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Yahoo
8 hours ago
- Business
- Yahoo
The board decision that sent the MLB, NFL unions into controversy
Last June, eight members of the board of directors for a licensing group called OneTeam Partners, which is co-owned by the players unions for five major sports leagues, signed a resolution that would have included the member unions in a plan to receive 'profits units.' Those units, like traditional equity, could be turned into cash if the company did well. It was a move that raised alarms within at least one of the unions. Advertisement By late 2024, an official at the National Football League Players Association had repeatedly raised concerns that implementing the plan could mean that labor officials serving on OneTeam's board of directors — including the head of the NFL players union, Lloyd Howell Jr., and the leader of the Major League Baseball players union, Tony Clark — were attempting to make a change that could lead to their own financial gain, potentially at the expense of union members. The resolution, which was obtained by The Athletic, called for any eventual payouts — made through what is known as a senior employee incentive plan (SEIP) — to go to the unions the board members hail from. The resolution also directly acknowledged the possibility that the unions could then grant that money to their board members. 'The explicit goal throughout the process was to financially enrich the individuals who serve on the OTP Board as labor organization representatives,' the NFLPA official wrote to lawyers in a communication criticizing the plan, which was reviewed by The Athletic. '… the idea was to pay the money into the unions, then the individuals.' In a statement to The Athletic, OneTeam said that though the plan was considered, it was ultimately abandoned. Advertisement 'In early 2024, OneTeam initiated an exploratory review to determine whether the company could lawfully offer incentive-based compensation to current and prospective Board members,' OneTeam Partners said. 'This exploratory effort was part of a broader initiative to assess strategies for attracting high-caliber, independent talent. 'Following the legal advice of a labor law expert, it was determined that the best practice, if implemented, was to make grants to the respective players associations. In so doing, any future payments would be governed by each union's player-approved bylaws, policy, and governance frameworks. It added: 'To be unequivocally clear: no OneTeam board member, nor any union employee, was directly or indirectly granted equity in OneTeam, holds equity in OneTeam or is a participant in its SEIP and any claim to the contrary is simply misinformed and false.' Federal authorities are conducting an investigation related to OneTeam Partners and union officials. The full scope of the probe, which is being run out of the Eastern District of New York, is unclear. The Eastern District of New York declined to comment. Advertisement Five major sports unions hold stakes in OneTeam, the two largest belonging to the NFLPA and the Major League Baseball Players Association, which together own two-thirds of the company, according to people briefed on the business structure who requested anonymity because they were not authorized to speak publicly. The NFLPA has 44 percent, the MLBPA 22 percent. The unions representing players in Major League Soccer, the U.S. Women's National Soccer Team and the Women's National Basketball Association own much smaller shares in OneTeam: 3.3 percent for MLS, .3 percent for the USWNTPA, and .2 percent for the WNBA, according to one of the people briefed on the structure. Early this month, the FBI started calling MLB and NFL players or their representatives. Prosecutor David Berman is heading the federal investigation, said people briefed on its process who were not authorized to speak publicly. With a federal investigation underway, the NFLPA has retained outside counsel separate from the outside lawyers retained by its executive director, Howell. Howell's lawyer did not reply to requests for comment. 'We're guided by our responsibility to our members in everything we do and we will continue to fully cooperate with the investigation,' the NFLPA said in a statement to The Athletic. Advertisement The MLBPA declined to comment Friday. That union too has retained outside counsel separate from its leader, Clark. His attorney did not return requests for comment. The NFLPA official who voiced concern about the incentive plan wrote that they were concerned about the potential for various conflicts of interest. The official argued internally that the change to the plan could dilute the players' existing stakes, which they held via their unions. The official also questioned whether the players were informed of how their financial interests might be affected. The NFLPA official's email with lawyers shows talk of changing OneTeam's SEIP dated to 2023, when a new