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Donating Recoveries? Game On!

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By William Vogeler, Esq. on July 28, 2017 7:00 AM

It's bad enough that former athletes often go broke, but add to that corporate profiteering on their images after they retire -- really?

"Come on, man," as Charles Barkley would say. Don't know basketball? Then how about Chris Spielman, former pro football player? Now a television analyst, Spielman is suing Ohio State University for using former athletes' images without their permission.

He is donating any recovery to help other student athletes at a time when the federal government is cutting back on donating settlements to third parties. For litigants with causes, sometimes it's a game of strategy.

Donating Recovery

Spielman's case is about leveling the playing field, where universities and corporate sponsors make millions from athletic programs. Many student athletes never make it professionally, and even pros often struggle financially.

According to Sports Illustrated, 78 percent of all NFL players are under financial stress or bankrupt within two years after their career ends. Sixty percent of NBA players lose it, or most of it, within five years.

While donating to struggling athletes is not quite a Robin Hood story, truth is in the eye of the beholder. Spielman sees it like David versus Goliath.

Attorney General Jeff Sessions has a completely different view of donating recoveries to causes.

No Recovery Donations

During the Obama Administration, the Justice Department settled cases that required parties to pay funds to third-party community groups, such as the National Council of La Raza, Habitat for Humanity and the National Urban League.

For example, the government settled with several banks over mortgage-backed securities in 2013, but required them to pay about $3 billion of more than $23 billion to neighborhood and legal aid organizations.

"These third-party organizations were neither victims nor parties to the lawsuits," Sessions said in a memo to senior Justice Department officials and U.S. attorney's offices. Effective immediately, he said, settlement payments to nongovernmental third parties, such as advocacy or housing groups, are prohibited.

Instead, Sessions said, the funds will go only to compensate victims, redress harm and punish unlawful conduct.

Unjust Enrichment

Fortunately for Spielman's cause, his case will not likely involve the federal government. Like sports itself, it gives some hope to those who sometimes face crippling twists in life.

His antitrust case targets Ohio State's marketing programs for using the likenesses of athletes. The complaint accuses the defendants of "unjust and monopolistic behaviours," noting the university makes millions of dollars from merchandising ex-athletes.

"Former OSU student-athletes do not share in these revenues even though they have never given informed consent to the widespread and continued commercial exploitation of their images,'' the lawsuit says.

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