USFA considering forcing members to use THS

[Grasshopper]

That sounds pro Stay & Play.

R-

I am neither for it or against it. I am forgainst it.

[fencerX]

Doubt that the hotel counts as an unrelated service. If it was then all package tours would count as tying.

Don't confuse combination sales (aka bundling), which are legal and can have benefits to consumers, with illegal tying, which are neither.

The excerpt quoted previously notes the difference:

Tying arrangements constitute unreasonable restraints of trade in and of themselves per se whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a not insubstantial amount of interstate commerce is affected, but mere fact that goods or services are sold in combination does not establish prohibited tying arrangement.

When US Volleyball or US Fencing move to sell a product they have a monopoly on, but only on the condition that the buyer also purchase a different (or tied) product, they have created a prohibited tying arrangement.

This issue has been raised to the USFA, but hasn't been addressed, at least not publically. Is Kurt ignorant about the topic? Receiving bad info? Does someone believe Congress really intended to give the USOC/USFA via the Amateur Sports Act a monopoly on not just fencing but also on forced sales of accommodation to fencers? While Congress granted MLB an antitrust exemption for baseball, does that mean the Yankees could get away with only selling game tickets to customers who rent hotel rooms from Trump?

Since Kurt doesn't seem interested in addressing the antitrust concerns, maybe any further letters should be directed to those who do care about the topic.

[occasionalfencer]

Lotsa good points.
Grade D-[/QUOTE]

Please email all these good points directly to the national office, to several people, staff and board both. Please. And tell us if you get any answers. You have several good questions there.

[Guided by Wire]

Who is "we"?? Who will be in charge of approving and issuing the waivers?? What is the objective criteria for these waivers anyway - What will the turn around time be when a waiver is requested. What if my waiver is denied - what is my recourse - who will I call? What are my rights? What if I miss a registration deadline because I'm spending all my time trying to get my waiver?

I just remembered what all this waiver talk reminds me of:

http://www.youtube.com/watch?v=NjLUMG4Kpf4

[CvilleFencer]

I would strongly suggest that you do not let youth fencers stay in the same room with you. That is against standard policy of almost any athletic organization, including the USFA's.

I have a standard policy of not trying to sleep with my students regardless of age. It seems to stem off those pesky ethics issues surprisingly well and I am always surprised more coaches don't try it...

To my world view it is much more risky to book a hotel in, oh lets say any mid to large size city in the country and have your young fencers completely unaccompanied on the other side of the hotel or convention center complex because you are mandated to use an organization that gives a **** about doing a good job because they have a signed contract with the USFA mandating the use of their services.

[Philistine]

Don't confuse combination sales (aka bundling), which are legal and can have benefits to consumers, with illegal tying, which are neither.

The excerpt quoted previously notes the difference:

Tying arrangements constitute unreasonable restraints of trade in and of themselves per se whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a not insubstantial amount of interstate commerce is affected, but mere fact that goods or services are sold in combination does not establish prohibited tying arrangement.

When US Volleyball or US Fencing move to sell a product they have a monopoly on, but only on the condition that the buyer also purchase a different (or tied) product, they have created a prohibited tying arrangement.

This issue has been raised to the USFA, but hasn't been addressed, at least not publically. Is Kurt ignorant about the topic? Receiving bad info? Does someone believe Congress really intended to give the USOC/USFA via the Amateur Sports Act a monopoly on not just fencing but also on forced sales of accommodation to fencers? While Congress granted MLB an antitrust exemption for baseball, does that mean the Yankees could get away with only selling game tickets to customers who rent hotel rooms from Trump?

Since Kurt doesn't seem interested in addressing the antitrust concerns, maybe any further letters should be directed to those who do care about the topic.

I know next to nothing about antitrust law--but I'm reasonably sure that THS has hired lawyers who do.

In any event, just from reading the blurb (and a couple of other things)--it appears that beyond having economic power over the tying market (USFA competitions), that there must sufficient economic power over the tied market (hotel rooms), and that the hotel room market is not just limited to fencers, but the broad population.

But that's just a half-assed reading from a half-hour or so poking around on the internet.

Just saying--accusations of actual illegality from saying it looks bad, probably aren't that useful. OTOH, if someone could show that it actually was, that'd pretty much scotch it--but it would surprise me.

--Philistine

[VorpalCat]

I thought using points was grounds for a waiver, apparently not.

F that. Pure and simple.