CEO took over. In March 2024, OneTeam asked outside counsel whether there would be any issues granting union officials on its board participation in a SEIP, according to the same email. In response, the official wrote, the law firm flagged concerns regarding the National Labor Relations Act were any units to be granted directly to union board members. Plans like SEIP are common in the business world. Companies use them to reward and lure top leaders, and the programs often grant traditional shares in a company. Private companies in particular will often grant something that operates similarly to shares but is not traditional equity, according to Chris Crawford, managing director for the executive compensation practice at the firm Gallagher. Advertisement 'It's not a publicly traded, readily tradable environment,' Crawford said. 'It gets into these third-party transactions that get a little bit messy. The most common is by a generic term called 'phantom stock.'' Hence OneTeam's use of 'profits units.' But ultimately, OneTeam is not a common business because it is largely owned by unions. Union officials have legal obligations to their members and their members' interests, and most unions don't have for-profit arms with the overlay of those governance concerns. 'The labor organizations' representatives on the OTP Board are there as FIDUCIARIES representing their union members' direct ownership interests in the Company — their legal duties are not to the Company generally, but rather their union members' ownership in the company,' the NFLPA official wrote in the email to lawyers. Advertisement The union officials have their positions on OneTeam's board because of their union roles, positions for which they are already compensated. Howell was paid $3.6 million by the NFLPA for the 12 months from March 2024 through February 2025, according to the union's annual disclosure filed with the Department of Labor. Clark was paid $3.5 million for the 2024 calendar year, per the baseball union's filing. The NFLPA has four seats on OneTeam's board, and the MLBPA has three seats. Both Howell's and Clark's signatures appear on the resolution to change OneTeam's senior employee incentive plan. The unions representing players in MLS, the USWNT and the WNBA share one seat on the board that rotates. Only the signature of Becca Roux, the head of the USWNTPA, appears on the resolution from last year. Roux, as well as Bob Foose, head of the MLSPA, and Terri Jackson, head of the WNBPA, have hired Steve McCool of McGuireWoods as outside counsel. Advertisement 'I notified the prosecutor in New York that I represent a number of OTP board members,' McCool said by phone Friday. 'My clients have no cause for concern and they are available to answer any questions the government may have about this matter.' Outside investors own the remaining 30 percent of OneTeam that is not owned by unions. The SEIP resolution called for the NFLPA to receive 44 percent of the new plan units available to the board, and the MLBPA 33 percent. The other three unions were in line to receive 3.7 percent each. The outside investors on the board were not going to receive any new incentive units, the resolution said. Such an arrangement has the potential to create at least the appearance of a conflict of interest, according to Lee Adler, a labor lawyer with no involvement in the matter who has long worked as counsel to unions. Advertisement 'Is there something in that set of criteria for the incentive that might have some influence on how or what the union officials who sit on the board actually end up … legislating (at OneTeam)?' asked Adler, a lecturer at the Cornell University School of Industrial and Labor Relations. NFLPA employees said at a meeting in November 2024 that they expected payments via SEIP would be $200,000 to $300,000, the NFLPA official wrote in the email. Sports unions have moved aggressively to capitalize on their players' branding rights. The MLBPA and NFLPA were among the founders of OneTeam in 2019. Both unions already had for-profit arms that handled licensing business, and those arms still exist today. But they were betting that a company with aggregated rights would have greater leverage. The venture has been a boon not only for the unions but also for the private equity investors who partnered with them. RedBird Capital cashed out its 40 percent stake in 2022, when the company had a $1.9 billion valuation. The windfalls from name, image and licensing rights carry a slew of gains for athletes, including bolstering traditional labor objectives like collective bargaining. The NFLPA reported about $101 million in revenue from OneTeam from early 2024 into 2025, and the MLBPA about $45 million for 2024. But both the baseball and football unions have been wrapped up in public controversy this year over, in part, OneTeam. Advertisement Late last year, an anonymous complaint filed with the National Labor Relations Board levied allegations at Clark, including concerns over equity from OneTeam. The football union, where internal complaints had already been lodged, then brought on an outside firm, Linklaters, to conduct a review. The NFLPA has not publicized that firm's findings. But in March, in an email reviewed by , Howell notified OneTeam's board of directors that Linklaters found the NFLPA and OneTeam had been in compliance. This article originally appeared in The Athletic. NFL, MLB, MLS, WNBA, Sports Business 2025 The Athletic Media Company
