was the Red Sox. So he's not a Mets fan like myself, but him and his brother are Red Sox fans.

00;33;05;01 - 00;33;13;24
Mark Conrad
Great, and what advice would you give to a young CPA who is interested in getting involved with athletes’ taxes?

00;33;13;26 - 00;33;36;14
Robert Raiola
I would say if they want to do on the tax [...] to get a bit of a background so you learn individual income tax and corporate income tax and then after a couple of years, maybe you transfer, you go to a different firm or you transfer into the department that has sports and entertainment stuff. You know, it's a good...I love what I do, but it's not for everybody.

00;33;36;16 - 00;33;41;09
Mark Conrad
And when you say it's not for everybody, what are some of the downsides?

00;33;41;12 - 00;33;59;20
Robert Raiola
Sometimes you deal with people that don't really understand financial situations and you have to explain it to them over and over again and they still don't get it. So it takes time to explain to people sometimes what happens. Now they're all not like that. There's a bunch of them that get it and understand what we do to save them money.

00;33;59;22 - 00;34;01;18
Mark Conrad
Hey, anything else you'd like to add?

00;34;01;21 - 00;34;04;17
Robert Raiola
Thanks for having me on the podcast. I enjoyed it.

00;34;04;20 - 00;34;30;14
Mark Conrad
Well, thank you for being on the podcast. On behalf of Fordham University, the Gabelli School of Business and the Sports Business Initiative, I'd like to thank you, Robert Raiola, for taking the time to discuss the intricacies of taxes for athletes. It's been a great pleasure. I also want to thank my producer, Victoria Ilano, for her great work in putting the Sports Business Podcast with Prof.

00;34;30;14 - 00;34;57;01
Mark Conrad
C together, and thanks to all of you for listening in. For the Sports Business podcast at Fordham's Gabelli School of Business, I’m Mark Conrad or Prof C, and have a great day.

00;00;00;00 - 00;00;45;03
Mark Conrad
Hello and welcome to the Sports Business Podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur, and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as a professor of law and ethics and the director of the Sports Business Initiative. Here is a trivia question. In 1954, Roger Bannister broke the four minute mile.

00;00;45;05 - 00;01;13;07
Mark Conrad
Since then, thousands of male runners have broken that barrier. The world record is about 20 seconds faster today than it was then. But how many women have broken the four minute mile? Answer: Zero. None. The difference in success in one of the leading track races made me think about the issue of the inclusion of transgender athletes competing in their preferred sex.

00;01;13;09 - 00;01;41;26
Mark Conrad
This has become more than a sport's topic. It has become a legal and political landmine, with strong opinions offered by those in favor and those opposed. Some feel that trans athletes have the right to compete with no restrictions. Others feel the opposite, including some women's rights advocates. In certain states, legislators who have been able to enact bans on trans athletes from competing in their preferred gender.

00;01;41;28 - 00;02;19;26
Mark Conrad
While the Biden administration has released proposed rules that would try to mark a middle ground, the rules would allow such athletes to compete except in situations where they were past puberty, and the result would be an unfair advantage over cisgender women. Suffice it to say that the debate has been at times nasty and personal. I want to focus on a sub issue that centers on the Roger Bannister trivia question, and that is formerly male trans athletes competing as women on the elite or professional levels.

00;02;19;29 - 00;02;52;14
Mark Conrad
The stakes are not insignificant as medals, fame and money come from being a top of the world in a given sport. At this time, most international sports federations have allowed transgender athletes, but only after they take hormonal suppressants to limit their testosterone levels. This involves a central question: Do formerly male trans athletes who transitioned after puberty have an advantage over cisgender women?

00;02;52;16 - 00;03;28;23
Mark Conrad
And here is where we must address the biology of whether testosterone levels create an unfair advantage. Is there a biological basis for this variance? A recent study released by the American Academy of Sports Medicine concludes that testosterone levels point to significant performance differences based on sex. The study, available on its website, acsm.org, does not make recommendations, but its conclusion fans are definitive. Quoting from the abstract:

00;03;28;25 - 00;04;12;14
Mark Conrad
“Biological sex is a primary determinant of athletic performance. Because of fundamental sex differences in anatomy and physiology dictated by sex chromosomes and sex hormones.” Note the words “primary determinant”. The study concludes that, quote, “adult men are typically stronger, more powerful, and faster than women of similar age and training status. Thus, for athletic events and sports, relying on endurance, muscle, strength, speed and power, males typically outperform females by 10 to 30%, depending on the requirements of the event.

00;04;12;16 - 00;04;45;24
Mark Conrad
These sex differences in performance emerged with the onset of puberty and coincide with the increase in endogenous sex steroid hormones, in particular testosterone in males, which increases 30 fold by adulthood but remains low in females,” unquote. The report compares the biological male and female performances in track and field, swimming, speed skating, track cycling, weightlifting, and archery. And the differences are striking.

00;04;45;26 - 00;05;30;13
Mark Conrad
Just a few examples: in running, from 100 meters to the marathon, the difference hovers around 10%; in jumping and pole vault, about 15%; in swimming between five and 15%; and speed skating 8 to 10%. Weightlifting has the widest range, 22 to 30%, and archery the least with 2%. As noted earlier, the American Academy of Sports Medicine report does not make any recommendations on the issue of inclusion of transgender athletes in cross sex competition or how athletes should be categorized for recreational or competitive sports.

00;05;30;16 - 00;06;06;16
Mark Conrad
Rather, it is an overview of the state of the science. But the science says a lot, and it should be food for thought in the debate over transgender athlete participation in elite level sports competitions. Any thoughts? Send them to me at [email protected]. That's gsbsportsbusiness - One word - @fordham.edu. Thanks to my producer, Victoria Ilano for all her hard work to make this podcast happen.

00;06;06;19 - 00;06;26;23
Mark Conrad
And thanks to all of you for listening. Until next time, this is Prof C for the Sports Business Podcast.

00;00;00;00 - 00;00;42;24
Mark Conrad
Hello and welcome to the Sports Business Podcast with Mark Conrad; the podcast that explores the world of professional, collegiate, amateur and Olympic sports. I'm Mark Conrad, or Mark Conrad from Fordham University's Gabelli School of Business, where I serve as professor of law and ethics and the director of the Sports Business Initiative. The Olympic movement has seen its share of issues.

00;00;42;26 - 00;01;12;12
Mark Conrad
Human rights, the selection of host cities, doping and climate change, to name a few. The International Olympic Committee is in the process of making important decisions about the future of the century plus movement and has had to deal with its own controversies and those of some international sports federation. Adding to this are the unsettled world events such as the conflicts in Ukraine and the Middle East.

00;01;12;15 - 00;01;42;11
Mark Conrad
With me to speak about the present status and the future look of the Olympic movement and international sports scene is Rich Perelman, an expert who has worked in the field for years and now publishes one of the most authoritative online sources about the Olympics and international sports. Rich's involvement in the Olympics goes back to the 1984 Summer Games in Los Angeles, where he served on the organizing committee.

00;01;42;14 - 00;02;19;29
Mark Conrad
Since then, he has used his skills in communications, organization, and project management to help other high profile sports and non-sports projects over four decades. He helped produce many famous sports events, including the 1999 FIFA Women's World Cup, the 2002 Olympic Winter Games in Salt Lake City and the 2006 , 2009, and 2013 World Baseball Classics. This is in addition to major entertainment and civic events that he has handled as well.

00;02;20;01 - 00;02;52;24
Mark Conrad
A native of Los Angeles, Rich graduated from UCLA with a degree in economics and earned his juris doctor degree from Loyola of Los Angeles Law School. Rich's online publication - TheSportsExaminer.com - is an all in one online resource for commentary, coverage, and results of 40 international sports on the Olympic sports program. Very few have the expertise on this important sports area as Rich Perelman.