You are talking a potential impact on fencers that use them of several hundred dollars a year.

R-

Using points is grounds for a waiver -- see page/slide 20 of the overview. Note that the waiver shown is a sample, not the official, final document that will be used if this goes through.

[fencerwallet]

I know next to nothing about antitrust law--but I'm reasonably sure that THS has hired lawyers who do.

What would indicate this assumption to be true? Even so, losing litigants often blame the result on the shoddy advice of their legal counsel.

[Philistine]

What would indicate this assumption to be true?

Some familiarity with business operations. Motivation on behalf of THS to avoid economic problems (and arguably jail-time, though not likely). The fact that these same concerns have been raised by volleyball with no real reaction or reasoned basis.

For a smaller microcosm of this type of "tying", do you think a local little-league organization which requires all participants buy uniforms from one supplier (who is likely a sponsor) would be illegal?

The difference here, isn't really one of quality. What's causing the main ruckus (beyond the drastically mishandled "roll out" to the membership) is that this isn't seen to be a real requirement (like having everybody wearing the same uniform), but is rather being perceived as an attempt to strong-arm unrelated costs on a subset of the membership--and doing it in a way likely to cause a great deal of aggravation, loss of privacy, and general unpleasentness. All IMHO, of course.

--Philistine

[occasionalfencer]

Using points is grounds for a waiver -- see page/slide 20 of the overview. Note that the waiver shown is a sample, not the official, final document that will be used if this goes through.

I really think it is pointless to discuss whether this particular aspect of a fencer's life "entitles" them to a waiver. The entire notion of the USFA intruding into every aspect of the fencer's life in order to allow them to fence is highly offensive. We really should not be acquiescing so far as to be fine-tuning the waiver issue.

Nothing about this is good. If there is any company that wants to work with the USFA to secure blocks of hotel rooms for negotiating power, as the THS was supposed to do for the last several years, they could work on the basis of predicting rooms used from previous years' rooms used. Just as we predict the size of NAC's from previous years. If the fencers choose not to use a given company perhaps it is because that company is not doing the job. If a company is doing a good job, they do not need coercion.

[fencerwallet]

The USFA is simply selling two things at once.

But I'm not a lawyer either.

First, the USFA is not selling two things at once. They have a monopoly on one thing (tournament entry) and are tying it to your mandated purchase of another thing (travel service) which you can readily obtain elsewhere, from which they get a kick back.

Lawyers who conduct issue identification like to ramble down the slippery slope argument: if this is profitable and unchallenged, then at some point everyone as a prerequisite to tournament registration has to rent a car from Hertz. No matter that youth fencers cannot drive, or that you don't need a car, or that you don't have a driver's license. You want to fence, you have to rent a car, so the USFA can get their $12 kick back. This is really no different, after all.

I will be honest. THS screwed up my reservation once, for a tournament in Tucson. If you think that hotel they use there is bad to begin with, try sleeping with multiple people in a single room the size of a janitor closet, on a folding cot, your head necessarily resting for lack of space against the hollow core door separating you from from the adjoining room shared by 3-4 older male epee fencers.

Yet, I still use THS, when it is the best option, with OPTION being the operative word here. And what if the USFA suddenly starts to schedule events where, for example, a fencer has 3 events, but they are spaced out over a week during Nationals, instead of 3, 4 or 5 days? 2 extra hotel days, all at the THS rack rate, simply by clever scheduling? Suddenly Y10 and Y12 events are 3 days apart instead of on consecutive days, so that parents have to book 5 hotel days during SN instead of 2 or 3? How does the parent save money, then to be able to do this when they have to pay the THS rack rate instead of using their Hilton points? Slippery slope, my friends.

I am totally behind revenue generating measures for the USFA. However, I average a 3 day stay for NACs, 2-3 days for JOs, and typically a week for SN. If I were to pay an additional $40 per night for a hotel as a result of having to use THS all the time, I'm adding $120 to the personal cost of each NAC, $80 or more for JOs, and $280 for Nationals, plus hotel/restaurant meals for those extra days.

I'm literally spending the equivalent of a new compact car every year on fencing as it is, when you add up club fees, lessons, coaching, travel, hotel, etc. The travel is perhaps the one variable through which parents can currently hope to curb some of the cash outlay for this sport. Otherwise, the USFA is just making it too expensive to be able to compete for the average income family. Add the international fencing requirements adopted in order to earn enough points to be able to make a World team, and those parents who do not earn a six figure salary have no hope of their children ever realizing any Olympic dreams. Stuff that in your child's stocking for Christmas.