New York Times
9 hours ago
- Business
- New York Times
The board decision that sent the MLB, NFL unions into controversy
Last June, eight members of the board of directors for a licensing group called OneTeam Partners, which is co-owned by the players unions for five major sports leagues, signed a resolution that would have included the member unions in a plan to receive 'profits units.' Those units, like traditional equity, could be turned into cash if the company did well. Advertisement It was a move that raised alarms within at least one of the unions. By late 2024, an official at the National Football League Players Association had repeatedly raised concerns that implementing the plan could mean that labor officials serving on OneTeam's board of directors — including the head of the NFL players union, Lloyd Howell Jr., and the leader of the Major League Baseball players union, Tony Clark — were attempting to make a change that could lead to their own financial gain, potentially at the expense of union members. The resolution, which was obtained by The Athletic, called for any eventual payouts — made through what is known as a senior employee incentive plan (SEIP) — to go to the unions the board members hail from. The resolution also directly acknowledged the possibility that the unions could then grant that money to their board members. 'The explicit goal throughout the process was to financially enrich the individuals who serve on the OTP Board as labor organization representatives,' the NFLPA official wrote to lawyers in a communication criticizing the plan, which was reviewed by The Athletic. '… the idea was to pay the money into the unions, then the individuals.' In a statement to The Athletic, OneTeam said that though the plan was considered, it was ultimately abandoned. 'In early 2024, OneTeam initiated an exploratory review to determine whether the company could lawfully offer incentive-based compensation to current and prospective Board members,' OneTeam Partners said. 'This exploratory effort was part of a broader initiative to assess strategies for attracting high-caliber, independent talent. 'Following the legal advice of a labor law expert, it was determined that the best practice, if implemented, was to make grants to the respective players associations. In so doing, any future payments would be governed by each union's player-approved bylaws, policy, and governance frameworks. Advertisement It added: 'To be unequivocally clear: no OneTeam board member, nor any union employee, was directly or indirectly granted equity in OneTeam, holds equity in OneTeam or is a participant in its SEIP and any claim to the contrary is simply misinformed and false.' Federal authorities are conducting an investigation related to OneTeam Partners and union officials. The full scope of the probe, which is being run out of the Eastern District of New York, is unclear. The Eastern District of New York declined to comment. Five major sports unions hold stakes in OneTeam, the two largest belonging to the NFLPA and the Major League Baseball Players Association, which together own two-thirds of the company, according to people briefed on the business structure who requested anonymity because they were not authorized to speak publicly. The NFLPA has 44 percent, the MLBPA 22 percent. The unions representing players in Major League Soccer, the U.S. Women's National Soccer Team and the Women's National Basketball Association own much smaller shares in OneTeam: 3.3 percent for MLS, .3 percent for the USWNTPA, and .2 percent for the WNBA, according to one of the people briefed on the structure. Early this month, the FBI started calling MLB and NFL players or their representatives. Prosecutor David Berman is heading the federal investigation, said people briefed on its process who were not authorized to speak publicly. With a federal investigation underway, the NFLPA has retained outside counsel separate from the outside lawyers retained by its executive director, Howell. Howell's lawyer did not reply to requests for comment. 