00;02;52;26 - 00;02;55;09
Mark Conrad
Rich, welcome to the podcast.

00;02;55;11 - 00;02;58;09
Rich Perelman
Thank you. Thank you for the wonderful introduction.

00;02;58;11 - 00;03;09;09
Mark Conrad
My pleasure. It is well-deserved. To start us off, could you give us a short background on the Olympic movement - its goals, its organization and its funding?

00;03;09;12 - 00;03;37;21
Rich Perelman
The Olympic Games is an ancient Greek religious right, for lack of a better term. That was started in 1776 before the Common Era and continued all the way to about 394 of the Common Era, when it was outlawed by the Roman Emperor Theodosius as a pagan ritual. Took place always in Olympia, and it was essentially a celebration of the famous Greek god Zeus.

00;03;37;23 - 00;04;22;14
Rich Perelman
The games were dormant after being ended by the Romans, and then it was revived in the 1890s, primarily by Frenchman Pierre de Coubertin, who proposed a revitalization of the games in 1894. And it took hold in the first modern games, so to say, was in 1896 and Athens, and except for three cancellations due to World War II and a one year postponement in Tokyo from 2020 to 2021, the Games have taken place every four years from 1896 until today and are scheduled to be in Paris in 2024 from a few hundred athletes in Athens in 1896 to just about 11,000.

00;04;22;14 - 00;04;52;26
Rich Perelman
The quota is 10,500, but I think they'll have about 11,000 athletes all together in Paris next year. The Games has grown enormously and because of the interest primarily from American television, but also European television, and less so in other countries, but still important. The games is a financial behemoth because of the rights fees paid by television networks, primarily the U.S. and Europe, and also a very lively international sponsorship program.

00;04;52;26 - 00;05;21;00
Rich Perelman
And the International Olympic Committee, in their most recent meeting, indicated that they have already signed contracts, signed contracts, committed money for the quadrennial from 2029 to 2032, a 5.4 billion U.S. dollars. That's on top of $7.6 billion U.S. That was for the quadrennial that ended with the Tokyo 2020 Games in 2021. So there's a lot of money in this,

00;05;21;00 - 00;05;31;27
Rich Perelman
and the International Olympic Committee - the IOC - is the one that collects all that money, that owns the games and is ultimately responsible for their organization and staging.

00;05;31;29 - 00;05;37;19
Mark Conrad
And how did you become involved in the Olympic movement and in international sports?

00;05;37;22 - 00;05;59;12
Rich Perelman
Well, I fell in love with the Olympic Games when I was 11 years old, watching the 1968 games in Mexico City on my parents' television in their bedroom because they had a color TV. So I watch the games. I was completely fascinated by the games. I had always been interested in sports as a real youngster, not really athletically gifted,

00;05;59;12 - 00;06;31;20
Rich Perelman
so I didn't play much, but I was very interested in the organization of the games and how this event showed up on television. I still think television is something of a miracle, not to mention the Internet and all the rest of it that we have today. But there it is. And as I got older, I went to track meets at UCLA, which had a new stadium in those days, and I followed it in the newspapers, especially the Los Angeles Times, when newspapers were actually comprehensive coverage of all sports, not just the big four ball sports and a couple of others.

00;06;31;22 - 00;07;03;21
Rich Perelman
And when the opportunity came to be part of a team, I wasn't good enough to be a runner in track - I had some physical problems - I became a student manager and I became the student manager at UCLA. And I worked for the athletic news service. And when I was in law school, the Los Angeles Olympic Organizing Committee had begun, and I sent a note saying, I can really help you because I'm already the press officer for the U.S. track and field team and know a lot about the logistics of press service.

00;07;03;21 - 00;07;27;29
Rich Perelman
And I got turned down a couple of times. But finally, in 1981, I got hired and I was vice president, eventually, of the Olympic Organizing Committee in Los Angeles. And that really changed my life. The Olympics has changed my life, and I've been involved in Olympic organization and now in coverage of the Olympics, really since I would say, you know, the mid 1970s.

00;07;27;29 - 00;07;30;22
Rich Perelman
So it's been a lifelong interest of mine.

00;07;30;24 - 00;07;51;07
Mark Conrad
And indeed, my first Olympics was the 1968 Olympics as well, watching it on a black and white television as we didn't have a colored television. And that was a luxury back then for those of you way too young to remember those days. So what do you think are the major challenges for the International Olympic Committee right now?

00;07;51;09 - 00;08;16;01
Rich Perelman
Well, there are short term challenges and there are long term challenges. The short term challenges right now have to do primarily with what is going to happen with Russian and Belarusian athletes at the Paris 2024 Olympic Games. The Paris organizers, by all accounts, have done a pretty good job of organizing the games. The construction, which is being done.

00;08;16;01 - 00;08;34;19
Rich Perelman
There's not a huge amount of it, but there is some that's being done by the French government. All the reports on that have been that they're on time and they're on budget. So these things are going to get done. The most important is the Olympic Village, and that seems to be coming along well. They're going to do some really interesting things.

00;08;34;19 - 00;09;01;23
Rich Perelman
The opening ceremony will not be in a stadium. This will be the first time. They're actually going to float all these athletes on boats on the River Seine, which to a lot of people comes off as insane, but that is their plan and it appears to be workable. So it's going to be something completely new. It's a six kilometer course along the Seine and it should work that the logistics are doable.

00;09;01;25 - 00;09;28;09
Rich Perelman
But the overshadowing issue is what happens with the Russians. You know, obviously the invasion of Ukraine right after the Beijing 2022 Olympic Winter Games cast a huge shadow over those games, over the Beijing 2022 Paralympics. And it has been a tragedy of enormous proportions in the world ever since. And now joined, unfortunately, by the Hamas attack on Israel.

00;09;28;11 - 00;10;07;07
Rich Perelman
So the question is going to be not will Russia be at the games? The Russian Olympic Committee is suspended and Russia as a team with the flag and the anthem and all that is not going to be at Paris. But the International Olympic Committee, under the leadership of the German Thomas Bach, who was a 1976 Olympic gold medalist in team fencing and foil, has said that they would like to see neutral Russian athletes, whatever they define that to be, and they have not defined it in specificity, to be able to compete in the games because they're not responsible for what their government has done.

00;10;07;10 - 00;10;34;10
Rich Perelman
That is the immediate short term issue that deals primarily with the credibility of the Olympic movement and in our what President Bach calls "our aggressively divisive times," I think that's a great way to put it, the difficulty for the IOC is credibility going forward from 2024 in Paris to 2026 and the Winter Games in Milano and then to Los Angeles again in 2028.

00;10;34;13 - 00;11;02;19
Rich Perelman
That's the short term challenge. The long term challenge comes after 2032. The reason for this is that the NBC contract, which is still the major driver of the IOC's revenue, ends in 2032. And for those who weren't paying attention, and if you look at the Olympic ratings from Tokyo - you weren't - the ratings were the lowest they've ever been in the history of the Olympics in the United States.

00;11;02;22 - 00;11;39;03
Rich Perelman
And NBC, which has done very well with its ad sales, is hoping for a major rebound in Paris. A, because the games will not be impacted by COVID. And two, it's in a much more friendly time zone to the U.S. than anything that's held in Asia or the Middle East. So there is a lot of concern and a lot of chatter among those of us who follow these things pretty closely that NBC may or may not be interested in extending beyond 2032, that there might be a change for those of us who follow the games in 68 and 72 and 76 and so on,

00;11;39;07 - 00;12;06;17
Rich Perelman
NBC was not the U.S. Olympic broadcaster. It was ABC, and Roone Arledge and ABC really owned the games. They were the ones that were closely identified in the U.S. with the games. That really changed in 1992 when NBC took over in Barcelona. And they've been the broadcaster ever since. But that's because they have been willing to make extensions in the billions of dollars for groups of four or six games.

