SPORTS PRACTICE ADVANTAGE SM. The Game Plan for the Business of Sports.

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1 THE SPORTS LAW PRACTICE PLAYBOOK SPORTS PRACTICE ADVANTAGE SM The Game Plan for the Business of Sports.

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3 DUANE MORRIS SPORTS PRACTICE ADVANTAGE SM Athletes, team owners, collegiate administrators, those at apparel and equipment companies and others involved in business connected to sport in the United States or around the globe, all confront a myriad of issues on the road to success. What we call the DUANE MORRIS SPORTS PRACTICE ADVANTAGE SM can be a key force in bringing about that success in whatever role you or your enterprise plays in sports. Duane Morris attorneys have extensive experience representing clients doing business in sports. Whether pursuing new opportunities or investments, enforcing contracts or agreements or protecting clients rights, the firm s lawyers understand the unique issues presented by operating in the industry, including the importance of establishing and maintaining relationships, controlling sensitive information, maintaining privacy and confidentiality and achieving goals in tight time frames. Providing personal service similar to a boutique firm that may have offices in one or a few cities, Duane Morris provides clients access to lawyers around the world working in all the legal disciplines that clients may require. Whether in New York, Los Angeles, London, Asia, Latin America or any of the more than 20 markets where Duane Morris has offices, the firm s attorneys are able to provide experienced counsel and effective representation for clients in this fast-moving, high-stakes industry. The Advantage? Substantive and geographic diversity, combined with in-depth sports industry knowledge and experience. 1

4 INTRODUCTION In the sports industry, we re all competitors. And every competitor needs a game plan. Whether you re an athlete or a business person, there are phases that can be expected; how each of those phases is navigated is integral to being best positioned for success. In the first section of the Game Plan, we address the issues athletes can anticipate on their path from being an amateur, to a young pro, to a veteran ready to embark on a successful life beyond sports. In the second section, we focus on sports enterprises and the unique challenges these businesses will encounter on their way from startup to established industry player. We take you chronologically through the success cycle of each and describe the guidance and support that an experienced law firm can provide along the way. Game Plan for Athletes...4 The Formative Years The Established Pro Athlete Preparing for Retirement Game Plan for Sports Enterprises...12 Acquisitions or Startup Moving to the Next Level Moving On Choosing Your Team...24 For Additional Information...25 About Duane Morris

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6 ATHLETES

7 PREPARATION. FOCUS. EXECUTION. We understand that the needs, earning potential and schedules of athletes are not all the same. We have had experience in sports ranging from English soccer to Olympic rowing and auto racing to, of course, all of the major U.S.-based sports leagues. We can work with athletes to formulate a long-term plan for success that fits their unique circumstances. THE FORMATIVE YEARS THE ESTABLISHED PRO ATHLETE PREPARING FOR RETIREMENT 5

8 THE FORMATIVE YEARS MAINTAINING ELIGIBILITY In sports where amateur status remains important, complex hurdles abound in interpreting the rules of the relevant governing body, whether the NCAA, USTA or FIE, to determine what levels of sponsorship might be acceptably received. Complicating matters further may be the opportunity to sign agreements with management companies that seek to acquire these funds for the athlete. What are the issues in signing with agencies? Accepting support funds from benefactors? Entering into equipment or apparel deals? We can assist with these issues and help develop a strategy moving forward. ENDORSEMENT DEALS The rules of national and international sports-governing bodies vary as to how much and in what form athletes may accept support from interested parties, if at all. What is not desired is any action that could interfere with the opportunity to perform successfully in the sport. We can review the relevant regulations and provide guidance. Once we evaluate the obstacles, we can move you through the contracting process to put together the deal that best meets your needs at this stage of your career. PREPARING TO GO PRO Particularly for student-athletes preparing to enter a draft, the selection of an agent and other members of a team can be challenging. As legal counsel, we can assist you in implementing a system to make these selections. We can work with your institution or even stage a formalized selection process at one of our nearby offices. We can assist further by reviewing or preparing the appropriate agreements for these relationships. 6

