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Fantasy Football, playing for keeps; Fans could buy a piece of their favourite player.

What if you could actually invest in your fantasy football team?  Would you put your own money behind your star striker?

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Across the pond this is exactly what is happening in the United States. A company called Fantex is offering fans the chance to buy a percentage of a player’s future earnings. The first athlete to sign up with Fantex is NFL running back Arian Foster of the Houston Texans. In exchange for $10 million Fantex will get 20% of the three-time Pro Bowl running back’s future earnings. Fantex is trading stock linked to the “value and performance of the brand”. The payment is conditional on Fantex selling 1,055,000 shares at $10 per per share. No individual can buy more than 1% of the shares, which amounts to $105,000. Take out Foster’s $10 million and the remaining $550,000 pays for the underwriters and other expenses.

So let’s look at it from two perspectives; what’s in it for the fans and what’s in it for the player? For the fans the idea of investing in your favourite player sounds like every boyhood dream but if we look past the thin veneer of the all singing and dancing website and glossy prospectus what are fans actually investing in? Fantex state:-

Holders of shares of Fantex Series Arian Foster will not have an ownership interest in our Adrian Foster Brand, or any of our affiliated entities. Rather, investors in our Fantex Series Arian Foster will be our common stockholders

What fans would be investing in would be Fantex the brokerage. Despite buying a direct stake in Fantex, as the offering states, they would get no voting power or representation. All actual distributions are at the discretion of Fantex who will be taking a 5% cut. And what if Arian Foster were to be hit with a season ending injury? Well, that’s exactly what has happened, surgery on his back if you are interested! So the deal is on hold, in any event money will not exchange hands until the 1,055,000 shares are sold.

And the player what is in it for him? If we take the example of Arian Foster he due to get a lump sum of $10 million. Not many would argue with seeing their bank account bumped up with such a lofty sum. But are these athletes selling their souls to the devil? Like Keanu Keeves in a Devil’s Advocate, is the sum of $10 million compensation enough for 20% of all future earnings going directly to Fantex for life. Granted Fantex would have a vested interest in the athlete but international superstar athletes are always looking for ways to avoid paying tax so why would they tie themselves into a deal where they pay 20% to a third party for the rest of their days?

The closest example in Premiership football was the 3rd Party ownership saga involving Carlos Tevez and Javier Mascherano. West Ham United made the remarkable signings of Tevez and Mascherano in August 2006 after the pair impressed on the world stage in Germany, playing for their native Argentina. The story unfolded that the pair were not actually registered to the Hammers rather that they were loaned and they were actually still “owned” by offshore companies based in tax havens. Tevez was owned by MSI and Just Sports Inc and Mascherano was owned by Mystere Services and Global Soccer Agencies.

As the UK follows the American way from endless repeats of the sitcom Friends to the fast food eateries of Colonel Saunders and Ronald MacDonald will our Premiership footballers be targeted by the same sports stock market utopia? Fantex has setup its own proprietary exchange so if fans wish to buy or sell shares, you guessed it fans will be liable for a brokerage commission payable to Fantex too! The question remains would such a scheme even get off the ground. The rules, regulations and restrictions of the Football Association would need to be examined closely following the outright ban on 3rd party ownership in English football. Could a time arise that players directly or indirectly may start investing in up and coming youth players in order to receive a percentage of that player’s future earnings?

If you want further advice on the legitimacy of financial schemes do not hesitate to contact one of our team. For the time being we recommend you stick to Fantasy Football in your work league!

John Hendrie – Sports Consultant

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Drop Shot; Will 2024 finally be the year for Squash to realise its Olympic Dream?

The squash world is still coming to terms with the fact that our beloved sport has been overlooked once again for an Olympics berth.

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An extremely long and professional bid was not enough to persuade the IOC to add a new sport to the Olympic program. They instead opted to reinstate wrestling which had been removed only months earlier. The vote, live on TV and farcical to watch at times left most squash players wondering what the sport must do to convince the Olympic movement of how the games could really be blessed to have such a fantastic sport involved. Also, the question remains whether or not the political influences will ever leave the IOC.

Squash targeted Barcelona 1992 with its first bid for inclusion at the Olympic Games and has been knocking on the door ever since. Squash also missed out on a place in Rio 2016 to Rugby Sevens and Golf.