00;12;06;17 - 00;12;31;12
Rich Perelman
And given the financial pressure on the NBC ownership and the parent company Comcast, it's not at all clear what they're going to do, whether they're going to renew. And if they do renew, what is the dollar number going to be? So I think the long term health of the Olympic movement in terms of finances is something that the IOC is concerned about.

00;12;31;12 - 00;12;52;23
Rich Perelman
And those of us who observe the games, watch the games are fans of the games are also very concerned about because the Olympic Games now, as was said at the recent IOC session in India, include a whole bunch of sports which, if not for the largesse of the International Olympic Committee, would essentially fall apart. And that's a concern.

00;12;52;25 - 00;13;02;29
Mark Conrad
And more sports have been added for the 2028 games as well, which are kind of offbeat sports, but do you think some of those were added to attract the younger viewers?

00;13;03;01 - 00;13;27;01
Rich Perelman
Well, I think that it's a mixed bag under Bach, who has done some very interesting things, I think a lot of which are for the positive. He has tried to reign in the expansion of the games. So there was a decrease in the number of sports and the number of events from Tokyo to Paris. It wasn't a huge decrease, but it was a decrease, which in and of itself was amazing.

00;13;27;03 - 00;14;01;21
Rich Perelman
Now along comes the LA '28 Organizing Committee and they have taken the top off this thing because they agreed - before these added sports - they agreed to add as a permanent part of the program sport climbing, skateboarding and surfing. So the 28 core sports that had been approved for Paris now is 31 for Los Angeles in 2028. It's actually 30 right now because boxing is in limbo for reasons having to do with governance and the International Federation for Boxing.

00;14;01;23 - 00;14;32;02
Rich Perelman
But L.A. '28 has blown the roof off of this because they brought in baseball and softball, which are very popular in the U.S. and they'll do very well. That will be a moneymaking exercise for L.A. '28. They brought in cricket, which they feel is going to help bring a important international sport into the U.S.. They brought in lacrosse, which is very popular in the eastern U.S., not as popular in the western U.S., especially at the collegiate level.

00;14;32;10 - 00;14;56;03
Rich Perelman
They brought in squash and they brought in flag football. Now, personally, I don't I don't understand squash. I understand the reason for the others. Baseball, softball, very popular in Los Angeles, the Dodgers, the Angels so on, college softball with UCLA, very popular. So I think those sports will do well. Everyone expected that baseball and softball to come in. Flag football,

00;14;56;03 - 00;15;25;13
Rich Perelman
there has to be a sponsorship deal with the NFL in this somewhere. Has to be. And cricket, there has to be a sponsorship deal or a portion of the television rights addition, which are, according to the International Cricket Council, the television rights for 2028 now in India will go from somewhere in the 14 to $20 million range to 150 million or more because of cricket.

00;15;25;16 - 00;15;56;15
Rich Perelman
And I'm sure the IOC will share some of that with the LA '28 organizers. So if you can get money from cricket and you can get money from the NFL, now you've got essentially two more major sponsors, right? And that's money in the till. And that's good for organizing committees. Organizing committees like money in the till. Lacrosse, I think the LA 28 organizers, and this was mentioned at the IOC meeting, that some of these sports are going to be played outside of California.

00;15;56;15 - 00;16;25;05
Rich Perelman
And so it doesn't take too much imagination to conjure up the image of 20 or 30,000 people who were at the NCAA lacrosse championship at M&T Bank Stadium in Baltimore about a decade ago, having Olympic lacrosse take place in one or more of these big eastern stadiums, maybe even an NFL type stadium where you could fill it up with people who really enjoy lacrosse.

00;16;25;05 - 00;16;58;00
Rich Perelman
It's something they understand, something they already a fan of, which does not really exist in Los Angeles. There is a pro lacrosse franchise, but it does not draw as the franchises do in the East. So it's very interesting what they've done. But the hard work that Bach did to try and make the games a little bit smaller has been stymied, if you will, by this dramatic expansion to 35 or 36 sports in Los Angeles, which will be the most sports ever held in an Olympic Games.

00;16;58;02 - 00;17;27;12
Mark Conrad
And a lot of food for thought. And certainly money does play a huge role and continues to do so in the whole Olympic system, and all whole sports system for that matter. But let's move on to a more controversial issue. And that has been the issue of human rights and how has the IOC dealt with the issue in its selection of Beijing for the last Winter Games, a kind of unusual location in the best of circumstances, not exactly known as a Winter Games haven.

00;17;27;15 - 00;17;38;14
Mark Conrad
And how successfully do you think the IOC handled the considerably negative press regarding these issues involving the Beijing Games?

00;17;38;16 - 00;18;16;16
Rich Perelman
Well, the choice of Beijing was an extremely important one for a multitude of reasons. The election of Beijing, which people, you know, don't remember, there were three or four European cities, traditional winter sports, host type cities that decided they were not going to bid for the 2022 Olympic Winter Games. They were unhappy. Not so much with the IOC on human rights, but they were very unhappy with the IOC about the cost of the Games, the way the games had to be organized under the IOC's requirements.

00;18;16;18 - 00;18;46;04
Rich Perelman
And Bach, to his credit, got in there. He was elected in 2013. He was the president when the IOC selected Beijing and it was selected over Almaty in Kazakhstan, 44 to 40. And that Kazakhstan could get 40 votes against China shows you how uncomfortable the IOC membership was with going to Beijing for the Olympic Winter Games. But Beijing was elected.

00;18;46;07 - 00;19;19;03
Rich Perelman
They went there and the games were successfully done. From a sporting standpoint, there were a lot of concerns during the Games about Beijing as a choice because of the human rights concerns of what was happening in the Jiu Jiang province with the Muslim population there. And if the IOC had had a better opportunity to go somewhere else, I think they would have they didn't want to go to Almaty because they didn't even know if the games would be competently organized there.

00;19;19;06 - 00;19;48;22
Rich Perelman
But they didn't have a good option. And the IOC, and this is Bach and he deserves the credit on this, he changed the paradigm. And so now the IOC does not go to a winner take all vote where everybody is crowded into a ballroom in some hotel or convention center, and out comes the card that says that Beijing won and everybody else in the room is humiliated and has spent millions of dollars and got nothing for it.

00;19;48;22 - 00;20;15;24
Rich Perelman
It's a winner take all kind of system. So he eliminated this system into more of a discussion system, and the IOC select who it wants to run the games and be the host. And so out of this process has come Paris for 2024, Milan-Cortina for 2026, Los Angeles for 2028. Either France, Sweden or Switzerland for 2030.

00;20;15;24 - 00;20;50;19
Rich Perelman
That has not been selected yet. Brisbane in Australia for 2032 and certainly it will be Salt Lake City for 2034. Those are not Beijing and they're not Almaty. Those are all in first world democracies. So and the whole way that bidding has been arranged is different. The IOC for decades demanded that new facilities be built and the international sports federations all demanded that new facilities be built.

00;20;50;19 - 00;21;15;14
Rich Perelman
The IOC has finally, after all these decades, arrived where the Los Angeles 1984 bid was, that existing facilities should be used wherever possible. Buildings should be kept to a minimum. And if you can do a temporary facility, that's the best way to do it. So that's where the IOC is now. They don't want to build anything, and that's good.