[nyacfencing]

I've looked everywhere and haven't actually found the USFA's recourse if I flip them the bird and tell them I'm a U.S. citizen and will stay wherever I damn well please and won't inform them of bupkis. Was this included somewhere or does anybody know?

[keith]

I've looked everywhere and haven't actually found the USFA's recourse if I flip them the bird and tell them I'm a U.S. citizen and will stay wherever I damn well please and won't inform them of bupkis. Was this included somewhere or does anybody know?

Since your name would only be on one list (entrants) and not the other (THS) they would flip you the bird right back when you walk up to the registration table.

[cbcarey]

I can't wait to see the 2009-2010 athletes handbook

2.5 Eligibility to compete
...
Category: Division 1
Code: DV1
Age: Born on or before 1996
Class: C, B, or A
Hotel: booked through THS

[Joe biebel]

Many that have posted here are worried about the "particulars" of the plan and the rollout. This frightens me as a sort of slow "buy-in" to the idea.

It's not going to happen!

This whole idea is a lazy way to turn the USFA finances around. The USFA is "making a deal with the Devil", but using our souls. Ceding the hard work that is necessary to bring the finances back into the black, to another “for profit” organization that has an arguably bad track record, well that’s just foolish.

There are several ways this can play out. The best option would be for the "movers" of this plan to scrap the whole idea unless and until the membership is sold on the idea. Conversely, “selling out” the membership will cause a lot of “pain”. Lacking a complete reversal, a move to embed play with stay, will likely cost people their jobs, their status, their friends, and the trust of the membership. My trust is already deeply shaken.

The "movers" have underestimated the resolve of the membership to be free to make their own decisions. Any erosion of that freedom will be met with an avalanche of resistance and cannot work. The thing that upsets me most about this idea is the idea. In my opinion, this whole concept reeks of collusion and shows an abiding disrespect for the membership . I also feel that THS should be banned from any dealings with the USFA (and Volleyball for that matter) and that the USFA should find another vendor.

If the USFA wants to be "in the black", alienating the membership is not the way to do it. Ask yourself the question: Why does the USFA need to have this explained to them? I can't think of a good answer, an answer that does not show contempt for the rights, intelligence and freedoms of the membership.

[Joe biebel]

Many that have posted here are worried about the "particulars" of the plan and the rollout. This frightens me as a sort of slow "buy-in" to the idea.

It's not going to happen!

This whole idea is a lazy way to turn the USFA finances around. The USFA is "making a deal with the Devil", but using our souls. Ceding the hard work that is necessary to bring the finances back into the black, to another “for profit” organization that has an arguably bad track record, well that’s just foolish.

There are several ways this can play out. The best option would be for the "movers" of this plan to scrap the whole idea unless and until the membership is sold on the idea. Conversely, “selling out” the membership will cause a lot of “pain”. Lacking a complete reversal, a move to embed play with stay, will likely cost people their jobs, their status, their friends, and the trust of the membership. My trust is already deeply shaken.

The "movers" have underestimated the resolve of the membership to be free to make their own decisions. Any erosion of that freedom will be met with an avalanche of resistance and cannot work. The thing that upsets me most about this idea is the idea. In my opinion, this whole concept reeks of collusion and shows an abiding disrespect for the membership . I also feel that THS should be banned from any dealings with the USFA (and Volleyball for that matter) and that the USFA should find another vendor.

If the USFA wants to be "in the black", alienating the membership is not the way to do it. Ask yourself the question: Why does the USFA need to have this explained to them? I can't think of a good answer, an answer that does not show contempt for the rights, intelligence and freedoms of the membership.

[EldRick]

BTW, 92% correct reservations without errors is a really lousy record. That means that one in twelve of your customers is annoyed.

Not good enough for a commitment to use them, by a long shot, IMHO.

If this program were voluntary, it might be a good deal, but forcing it down the members throats is not the right solution to USFA's financial problems.

Note: MEMBERS, not serfs...

[Joe biebel]

Many that have posted here are worried about the "particulars" of the plan and the rollout. This frightens me as a sort of slow "buy-in" to the idea.

It's not going to happen!

This whole idea is a lazy way to turn the USFA finances around. The USFA is "making a deal with the Devil", but using our souls. Ceding the hard work that is necessary to bring the finances back to another “for profit” organization that has an arguably bad track record, well that’s just foolish.