'We're guided by our responsibility to our members in everything we do and we will continue to fully cooperate with the investigation,' the NFLPA said in a statement to The Athletic. The MLBPA declined to comment Friday. That union too has retained outside counsel separate from its leader, Clark. His attorney did not return requests for comment. The NFLPA official who voiced concern about the incentive plan wrote that they were concerned about the potential for various conflicts of interest. The official argued internally that the change to the plan could dilute the players' existing stakes, which they held via their unions. The official also questioned whether the players were informed of how their financial interests might be affected. Advertisement The NFLPA official's email with lawyers shows talk of changing OneTeam's SEIP dated to 2023, when a new CEO took over. In March 2024, OneTeam asked outside counsel whether there would be any issues granting union officials on its board participation in a SEIP, according to the same email. In response, the official wrote, the law firm flagged concerns regarding the National Labor Relations Act were any units to be granted directly to union board members. Plans like SEIP are common in the business world. Companies use them to reward and lure top leaders, and the programs often grant traditional shares in a company. Private companies in particular will often grant something that operates similarly to shares but is not traditional equity, according to Chris Crawford, managing director for the executive compensation practice at the firm Gallagher. 'It's not a publicly traded, readily tradable environment,' Crawford said. 'It gets into these third-party transactions that get a little bit messy. The most common is by a generic term called 'phantom stock.'' Hence OneTeam's use of 'profits units.' But ultimately, OneTeam is not a common business because it is largely owned by unions. Union officials have legal obligations to their members and their members' interests, and most unions don't have for-profit arms with the overlay of those governance concerns. 'The labor organizations' representatives on the OTP Board are there as FIDUCIARIES representing their union members' direct ownership interests in the Company — their legal duties are not to the Company generally, but rather their union members' ownership in the company,' the NFLPA official wrote in the email to lawyers. The union officials have their positions on OneTeam's board because of their union roles, positions for which they are already compensated. Howell was paid $3.6 million by the NFLPA for the 12 months from March 2024 through February 2025, according to the union's annual disclosure filed with the Department of Labor. Clark was paid $3.5 million for the 2024 calendar year, per the baseball union's filing. Advertisement The NFLPA has four seats on OneTeam's board, and the MLBPA has three seats. Both Howell's and Clark's signatures appear on the resolution to change OneTeam's senior employee incentive plan. The unions representing players in MLS, the USWNT and the WNBA share one seat on the board that rotates. Only the signature of Becca Roux, the head of the USWNTPA, appears on the resolution from last year. Roux, as well as Bob Foose, head of the MLSPA, and Terri Jackson, head of the WNBPA, have hired Steve McCool of McGuireWoods as outside counsel. 'I notified the prosecutor in New York that I represent a number of OTP board members,' McCool said by phone Friday. 'My clients have no cause for concern and they are available to answer any questions the government may have about this matter.' Outside investors own the remaining 30 percent of OneTeam that is not owned by unions. The SEIP resolution called for the NFLPA to receive 44 percent of the new plan units available to the board, and the MLBPA 33 percent. The other three unions were in line to receive 3.7 percent each. The outside investors on the board were not going to receive any new incentive units, the resolution said. Such an arrangement has the potential to create at least the appearance of a conflict of interest, according to Lee Adler, a labor lawyer with no involvement in the matter who has long worked as counsel to unions. 'Is there something in that set of criteria for the incentive that might have some influence on how or what the union officials who sit on the board actually end up … legislating (at OneTeam)?' asked Adler, a lecturer at the Cornell University School of Industrial and Labor Relations. NFLPA employees said at a meeting in November 2024 that they expected payments via SEIP would be $200,000 to $300,000, the NFLPA official wrote in the email. Advertisement Sports unions have moved aggressively to capitalize on their players' branding rights. The MLBPA and NFLPA were among the founders of OneTeam in 2019. Both unions already had for-profit arms that handled licensing business, and those arms still exist today. But they were betting that a company with aggregated rights would have greater leverage. The venture has been a boon not only for the unions but also for the private equity investors who partnered with them. RedBird Capital cashed out its 40 percent stake in 2022, when the company had a $1.9 billion valuation. The windfalls from name, image and licensing rights carry a slew of gains for athletes, including