00;21;15;19 - 00;21;55;16
Rich Perelman
This means you don't have a series of white elephants as the legacy of the games, which is what you had in Athens in 2004. And that's still a significant problem for Athens today. They're still struggling with all these venues. So this has to do with the structure of the way the Olympics are selected and the structure of the way the IOC goes to countries to put on games and I think to some extent by relocating these games now, at least for the next decade, in first world democracies, you're going to alleviate a lot of the issues about local human rights concerns.

00;21;55;18 - 00;22;22;10
Rich Perelman
They're going to be not ended, but the questions are going to be different in a Democratic host country than you would have from a totalitarian host country. Now, the IOC just made at this last session in India, just incorporated into the Olympic charter, which is their rules and regulations, a mention of internationally recognized human rights, whatever those are.

00;22;22;12 - 00;22;54;12
Rich Perelman
But Bach has been very, very strong on referencing United Nations documents and United Nations regulations, relative to all series of things, including human rights. So it is something which is of more interest now to the IOC, but to some extent, as long as the IOC, as long as the Olympic Games are very popular and people tune in and watch and sponsors want to pay to be part of it and television companies want to pay hundreds of millions or billions of dollars to be part of it.

00;22;54;15 - 00;23;10;10
Rich Perelman
The human rights criticisms of the IOC are something of a tempest in a teapot because most people don't pay attention to the politics of the IOC and of the Olympic Games. They want to know how their country did, and that's what's important to them.

00;23;10;12 - 00;23;33;24
Mark Conrad
Although couldn't you argue that is a little bit political, too, because during the Cold War era, one of the reasons why the Olympics became so popular in the U.S. was, of course, you know, we wanted to see U.S. athletes play the Soviets and beat the Soviets. And it added another backdrop, you know, to the nature of the competition, like the 1972 basketball game, for example, infamous result.

00;23;33;26 - 00;23;47;06
Mark Conrad
So in the background, wasn't there something that, yes, a certain amount of regional rivalry or Cold War rivalry certainly helped the interest for fans to watch the Olympic Games, at least in the U.S.?

00;23;47;08 - 00;24;08;11
Rich Perelman
I think that's certainly true in the U.S. I think it was true to some extent in Europe because there was the West versus east question actually playing out on the ground there. But I think people are generally, from the Olympic standpoint, interested in how is their country doing? Not so much, I think, today. Yeah. Is the U.S. beating Russia?

00;24;08;17 - 00;24;30;28
Rich Perelman
But how is the U.S. doing? Is the U.S. going to win 100 medals? Is the U.S. going to have the the most gold medals or the most medals overall? I think the overall question of, you know, who are our heroes? Who are the athletes in our country, whether it be Jamaica or Ethiopia or Japan or anywhere else, how is our country doing?

00;24;30;28 - 00;24;53;24
Rich Perelman
How are the young men and young women who have our country's name on their chests doing in the games? And so I think the the games, to some extent, although it's a worldwide spectacle, is really hyper local. People in Jamaica want to know how our our Jamaican athletes doing in Spain, they want to know how are our Spanish athletes doing and so on.

00;24;53;26 - 00;25;23;15
Rich Perelman
And then you have regional areas. There is a tremendous I want to say, resurgence, but tremendous interest. Now, the politics of the global South are emerging and in Africa there is a tremendous amount of pride, not just in Moroccan athletes or athletes from the Congo or athletes from South Africa, but how are African athletes doing as against American athletes, European athletes, Asian athletes?

00;25;23;15 - 00;25;45;18
Rich Perelman
There are some of this in Asia also, although now it's a little different because is dominated by China. So I think the rivalry question is still there, but it isn't East versus west, democracy versus communism, I think it is more regionally based. How is Africa doing? How is Europe doing? How is Asia doing? How is South America doing?

00;25;45;18 - 00;26;03;18
Rich Perelman
How are Caribbean athletes doing? The U.S. is so big that the question is how are the American athletes doing? And I think that's the real focus of the television viewing today versus where it was when the Soviet Union still existed.

00;26;03;20 - 00;26;26;13
Mark Conrad
And let's actually move on to climate and the Winter Olympics, because the Winter Olympics, although much smaller, you know, has to take place in cold weather climates. And many have said that many past cities that hosted the Winter Games would not really be able to do it today, say Nagano. Japan was actually one of the more southern areas.

00;26;26;16 - 00;26;55;01
Mark Conrad
The host of the 1998 Games. You know, Kochi is even further south than that. So do you think that eventually there will be a system for the Winter Games of, say, three locations that will alternate, that will be sufficiently cold, you know, given the increases in temperatures worldwide as a better model then outside bids, you know, by different cities, you know, with the risk of increasingly warm temperatures.

00;26;55;03 - 00;27;22;15
Rich Perelman
Well, the short answer is yes. And in fact, this is already happening. So the IOC has set up a system where these discussions about future hosts is not done with the IOC management, it's not done with the president, it's done with a commission. And there is a future host commission for summer games and there is a future host commission for Winter Games and the Winter Games Federation.

00;27;22;15 - 00;27;52;18
Rich Perelman
Sorry, the Winter Games Commission has been tasked and made a report at the last IOC session that just concluded India trying to get their arms around the issue of how many previous host cities for Olympic Winter Games could host them today and how many will be able to host them in 2040. Given certain models about climate change and how many would be able to host in 2050.

00;27;52;21 - 00;28;20;24
Rich Perelman
The last report that was given in India is that in the 2040, 2050 timeframe, there are probably only about ten countries in Olympic parlance, national Olympic committees. There are only about ten countries that really would have a site or more than one site which would be reliably cold enough to actually allow snow. Sports to take place on natural snow, not manmade snow.

00;28;20;26 - 00;28;48;02
Rich Perelman
Beijing, for example, which had their mountain events, they use almost completely artificial snow. There was not enough natural snow. So the question that they are wrestling with is, do we go to a rotation of four cities or three cities that would have the Winter Games on a rotating basis? Do we do three? And then we come up with a fourth one that could come from somewhere else?

00;28;48;04 - 00;29;18;15
Rich Perelman
They're trying to figure this out. I think the idea of a rotation, which no doubt would include Salt Lake City, which is very cold because it's way up there in elevation and has lots of snow. So the U.S. would be a beneficiary of that. It would certainly Salt Lake City would be a choice. They just approved a double allocation for 2030, which will be in either France, which is not likely, but most likely Sweden or Switzerland, and then to go to Salt Lake for 2034.

00;29;18;17 - 00;30;07;01
Rich Perelman
And the stated reason for doing this is that by giving an allocation for 2030 and for 2034, it will give the future host commission and the IOC at large enough time to come up with how this rotation system is going to work if they adopted and which places would be part of that rotation. And if you want to telescope a little bit, I think it would certainly not be beyond the realm of even probability that the rotation, if you have a rotation of four different places, that the first stop of the first rotation of the Winter Games would be in Salt Lake City in 2034, which means that if you go 2038, 2040 to 2046,

00;30;07;04 - 00;30;12;15
Rich Perelman
you could see the Winter Games back in Salt Lake City in 2050.

00;30;12;17 - 00;30;34;05
Mark Conrad
And let's actually talk about Sweden for a second, because Sweden was thought to make an earlier bid for those 20, 30 games. But there was popular opposition to that and then they shelved it and somehow they got back in the picture and most likely maybe the holder of the 2030 Olympics because Sapporo bowed out for a number of reasons.

00;30;34;05 - 00;30;58;12
Mark Conrad
Sapporo, Japan bowed out. And then the question is for these potential locations. What about the role of quote unquote, the taxpayers, you know, the people that live in these areas and in some areas, it has been controversial and there's been objections. So the how does the IOC take that or their new committee take that in consideration in choosing their locations for future games?

