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Today on "Sports Files" we look
at some of the pressing legal

issues surrounding
intercollegiate athletics,

including the attempt
to unionize athletes at

Northwestern University, and
I do so with Memphis Labor

Attorney David Prather.

[theme music]

Each week on "Sports
Files" our goal is

to both entertain
and educate.

And today we'll be going to
school on some major issues that

could turn collegiate
athletics inside-out.

But first, the Grizzlies are
looking to eliminate the Thunder

from the post-season as the
teams are going at it this

evening at FedExForum.

Tuesday night in Oklahoma City
the Grizzlies nipped the Thunder

100-99 in overtime
to take game five,

and grab a 3-2 lead in their
first round Western Conference

playoff series.

This incredible best of
seven set has produced four

consecutive overtime games.

In the win Tuesday, the
Grizzlies blew a 20 point lead

and survived a late game
meltdown only to roar back and

win their third
overtime game in the series.

Of course the last play was not
without drama as Kevin Durant

missed a three point attempt
and Serge Abaci's putback at the

buzzer, which would have
won the game for O-K-C,

was ruled to have come
after the red light went on.

If the Grizzlies win tonight
they take the series and move

into round two.

If the Thunder can
stave off elimination,

they will force a
decisive game seven on Saturday,

back in Oklahoma City.

It's also with heavy hearts that
the Grizzlies battle the Thunder

as former team owner
Michael Heisley passed away last

weekend.

Later in the show we'll look
back at the colorful former

owner of the Grizzlies and show
you why he cared so much for the

Memphis community.

But first the ever changing
landscape of amateur sports on

the collegiate level.

And just how long will we be
able to continue to say that?

David Prather is a Memphis
Attorney who deals in labor law.

He has considerable experience
with Fair Labor Standards Act

litigation, including collective
class actions and represents

employers in department of labor
wage and hour investigations.

In 2008, he was appointed by the
Bush administration to serve as

senior advisor to the
administration of the wage and

hour division of the U.S.

Department of Labor.

Today David Prather lends his
expertise on a number of issues

including Northwestern's
scholarship Football players

unionizing and what impact
it will have if it clears all

hurdles.

Plus the need for fundamental
reform with the N-C-A-A and the

pressing Ed O'Bannon class
action anti-trust lawsuit

against the N-C-A-A.

Get out your notebook ready
because class is in session,

and it's next on "Sports Files."

[theme music]

Well David,
thank you so much for

joining us today.

Appreciate you having me.

Glad to be here.

Let's update everybody
where we stand with the case at

Northwestern University with
the football players voting on

unionizing.

Sure.

So in March of this year,
the regional director of the

National Labor
Relations Board, the N-L-R-B,

ruled that the Northwestern
scholarship football players are

employees and would be
eligible to form a union.

And regional director also
directed that an election be

held on April 25th.

Following that ruling,
Northwestern has appealed that

ruling to the full N-L-R-B to
the board in Washington D.C.

And N-L-R-B has
accepted that appeal.

And in doing so also said
that the ballots -- the election

would go forward but the
ballots would be impounded.

So since that time, we've had..

April 25th has passed.

The right has been held and the
ballots are going to sit there

until the N-L-R-B
rules on this appeal,

which could be, you know.

This is an important issue.

They know it.

They're gonna take
their time on it.

So it could be likely
the end of the year,

maybe even early part of next
year before we even find out,

you know, what the ruling is
from the N-L-R-B and if they

rule in favor of the employees
or the athletes as the case may

be then what the
election results will be.

Well my question is this.

Why impound the votes?

Can't you settle a lot of things
and save a lot of time if you

look at the votes, if they
come up short and they turned it

down, they voted it down?

Then you save all
that process, don't you?

I think they just want an
election that is clean and

doesn't have -- isn't tainted by
any kind of ruling that may come

out.

And they want to be able to make
a ruling that's not tainted by

the outcome of the vote.

