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As avid readers of this blog already know, I am a fan of New Year’s Resolutions. I usually set over twenty goals for each year, and they prove helpful in directing effort during the year. 

Over the past few years, my employer (Belmont University) has been engaged in Vision 2020, which should amount to something like New Year’s Resolutions for the University (to be accomplished by 2020). I recently served on the committee for the Athletics Department’s contribution to Vision 2020, which was an enjoyable and interesting experience. 

My time on the Vision 2020 committee and my years of doing my own resolutions have taught me a few things. Most importantly, I have learned that SMART goals tend to be the most useful and effective. (For those who don’t know, SMART usually stands for Specific, Measurable, Attainable, Relevant, Time-Based, though there are variations).

The most difficult part, in my view, is finding appropriate measurements. Some items are easy to measure – movements in endowment, enrollment, incoming student GPA and standardize test scores, rankings, etc. There are plenty of items that are important, but much more difficult to measure. And measurements can be overdone, especially if the focus on the measurement overshadows the

I previously posted in praise of Sandys v. Pincus for its excellence as a teaching tool – which meant that its reversal was inevitable, as occurred days after classes concluded. (Same with the Salman v. United States decision, though that changed little; naturally; we won’t even what get into what changes midstream when I’m teaching Securities Regulation).  The reversal itself is quite interesting, though, as the latest entry in the Delaware Supreme Court’s developing jurisprudence on friendship/social ties as a basis for director disqualification.  And, strikingly for Delaware, it generated a dissent.

In Sandys, the basic dispute involves a secondary offering by the social-media game company Zynga.  The plaintiffs filed a derivative lawsuit alleging that the secondary offering was designed to allow major insiders – including the controlling shareholder, himself a member of the Zynga board – to cash out before a disappointing earnings announcement.  As a result, the secondary offering materials were alleged to have omitted critical facts about the company, ultimately exposing Zynga to a securities fraud lawsuit.

The Chancery decision held that demand was not excused, resting in large part on the court’s conclusion that the directors who were not directly implicated in…

A year and a half ago I was attending a panel discussion on sports law issues at the Academy of Legal Studies in Business (ALSB) Conference in Philadelphia.  A meaningful discussion arose about the logistics of moving toward the pay-for-play model in college sports.  At one point somebody asked whether anyone has thought about the tax consequences of moving towards that model, to which my co-author Adam Epstein (who was one of the panelists) responded yes, and noted that our paper analyzing the state tax implications of paying student-athletes was our most downloaded article on SSRN.

Thus far the NCAA hasn’t evolved from the paradigm of amateurism, but every time the debate seems to quiet down about whether it should something new pops up that brings the idea of paying student-athletes back into the spotlight.  This week it was the headline, Could Fournette, McCaffrey Skipping Bowls Lead to NCAA Paying Players?  As long as there is a remote possibility of moving in that direction in the future, tax issues should be included in the overall discussion of the effects of pay-for-play on college sports.

This past November I presented a working paper at the Southeastern Academy of Legal Studies…

One of the more … striking … habits of President-Elect Trump is his tendency to use Twitter to attack specific companies that have displeased him in some way.  For example, after the CEO of Boeing criticized him, he tweeted:

After Vanity Fair published a scathing review of Trump Grill, he tweeted:

And other times, Trump seems to simply be reacting to whatever he sees on the news.

These tweets might explicitly threaten to harm their targets through the exercise of government power – such as the threat to cancel Boeing’s Air Force One contract – but even if they don’t, the implicit possibility is there.  As a result, Trump’s tweets move the market.  Boeing’s stock reacted negatively to Trump’s tweet (though it rebounded).  Shares of Lockheed Martin dropped dramatically after Trump criticized one of its fighter jets as too expensive.

Wall Street traders have begun building a Trump tweet effect into their models.  One anecdotal report says that compliance departments have lifted bans on trader Twitter usage, aware that presidential-tweet monitoring is now a necessary part of the job.

The Wall Street Journal even published a blog post recommending four proactive steps all businesses take in anticipation of a Trump twitter attack.

All of this has prompted some accusations of market manipulation and insider trading.  For example, it’s been reported that some lucky trader started dumping shares of Lockheed Martin six minutes before Trump tweeted, though that could simply be the result of hedge funders correctly predicting where Trump would tweet next.

For the sake of argument, let’s say that Trump’s tweet attacks – at least some of them – are calculated to drive down stock prices in order to allow someone (maybe Trump himself, maybe someone in his circle) to make a profit.  Is there anything illegal here?

[More under the jump]

As I mentioned in my “Show Me the Money!” blog last week, back in March of 2014 the Chicago District (Region 13) of the National Labor Relations Board (NLRB) held that Northwestern University football players qualified as employees and could unionize and bargain collectively.  Although this decision was later overturned, the national level NLRB’s final holding specifically targeted unionization efforts at private schools – leaving the door wide open to revisit this issue at some point with respect to public universities.

Although the Regional decision was reversed, I was interested in Peter Sung Ohr’s (Director of Region 13) analysis, especially with respect to athletic scholarships.  He noted that although student-athletes don’t officially receive paychecks from universities, they do receive “a substantial economic benefit for playing football” in the form of scholarships.  He also focused on the extent of control exerted by coaches on players (something that has been touched on quite a bit in academic literature) and the amount of time players spend on football related activities, ultimately concluding that receiving scholarships in exchange for playing football amounts to a contract-for-hire between employer and employee.

I was inspired to write my 3rd sports/ tax paper, Northwestern, O’Bannon And …

As part of my ongoing effort to sample most pop cultural representations of corporate/business life, I’ve started watching SyFy’s Incorporated.  Incorporated envisions a dystopian future where, due to global warming and related environmental catastrophes, the world’s governments have become bankrupt, and in their place, “multinational corporations have risen in power and now control 90% of the globe.”

We learn in the first episode that formal governments still exist, but in almost vestigial form; as a practical matter, multinational corporations are in charge.  These corporations compete with each other for resources and market share.  They target each other with espionage and sabotage; when one’s stock price falls, the others’ stock prices rise.  Employees lead a comfortable life within the corporate compound, so long as they adhere to the rules set by their employers; outside of corporate compounds, life is poverty and anarchy.

I get where this show is coming from; I mean, fear of corporate control of government represents a particularly timely anxiety.  And there are lots of sly jokes about today’s political environment – a television news report, for example, tells us that the “Canadian Prime Minister is constructing a fence after 2073 became a record year…

If you’re a college football fan it’s hard to forget the beginning of the 2013 season when star quarterbacks Johnny Manziel (Texas A&M) and Tajh Boyd (Clemson) took the Internet by storm after rubbing their fingers together in the air – prompting “Show Me the Money!”, Jerry Maguire type hype across the nation – following touchdown plays.  That season Manziel even donned the cover of Time Magazine with the accompanied headline: “It’s Time to Pay College Athletes”.

Not six months later, Region 13 of the National Labor Relations Board (NLRB) held that Northwestern University football players qualified as employees and could unionize and bargain collectively.  Although the national level NLRB ultimately overturned this decision – denying players at private universities the ability to form unions – these highly-broadcast events reignited the historic debate about whether student-athletes should be paid to play.

As a tax aficionado and amateur sports fanatic, I can’t help but ponder the various tax consequences associated with paying student-athletes.  Such intrigue ultimately led to the first of three papers I’ve written thus far addressing the tax issues surrounding the pay-for-play model.  ‘Show Me the Money!’ – Analyzing the Potential State Tax Implications of Paying Student Athletes evaluates…