00;30;58;15 - 00;31;25;00
Rich Perelman
Well, one of the rules, having worked with five Olympic organizing committees and actually being a staff member on a couple, one of the things that goes on within organizing committee, which is of great import, obviously, is finance. How do you bring in enough money to be able to do the games from whatever source, whether it be government or anywhere else, sponsors tickets.

00;31;25;02 - 00;31;45;17
Rich Perelman
They don't own the television rights. The IOC owns those. But about a little more than a third of all the TV rights money, I actually more than about 40% of all the TV rights money actually goes to organizing committees to put on the games. So you get a share from the IOC That's fixed. You know what that is before you, you jump in.

00;31;45;19 - 00;32;20;20
Rich Perelman
The real change came with Bach and his program of Olympic Agenda 2020 that was approved in 2014. And what the Olympic Agenda 2020 did in specific relative to future games is it declared that existing venues should be used whenever possible. And if you're a veteran of Olympic organizing committees, you will know, as a rule of thumb that Olympic organizing committees make money on operations.

00;32;20;22 - 00;32;50;29
Rich Perelman
No Olympic organizing committee that I'm aware of has lost money on operations. Where they lose money is on construction and venue retrofit. And so if you're not building anything, for example, we built very little in 1984 and we ended up with a 232 and a half million dollar surplus, the most financially successful games in history. Salt Lake built very little and they ended up with a large surplus.

00;32;51;01 - 00;33;24;03
Rich Perelman
They were only the second Winter Games to do it. Oslo also did it in Norway in 1952. So the IOC is trying as much as possible to eliminate construction and to say don't build anything. And if you need a venue that you don't have, cut it out temporarily or go to another country. So, for example, with Sweden, they did not have a bob luge and skeleton facility, a sliding center which is artificially refrigerated, is incredibly expensive.

00;33;24;06 - 00;33;53;05
Rich Perelman
So their bid for 2026, they were going to do the sliding sports right across the Baltic Sea in Latvia in a place called Sigulda, which has a world class sliding center. And the Latvians have been very, very good ever since they emerged from the breakup of the Soviet Union. And by taking the construction aspects out of this, the financial issue is much more palatable to people.

00;33;53;07 - 00;34;20;27
Rich Perelman
And you don't have to go to government funding in the billions in order to do this. So in Milan-Cortina they were trying to build the Italian government was trying to build this part of an amusement district, a new sliding center in Cortina, D'ampezzo, which hosted the 1956 Winter Games, but its track had fallen into disrepair and has been demolished and there were no bidder.

00;34;21;00 - 00;34;56;25
Rich Perelman
Believe it or not, no construction company wanted to bid on building a new sliding center. So just within the last couple of weeks, the Italian government has thrown up its hands and said, okay, we're not going to build this sliding center. We're going to save tens of millions of dollars and will go to Innsbruck in Austria or San Moritz in Switzerland or Coningsby in Germany, and we'll hold the Olympic Winter Games, Milano, Cortina in Austria, in Germany or in Switzerland just for these events.

00;34;56;28 - 00;35;20;07
Rich Perelman
So by changing this paradigm and this has been Bach, you have to give Bach credit for this by changing the way that the games are organized. They're not requiring this construction and trying to save money, trying to not have countries embarrass themselves by spending millions of dollars on a bid and then losing and getting nothing. The financial options are much more palatable.

00;35;20;07 - 00;35;42;19
Rich Perelman
And I think in Switzerland, they are talking about a national games in 2034 Winter Games building nothing because across the entire country of Switzerland. They have all the winter sports facilities. This is largely true in Sweden, but they would do again a national bid. But they would do the sliding sports in Latvia. I don't know what the French are going to do.

00;35;42;22 - 00;36;09;05
Rich Perelman
They're still talking about it. But the idea of not having to build anything generally means that with sponsorships, the IOC contribution of television rights and some sponsorships, tickets, merchandizing COIN program stamp programs, things like that, you'll be able to do the Winter Games, the Olympic Games and the Paralympic Games, which are attached now within the amount of money that those activities will generate.

00;36;09;05 - 00;36;39;15
Rich Perelman
And you don't need federal, national or regional governmental dollars with the exception of security. However, if you look at the business deal, the amount of tax money that the countries take in is pretty substantial over the run up period and during the games because of all the people who attend and the infrastructure, the temporary infrastructures that are built, all the spending that goes on for people and things, it comes out of the Warsaw a little better than a wash.

00;36;39;18 - 00;37;00;03
Mark Conrad
And do you think that would be an interesting idea to think of that idea of all nation Olympics as you stole? My next point, because instead of just cities, do you foresee the possibility of becoming a more national games like the World Cup and soccer is in the country or countries? Do you see, especially for a small country, to be a viable option?

00;37;00;03 - 00;37;11;25
Mark Conrad
So Winter Olympics will be in Switzerland or the Summer Olympics would be in France or a region of Spain or whatever it would be. Do you think that that seems to be evolving as a paradigm?

00;37;11;27 - 00;37;37;03
Rich Perelman
Yes, it's clearly happening. The Swiss actually came out yesterday and presented the outlines of a plan that would literally take the 2030 Olympic Winter Games and make it a national games in Switzerland. Now, Switzerland also happens to be the arm of the IOC in Lausanne, but they would take advantage of all the existing facilities, all the winter sports facilities that they have.

00;37;37;06 - 00;38;00;05
Rich Perelman
And remember, we're talking about snow facilities. You can do everything else, the ice facilities you can put in any hockey hall, you can put it in a center. That technology exists. It's not difficult to get and not difficult to implement. So that is no problem. But clearly you're going to see national games and I think the LA 28 organizers have the opportunity to do it, do this.

00;38;00;05 - 00;38;21;29
Rich Perelman
Imagine, if you will, that the baseball competitions and I have no inside information that this is what they're going to do. But it's an option and it's been talked about. Imagine if the Dodger Stadium was not involved in the LA 28 Olympic Games. All the games were held in Yankee Stadium not far from where you are. That is something which under the rules now is possible.

00;38;21;29 - 00;38;46;13
Rich Perelman
And what it would do, for example, in 2028, if you baseball at Yankee Stadium in New York and you had the lacrosse at M.A. Bank Stadium in Baltimore and you put the canoe slalom in Oklahoma City, which has a world class canoe slalom facility, a rapids facility. And you also took a softball and put it in Oklahoma City, which is where the women's college world Series is played.

00;38;46;19 - 00;39;06;13
Rich Perelman
Now you're nationalizing the games. This is not just something that's happening in Los Angeles. It's now happening all over the U.S. that I think is going to be a positive for the Olympic movement in the United States. And I think the L.A. 28 organizers have probably already thought about this and are talking about it as we speak.

00;39;06;16 - 00;39;45;17
Mark Conrad
And as Yankee Stadium is about maybe four miles south of where we are. It would be something quite relevant for certainly the community up here and for baseball fans in general in this area. I do want to turn to an issue regarding athletes and the scandals of sports federations, particularly in the U.S., some of the U.S. governing bodies, certainly not all, but USA Gymnastics has been the prime example of a system where athletes have suffered two highly publicized scandals involving sexual abuse and maybe other abuse as well, like doping.

00;39;45;20 - 00;40;06;18
Mark Conrad
What lessons do you think that the national and international sports governing bodies should heed from these events, which, by the way, are not limited to the United states? Because we've been hearing issues in Canada and the UK about these sexual abuse issues and of course, with doping, that is been something that has been discussed as well.