There are several ways this can play out. The best option would be for the "movers" of this plan to scrap the whole idea unless and until the membership is sold on the idea. Conversely, “selling out” the membership will cause a lot of “pain”. Lacking a complete reversal, a move to embed play with stay, will likely cost people their jobs, their status, their friends, and the trust of the membership. My trust is already deeply shaken.

The "movers" have underestimated the resolve of the membership to be free to make their own decisions. Any erosion of that freedom will be met with an avalanche of resistance and cannot work. The thing that upsets me most about this idea is the idea. In my opinion, this whole concept reeks of collusion and shows an abiding disrespect for the membership . I also feel that THS should be banned from any dealings with the USFA (and Volleyball for that matter) and that the USFA should find another vendor.

If the USFA wants to be "in the black", alienating the membership is not the way to do it. Ask yourself the question: Why does the USFA need to have this explained to them? I can't think of a good answer, an answer that does not show contempt for the rights, intelligence and freedoms of the membership.

[flechewounds]

I know next to nothing about antitrust law--but I'm reasonably sure that THS has hired lawyers who do.

Probably not. THS is a small company, anti-trust lawyers are very, very expensive. Also, note that restraint of trade is a state-law claim and a separate cause of action would occur in each state that a competition took place. This means lots of money on legal research - why not, instead, toss it against the wall and see if it sticks? Particularly since THS is not the party performing the illegal actions, the NGBs are.

Also note that this program has been rolled out to one sport - US Volleyball. It is not common practice in the convention business - you can go to a meeting, convention, or event and stay wherever you want. You may be foregoing the "goodie bag" or some other benefit, but you can stay on the floor of a barn if you want. That's the point.

Note that the Amateur Sports Act of 1978 grants the USOC and the NGBs an anti-trust exception for running their events and choosing teams. There can be no "North American Fencing Association" that competes for the selection of Olympians. However, my quick read of the act (and no, I'm not trying to practice law for the USFA) shows no grant an anti-trust exception beyond sanctioning and team selection.

Where this gets really interesting is that (at least in Colorado and Iowa - the two states I looked at) enforcement of restraints of trade can be enforced by the state Attorney General in the state in which the anti-competitive behavior occurred. Why? Because they are a business crime!

So instead of having our fearless leaders remain fearless because they don't think anyone is going to file a suit, an aggrieved person may be able to file a complaint with the state AG and have them do the heavy lifting (and pay the expense) (Colo. Rev. S. 6-4-111). In other words - FREE or NEARLY FREE law suit - and potentially one in EACH STATE in which the activity occurred. This could be a nightmare for the USFA. Of course, there can also be a private law suit - kind of like the OJ civil claim.

If they exclude someone for an S&P violation - and that person is barred from earning points, then the sparks could really fly - the damages to a fencer who is on a team would be significant - and it is possible in some states that treble damages are available.

Now, as I said, I'm not giving legal advice nor practicing law. However, I do hope (against hope) that USFA counsel has reviewed this program in EACH OF THE 50 STATES AND DC under state restraint of trade law, and has provided the board with a formal opinion that S&P does not violate such laws. THE BOARD MUST DEMAND THIS FROM COUNSEL.

Relying on the fact that USV has done this is not enough. That's like saying "officer, I shouldn't get a speeding ticket, the guy in front of me didn't get one." Relying on THS's counsel is even stupider - THS is not the potentially liable party, and they have a financial interest to ignore this potential problem.

In any event, just from reading the blurb (and a couple of other things)--it appears that beyond having economic power over the tying market (USFA competitions), that there must sufficient economic power over the tied market (hotel rooms), and that the hotel room market is not just limited to fencers, but the broad population.

But that's just a half-assed reading from a half-hour or so poking around on the internet.

Actually, you are incorrect. The purpose of tying is to push a product/service that has a competitive market by requiring its purchase when a monopoly product is sold. Microsoft anti-trust litigation over IE was based on this - it was a tying claim. MSFT had near monopoly power over operating systems and used that power to push its browser - even though there were competitive browsers out there. And note, MSFT didn't charge for IE separately - they made the argument that there was no financial cost. What got them was the tight integration into the OS.

Just saying--accusations of actual illegality from saying it looks bad, probably aren't that useful. OTOH, if someone could show that it actually was, that'd pretty much scotch it--but it would surprise me.