What are the advantages and
what are the disadvantages of

athletes basically becoming
employees while going to school

as scholar athletes?

What are the pros and cons?

Well certainly
from the cons side,

you know, there's
the university.

Their position is going
to be this is a team.

There needs to be team unity.

They need to have
-- be acting as one.

And when you bring a third party
in to being intermediary between

the coaches and between the
players that that's not a good

thing and could put them in a
competitive disadvantage versus

other teams.

So you know that's the cons.

And apart from any issues
also related to amateurs,

I mean whether we believe in
athletes should be paid or

whether they
should be, you know,

it should be more of a pure
system to the extent if that's

possible.

You know some of the cons is you
see overtime college football

become more and more
commercialized and mroe and more

of a business.

You know there's a feeling out
there that these players are the

only ones who don't really have
a say in how what their role is.

There's a lot of
money being made in the,

you know, billions of
dollars on college athletics.

And the athletes
don't have a say.

And this is a possible way to
get them a seat at the table.

Is there a model for this
anywhere else in the world with

their amateur athletes?

Because we know in
Europe and other countries,

we don't hear a lot
about amateurism.

They play professional athletes
even for years and years in the

Olympics.

You know I'm not
aware of anything,

you know.

The closest model as far as a
unionization situation would

obviously be professional
sports where they are unionized.

But as far as amateurs being
unionized or just amateur sports

in general, I'm not aware of it.

The tax ramifications..

I mean it's easy to talk about
wanting the backing of a union

but when you are a collegiate
athlete and now all of a sudden

you become an employee and
you think well that's great.

There's the benefits.

We just talked about
the pros and the cons.

But one of the
cons could be taxes.

You may be owning the money that
they are giving you through a

scholarship.

So what about that?

Be careful what
you wish for, right?

Yeah, in the case
of Northwestern,

their scholarships are valued
at upwards of $75000 a year.

And so the tax on that
would be substantial.

Currently under the I-R-S rules,
a scholarship is not taxable

unless it is a scholarship
that is given in an exchange for

services rendered.

And that's the very nature of
the N-L-R-B's ruling is that

these student athletes or
if their ruling stands.

Employees are playing football
in exchange for getting the

scholarship.

And so there could be an
argument that would be taxable

because that's a scholarship
provided for services rendered.

Now the I-R-S is not going to be
bound by what the N-L-R-B says.

But if they agreed with it
and wanted to follow that same

logic, then you could see a
situation in which it was taxed.

But you can't say for
certain at this point.

Will this be the
process for any other school?

Right now it's private schools.

And I want you to explain why it
would not affect public schools.

But would this be the same
process if Stanford wants to go

through with this, Duke
wants to go through with this?

Yeah.

So if CAPA, which is the
organization that's attempting

to unionize Northwestern wanted
to go after Stanford tomorrow,

they would first have to go
and show that there is enough

football players who want to
be represented by a union.

And you do that by getting
card signed saying I wish to

represented for bargaining
purposes by this union.

And you have to get 30% of
the football players to sign.

So they first
have to go do that.

They then take that to the
N-L-R-B and say we want an

election.

And in this case, if the N-L-R-B
were to uphold the regional

directors ruling, they'd already
have that feather in their cap.

They wouldn't have to prove
that like the CAPA did in the

Northwestern case.

So and then from there, they'd
certify an election and they'd

have to then prove that they
have to win that election by

getting over 50% of the
scholarship football players to

vote in favor of the union.

So similar process but slightly
easier if the N-L-R-B obviously

were to uphold the regional
directors willing that they are

employees.

You know as far as..

So that's the route for
private school right now.

In the case of public schools,
the law that governs this is the

National Labor Relations Act.

And that's what the law that
gives employees the right to

unionize.

That does not
apply to the states,

to state government.

So a state school would not.

You would not be able to
unionize a state school under

the National
Labor Relations Act.

Some states though have their
own labor laws that would allow

for unionization
under state law.

And that's kind of just going to
be a patch work of laws that's

going to vary
from state to state.

