Originally published on Tuesday June 24, 2008 @ 07:18 PM EDT
at http://fans.nhl.com/members/JuiceinLA/blogs/17293Edit: at the hilarious suggestion of a reader, this post might more aptly be called “Better than Triptophan” be forewarned…
In Madison Square Gardens L.P. v. NHL, et al, the SDNY Federal District Court recently denied MSG’s claims and ruled in favor of the League.
I read the complaints, answers. orders and memoranda of law in the case so far and then I told some friends, and then well it got out of hand. Sooo, here is my half literate synopsis straight from the Judge’s Order.
Caveat Number 1: I am a little hesitant to post this, because (1.) its just my personal observations; (2) its so long that I am reminded of a conversation I had with Mr.Sonny Styles and the incorrigible “twenty_two” where we wondered just how long a Connect Blog could be… and (3) it covers dry boring material, much of which you cant spice up without losing precision.
Caveat No. 2: I am only writing about the fight between MSG itself and the NHL for control over IP rights concerning the creation and maintenance of a Rangers website- I don’t fully analyze the anti-trust arguments here, because they are more complex and this blog will be way way way way too long if I do.
Knowing those parameters- have at it if you really want…
Here we go…
At the heart of MSG v. NHL it’s a simple, simple issue: who has the right to control the place where the Rangers team website will be hosted and if the League can impose its rules on the content of the Rangers team website.
For those who believe that much much deeper, more complex issues precipitated this lawsuit, to that end I don’t speak. While I would not be surprised if a power struggle is as strong a basis for this suit as control of a website, that is not the scope of this blog or the case.
Though I will say that if power is at the center of this controversy then, in my opinion, MSG picked the wrong battle. Another blog, another time.
As you know the Court ordered in favor of the NHL (so far). Here is the synopsis and some juicy tidbits:
Purpose and Objective to the League
According to the NHL Bylaws, The “first purpose and object” for which the NHL is organized and exists is: “to perpetuate hockey as one of the national games of the US and Canada.”
Makes me think about the point of having a league in the first place: cohesion of rules, playing arenas/equipment, fair dissemination of players, structure to scheduling and playoffs are among the most important reasons for a league, but also important are these benefits: shared economies that a centralized league can provide on many things including extended media marketing and public exposure.
(The good kind of public exposure, not the creepy flasher kind, or girls flying up a nose kind. ewww. The edge commercials still creep me out.)
The Commissioner’s Power
As what I think is the most interesting and (if you will indulge me again) “Juicy” detail from the case, the Judge’s Order reveals that Gary Bettman has, as the Commissioner, rights under the NHL constitution to- basically -absolute power.
Settle down in the court room please or I’ll have you removed….
The Judge’s Order informs that the NHL Constitution, which all teams have signed and ratified, provides that (and I quote): “The commissioner has the power to interpret the provisions of the Constitution, By-Laws, League rules and resolutions; he also has FULL AND COMPLETE AUTHORITY TO DISCIPLINE MEMBER CLUBS FOR VIOLATIONS OF LEAGUE RULES”
Order Order people, cant you handle the truth??? Sheesh!
In honor of the late G.Carlin: “I shix you not.”
The NHL constitution gives the Commissioner the absolute right to set rules and regs, to enforce them and sanction for failure to play nice.
Wow. I want to be commissioner. No I’m kidding I would never take on that responsibility. Whew.
That is a seriously broad set of powers…..Maybe broader than the US Supreme Court has over the US constitution…(maybe not- I don’t know if there are checks and balances in the NHL Conny or Bylaws.)
The NHL constitution has been in effect longer than the current incarnation of assigning IP rights, so every owner understood the Commissioners powers before signing their IP rights away-
I know I hear you: “What are you talking about Juice, ‘Signing rights away???’ Your coo koo for cocopuffs blonde one….”
But is what they all did with respect to the world wide web- read on my friends, read on……
Exclusive License to Control Team Intellectual Property.