bolstering traditional labor objectives like collective bargaining. The NFLPA reported about $101 million in revenue from OneTeam from early 2024 into 2025, and the MLBPA about $45 million for 2024. But both the baseball and football unions have been wrapped up in public controversy this year over, in part, OneTeam. Late last year, an anonymous complaint filed with the National Labor Relations Board levied allegations at Clark, including concerns over equity from OneTeam. The football union, where internal complaints had already been lodged, then brought on an outside firm, Linklaters, to conduct a review. The NFLPA has not publicized that firm's findings. But in March, in an email reviewed by The Athletic, Howell notified OneTeam's board of directors that Linklaters found the NFLPA and OneTeam had been in compliance. (Top photo of Lloyd Howell Jr.: Sean Gardner / Getty Images)
New York Times
04-06-2025
- Business
- New York Times
Union head Tony Clark, MLBPA hire separate lawyers in face of federal probe
In the face of a federal investigation, Tony Clark and the union he runs, the Major League Baseball Players Association, have hired separate lawyers. The Eastern District of New York is reviewing whether MLBPA officials used licensing money or equity to improperly enrich themselves, according to people briefed on the investigation who were not authorized to speak publicly. That could put the union and its membership in a place where they have divergent interests. Advertisement 'In close coordination with the players, MLBPA has hired outside counsel at Morrison & Foerster to respond to an investigation conducted by the Department of Justice,' the MLPBA said in a statement Tuesday. 'The MLBPA has, and will continue to, fully cooperate with law enforcement during this investigation.' Clark's outside counsel, Daniel Collins of Katten, Muchin and Rosenman, declined comment. The Eastern District of New York declined comment as well. The full scope of the probe is unclear, but investigators have also communicated with the National Football League's players' union and a licensing company co-founded by both unions, OneTeam Partners, the people briefed on the investigation said. In a statement it first issued last week, OneTeam positioned itself outside of investigators' crosshairs. 'We are aware of an ongoing investigation of allegations concerning our partners,' OneTeam said. 'We want to emphasize that OneTeam is not the subject of the investigation and has not been accused of any wrongdoing in any way. OneTeam is fully committed to cooperating with the investigation and remains steadfast in our commitment to following the best business practices, as has already been determined by the independent audit conducted earlier this year.' The NFLPA declined comment on Tuesday and said last week it would cooperate with investigators. The MLBPA co-founded OneTeam, a company that specializes in athletes' name, image and likeness rights, in 2019 alongside other sports unions and backers. Last year, an anonymous complaint was filed with the National Labor Relations Board alleging that Clark had wrongly received equity in OTP. The MLBPA has previously called that allegation 'baseless.' A similar concern, however, arose in football. The NFLPA in December hired the firm Linklaters to review, in part, whether OneTeam had improperly granted equity, said people briefed on that process who were not authorized to speak publicly. The NFLPA did not disclose its findings publicly, but Lloyd Howell, the head of the union, in March notified OneTeam's board of directors that Linklater's report found the NFLPA and OneTeam had been in compliance, per an email reviewed by The Athletic. Advertisement Collins, Clark's attorney, is a former federal prosecutor who 'regularly defends clients in investigations conducted by the Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and other government agencies,' per his firm's website. Clark and Howell both sit on the board of directors at OneTeam. Two other MLBPA officials and three other NFLPA officials do as well, per the company's website. The MLBPA reported $44.5 million in revenue from OneTeam in 2024, per a filing with the Department of Labor. (AP Photo / Godofredo Vásquez )
Yahoo
31-05-2025
- Business
- Yahoo
MLB, NFL players contacted by federal agents in stunning licensing firm investigation