9 BEGINNING WEALTH PROTECTION PLANS An initial key financial decision is how to take funds. A signing bonus and timing the receipt of endorsement revenues can all have significant tax and other impacts. DOMESTIC RELATIONS Issues like prenuptial agreements and child-support arrangements are not easy for anyone to negotiate, particularly for a young, highly compensated individual. We have counseled and prepared athletes in a variety of circumstances, such as paternity, child custody, marriages and divorces, and even the tax and citizenship consequences of how and when these steps are taken. Our experience can help eliminate the uncertainty from what can be emotionally charged situations. 7

10 THE ESTABLISHED PRO ATHLETE INTERNATIONAL AND IMMIGRATION The sports world knows no borders. From business deals to asset management, and intellectual property rights to technology issues, the firm s attorneys advise clients on opportunities, obligations and rights in nations throughout the world. Also, Duane Morris globally recognized immigration practice assists athletes and their families with visa and naturalization issues. ENDORSEMENT OPPORTUNITIES Careful what you sign! Ranging from traditional shoe and apparel deals, to local car deals to even long-term business relationships that can have a huge impact on an athlete s future earnings, we can assist in the review and drafting of these agreements. Most significantly, we can make certain that each athlete has a clear grasp of the commitment that is being made and the obligations it brings going forward. MISCONDUCT / CRIMINAL CHARGES AND CIVIL CLAIMS Famous people facing claims of wrongdoing can find themselves simultaneously trying to protect their livelihoods and their reputations. Whether an athlete is accused of doping violations or charged with a crime, Duane Morris lawyers understand the situation not only needs to be handled effectively, but it also needs to be done quickly and discreetly to best put the client back in a position to perform. We have experience in the most severe matters, including those involving USADA and WADA. 8

11 STRATEGIC AND CRISIS COMMUNICATIONS For clients involved in any high-profile industry, a legal matter that may come to the attention of the public can have an impact with their fan base and potential future business prospects. Matters that could have escaped public attention just a few years ago are now quickly reported, commented on and circulated around the globe. Sending the right messages and key moments can make a huge difference in public opinion. SPORTS AGENT DISPUTES All does not always go smoothly with professional relationships. Big money and significant stresses can sometimes cause rifts between athletes and their agents. We have experience on both sides of the issue and have represented athletes, and also agents, so we understand the position and challenges from both viewpoints. BUSINESS AGREEMENTS It is not unusual for an athlete to start a business while playing. A popular path, for example, is investing in a franchise business. Some may invest as a limited or even a general partner in other types of business. We are prepared with those agreements and have experience looking out for the best interests of our athlete clients. FOUNDATIONS AND PHILANTHROPIC ENDEAVORS It is common for professional athletes to establish foundations. However, this decision is not always the best way to accomplish individual goals, whether those goals are to help a particular cause, employ family members or for tax purposes. We can assist in making the decision by providing a road map of alternatives and, if desired, structuring a foundation in the most beneficial form possible. 9

12 PREPARING FOR RETIREMENT WEALTH MANAGEMENT Athletes flow of income and return on investments can be more volatile than almost any other profession, making it of the utmost importance to have solid current plans and future financial strategies. Duane Morris attorneys have experience counseling high-profile, high net worth individuals in all stages of their careers, advising them and their heirs on estates, trusts, asset planning and protection and the creation and management of charitable foundations. TAX PLANNING Wisely handing tax obligations is vital to building and maintaining your wealth. The firm s Tax Accounting Group is a unique, in-house CPA practice that provides tax planning and consulting services, working in conjunction with the firm s attorneys to strive for tax minimization, while ensuring necessary compliance in an evolving tax landscape (such as the growing importance of multi-state tax reporting, as states are becoming increasingly aggressive in seeking tax revenue from athletes and entertainers performing in their states). BUSINESS AFTER PLAYING DAYS The next step in an athlete s life is often the longest. With some pro careers ending tragically short, and even at best with decades of work life remaining, what comes next is just as important as what came before. A ramping up of involvement in business begun while playing can certainly assist with the transition. Wherever athletes decide to begin the next phase, we likely have a presence from direction to the right consultants to assisting with agreements for a broadcasting career, book and movie deals or just traditional partnership or employment agreements. With our wide range of business assistance experience, we can counsel you through each stage of your career and beyond. 10