Not surprisingly, in order to be an NHL team, you must sign and assign certain intellectual property rights over to the league. The existing structure –where the 30 teams assigned their trademark and intellectual property rights to the NHL- in consideration to be in the NHL- pre-dates Bettman and Dolan.
In 1994, all 30 teams assigned their intellectual property rights over to an NHL subsidiary agreeing to give the NHL EXCLUSIVE license over all their logos, marks, name, AND to market the entire league and individual teams via “www”. (Exclusive!)
Did I mention exclusive????
To me, assigning such IP rights is very serious, and I hope there was a vote first as to whether this was the way to go. Frankly, once assigned I bet that the only way to get them back or break that assignment is to take the team out of the league, or get the entire league to vote on changes to the NHL control of the IP.
All teams knew the rationale behind the assignment of such rights: to work toward a goal of an integrated, cohesive league and to provide smaller markets with a more cohesive, polished platform that they might not otherwise be able to develop themselves. All teams were on board, including MSG.
No team probably had the foresight in 1994 to realize that the internet would be this important in 2008, but look at us now….
Therefore: it been a done deal for years now, every team did it, every other team is also in the same boat. The League has exclusive rights/license over all their logos, marks, name, AND to market the entire league and individual teams via “www”… Case closed.
Exclusive!
The New Media Strategy
Flash forward. In 2005, a committee of 10 teams formed by the League drafted a “New Media Strategy” and internet protocols and rules which the League adopted (thereby giving Bettman authority to enforce via his absolute power) and imposed on all team and team websites. The existing NHL.com format is the result.
Please note that the court docs suggest that the NHL sets most policy regarding the control of IP, team logos, names, marks and brands by committee making recommendations to the Commissioner. I don’t know if that is completely true, but it seems to be right. The committees are typically made up of 10 teams- like the New Media Strategy committee.
I do not know which teams were part thereof. I wish I did.
The New Media Strategy includes some very strong NHL controlled features: No independent team website, restrictions on content on the NHL based team website, etc. Teams may not license or distribute their own game footage for use over the internet.
A huge goal of the New Media Strategy mirrored league goals: to grow the international and national brand, create uniformity across the league in terms of consistent quality and reduce the costs of operating thirty back office website operations.
MSG Screws its own Pooch with its Arguments
MSG argues that the League was already being too heavy handed on things like merchandising and that the League is failing to properly market the league or individual teams and that the League cannot keep up with the technologies individuals teams could provide on their own team controlled sites. The Rangers apparently had a slick website with lots of fan traffic, and the New Media Strategy would scale back its features and remove certain fan favorite interactions.
Basically, MSG thought the New Media Strategy sucked.
Probably did for big market teams. You know, trading creativity for homogeneity…
So MSG Rangers said “f” this, and continued to operate their own super fantastic bubble plastic website.
They argued that the NHL was enforcing rules that amounted to anti- competition and revenue sharing. Again, probably not untrue, in these sense that a national platform and league uniformity helps smaller market teams who can’t expend significant resources on internet toys and games like New York, LA or Detroit can.
However, if this is your strongest anti-trust argument, then my friend you are screwed. You Pooch is screwed, your neighbor’s pooch is screwed.
Honestly, I don’t think MSG is wrong to be upset about not being able to creatively develop the content of its website, I just think: “well doofuses, you shouldn’t have signed your rights over without better protections.” Plus, the League did try to work with MSG and to address many of the creativity complaints.
However, MSG actually (pathetically) argued that Ranger fans would be alienated by an NHL based website and that Ranger fans don’t care about hockey in general, only their own team and that a national website would dilute local rivalries.
I am happy to personally report that this is the biggest bunch of Horse Hockey I have ever heard and for even suggesting such an argument those lawyers should be forced to wear pee wee goalie pads, stand in net and let people like Al Iafrate, Bobby Hull and Al McInnis take slap shots at them.
Was McInnis the last guy in the league to play “sans helmet”? I think he was- for St. Louis right? Any how….