MLB and NFL pros have been contacted by federal agents as part of an investigation regarding a licensing firm owned by the league's unions, according to reports. Agents are looking into financial dealings regarding OneTeam Partners, created by the National Football League Players Association (NFLPA), Major League Baseball Players Association (MLBPA) and private-equity firm RedBird Capitals in 2019, per ESPN. Players are not being targeted by the agents, according to ESPN, and at least three MLBers who are involved with 'union leadership' have been contacted. The FBI and Department of Labor (DOL) are partaking in the investigation, per The Athletic. '(OneTeam) is aware of an ongoing investigation of allegations concerning our partners,' it told ESPN in a statement. 'We want to emphasize that OneTeam is not the subject of the investigation and has not been accused of any wrongdoing in any way. OneTeam is fully committed to cooperating with the investigation.' OneTeam Partners' website claims 'we united Players Associations and elite athletes by giving them the platforms, resources and expertise necessary to maximize their collective value.' Both NFLPA executive director Lloyd Howell and MLBPA boss Tony Clark are listed on the board of directors, and former NFLPA boss DeMaurice Smith helped found it. OneTeam Partners paid the MLBPA $44.5 million in 2024 and the NFLPA received $422.8 million over the past five years, per ESPN. ESPN described the partnership as a 'major financial boon' for both unions. Union executives told ESPN they had not been contacted, and the investigation is being run by the Brooklyn-based Eastern District of New York. 'We are aware of the investigation and fully prepared to cooperate if the NFLPA is contacted,' an NFLPA spokesperson told The Athletic. The MLBPA also said to the outlet: 'If the MLBPA is contacted by the government, we intend to cooperate fully with any investigation.' OneTeam has faced questions before regarding its operations with the NFL and MLB unions. An anonymous unfair labor practices complaint was filed in 2024 with the National Labor Relations board that alleged 'nepotism, corruption and mismanagement' within the MLBPA, per ESPN. The complaint alleges Clark 'improperly gave himself & other executives equity' in OneTeam, along with 'inadequate disclosures' about the alliance in the yearly union updates. The MLBPA denied those allegations, per ESPN. This past December, Richard Smith, the NFL's outside counsel, reportedly ran an audit to see whether the company has afforded equity options to executive directors of its union partners, including the MLBPA. The NFLPA audit revealed the union's involvement with OneTeam was 'in compliance with best governance practices,' a source told ESPN. '(OneTeam) remains steadfast in our commitment to following the best business practices, as has already been determined by the independent audit conducted earlier this year,' it told ESPN. 'We remain dedicated to upholding the highest standards of integrity and transparency in all that we do.'
New York Times
31-05-2025
- Business
- New York Times
Federal agents contacting NFL, MLB players as part of investigation related to licensing firm
Federal agents have contacted Major League Baseball and National Football League players as part of an investigation into financial dealings related to a group licensing firm, OneTeam Partners, that was created by both leagues' unions and other backers, people briefed on the investigation who were not authorized to speak publicly said. ESPN first reported the inquiry and that baseball players had been interviewed. Advertisement The players involved are not targets of the investigation, sources said. The FBI and the Department of Labor are both involved in the inquiries, which concern the financial structure and dealings of OneTeam. OneTeam secures media deals and leverages the name, image and licensing rights of players in the NFL and MLB and in several other sports, and makes payments to the respective unions. OneTeam paid the MLBPA $44.5 million in 2024, the MLBPA reported to the Department of Labor. MLBPA head Tony Clark is on the OneTeam Players Association Board of Directors, as is NFLPA leader Lloyd Howell. Clark and former NFLPA leader DeMaurice Smith co-founded OneTeam in 2019 in partnership with the private equity firm Redbird Capital, and it has since grown into a multibillion-dollar entity. Smith left the NFLPA in 2023; RedBird sold its stake in OneTeam in 2022. In a statement to ESPN, OneTeam said it is 'aware of an ongoing investigation of allegations concerning our partners. We want to emphasize that OneTeam is not the subject of the investigation and has not been accused of any wrongdoing in any way. OneTeam is fully committed to cooperating with the investigation.' NFL players received a communication from someone within the NFLPA on Friday with information about the investigation, though a person with knowledge of the NFLPA's actions who was granted anonymity to speak freely said that the communication did not actually come from NFLPA leadership. 'We are aware of the investigation and fully prepared to cooperate if the NFLPA is contacted,' an NFLPA spokesperson said. Said the MLBPA in a similar statement: 'If the MLBPA is contacted by the government, we intend to cooperate fully with any investigation.' ESPN reported that the U.S. Attorney's Office for the Eastern District of New York is running the investigation. The Eastern District did not immediately return a request for comment. (Photo of Clark: AP Photo / Jose Luis Magana, File)