The participation base of the game is truly impressive as it is played in 185 countries by over 20 million people. The international appeal is breathtaking as in both the men and women’s game there have been World Champions from five continents across the globe. If Squash had been included at London 2012 the sport would have been a platform for Olympic minnow nations Malaysia and Egypt to receive worldwide recognition for sporting excellence.

Malaysia has Nicol David, a superstar in her own country who in 2008 won ten tour titles and went unbeaten for 53 straight matches. Egypt boasts Ramy Ashour, a player with skills and charisma as amazing as any modern day racquet player and the man who went 41 matches undefeated between the 2012 and 2013 British Opens.

Karem Gaber in Athens 2004 is the only Egyptian to win a Gold medal in modern times; interestingly the Gold medal came in wrestling, the sport responsible for Squash’s latest misfortune. Malaysia have never won a Gold medal in the history of the Olympics but have come close in another racquet sport, Badminton. Lee Chong Wei brought home Silver medals at both Beijing 2008 and London 2012.

It would be highly plausible that David and Ashour could have taken Gold in London as both are current World number 1’s. London 2012 could also have produced a number of British medals too. Athletes such as Nick Matthew and James Willstrop and possibly myself may have enjoyed fame such as Jessica Ennis or Mo Farah but we will never know having not been given the chance to show our skills on the biggest sporting stage of all.

Squash has put courts in some of the most iconic locations in the world; Grand Central Station in New York has provided a backdrop for the sport and the floodlit tournament at the Pyramids in Cairo put Squash on the front of international newspapers across the globe. The sport has proven that courts can be put up anywhere in the world with relatively low overheads. The sport would not leave the potential for ‘White Elephant’ venues seen at its worst in the aftermath of the Athens Olympics in 2004.

There is no doubt that the sport ticks all the boxes that an Olympic sport should but for now the professionals must put their Olympic dream on hold and concentrate on their thriving world tours and other multi sport games. The next of which is the Commonwealth Games in Glasgow. There will be plenty of English and N.Irish interest in the sport as 3 of the top 10 men’s players and 4 out of the 10 women’s players make up the respective world top 10’s. Perhaps a tournament with so much home-grown talent can be the catalyst to convince the IOC that Squash should be included in the Olympics?

Madeline Perry – Sports Consultant

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A Double Bogey; McIlroy’s two lawsuits he would love to see struck out of bounds

In the 27-year history of golf’s ranking system no fully fit golfer will have slid so far so quickly down the depth charts than if Rory McIlroy finishes the year as world number 6 having started the year as number 1.

paul_eales    jim_pearson

McIlroy will look back on the year that has been as one dominated by an off-course side show. McIlroy is at the centre of two multi-million dollar court cases; Oakley v McIlroy in the United States and McIlroy v Horizon Sports Management in Ireland. The catalyst for all McIlroy’s legal nightmares centre around his monster contract deal with Nike, with the young Ulsterman netting himself a 10 year deal worth a reported $20Million dollars a year.

The claim that Oakley have against McIlroy is that the young golfer and his management company of the time, Horizon Sports Management, did not grant Oakley a right of first refusal. Under the terms of the contract between Oakley and McIlroy, if any competitor of Oakley (on the facts Nike) put an offer on the table, Oakley were entitled to match that offer. What complicates matters for McIlroy is that the testimony he is relying heavily on to disprove Oakley is from his former Horizon agent, Conor Ridge.

McIlroy’s legal proceedings in Ireland are against the said Ridge. McIlroy has stated that when he penned the deal with Horizon he did not have the relevant business experience or was directed to seek the relevant legal advice. The extent of the management deal came to light when McIlroy signed his lucrative Nike deal and the percentage that Horizon were taking from the young golfer. From all off-course earnings this was a cool 20% in addition to a 5% cut for his on-course winnings. Now McIlroy is seeking to sue Ridge in what he describes as an “unconscionable” contract which left McIlroy handing over $6.8Million in fees in just an 18 month period surrounding the Nike deal. Horizon have been bold in their defence of these allegations, saying they have a legally binding contract and the success he enjoyed before he signed the Nike contract, when he had risen to world number one under their guidance, is compelling evidence.