Does Tennessee allow it?

You know I'm not sure.

I haven't looked at it.

I don't believe they do.

It's going to be less
common in your southern states.

So that could obviously affect
the University of Memphis,

University of Tennessee if
they went down this route.

Vanderbilt's a private school.

Of course they could do
what's happening right now at

Northwestern.

I want to show
everyone a graphic right now.

This kind of goes back to March
26th after the N-L-R-B decision,

the original decision.

This comes from U.S.

Senator Lamar Alexander, the
senior Republican and on the

Senate Health Education
labor Intentions Committee.

Quote -- I'm sure
you've seen this quote.

Your comments?

Well you know I
think that's your..

We don't now how
it's going to turn out.

But that's your worst case
scenario that the kind of labor

strike that you often get and
the tension that you get in

labor relations would follow in
to college football or college

basketball.

You know, strikes,
tense negotiation sessions.

You know, those
type of situations.

You know it would be naive to
think that it couldn't happen.

On the other hand, you
know, anytime you've moved from

amateurism to
professionalism or you've,

for instance, people thought
that it might be the demise of

the Olympics when we start
allowing professionals in to the

Olympics.

And when free agency has
been introduced in to certain

professional sports.

There was certainly dooms
day scenarios put out there.

So nobody knows.

But I do think that the
potential for labor disputes

that could fundamentally change
the game and fundamentally

change the relationship between
player and coach and player and

university is very real.

I don't think it's unrealistic
to think that that worse case

scenario that he
describes could occur.

At Northwestern,
we're talking football.

Senator Alexander just
mentioned basketball.

Are we talking about only sports
that are revenue making sports

or can a softball
try to unionize?

Can a badminton
team try to unionize?

How far does it go?

Well the way that the regional
director in Chicago that wrote

on the Northwestern case,
the way his opinion read,

I don't think it would preclude
a non-revenue sport from

unionizing.

As long as they were
receiving, you know,

value for their
services, you know,

the argument that they
are employees could apply.

But that particular ruling
related solely to the football

players at Northwestern.

So if somebody tried to
unionize a non-revenue sport,

they would have to, you know,
they would likely have to go

through that kind of hearing
again to determine whether that

particular sport
is an appropriate,

whether those players on
that particular team at that

particular school are employees.

And the fact that
they are losing money,

that it's not a commercial
enterprise would be a factor

that's, you know, would be in
the university's favor that

wasn't in the university's favor
in the Northwestern case because

football, they make a
lot of money off football.

We have this interesting
deal going on with the possible

unionization of football players
at Northwestern and who knows

what other schools
want to follow suit.

We have an even bigger issue
that's affecting collegiate

athletics and that is the
O'Bannon in class action

anti-trust lawsuit, For
those who don't know,

it's expected to
go to court soon.

But as you told me
before we started taping,

there may be delays.

Basically, O'Bannon and the
athletes he's representing are

suing for the use of
the name, the likeness,

the image and trying to
be rewarded monetarily.

What does this do for
collegiate athletics?

Does it completely
slam open Pandora's box?

Yeah, I think the Ed O'Bannon
case and there's a similar case

that's just recently been filed
in New Jersey that are really

attacking the heart
of the N-C-A-A model,

the amateur model where athletes
are not allowed to receive money

in exchange for their services.

And these lawsuits, these
anti-trust lawsuits are really

attacking that model at
its heart and trying to get

compensation for athletes who
are certainly the work horses in

the business.

That's gonna change things a
great deal and I think a lot

more than what the Northwestern
case could potentially change.

So you know there it would
really change the revenue model.

It would go at the type of money
that they can get from jerseys.

There's already been a
settlement with the plaintiffs

in the video game companies
are using their likeness.

It could impact.

It could cause them to
have to share T-V revenues,

which is the real cash
cow for the N-C-A-A.

Billions of dollars.

Yes, exactly.

