USATF and Athletes at Impasse over Uniform Regulations: USATF Says Blame Nike Contract
February 22, 2012
Now that we finally feel we've got an understanding on this, we've got an update on the USATF uniform logo restrictions.
The good news is progress is being made. USATF has agreed to go beyond the IAAF uniform regulations and allow athletes with a club logo to have two commercial logos as well. (IAAF regulations only allow 2 commercial logos or 1 club logo and 1 commercial logo). For the athletes represented by the Athletes Advisory Committee, this is not enough. They want athletes to be able to have 3 commercial logos and a club logo, they do not want restrictions on the width of the logos (to allow for long names), and they only want these restrictions enforced at USATF indoors and outdoors and Visa Championship events (USATF wants them enforced at all USATF elite/professional and championship events including Road Championships).
So the differences outstanding are 1) 3 commercial logos vs 2 commercial logos 2) the width of the logos 3) where these rules are enforced.
Athletes Legal Counsel Says USATF Has Violated Informal Agreement Reached at USATF Convention
Now onto the bad news. First, David Greifinger, the legal advocate for the Athletes Advisory Committee and former legal counsel to the USATF Board, says that by implementing uniform restrictions at this weekend's USATF Indoor Championships, USATF is violating an informal agreement reached between him, AAC Chair Jon Drummond, USATF President Stephanie Hightower, and the USATF Board's legal counsel, Larry James, not to implement any uniform restrictions until they were vetted by athletes and approved by the USATF Board. David told us this over the phone and says so in a memo he wrote. We've contacted USATF for comment. (Sure it's a bit troubling, but informal agreements sadly don't mean anything. Greifinger tabled his motion for a formal rule change at the Annual Convention, but if USATF ignores the athletes, then it seems like this will all be moot a year from now because the motion will be brought back and approved. So short this sucks, but long term it is not a huge deal).
USATF Blames Nike Contract That Says Nothing About Uniforms for Its Position
The more troubling news for us is that USATF in essence is saying it can't agree to the athletes proposal because of its Nike contract when the Nike contract says nothing about uniform restrictions. Nike has made clear to USATF that it prefers the IAAF logo restrictions.
In justifying its logo proposal to its board, USATF said it was worried that if it allowing less logo restrictions, Nike would say that USATF reduced the value of its sponsorship agreement with USATF and thus Nike could pay USATF less. In a memo to the USATF board, legal counsel Larry James writes, "We also advised David Greifinger that the Nike contract did not directly address the issue of his proposed resolution and the logo issue. However, we advised David that the contract is crystal clear that Nike has the right to make a determination as to whether any action by USATF reduced the value of this contract. If Nike made that determination, they had the right to reduce revenue."
So what exactly does the Nike contract say? Apparently from the quote above it has a phrase that says if Nike determines USATF had done something to reduce the value of its contract then it can pay USATF less. However, as Larry James acknowledged the contract says nothing about logo restrictions. The thinking from USATF is because the contract calls for Nike to sponsor the US Indoor and Outdoor National Championships Nike could argue the value of its sponsorship is reduced if USATF says athletes can wear more logos.
Mr. Greifinger reached out to former USATF CEO Doug Logan who negotiated the Nike contract to see what he thought. What did Mr. Logan say? He said he would testify in court against Nike if they tried to make that argument. Logan wrote, "I made absolutely no oral promises nor did I represent that they [Nike] were entitled to any rights other than those expressed in the contract. I did assure them I would aggressively enforce the rights which they were acquiring. If asked to testify I would assert my belief that athlete uniforms in domestic competitions are outside the scope of rights acquired by Nike and not material."
Who is in Charge?
As currently worded, Nike can argue anything reduces the value of its contract. If it wants to go off the deep end and argue this materially affects the value of its contract let it.
Mr Greifinger touched on this point in his memo, "Taken to its logical extreme, Nike would have veto power over the composition of USATF's Board and committees, USATF's Bylaws, Regulations, and Competition Rules, and all matters pertaining to competitions and athletes' rights."
He also notes however under the Amateur Sports Act says USATF should be "free from outside restraint". He adds, "USATF cannot delegate the drafting of its rules or decisions about athletes' rights and economic opportunity to Nike or to any other sponsor. Doing so will jeopardize USATF's standing as a National Governing Body and subject it to potential litigation."
We agree 100%. FedEX doesn't tell the PGA Tour how to regulate the size of its logos. USATF should do the same with Nike. We'd love to see Nike try and put a material value on how much its contract (which primarily is about sponsoring the US National team) is reduced if athletes can wear slightly larger logos on their jerseys at a couple of meets. (We looked at photos of last year's USATF Indoors. Nike's contract does not give it any rights to put a swish on a bib, so we don't see how its sponsorship contract for the meet is reduced in any way. We have heard that the shoe companies main concern is that they don't want to have to make two sets of uniforms, one for domestic meets, one for international meets). Nike has expressed a preference on something. If they want to go to court over this and generate a ton of bad publicity let them. Nike already does so much that is good for the sport. We don't think it wants to jeopardize its name by suing USATF over the size of its logos. Nike has a preference on something. They do not run USATF the last time we checked.
The final point we want to make is how inconsistent USATF's argument is. USATF by allowing two commercial logos and one club logos is already going beyond the IAAF rules. Nike could just as easily try and argue that this change by USATF reduced the value of its contract.
The bigger issue is it is clear Nike is used to getting its way with USATF. If is time for that to change. They are a sponsor of the sport just like FedEx and the PGA Tour. They have a preference on logo sizes. Big deal. USATF is going overboard with tenuous legal reasoning to try and support Nike's position, when common sense, the athletes and even the fired Doug Logan are all on the same side.
Documents below. Mr Greifinger's memo is the starting point for this story. We spoke to him as well. We tried to get a comment from USATF but were unable. USATF has realized a statement here saying, "USATF and athlete leaders have been in vigorous discussions the last few weeks, and a resolution is likely to come at the in-person board meeting in Albuquerque as that discussion continues."
LRC Note: Exhibits Referenced: Exhibit A: Athletes Proposal for Uniforms
*Exhibit B: USATF's Counteroffer
*Exhibit C: Mr James Memorandum Explaining USATFs Position
*Exhibit D: Doug Logan Email from 2009 to USATF Board Announcing Nike Agreement
*Exhibit E: Doug Logan Email Saying He Would Testify Uniform Restrictions Are Not Part of Current Contract