00;40;06;20 - 00;40;27;25
Rich Perelman
Well, it's clearly an issue and people have been abusing each other throughout history. You don't have to go more than a couple of chapters into Genesis to reach the Cain and Abel story, right. I mean, this has been with us since the beginning of time. And animals have been eating each other all the way back before the dinosaurs.

00;40;27;28 - 00;40;50;28
Rich Perelman
So, you know, violence between people, violence between species. This is something which has been going on for a long, long time. What is happening now is that societies are rebelling against this and they're unhappy about it, and they don't want it to happen. And they especially do not want it to happen to children and to young people who have no leverage in these situations.

00;40;51;01 - 00;41;15;25
Rich Perelman
So what you are seeing is the development of groups like the U.S. Center for Safe Sport, which is now primarily funded by a congressionally mandated $20 million a year payment that goes from the United States Olympic and Paralympic Committee to the US Center for Safe Sport. And then Safe Sport tries to get sponsors and donations and foundation funds and whatever else they can cobble together.

00;41;16;02 - 00;41;41;24
Rich Perelman
And they are a kind of a one stop shop that you can call them with whistleblower complaints and they have the authority to go in and to investigate and they can put sanctions in. Now, there are a lot of critics of the U.S. Center for Safe Sport, but it is becoming a model for other countries. And whether that's good or whether that's bad, that's the way that it's working.

00;41;41;24 - 00;42;12;11
Rich Perelman
The difficulty is these are national solutions and you don't need a national solution. You need a local solution that the inside the local gymnasium where the abuse is actually taking place. This is not the Larry Nassar story that had to do with U.S. national teams and his being a doctor at Michigan State and not having any supervision. But it has to be local at the level of the club where the athletes are.

00;42;12;11 - 00;42;40;25
Rich Perelman
And this is something which most of these gyms, most of these places, we don't have an organized system of clubs like they do in Europe, where you can layer this on. The closest thing that we have would be high school athletic departments, which increasingly have had athletic trainers and more administration. But how many high schools really are set up to deal with a coach abusing an athlete?

00;42;40;27 - 00;43;07;25
Rich Perelman
It's very difficult at that level and it's also very difficult that the Little League level, the Pony League level, the air Seoul level, you know, you're getting down essentially to the point where you're going to have to have a monitor at every practice and every game that every team in every city and every country plays. And that kind of policing is something that no one has the money for, no one.

00;43;07;28 - 00;43;52;18
Rich Perelman
So the difficulty is local the IOC, the National Olympic committees, the international federations, the national federations are all trying to deal with this primarily through the lens of if you're abused, call this number, use this app, say something. But that tends to be a problem of cleaning up the mess after it took place rather than preventing it. On the prevention side, there is an increasingly large and this will expand dramat actually exponentially of education, telling young athletes, telling parents of young athletes, telling coaches, watch out for this.

00;43;52;18 - 00;44;16;17
Rich Perelman
If you see it, don't be silent. Let us know. Let us investigate hypothetically. It works, but it is not going to stop the problem every time. Everywhere. This is a problem. It's been going on since the beginning of time. It is not going to be solved completely, but I think the most gross abuses are going to be curbed as they have been in doping.

00;44;16;17 - 00;44;40;18
Rich Perelman
By the way, we don't see that kind of a state sponsored doping that we saw in East Germany, in the Soviet Union, and Russia's program, which from 2011 to 2015 was exposed and a lot of Russian athletes have lost their medals and have been ashamed and people have been given medals that they didn't win on the field because of the doping.

00;44;40;18 - 00;45;02;00
Rich Perelman
So it does come out inevitably now and it does come out and this is a positive of the Internet, of better communications, of social media. These things do come out. There's a lot of other stuff that's floating around out there. But these kinds of things tend to come out because someone talks to somebody else. Nothing is ever perfectly secret.

00;45;02;02 - 00;45;28;02
Mark Conrad
Let's move on just for a short word on the status of the value of arbitration. Speaking of doping and many remember the events at the Beijing Games with Russian figure skater who apparently may have tested positive in a delayed result. And there was the question of whether the Russian team would keep their gold medal in the team skate.

00;45;28;04 - 00;45;37;07
Mark Conrad
But is one many people are wondering, why has there been such a delay in making a final determination by the international sports arbitration body?

00;45;37;09 - 00;45;56;28
Rich Perelman
Well, everything takes time, when you're in a judicial process, which is what we're in, everything takes time. Valley Eva did test positive. There was no question about this. She tested positive for Azzedine, which is a prohibited substance. If you use it over a period of time, it can give you some increased energy for training and things like that.

00;45;57;01 - 00;46;33;03
Rich Perelman
She definitely tested positive on Christmas Day 25 December of 2021, she was allowed to compete by not by the Russian Anti-Doping Agency, which by the way, gave her a four year ban right away. But there is an independent, separate appeals panel within the Rusada Russian Anti-Doping Agency structure valid above who was 15 years old at the time, appeal to the independent group and the independent group, the anti the disciplinary Anti-Doping Committee gave her essentially a pass and allowed her to compete in Beijing.

00;46;33;05 - 00;46;56;08
Rich Perelman
She competed in the team event. She was part of a gold medal winning team. Then the thing broke and literally an hour after the team event was over. And what ended up happening is that the pressure on her was so great from the international media that was there that she performed very poorly and finished fourth off the podium in the women's competition in which she was the overwhelming favorite.

00;46;56;10 - 00;47;20;04
Rich Perelman
So after the games, the way that it works in terms of process, Rusada had to go through its own investigative process. They did. It took a long time, never completely finished. The World Anti-Doping Agency said, We've had it with this. They filed with the Court of Arbitration for Sport, which remember, is an arbitration court, not a public law court.

00;47;20;11 - 00;47;49;05
Rich Perelman
And that's very important to remember. So this has gone on and on and on and on. And finally, there was a few weeks ago a three day hearing that took place in-person in Lausanne and was online from Russia. Vasilyeva not come to Lausanne. She appeared by video link from Russia. And now there is a panel of three arbitrators that has all the data and they're asking additional questions.

00;47;49;07 - 00;48;13;28
Rich Perelman
So there is now going to be an additional two days of hearing in November. So it may never end, but I think the additional hearing will end up with the arbitrators coming to a decision somewhere either right near the end of the year or at the very beginning of 2024. So the justice wheels are grinding very slowly, but they are grinding.

00;48;14;00 - 00;48;23;27
Rich Perelman
And it, as Yogi Berra famously said, it ain't over until it's over. And so this is not over yet, but it is moving toward being over.

00;48;24;00 - 00;48;56;07
Mark Conrad
You write and publish one of the very few outlets online and offline devoted to the Olympics and international sport. And for those interested, it is found on the sport's examiner dot com. That's one word the sports examiner dot com. It is free of charge, although voluntary contributions are accepted. And this leads to my final question, why do you think there is such little interest in international sports from the sports media in the United States?

00;48;56;10 - 00;49;20;10
Rich Perelman
I think the short answer is the collapse of newspapers. There was for more than 100 years in the United States, a very vibrant newspaper industry which tried to cover more things to appeal to more readers. Now, there are very few newspapers because of the online opportunity and people are not stupid. If they can get something for free, which is a quality, they'll pick it up.

00;49;20;13 - 00;49;55;29
Rich Perelman
And so that's why I depend on contributions. I tried to be a subscription site. It didn't work. People are very devoted today because of the availability of all kinds of content about the ball sports, baseball, football, hockey, basketball. And now soccer has come up tremendously. And so with the amount of content that is devoted and the number of hours which is devoted to these ball sports for which advertising can be sold, the Olympics is only something that comes once every four years, right?