Last month saw McIlroy officially split from Horizon taking with him their former head of Strategy, Donal Casey. Casey has taken the role of CEO of Rory McIlroy Incorporated (RMI) along with Barry Funston, Terry Prone and Rory’s father Gerry making up the other members of the company. It is reported that Casey also suffered at the hands of Horizon as he was not paid a €500,000 success fee; rather he was offered an amount closer to €200,000. This was another factor in McIlroy wishing to part ways with Horizon as McIlroy states in Court papers that he was not notified of the dispute.

In financial terms McIlroy is looking very healthy as he earns a reported £31,000 a day from Nike but he will want to get his game back to the time when Nike decided to make the Ulsterman one of the highest paid sports stars in the world.

If you need any advice in relation to management or sponsorship agreements please do not hesitate to contact one of our team.

Paul Eales and Jim Pearson – Sports Consultants

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Wheels and reels are spinning; Cyclists cameras are ‘black boxes’ in road accidents

Interest is growing in the Tour de France in the UK as the Le Tour has seen British riders Bradley Wiggins and Chris Froome take the ‘maillot jaune’ (yellow jersey) on the last two tours.

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The 2014 Tour will see the Grand Depart leave from Yorkshire, which has been a contributing factor in the surge of interest in the sport following the success of British riders in recent years. British Cycling’s membership has increased by more than 30,000 since Bradley Wiggins crossed the line as winner of the Tour de France.

As the dark nights are closing in and the growing fluorescent army of cyclists persevere with their daily commutes through cold, wind and rain, have you noticed the increasing number of cyclists with a camera mounted to their helmet? GoPro and Contour make popular models which act as a cyclist’s black box if they are involved in a road traffic accident. The video cameras chronicling a cyclist’s daily commute to work are growing in popularity as cyclists want to be in a position where they have evidence to demonstrate they were not at fault and have proof of an offending motorist’s vehicle registration plate if the motorist decides to drive off from the scene of an accident.

Between 1999 – 2000, 1575 cyclists were killed on the roads in the UK with the greatest number of deaths and injuries taking place during the morning and evening rush hours, on week days. A consistent grumbling from aggrieved motorists is that cyclists should have their bikes registered and insurance should be made compulsory. Independent Market research firm Consumer Intelligence confirmed that 59% of motorists believe cyclists should have insurance to be on the roads.

Picture scenario one; a cyclist covered from head to toe in high visibility gear, lights flashing (so should be clearly visible) but the cyclist chooses to pay no attention to a red light at a junction, carries on without hesitation and despite the best efforts of the motorist (who has slammed on his brakes) he cannot avoid the collision, the cyclist gets an introduction to the tarmac and the motorist’s car is a write-off. In anyone’s book the fault lies with the cyclist but without any insurance in place on the part of the cyclist the motorist (if he is unsuccessful in pursuing the cyclist personally) has to swallow a hefty repair bill from the garage or a claim off his own insurance, losing his no claims bonus and an inflated premium to look forward to at his next renewal.

Picture scenario two now; an uninsured motorist is fast approaching tail back traffic, in an instant he makes a judgment call to take a diversion, without a thought, cursory look, an indication, let alone a life saver, the motorist pulls a ‘U’ turn and sends the trailing cyclist flying to a certain visit to the nearest Casualty department. The uninsured motorist leaves the scene immediately with no witnesses able to verify the vehicle’s registration plate. The cyclist could not possibly have known the intention of the driver and had no chance to avert the danger but fortunately he has his own insurance and despite an extended lay off from work he is covered for his loss of earnings and injuries suffered.

The merits of cyclists being insured is clear to see, however the limiting factor of compulsory insurance for cyclists is regulation. Who is going to pay for bicycles to be registered, as without registration no cyclist would be compelled to hand over their details? The administration of such a scheme would run into hundreds of thousands of pounds with such a burden being met by the taxpayer. Despite there currently being no legal obligation to have cycling insurance, with such policies costing as little as £30-40 a year, (and many cycling clubs offer third party insurance as part of their membership packages), is this a small price to pay for peace of mind?

If you want any further information on insurance matters please do not hesitate to contact our team.

Andy Boyde – Sports Consultant

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The final furlong; AP McCoy closes in on his 4,000th winner

AP McCoy is one win away from recording a breathtaking 4,000 wins in his illustrious racing career.