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14 SPORTS ENTERPRISES 12

15 COMPETITION. PRESSURE. PERFORMANCE. In the business of sports, every day is game day. Pro franchises, college athletic programs, apparel and equipment companies and all the other businesses connected to sports have the ones that every other business faces, as well as some unique ones that come with operating in a fastmoving, high-stakes industry with customers that can be fiercely loyal and, just as often, harshly critical. Keeping ahead of the pack is the only way to survive and thrive. ACQUISITION OR STARTUP MOVING TO THE NEXT LEVEL MOVING ON 13

16 ACQUISITION OR STARTUP EMERGING BUSINESSES Duane Morris has a strong commitment to the emerging business community and assists many new and emerging businesses with all aspects of their formation, growth, financing and development. In particular, our attorneys help new businesses identify and structure an appropriate legal entity; assist in the preparation of business plans; and structure and draft agreements among partners, shareholders and stakeholders. Going forward, we help our clients with everything from complex compliance issues to counsel on bank loans, leases and other business contracts. VENTURE CAPITAL / FINANCING How do you define the relationship among your new business partners? When and how do you raise financing? Or do you raise capital? What structures with your new and very large client will preserve the relationship and still protect your company? How do you incentivize and retain your growing employee base? Our lawyers have worked with entrepreneurs to find the right answers to questions like these for decades. This depth and breadth of experience allows us to help you arrive at a solution that gets you what you need and positions your company for the growth and success you are working so hard to achieve. 14

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18 MOVING TO THE NEXT LEVEL GROWTH AND VALUE Buying? Selling? Dividend recap? IPO? Can t decide? Our lawyers understand that knowing which route to run is as important as how you run it. We can help you understand how the decisions you make for your company today can impact your growth and value down the road. Once you have chosen a route whether a simple sale or complicated multi-party international financing our lawyers have the experience and business acumen to get your deal done. INTELLECTUAL PROPERTY In sports, names, logos and likenesses are among the most valuable aspects of the industry. Enabling their use in the most advantageous ways while simultaneously protecting against non-permitted uses is a constant balancing act. For many years, Duane Morris attorneys have negotiated trademark and copyright licenses, purchases and consent agreements for sports clients. More recently, Duane Morris has become increasingly involved in global anticounterfeiting enforcement, coordinating efforts to stop the sale of knock-off sporting goods around the world. EXECUTIVE AND EMPLOYEE CONTRACTS The executive in the sports setting can be traditional, such as a president or director of marketing, or unique, like a college head coach or athletic director. We have the experience and know-how to assist either side, structuring the best agreement from the standpoint of the executive or the enterprise, whether it is with a pro team or league, collegiate athletic department or traditional business setting. We are experienced at structuring and drafting employment, consulting and noncompete agreements, and drafting and providing advice regarding various types of stock option and other equity incentive plans, employee stock savings plans and other employee benefit plans. 16

19 EMPLOYMENT LAW ISSUES Duane Morris employment lawyers offer practical counseling designed to help our clients avoid and resolve potentially disruptive labor and employment disputes, aggressively promoting client interests before state and federal courts and in mediation and arbitration proceedings, as well as before the Equal Employment Opportunity Commission, the Department of Labor, the federal Wage and Hour Division and all other state and federal agencies. We have experience assisting enterprises in responding to union organizing efforts and regularly defend businesses against unfair labor practice charges filed with the National Labor Relations Board. In unionized industries, our lawyers represent clients in the collective bargaining process, as well as in labor arbitration proceedings. NEW STADIUMS, ARENAS AND BALLPARKS No two deals for stadiums, arenas or ballparks are alike. We have been involved in a variety of deals and types of facilities, from the major facilities in Philadelphia, to Barclays Center in Brooklyn to PETCO Park in San Diego. The ongoing regulatory and tax issues are a particular area that we have dealt with, for example, in Philadelphia and Chicago. Duane Morris has a national and regional project financing practice providing extensive skills and experience in virtually all real estate and development matters. We represent clients in a broad range of sophisticated and complex real estate transactions and offer a full array of services related to the purchase, sale, leasing, development, financing, joint venture, syndication, securitization, use and management of real property and real estate portfolios. Our representations include work relating to lease agreements, financing and loan documents, restructurings and workouts, condemnation, eminent domain, valuation and tax issues, purchase and sale agreement negotiations, real estate development and real estate portfolio management. And, of course, the firm is known for having one of the most acclaimed construction law practices in the United States. 17