All the Ranger fans I know at Connect care about the game- other teams, interact with people who are not Ranger fans, have fun rivalries with others and usually applaud and support their friend’s teams accomplishments (unless the friend’s team is a rival) even if their friend’s team is say, the Detroit Red Wings.
Of course that is an unfair comparison, what is not to love about the Wings.
But I digress…
The League Rules at Issue in the Case
While MSG was clearly torked about a whole bunch of stuff, this suit only focused on the internet uses(creating, operating and managing team websites). The main New Media Strategy/League rules scrutinized and ultimately at issue in this case amounted to the League requiring that while each team will control its own NHL platformed website, it has to be a basic format uniform with all the other teams sites, has to provide certain percentages of front page space to national use and marketing and all team logoed merchandise had to be sold through NHL.com.
Interestingly and not necessarily completely fairly, the league rules also REQUIRED each team to pay for its own site, and be wholly responsible for all website content not required by the League. To be fair it’s a little like saying- “While you live in my house you’ll abide by my rules and my rules are that you may not move out of this house and you must donate all your allowance to the family.”
But it’s not a completely heinous circumstance either. Price to play I guess.
So, to resolve the mess and try to address some of MSG’s complaints, the League tried to work with MSG, granting special demands that other teams weren’t getting …The Court basically said, that up to the filing of the lawsuite, the league tried to play nice Mr. Dolan, and you f’ed up.
MSG balked on one stupid item.
The NHL required all team websites to be hosted on the same server. On this single issue MSG said: “screw you and your little dog too Bettman” – and filed suit in September.
Are you kidding me?????
Despite the litany of other complaints the MSG dumped into their (Amended) Complaint, they basically were arguing that centralized hosting of websites on one server amounts to revenue sharing. And on that issue, Dolan and MSG are wrong.
And the court has said so. What bothers me most about MSG’s position is that they are arguing over rights they gave away to the League. “I didn’t know the internet would be so big it so now I want it back… whaaaaaaa…” In my book, MSG doesn’t get to fight about what the NHL does with the IP rights assigned to the League unless they can actually show that there is some unduly burdensome restraint, trademark deprecation or burdensome financial loss associated with the NHL’s use of the Rangers brand. That, they did not do.
The Court said they did not meet their burden. MSG lost. MSG has appealed.
And this is when it gets good….
Absolute Power? More like a bunch of Grey Geese running around hissing.
So the League, Mr. B, exercising his absolute power of – yea I said it- “absolute”….
Though I prefer Ketel One, then the goose.
Mr. B. the League decided enough was enough- and said if you want to throw poo, bring your shovel. The League has responded apparently by try to remove Mr. Dolan and CO. as the Ranger ownership, under Bettman’s grey goose rights to discipline under the NHL Constitution. MSG is fighting back with an appeal on its antitrust violation claims.
Bottom line at the End of the Day
Its unclear if the league would be found in violation of antitrust, but I am thinking not because of Microsoft’s impact on such laws and the fact that no sports league or franchisor (sport or otherwise) can afford to see the law come down against the NHL.
Really, an anti-trust appeals ruling in favor of a professional sports team, against the league, for what MSG alleges to be in violation of anti trust laws, would cause fundamental changes in the format of all professional leagues as we know them. It would impact all associations and groups, like franchisors, and even small joint ventures.
And probably not in a good way.
The last time a professional sports franchise fought a league was when the Dallas Cowboy’s sued the NFL for antitrust violations a case ultimately settled out of court on undisclosed terms.
There will likely be a settlement, if MSG wants to remain owners. Maybe they don’t maybe they want to be bought out and this suit was just to position itself more advantageously. Maybe they had to take it to court to get more bargaining power.
That worked out well didn’t it?
Bottom line? At the end of the day, in the simplest possible terms, I can’t imagine the revenues they think they lost outweigh the costs of such a lawsuit- geez its a frickin’ website. Your fans are already here Mr. Dolan, get used to it.
Copyrighted 2008, all rights reserved by Behrgreer Ltd. and the author. No reproduction or use without the express written permission of the author.
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