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With an average of one fall every 16 races, McCoy has hit the turf hundreds of times in his career. Spring next year will see McCoy turn 40 and despite injuries including broken middle & lower vertebrae, shoulders, collarbones, ribs, ankles, cheekbones, wrist, leg, teeth and thumb McCoy has gritted his teeth and saddled up time and time again, such is his desire to bring home the next winner. Each fall could signal the end of his career but McCoy’s tenacity in the face of such danger is testament to the longevity of his career.

Another individual who is synonymous with the word longevity is horse racing fanatic and former Manchester United Manager Alex Ferguson. Ferguson made headlines just over 10 years ago in the horse racing community in relation to the part-owned horse, Rock of Gilbraltar, who Ferguson had seen win seven Group one races as a three-year-old. Ferguson’s name was not included in the list of owners when the colt went to stud. Ferguson began legal proceedings to contest the decision, which ended up being settled for £2.5million after tax. Scottish sportswriter Martin Hannon puts Ferguson’s decision to forfeit his rights to the horse into context:-

“The biggest mistake Sir Alex ever made was taking John Magnier to court in the first place, but the second biggest was turning down the chance to own the progeny of this fabulous horse.”

The horse’s first foal was sold at auction in Ireland for a cool EUR400,000. The 2013 stud fee for the Horse stands at EUR17,500. Only time will tell how much Ferguson has missed out on.

Many footballers have paid the price of getting involved with Horse Racing, notable high profile current and former footballers with reported gambling issues include: Dominic Matteo, Wayne Bridge, John Terry, Scott Parker, Keith Gillespie, Michael Chopra, Matthew Etherington, Steve Claridge and Paul Merson. In contrast no-one can dispute the success stories of the two Micks; Quinn and Channon, who have mirrored success on the field with success on the track. Both have become successful trainers who have set the bar for the likes of Wayne Rooney, Michael Owen, Joey Barton and Joe Cole who all own their own racehorses. Rooney and Owen’s horses are trained by Tom Dascombe. Whilst the pair were both under Alex Ferguson’s guise at Manchester United Owen introduced Rooney to Dascombe. To date Rooney’s prowess as an owner does not match that of his footballing abilities, having laid out £80,000 on his horses for a return of just £5,000. Owen on the other hand in 2010, took home £400,000 in prize money and his passion for horse racing is clear to see from his own words:-

“When you retire, you have to have something that grips you and gives you that adrenaline thrill. I’ve been in racing for 10 years and it is the only thing that matches the thrill of scoring a goal.”

Owen’s enthusiasm for horse racing definitely mirrors that of McCoy’s and no-one can sum up McCoy’s passion and dedication better than the legend himself:-

“I’ve never taken drink or drugs in my life, and don’t know what it does for most people, but this is the nearest thing I’ve had to a drug…It’s what I’ve always lived for and gives me the greatest high. Nothing has ever given me more satisfaction. I’m a realist, but it is the worst thing trying to contemplate not riding. It is an unbearable thought.”

We wish AP the best of luck in his upcoming races and who would bet against the Northern Irishman pursuing 5,000 wins!

Kevin Darley – Sports Consultant

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Caught Behind: How will the Ashes play out over social media in Australia this winter?

If cricket and social media appear in the same sentence Kevin Pietersen’s hashtags won’t be far away.

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@KP24 certainly wears his heart on his sleeve across the Twittersphere. His most recent newsworthy Tweets are that he is openly inviting Australian banter on his Twitter page. Whilst compatriot all-rounder Stuart Broad would prefer not to get entangled in such a sledging match following comments made by Darren Lehman as a result of Broad’s decision not to walk after he edged Australia spinner Ashton Agar to slip during last summer’s first Ashes Test at Trent Bridge:-

“I just hope everyone gets stuck into him because the way he’s carried on and the way he’s commented in public about it, it is ridiculous. He hit it to first slip … and the biggest problem there is the poor umpire cops all the crap that he gets in paper and Stuart Broad makes them look like fools.”

