My 2 cents worth...
Have you considered what they might be able to do for you? Something of value, that would both further your business and give you a basis for discounting their use of some of your photos?
Photo credits are "nice", and something I'd request whenever and where ever they use your shots. But photo credits don't pay the bills.
The real meat & potatoes they might provide would be URL/links to your image galleries, on their website and in their print publications. That will help drive business your way and it costs them nothing, but is of high value to you.
This is sort of a subtle "endorsement", but don't call it that. They may have a policy against making endorsements.
When talking or writing to them, emphasize that it's a benefit, convenience and service for their students and parents (i.e., their "paying customers"), making it easier to find and freely browse the event photos. "No purchase necessary", viewing is free... but more traffic should translate into more sales.
I would not give them a CD of all the images, personally. Sure, it's easy and quick, but it gives up control over your images and their usage. Who knows if and when someone who is not knowledgeable about your agreement might get hold of it, copy it, use the images in some way you don't want, etc.
But, if you must, I would not make a statement about "restrictions of use would be non distribution to parents and athletes". That's both too narrow a restriction and sounds sort of obviously greedy.
Instead spell out in detail how they can use the images by granting them limited rights of usage "for school publications - printed and electronic, for school promotion and marketing".
Then include a limitation further down that reads something like: "All rights reserved. Photographer retains copyright of all images. School may not sell, extend or transfer the copyright of any images provided to third parties, with the sole exception of any vendors supplying printing and/or other publishing services to the school." It could actually be more generic than this. Look around for image licensing agreements and come up with one you can use.
Now, depending upon their usage and needs, I might deliver select images to them on CD or DVD, as needed. I wouldn't charge for it, either.
Imprint the CD/DVD with a brief copyright statement in fine print. Something like: "(C) Copyright 2008, xxxxx xxxxxx, photographer. All rights reserved, this disk and all its contents."
Write up and include a small txt document regarding copyright, to include on all CDs and DVDs. This file can reference URLs, provide your name, address, phone and email for contact, etc. In case you are unaware, virtually any computer can open a txt document.
Follow up each image (or small group of images) that they ask to use with a written image usage licensing agreement, signed by you and sent to them "for their files". This is professional and shows that you continue monitoring all use of your images and are working within the terms of your agreement with them. You should have a license form prepared for this purpose, and can find examples on the Internet and in various books about selling photography. In the blank on the form that normally would contain the compensation to the photographer that's been agreed upon, just write "complimentary, per agreement dated such and such". This is another chance to reiterate your terms of usage in a "form letter" and non-threatening way.
You might want to offer them free use of the images they find in your galleries online. I do this with most event organizers I work with, in exchange for their help promoting my images and giving me relative exclusivity and exceptional access. In return I get URLs, ads in programs, "official photographer" status, frequent PA announcements at events, the right to set up and display at events, etc.
After all, what's good for them is good for me. If their events are popular, well attended, and talked about a long time afterward, I can expect better print sales. I try to make them aware, too, that what's good for me is also good for them.
Try to make your negotiations more conversational and use less legalese. Think of it as forming a partnership, with the emphasis on the benefits to both sides, then protect yourself from abuses within the written agreement that you'll both eventually sign.
List the benefits they will receive up front and nice and bold in any conversation or correspondence. Just don't forget to eventually include the restrictions and protections for yourself in the finer print further down in the discussion or more deeply buried in the document.
In other words, put your emphasis on all the things you can do for them, not on the things you can't or won't permit and want to restrict. Just judging from what you've written above (which I realize might be an abbreviated overview of the negotiations), I'd be disinclined to hire you. It just sounds like you will be difficult to work with.
Oh, and use email to set up appointments for face-to-face meetings or let them know you have sent a letter, confirm a date, or to clarify minor points of discussion. Do not use email for negotiation. Don't get into major points with email. You need to be able to see and respond to their reactions. There's a lot of non-verbal and unwritten communication in negotiations. You can't observe these through email.
Just work out the major points in discussion. Don't overwhelm them with the fine details.
In the end, once you have arrived at mutually agreeable major terms, put it on paper for both parties to sign. This is where the fine points come in and are reviewed. If you are already 95% of the way toward agreement, they are more likely to go ahead and sign even though they don't like some fine point that's shown up in the document at the last minute.
If they do refuse to sign over something you thought was a fine point, you've just identified another important issue that needs discussion or clarification.
Be very careful about citing laws and such during negotiations. It sounds too restrictive and threatening.
Be sure the EXIF of each of your images contains copyright info. I suppose, if you wished, you could also add your licensing terms to that, when you send images to them on CD or as an ftp or email attachment.
There's a field in EXIF to refer to a URL for copyright info, which you might put on your own website. Or, you could simply refer to the US gov's URL regarding copyright.
guess I just have to dig deep.