Phil - I'm not just blowing smoke about this just to stop it. I was actually surprised that the statutes were that easy to find and that clear (it took about 10 minutes). However, I do think that it is incumbent for our board to require that it rely on advice of its own counsel - formal advice so that a showing of consideration can be made in the inevitable lawsuit - before instituting something that is a pretty simple, straightforward legal argument - and a pretty clear violation of a plainly-written statute.

This is especially true if the suits can be instituted by AGs under a criminal investigation (restraint of trade is a business crime). Why? It makes it much less expensive for an aggrieved fencer or family to seek redress (and by aggrieved, I don't mean excluded, I mean someone who's business activity was limited by this relationship) - and it potentially subjects our organization to criminal liability - not good for PR purposes.

[pillow]

Probably not. THS is a small company, anti-trust lawyers are very, very expensive. Also, note that restraint of trade is a state-law claim and a separate cause of action would occur in each state that a competition took place. This means lots of money on legal research - why not, instead, toss it against the wall and see if it sticks? Particularly since THS is not the party performing the illegal actions, the NGBs are.

Also note that this program has been rolled out to one sport - US Volleyball. It is not common practice in the convention business - you can go to a meeting, convention, or event and stay wherever you want. You may be foregoing the "goodie bag" or some other benefit, but you can stay on the floor of a barn if you want. That's the point.

Note that the Amateur Sports Act of 1978 grants the USOC and the NGBs an anti-trust exception for running their events and choosing teams. There can be no "North American Fencing Association" that competes for the selection of Olympians. However, my quick read of the act (and no, I'm not trying to practice law for the USFA) shows no grant an anti-trust exception beyond sanctioning and team selection.

Where this gets really interesting is that (at least in Colorado and Iowa - the two states I looked at) enforcement of restraints of trade can be enforced by the state Attorney General in the state in which the anti-competitive behavior occurred. Why? Because they are a business crime!

So instead of having our fearless leaders remain fearless because they don't think anyone is going to file a suit, an aggrieved person may be able to file a complaint with the state AG and have them do the heavy lifting (and pay the expense) (Colo. Rev. S. 6-4-111). In other words - FREE or NEARLY FREE law suit - and potentially one in EACH STATE in which the activity occurred. This could be a nightmare for the USFA. Of course, there can also be a private law suit - kind of like the OJ civil claim.

If they exclude someone for an S&P violation - and that person is barred from earning points, then the sparks could really fly - the damages to a fencer who is on a team would be significant - and it is possible in some states that treble damages are available.

Now, as I said, I'm not giving legal advice nor practicing law. However, I do hope (against hope) that USFA counsel has reviewed this program in EACH OF THE 50 STATES AND DC under state restraint of trade law, and has provided the board with a formal opinion that S&P does not violate such laws. THE BOARD MUST DEMAND THIS FROM COUNSEL.

Relying on the fact that USV has done this is not enough. That's like saying "officer, I shouldn't get a speeding ticket, the guy in front of me didn't get one." Relying on THS's counsel is even stupider - THS is not the potentially liable party, and they have a financial interest to ignore this potential problem.


Actually, you are incorrect. The purpose of tying is to push a product/service that has a competitive market by requiring its purchase when a monopoly product is sold. Microsoft anti-trust litigation over IE was based on this - it was a tying claim. MSFT had near monopoly power over operating systems and used that power to push its browser - even though there were competitive browsers out there. And note, MSFT didn't charge for IE separately - they made the argument that there was no financial cost. What got them was the tight integration into the OS.


Phil - I'm not just blowing smoke about this just to stop it. I was actually surprised that the statutes were that easy to find and that clear (it took about 10 minutes). However, I do think that it is incumbent for our board to require that it rely on advice of its own counsel - formal advice so that a showing of consideration can be made in the inevitable lawsuit - before instituting something that is a pretty simple, straightforward legal argument - and a pretty clear violation of a plainly-written statute.

This is especially true if the suits can be instituted by AGs under a criminal investigation (restraint of trade is a business crime). Why? It makes it much less expensive for an aggrieved fencer or family to seek redress (and by aggrieved, I don't mean excluded, I mean someone who's business activity was limited by this relationship) - and it potentially subjects our organization to criminal liability - not good for PR purposes.

Just to complete the idea as expressed above:

Attorney General John Suthers, State of Colorado
Consumer Complaint Phone Number: 303-866-5189