The decision review system (DRS) caused a great deal of controversy over the summer as the umpire missed Broad’s obvious edge to slip at a pivotal point in the first test, however the Australian’s had run out of reviews. This decision was compounded by the fate of Usman Khawaja when the third umpire failed to overturn an erroneous decision to give Khawaja out. Australia’s prime minster at the time Kevin Rudd, took to Twitter to describe the decision as:-

“…One of the worst umpiring decisions I have ever seen”

The Ashes summer series in England was witness to more controversy across Twitter and this time it involved Kevin Pietersen. For once the outspoken batsman was not in trouble for his own tweets rather he was the victim of defamatory comment from high street optician Specsavers who took to Twitter to release an advert with a hot spot image from the test series, with Pietersen playing and missing coupled with the statement:-

“Bat tampering in the #Ashes? Apparently Hot Spot should’ve gone to Specsavers.”

The Hot Spot technology uses heat sensors to assist third umpire in making their decision as to whether any contact has been made by the ball with bat or pad. However the fallibility of the system prompted allegations that batsmen were applying silicon tape and petroleum jelly to the edges of their bats to conceal any contact with the ball. Pietersen accepted substantial undisclosed libel damages as a result of a court ruling which found against the Specsavers advert, which implied that he may have tampered with his bat during the Ashes. Hot Spot will not be used in the winter Ashes series as Australia’s host broadcaster Channel Nine have so far failed to agree a financial package with Hot Spot’s owners, BBG.

The third umpire will now have left at his disposal, the ball-tracking system; Hawk-Eye, Audio from stump microphones and slow-motion replays. The more reliable snick-o-meter, desirable as it is, doesn’t warrant inclusion for this winter’s series as the time delay in returning a decision is currently took long for the International Cricket Council.

The Ashes down under is bound to be full of controversy again with former Australian spinner Shane Warne having already stoked the fire earlier this week, openly criticising England captain, Alastair Cook’s leadership style. With the 8/9 hour time delay Twitter will be the source of the most up to date information for England cricket fans, with drama a certainty, hash tags at the ready for what promises to be a scintillating series.

Anthony McGrath – Sports Consultant

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Treading Water; What does a ‘non-delegable duty of care’ mean for public bodies and independent contractors?

On 5 July 2000, 10 year old Annie Woodland suffered a serious brain injury during a school swimming lesson in normal school hours as required by the national curriculum.

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At the time she was a pupil at Whitmore Junior School, for which the Essex County Council education authority was responsible.

Annie was swimming in a group being taught by a swimming teacher, Ms Burlinson, and a lifeguard, Ms Maxwell, was poolside. It is alleged that both negligently failed to notice that Annie had got into difficulties in the water, causing her to suffer the injury which has left her with severe brain damage. Neither was employed by Essex CC, their services had been provided to Essex CC via a contract with Direct Swimming Services to provide the lessons.

Subsequently proceedings were issued for negligence against numerous parties including Essex CC. Part of the claim included an allegation against Essex CC that at the relevant time it had owed her a ‘non-delegable duty of care’. The Council denied it owed that duty and successfully applied to strike out that allegation against it in the High Court. The allegation to strike out was upheld in the Court of Appeal.

Last month the Supreme Court passed down its verdict on the case and held that Essex CC had delegated the control of Annie and her classmates to third parties to carry out an integral part of its teaching function and if it was found that the third parties had been negligent then the Council would be in breach of that duty. The case has now been passed back to the High Court for the court to determine whether Essex CC will be liable for Annie’s injury.

The ‘non-delegable duty of care’ is a departure from the normal fault-based principles of negligence and can only arise in exceptional cases. Lord Sumption in his judgment set out five defining features of the circumstances in which a non-delegable duty of care will exist.

So what can schools do to protect themselves from a breach of a ‘non-delegable duty of care’?
There are three options available to schools;

1. Don’t offer activities with a high degree of risk. Any danger of liability is averted but the children lose out on new experiences.

2. A school may attempt to insure themselves against breaches of a ‘non-delegable duty of care’ committed by independent contractors. In reality an insurance premium off the back of the Supreme Court’s judgment will be sky high.

3. Schools should seek to have contractual clauses drafted by legal experts whereby the independent contractor indemnifies the school in relation to the liability of the school’s non-delegable duty of care, where the liability is a result of the independent contractor’s negligence. In reality only large independent contractors could indemnify losses when the worst case scenario occurs, as in the case of Annie where her claim for damages is estimated to be in the region of £3milliom.

If you are a public body, why not speak to one of our team who can examine the contracts you have in place with your independent contractors and advise you on your current outsourcing procedures.

Andy Boyde – Sports Consultant
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