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21 RESORTS, FACILITIES AND EQUIPMENT LIABILITY For the past 30 years, our attorneys have been at the forefront of work for the sports and recreation industry, including skiing and snow sports, golf, bicycling and other outdoor industries. During that time, we have helped revitalize and define one of the most pressing issues to the sports industry: the doctrine of primary assumption of risk. We help resort owners, equipment manufacturers and other clients identify which claims should be vigorously defended through trial and which should be settled. Our attorneys are particularly skilled in helping to weigh the risks of litigating against the importance of maintaining a reputation for not settling when there is little or no liability exposure. LITIGATION / TRIAL As one of the 100 largest law firms in the world, Duane Morris has the depth, specific experience, geographic representation and well-defined approach to handle complex litigation. Our trial lawyers have the level of industry-specific litigation experience necessary to successfully manage large-case litigation for clients ranging from individuals to Fortune 100 companies. SPORTS MEDICINE AND TRAINING Duane Morris nationally recognized Healthcare practice represents physicians, physician groups and other medical practices and facilities involved in athletic training, sports medicine and concussion prevention and treatment. Clients include physicians for professional and collegiate sports teams. Our attorneys have dealt with such issues as who has the authority to make medical clearance decisions, team physician licensing and certification questions (including on road trips into other states), the release of medical information of public figures, health insurance coverage issues and more. 19

22 STRATEGIC AND CRISIS COMMUNICATIONS Enterprises need to protect their reputations just as much as athletes. Legal matters coming to the attention of the public can have an impact on fan bases, customers and potential future business prospects. Little escapes public attention in today s 24/7 news cycle, and news is quickly reported, commented on and circulated around the globe. Sending the right messages in key moments can make the difference in public opinion. MEDIA DEALS For spectator sports, media deals can be a key financial driver for business success. The valuation and rights-specific issues are pivotal. Long-term deals can have enduring implications for the leagues, teams, networks, advertisers and others. Our lawyers have experience with these deals at many levels for a variety of sports. GAMING Legalized wagering on sports is becoming a reality in more and more jurisdictions. Duane Morris attorneys have decades of experience with gaming, casino and related clients in all aspects of the industry on a global basis. We help clients understand and navigate the regulatory and permitting process, as well as the vast array of other legal and business issues. GLOBAL EXPANSION The world is getting smaller for all businesses, and sports are no exception. As global opportunities are presented, whether via expansion, acquisition or merger, we have lawyers around the world who are experienced in global business transactions of almost every kind. 20

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25 MOVING ON THE SALE The market for sports entities is limited. The most successful teams, leagues and sports-related ventures are coveted by many, but can only be attained by few. Selling any company that was created, nurtured and grown can be as much a personal decision as a business decision. Experienced guidance in these transactions can prove to be invaluable. WEALTH AND ESTATE PLANNING For those who retain their organizations and want them to continue on in the family, extensive planning may be required. Similarly, should there be an economic event, such as a sale, planning needs to take place so that the most favorable tax treatment occurs when the deal closes. Whether an athlete or business owner, many of the same concerns exist. We advise high net worth individuals and families on estates, trusts, asset planning and protection and the creation and management of charitable foundations. MONETIZING THE SUCCESS STORY Just like with the athletes, many other successful parties in the sports business have monetized their stories. It may be a book or a documentary or some other form of presentation. We can assist in protecting your interests in developing a project focusing on all the details, from co-author or ghost writer agreements to publishing and other rights agreements. 23

26 CHOOSING YOUR TEAM Before embarking on your next phase of sporting life, you should have an experienced lawyer who will represent your interests. Loyalty and history are wonderful things, but your best bet will be a lawyer (and law firm) that has been there before. (If your legal counsel is your hometown lawyer, you may not be getting the best advice for where you are going next.) If you have good counsel, they will do more than draft legal documents for you; they can provide introductions to people in the industry, and will know what can be expected in many scenarios, reducing the unknown. A good lawyer and law firm can be key members of the team that helps you get to the top of the game, stay there and go on to enjoy the benefits through the rest of your life. Find out more about the DUANE MORRIS SPORTS PRACTICE ADVANTAGE SM at duanemorris.com/sports. READ OUR SPORTS LAW BLOG: LISTEN TO OUR SPORTSLAW10 PODCASTS: 24