00;49;55;29 - 00;50;21;14
Rich Perelman
So it's once every four years for the summer sports and once every four years for the winter sports. And the winter sports, with the exception of ice hockey, are even more invisible, a lot of the summer sports. So I think the fact that there is not a year round, 365 days a year Olympic content train, if you will, in terms of competitions and continuity on a 24 seven 365 basis makes it very difficult.

00;50;21;14 - 00;50;50;09
Rich Perelman
So I do this obviously not to be rich and famous because I take donations and we get in a little bit of money and we appreciate every one of our donors, one of whom we have a recurring donor who gives us five bucks a month and we're very happy to have it. So thank you, Phil, But it's not something which is end of interest when you have very, very small resources and very, very small news holes that you can fill on a daily basis in a newspaper that didn't used to be the case.

00;50;50;09 - 00;51;10;21
Rich Perelman
It used to be that there was lots of space to fill and you could do a lot with it, but you can't do that anymore. So I do it because I think it should be done and I can afford essentially to take that, take that time and do it. But I think as the Games come back to Los Angeles in 2028, I think you will start seeing more interest.

00;51;10;23 - 00;51;33;17
Rich Perelman
And I think the general interest in the U.S. will increase because the newspapers and the other news media are going to say, okay, the games are coming to L.A., it's going to be a big deal. Who is it that we should know about? Yeah, we know Simone Biles. We know Katie Ledecky. Who else should we know about? And I think that's going to help tremendously.

00;51;33;19 - 00;52;01;29
Mark Conrad
And again, that website, TheSportsExaminer.com, one word, TheSportsExaminer. Unfortunately, our time is up and we could probably go for another hour. But on behalf of Fordham University, the Gabelli School of Business and the Gabelli School Sports Business Initiative. I wish to thank Rich Perelman for taking the time and discussing the Olympics and international sports in this un very certain period.

00;52;02;01 - 00;52;36;29
Mark Conrad
Rich, it's been a great pleasure. I also want to thank my producer, Victoria Ilano for her great work in putting this podcast together. And thanks to all of you for listening in. For the Sports Business podcast with Mark Conrad at Fordham's Gabelli School of Business, I'm Mark Conrad and have great day.

00;00;00;00 - 00;00;45;16
Mark Conrad
Hello and welcome to the Sports Business podcast, the show that explores the world of professional, collegiate, amateur and Olympic sports. I’m Mark Conrad, or Prof. C from Fordham University's Gabelli School of Business, where I serve as the professor of Law and Ethics and the director of the Sports Business Initiative. Imagine a voluntary private sports organization of longstanding vintage, one that had a unique mission found nowhere else in the world.

00;00;45;19 - 00;01;19;05
Mark Conrad
Although non-governmental, it had a body of rules and regulations that would make a federal bureaucrat blush. They were intricate with armies of compliance officers employed by its members to ensure the rules were followed, and the rules were the de facto laws of college and university sports for decades. The organization was struck in a traditionalist mode, probably the last one in the world that maintained a strict series of rules barring even the whiff of professional conduct.

00;01;19;08 - 00;01;56;26
Mark Conrad
These rules, enacted by consent of the member schools, created a social contract. And to be fair, one that had some validity and may still have some validity for many, many schools and many school athletes. In essence, the organization claims that college athletes are students first and athletes second. The organization regulated competitive balance among schools. The goal was to get an education, experience competition, build friendships, and boost school spirit for students and alumni.

00;01;56;28 - 00;02;28;17
Mark Conrad
Not insignificantly, many receive full or partial scholarships to defray the cost of attendance. Rules were equally administered for schools in various divisions to prevent richer and bigger schools from using their leverage to find the best athletes. And of course, we're talking about the NCAA. For decades, the NCAA was the alpha and omega of college sports. It resisted outside attempts to regulate its activities.

00;02;28;19 - 00;03;04;28
Mark Conrad
It branded itself as a guardian for the sacred altar of amateurism. It did not consider itself a business. Really? It negotiated TV deals for years. The athletic conferences, ever more powerful, negotiated bigger ones. Its member schools paid big time coaches increasingly lucrative seven figure annual contracts and entered into profitable sponsorships. Schools sold tickets to alums and others, filling up arenas and stadiums that can make a pro facility look simply functional.

00;03;05;00 - 00;03;34;13
Mark Conrad
They thought of athletic success as a chip to attract big money from alums. So, the schools can make money. The broadcasters make money. The sponsors make money. Coaches make money. But what about the athletes? These students may start to think of themselves finally as a labor force, entertaining the other stakeholders. And they are not merely an appendage to college athletic departments.

00;03;34;16 - 00;04;08;12
Mark Conrad
State legislatures and the courts have belatedly discovered that the NCAA and the athletic conferences are business, especially in about 40 to 50 large universities in this country. By passing laws ensuring name, image and likeness rights to college students, which the NCAA opposed, the quaint idea of students not able to sign contracts, have agents or make money, must have shocked some of the folks at Indianapolis, the headquarters of the NCAA.

00;04;08;15 - 00;04;37;18
Mark Conrad
The fallacy of the NCAA’s misguided notion of amateurism was readily made clear by the U.S. Supreme Court in the Alston case a couple of years back, when the justices unanimously rejected the association's argument that its restrictions of educational benefits was justified despite laws against agreements that restrain trade. What is rarely reported is that the NCAA won a part of its case.

00;04;37;20 - 00;05;04;23
Mark Conrad
The lower courts accepted its rules restricting outside non educational income. It just restricted its limitations on educational benefits. I don't know who came up with the strategy of appealing to the U.S. Supreme Court, but appeal the NCAA. For its efforts and the millions in legal fees expended, the NCAA was rewarded with a 9 to 0 ruling against it.

00;05;04;25 - 00;05;47;13
Mark Conrad
Yes, this Supreme Court. The justices ripped the heart out of the NCAA’s ideal of amateurism as the raison d'etre of college sports. And one Justice, Kavanaugh, went even further, basically calling the NCAA’s regulations an illegal restraint of trade that would not be tolerated in any business. So we now have a world where some of the 40 to 50 powerhouse college programs are jockeying for new conference alignments in an attempt to pocket even more revenues, imposing difficult travel schedules for students on many teams to fatten up the broadcast and streaming rights fees.

00;05;47;16 - 00;06;19;26
Mark Conrad
All the while, athletes are litigating, seeking to be considered employees and possibly unionizing. This may sound like old hat for some of you, but this history leads to the question of where do we go from here? And it's time to look into my crystal ball, called Prof. C’s Prophecies. And here are some prophecies. One: In the next half decade, many college athletes, especially from these power conference schools, will be compensated as employees.

00;06;19;29 - 00;06;47;10
Mark Conrad
It is just a matter of time. Not all, but many. Either the courts will consider college athletes employees under the National Labor Relations Act or by the courts or Congress amending the labor laws, conferring such a right. Once they are employees, most likely in football and basketball, but possibly in other sports, then these athletes could unionize and some will.

00;06;47;12 - 00;07;18;29
Mark Conrad
Then we're left with two or three super conferences just for football or breakaway conferences becoming de facto NFL minor league teams. The great majority of schools will offer a more traditional menu of college sports, possibly reverting back to a model of less money, more walk-ons and fewer pressures to produce large revenues. A few schools could even eliminate football, making Title IX enforcement a whole lot easier.

00;07;19;01 - 00;07;49;16
Mark Conrad
Finally, antitrust law challenges to the NCAA’s policies will continue. But attempts in Congress to create an antitrust exemption for the NCAA, a persistent hope for the NCAA powers that be, will fail, as it should. Before traditionalists quake in their boots, hear me out. For the power schools, those generating $50 million a year or more from college football and basketball teams,

00;07;49;18 - 00;08;25;12
Mark Conrad
the unionization of athletes would avoid litigation and congressional action and would bring consistency and stability. NIL standards can be negotiated rather than devised by collectives and in the free for all situation that we have now. Working conditions and health insurance could be negotiated as would transfer rules. Finally, to the relief of everyone except the lawyers, the result will be a less contentious and less litigious atmosphere because collective bargaining agreements are essentially litigation-proof.