And so you know now you're
talking about somebody else is

getting a piece of that
pie, which could affect,

you know, universities ability
to pay coaches the way they're

currently paying them, to build
these new nice facilities a lot

of the universities
are building.

Then you've
got title nine
implications where if you

provide certain money
to the male athletes,

you have to provide it on
an equal basis to the female

athletes and the
non-revenue sports including.

So it's going to require a
real shift in budgeting and what

they're going to be able to
do as a university and an

institution.

Let me ask you this.

Quick answer.

Do you think O'Bannon wins this
case or do you think they settle

or he loses?

From everything I hear,
settlement is not likely.

I think there are some.

There's been some A-Ds who
have come out and would like a

settlement.

But the N-C-A-A seems to
have dug in its heel.

So I don't think that's likely.

Because how do you?

How do you give even an inch
there without opening up the

whole model, without changing
the whole amateur basis of the

model?

So it's going to be
tough to reach a settlement.

Now you know as to who
wins, it's a tough call.

There have been several lawsuits
throughout time where the

N-C-A-A has been sued on
anti-trust grounds that have

challenged the amateur model.

And to this point, the N-C-A-A
has prevailed on those on the

grounds that this isn't a
commercial enterprise and that

the amateurs in that particular
model is the benefit to the

system and to competition.

So the N-C-A-A at this point has
got some history on their side.

But it'd be interesting to see.

They have history but
they also are worried.

There's no question.

And now the N-C-A-A board
of directors recently met.

There's going to be changes.

There's no question.

In fact, there could be changes
to the full cost of attendance

scholarships.

There could be changes to
continuing education and medical

care for down the road
for collegiate athletics,

insurance, all types of things
that will be decided on in the

not too distant future.

Big five
conferences -- the big five.

We mean Pac 12,
Big 10, etcetera.

They would have the ability to
enact rules and other Division I

schools from other conferences,
for example Memphis in the

American, they could follow
suit if they decide to do so.

But again, a lot of rule
and acting by the Big Five.

So a lot of power that
the N-C-A-A's giving up.

There has to be something major,
change to the N-C-A-A for them

to survive.

Do you think they will?

Do you think the N-C-A-A will
ultimately be around and still

be the so-called governing body
of the collegiate athletics 50

years from now?

You know the question of what
the N-C-A-A is doing right now

is too little too
late to save themselves.

And there was a time where I
think people thought that's

striking a fair balance.

A kid gets a scholarship
and gets to play football.

And you know
that's fair grounds.

And now as you said billions of
dollars are going through the

universities and millions
are going to the coaches,

people are starting to wonder
is that balance still fair.

Is that scenario still one
that we thinks a fair one?

So the N-C-A-A is going to have
to give I think to give back

that public perception
and keep that balance.

Now they're always going to
need somebody to administer

tournaments,
administer bowl games.

And there's always going to be
rules in place and somebody's

going to have to
enforce those rules.

So the N-C-A-A I
think will be there.

It's just a question of whether
this will be an amateur model in

the future.

So many subjects, so many
topics out there that we're just

scratching the surface with.

But needless to say, there's
going to be a lot of changes in

what we know as we've known
for years what intercollegiate

sports is about, what
amateurism is about.

it's all changing.

And David, we
appreciate your time.

We appreciate your expertise
just touching on some of these

subjects for us.

Well I appreciate you having me.

I've enjoyed it.

Thank you so much.

That's David Prather.

We'll take a break.

Overtime is next.

[theme music]

Three..

Two..

One..

[buzzer sounds]

In 2000, Michael Heisley
purchased the Vancouver

Grizzlies and with the hard
work and dedication of the N-B-A

pursuit team in
Memphis, Heisley,

a Chicago Billionaire, relocated
his team to the bluff city.

The rest, as they
say, is history.

Heisley would control majority
ownership in the team until his

sale of the organization two
years ago to a group headed by

Silicon Valley tech guru and
wireless engineer Robert Pera.