27 FOR ADDITIONAL INFORMATION For more information, please see DuaneMorris.com or contact any of our lawyers, including: KENNETH SHROPSHIRE PHILADELPHIA SPORTS & BUSINESS MARK BELONGIA CHICAGO LITIGATION NEVILLE BILIMORIA CHICAGO HEALTH INFORMATION JOSEPH BURTON SAN FRANCISCO LITIGATION JOHN FAGAN LAKE TAHOE LIABILITY & RISK MICHAEL GROHMAN NEW YORK WEALTH PLANNING GREGORY GULIA NEW YORK INTELLECTUAL PROPERTY PATRICIA HOFSTRA CHICAGO SPORTS MEDICINE STANLEY KAMINSKI CHICAGO TAX PLANNING GEORGE KROCULICK PHILADELPHIA REAL ESTATE JOHN NIXON PHILADELPHIA EMPLOYMENT & BENEFITS MILES PLASKETT MIAMI CORPORATE KRISHNA RAMACHANDRA SINGAPORE CORPORATE FELICE SCHONFELD MIAMI LITIGATION DAVID TONER PHILADELPHIA CORPORATE

28 Lake Tahoe San Francisco Silicon Valley Las Vegas Los Angeles San Diego Chicago Pittsburgh Atlanta Houston Boston New York Newark Cherry Hill Philadelphia Wilmington Baltimore Washington, D.C. Boca Raton Miami Mexico City Duane Morris Office Representative / Liaison Office London, UK Shanghai, China Oman Sri Lanka Myanmar Hanoi, Vietnam Ho Chi Minh City Singapore 26

29 ABOUT DUANE MORRIS Duane Morris LLP, a law firm with more than 700 attorneys in offices across the United States and internationally, is asked by a broad array of clients to provide innovative solutions to today s legal and business challenges. DUANE MORRIS IN THE U.S., EUROPE, THE MIDDLE EAST AND ASIA Duane Morris has offices on multiple continents, including in 20 U.S. cities, London, Oman, Vietnam, Singapore, Myanmar and our newest location in Shanghai, China. DUANE MORRIS IN LATIN AMERICA For decades, Duane Morris attorneys have advised clients doing business in Brazil, Mexico, the Caribbean, and throughout Central America and South America. With the ramp-up in Brazil in preparation for its hosting of the 2016 Olympics in Rio de Janeiro, Duane Morris is poised to assist in construction, technology, infrastructure and other investment and financing, utilizing long-established relationships with local financial institutions and knowledge of the specifics of doing business in Brazil. DIVERSITY AT DUANE MORRIS Duane Morris is considered a pioneer in law firm diversity efforts. The firm was among the first to name a Chief Diversity Officer and hosts annual Diversity and Inclusion Retreats supporting targeted business development. Duane Morris not only won the Minority Corporate Counsel Association s Innovator Award, but the MCCA also renamed the award after George B. Vashon, further honoring a Duane Morris tradition. A Duane Morris lawyer was appointed by the Commissioner of Baseball to serve on the Major League Baseball On-Field Diversity Task Force. 27

30 THE DUANE MORRIS SPORTS PRACTICE ADVANTAGE SM Duane Morris, through its DUANE MORRIS SPORTS PRACTICE ADVANTAGE SM, is uniquely positioned with lawyers and professionals in markets across the U.S. and around the world who have extensive experience representing pro athletes, agents and others involved in the sports industry, and who understand the unique issues involved in this industry. Clients turn to us for guidance in all types of business strategy and legal issues, from wealth protection and tax planning to merchandising and licensing to litigation, arbitration and litigation avoidance. A Duane Morris lawyer has led the NFL Business Management and Entrepreneurial Program since its inception in 2004, among other work for the National Football League. Our lawyers have also worked with the NFL Players Association, USA Track and Field and other organizations, and represented numerous pro teams, hall of famers, world champions and all-stars. Duane Morris LLP 2016 June 2016

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32 Duane Morris Firm and Affiliate Offices New York London Singapore Philadelphia Chicago Washington, D.C. San Francisco Silicon Valley San Diego Shanghai Boston Houston Los Angeles Hanoi Ho Chi Minh City Atlanta Baltimore Wilmington Miami Boca Raton Pittsburgh Newark Las Vegas Cherry Hill Lake Tahoe Myanmar Oman Duane Morris LLP A Delaware limited liability partnership This publication is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The invitation to contact the attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.