00;08;25;14 - 00;08;52;07
Mark Conrad
And that is a big plus for all the stakeholders, including the fans. Thank you for listening. Until next time, this is Prof. C for the Sports Business Initiative.

00;00;00;00 - 00;00;49;16
Mark Conrad
Hello and welcome to the Sports Business Podcast. The show that explores the cutting edge issues in the world of professional, collegiate, amateur and Olympic sports. I'm Mark Conrad or Prof. C and I teach at Fordham University's Gabelli School of Business, or I serve as professor of Law and Ethics and the director of the Sports Business Initiative. Remember USA Gymnastics, the governing body for the sport whose executives were implicated for their inaction in the Larry Nassar sex abuse scandal?

00;00;49;18 - 00;01;22;03
Mark Conrad
The organization sued for hundreds of millions of dollars by those victimized by the sex abuse. Many, including myself, thought that the national governing body for women's and men's gymnastics should be decertified and a new body be created. However, I have to admit that this view may have been premature, but it does not mean that things are smooth sailing. On the positive, through serendipity or just plain good luck,

00;01;22;05 - 00;01;57;18
Mark Conrad
Simone Biles returned in superb form to capture the all around title, her eighth at the recent USA Gymnastics Championships. It comes two years after she had to withdraw from several events at the Tokyo Olympics due to a mental block known in gymnastics parlance as the twisties. Suffice it to say this is an astounding triumph for her. And it also seemed to be kumbayah time for USA Gymnastics and its CEO, Li Li Leung.

00;01;57;20 - 00;02;33;11
Mark Conrad
In 2019, Leung was appointed the CEO of USA Gymnastics. A former elite gymnast who served as an NBA vice president specializing in sponsorship and marketing, Leung was tasked to reestablish the organization's credibility. She took the helm of an organization facing huge challenges. One was the departure of all of the organization's sponsors due to the media and public backlash from the USA Gymnastics, failure to report the sexual abuse by coaches and the women's team

00;02;33;11 - 00;03;07;19
Mark Conrad
Doctor, Larry Nassar, to authorities. In addition, she had to clear an organization that found itself in bankruptcy court due to the liabilities it faced. More importantly, Leung had to gain the trust of the gymnastics community of 200,000 members. She had to ensure that gymnastics is a safe space for young women. She had to find new sponsors. In sum, she had to make USA Gymnastics more transparent and far more respected.

00;03;07;21 - 00;03;40;13
Mark Conrad
Four years later, Ms. Leung can claim some success. The organization settled lawsuits by Nassar victims for a total of about $380 million. It crafted a plan for reorganization to emerge after bankruptcy. Under her watch, athletes were given a greater say in the organization. On one level, Leung did what many thought could not be done, made USA Gymnastics respectable and no longer a poster child for toxicity.

00;03;40;16 - 00;04;10;17
Mark Conrad
She capped off the success by securing an expanded partnership deal. But there are still trouble spots: some questionable hires; too many coaches under investigation for abusive conduct; even a seemingly petty matter denying press credentials to the championships to Scott Reed of the Orange County Register, who has tenaciously covered the sport for 20 years, often critically, but honestly.

00;04;10;19 - 00;04;40;26
Mark Conrad
But there's one stain on Leung's tenure that makes me particularly uncomfortable. It is the expanded partnership deal with Nike. Nike will be exclusive apparel and footwear provider for the men's and women's national teams through the 2028 Los Angeles Olympics. Although figures were not reported, the organization says it is the biggest sponsorship in terms of both annual value and total value for the national governing body.

00;04;40;28 - 00;05;11;12
Mark Conrad
Here is why I am uncomfortable. Given the history of this governing body, I wonder if Nike is the best choice to be the organization's sponsor. The company has been justifiably criticized for its treatment of female runners at its former elite track club called the Nike Oregon Project. Former athletes have accused its Nike backed coach, Alberto Salazar, of body shaming, doping and even sexual misconduct.

00;05;11;15 - 00;05;40;17
Mark Conrad
Salazar has since been banned from coaching by both the U.S. Anti-Doping Agency and USA Safe Sport. In the fall of 2022, I interviewed one of those elite women's runners who wrote a bestselling book that details that atmosphere. For those interested, the interview is on our Gabelli Sports Initiative YouTube channel. Given what so many female gymnasts endured, is a partnership with Nike,

00;05;40;20 - 00;06;14;19
Mark Conrad
yes, that Nike, who permitted abuse under its watch, in the best interest of USA Gymnastics? It is ironic that USA Gymnastics, an organization with a history of looking the other way regarding abuse of its elite female gymnasts, would partner with a company with its own controversial history of treatment of female athletes. A sad irony indeed. Despite some successes in bringing USA Gymnastics from the brink, Li Li Leung has some explaining to do.

00;06;14;21 - 00;06;36;22
Mark Conrad
Thank you for listening. Until next time, this is Prof. C for the Sports Business Initiative.

00;00;00;00 - 00;00;53;27
Mark Conrad
Hello and welcome to the Sports Business Podcast. The show that explores cutting edge issues in the world of professional, college, recreational and Olympic sports. My name is Mark Conrad or Prof. C and I teach at Fordham University's Gabelli School of Business, where I serve as professor of law and ethics and the director of its Sports Business Initiative. Through the Sports Business Podcast, I will explore, discuss, debate and analyze the legal, ethical, societal, as well as business issues in this ever changing landscape of sports.

00;00;54;00 - 00;01;28;22
Mark Conrad
But what will make this podcast unique is that I am not going to be a cheerleader for the industry. Rather, I may praise, may criticize, may seek change in the current sports scene. In one episode, I may ask tough questions. In another I may state controversial views. In another I may interview guests with different and unusual perspectives. The future of college sports, civil rights, athletes who challenge the structure, changing youth sports, staging the Olympics.

00;01;28;25 - 00;01;54;22
Mark Conrad
Guests may include present or former athletes, coaches, owners, lawyers, medical specialists, authors, activists for social change, or those who wish to keep the status quo, and those wanting to even end the system and rebuild from the ground up. Often, guests will be people you've never heard of but should hear about, and there will also be time for some fun.

00;01;54;24 - 00;02;28;22
Mark Conrad
The occasional discussion that may fuse sports and arts, sports and comedy, sports and history, or sports issues for the weekend warriors not out to break records, but to enjoy and compete. I want this podcast to be the go to place for the trends, the controversies and the good stuff. At the end of each year, I will broadcast Prof. C’s Prophecies where I will look into my crystal ball to predict the future of sports in the next year.

00;02;28;25 - 00;02;56;02
Mark Conrad
I have been associated with Fordham's Gabelli School for over 35 years, and I have taught and researched legal and business issues and sports for most of that time. I have spoken at many leading academic institutions and have been frequently quoted in the media. I am totally psyched to lead this podcast and I hope you'll enjoy listening as much as I am thrilled to be a part of it.

00;02;56;04 - 00;03;41;12
Mark Conrad
The Sports Business podcast will be a place to hear incisive interviews, trenchant commentary, and even some fun and humor. I would like to thank the administration of the Gabelli School of Business, Dean Lerzan Aksoy, and fellow administrators and faculty, and Fordham University as a whole for their support. I welcome you to the Sports Business Podcast as Prof. C and hope you will join us in the future.