Last Saturday, news spread like
wirefire that Heisley had passed

away at the age of 77.

The colorful, boisterous giant
of a man died of complications

from a massive stroke
suffered nearly 15 months ago.

I was able to have Michael
Heisley on my radio show on

Sports 56 several times
and he never disappointed.

He shot from the hip and
wasn't afraid to step on toes.

But he was fair and
most importantly honest.

Heisley also made an appearance
with Geoff Caulkins here on

"Sports Files"
several years ago,

and when he spoke to the media
he always made sure to talk

about the importance of the
team having an impact on the

community.

And I would say he
accomplished that goal,

as just last year the Grizzlies
were named the top franchise in

professional sports.

So here's a look back
at Michael Heisley,

the man who brought big time
professional sports to Memphis.

I think that we've made
a difference in Memphis.

I think that's open to a lot of
discussion by different people.

But from my point of view, I
think that we have made an

impact on the city.

That was our number one, at
least my number one priority.

I think if people
went back and read,

that's what we
said we wanted to do.

We didn't just want to
be a basketball team.

We wanted to be somebody that
basically left an imprint on the

city.

And I think we have done that.

Would I have liked to have more
success as a basketball team?

Obviously.

All my life I've been an
extremely competitive person or

I wouldn't have
been as successful.

When you lose, you know
it is extremely painful.

When you lose in front of
thousands of people that are as

nice as they are and thank
you and everything else,

it makes it even more hurtful.

So you know that's been
very difficult for me to get.

I would have liked to been more
successful with the team than

we've been.

My intentions, I think, have
been focused on basically trying

to do the best job to make the
Grizzlies part of the fabric of

Memphis.

And quite honestly,
in some regards we;

ve done a pretty decent job.

In other areas, you
know its work unfinished.

And I think we can get there.

But that is so much harder than
I ever perceived it would be.

I am a very upfront person.

And sometimes people don't
like what I have to say.

But I guess if I had to be
a certain type of person,

I would want to be a person that
told people exactly what's on my

mind.

And that's why
generally speaking,

if you go back and
look at the record,

you'll find very
few times I've said,

given a statement, and then
turned out and did something

else.

You know I've been
extremely fortunate.

I started very poor.

And I've made a
substantial amount of money.

And I firmly believe
that money corrupts.

And I think that if
you don't give back,

it will corrupt you.

And worse, it will corrupt
your children and your family.

And so it has been a very strong
purpose in my family that we

would try to give back.

And I got this idea
that owning a sports team.

People in this
country are so sports nuts,

that owning a sports team, you
could get people to support your

charities and so on like that.

And you could have
even a bigger impact.

And so we looked at a couple of
things before we ended up with

the Grizzlies.

And quite frankly, I'm satisfied
that we have made a difference

in Memphis.

I'm sure people would like
to think I should have made a

bigger difference.

Would I be much more satisfied?

I'm not trying to
say I'm satisfied.

Would it be much more
satisfied to have been a winner?

I think people want more.

We got to the play-offs.

We were getting ready to move in
to the new arena and so on and

so forth.

People had a new team.

Expectations were a lot
less than what we had.

We went from 20-some wins
with a team that haven't done in

Vancouver anything and
we suddenly were at 50.

You know and that
was a tremendous move.

And that shows you that
what success would do if the

Grizzlies could basically
replicate that level of success

but it would have to be more.

To get to that, we would
not only have to get to the

play-offs, we would have to
win games in the play-offs.

And of course we send our
condolences to Michael's wife

Agnes, his five children,
and the entire Heisley family.

And that will do it
for this week's show.

We'll see you next time.

(female announcer) Production
funding for "Sports Files" is

made possible in part by..

(male announcer) Infiniti of
Memphis has moved to Germantown

road just half a mile north of
Wolfchase Galleria and is proud

to support W-K-N-O for its
quality broadcasting and service

to our community.

Quality and service -- No wonder
Infiniti of Memphis feels at

home on W-K-N-O.