Key sports law cases of 2017 - USA
Published 09 January 2018 | Authored by: Manali Kulkarni Sean Cottrell
As we begin the new year, we are running a series of articles reflecting on the key legal issues impacting sport in different jurisdictions and regions around the world in 2017.
For this article we have approached some of the leading sports lawyers in the United States to share their views on what they think was the biggest sports law issues of 2017.
We would like to thank all of the contributors to this article for taking the time out of their busy schedules to share their views with us.
- Ellen Zavian, Founder of EZ Negotiation Institute and Professor of Sports Law at George Washington University, DC.
- Joseph Hanna, Partner, Goldberg Segalla
- Darren Heitner, Founder, HEITNER LEGAL
- Richard Brand, Chair of the Sports Group, Arent Fox LLP
- Ricky Volante, Attorney at Buckley King, LPA
- Paul Greene, Attorney/Founder at Global Sports Advocates, LLC
- Brian Socolow, Chair, Sports Practice Group at Loeb & Loeb LLP and Office Administrative Partner, New York Office
- Glenn Wong, Distinguished Professor of Practice - Sports Law at Arizona State University
- Assisted by Cameron Miller, Research Assistant to Glen Wong, Arizona State University
- Assisted by Cameron Miller, Research Assistant to Glen Wong, Arizona State University
- Ryan Hilbert, Sports Attorney at Holley & Menker, P.A.
- Dimitrios Efstathiou, VP, Business & Legal Affairs, Major League Soccer
- Ron Katz, Of Counsel, GCA Law Partners LLP
- Len Glickman, Co-Chair of the Entertainment and Sports Law Practice at Cassels Brock & Blackwell LLP and Chair of the ABA Forum on the Entertainment & Sports Industries.
- Assisted by David Singh, Articling Student, Cassels Brock & Blackwell LLP
- Assisted by David Singh, Articling Student, Cassels Brock & Blackwell LLP
- Paul Anderson, Director, Sports Law program and National Sports Law Institute of Marquette University Law School
- Jeffery Kessler, Co-Executive Chairman, Winston & Strawn LLP
- Alan Milstein, Shareholder & Chairman Litigation at Sherman Silverstein Kohl Rose & Podolsky
Professor, George Washington University
Christie v. NCAA has recently been argued (November 27, 2017) in the current term of the US Supreme Court. This case could either legalize gambling across the US or keep it isolated to the current approved jurisdiction, Vegas, Nevada. While the Supreme Court rarely takes on sports-focused cases, this could be a sign that the court is finally ready to determine the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), a 1992 statute that prohibits states from maintaining a sports gambling enterprise within their jurisdictions, with an exception for Nevada and a few other locations that had sports betting prior to the passing of the Act.
With states seeking to create additional revenue streams for internal rising costs, sports gambling is the current golden ring in their sights. This desire, along with a global acceptance of sports gambling and US League Commissioners expressing support for this move, the timing might be right for the Court to declare PASPA unconstitutional.
Although the decision will not come down until early 2018, there are signs that the leagues are banking on the conservative Court overturning PASPA. Specifically, the major sports leagues have been investing in sports gambling entities and partnering with fantasy sports sites, just to be first “out of the gate”.
Partner, Goldberg Segalia
Matal v. Tam
In 2017, one court decision with a potentially enormous impact on sports law in the United States made no reference to sports whatsoever. The U.S. Supreme Court in June decimated the federal government’s longstanding prohibition on registering offensive trademarks, ruling that this ban violated the First Amendment. The decision came down in Matal v. Tam, a case springing from the U.S. Patent and Trademark Office’s (PTO) denial of a rock band’s attempt to register an arguably disparaging name, “The Slants.”
In the not-so-distant future, the world of sports law is likely to feel the ramifications of this decision. Specifically, given that the Supreme Court has deemed the Lanham Act’s disparagement clause unconstitutional, look for the Washington Redskins soon to take full advantage and request an immediate reversal of the Trademark Trial and Appeal Board’s (TTAB) decision in 2014 to cancel the trademark of the team’s controversial name. Similarly, the Matal decision will actively deter other activists from challenging trademark registrations in analogous situations, such as with the Cleveland Indians’ “Chief Wahoo” logo that recently caused a comparable uproar.
Founder, HEITNER LEGAL
The biggest sports law issue in 2017 is the federal involvement in what has been referred to as the "college basketball corruption scandal," which involves charges against high ranking individuals at an apparel and shoe company, college basketball coaches and player managers who were all allegedly involved in a pay-for-promise scheme with highly touted recruits and their families caught in the middle.
Chair of the Sports Group, Arent Fox LLP
In 2017, media rights and the booming age of digital sports broadcast distribution was the dominant topic in sports law. The immediacy, accessibility, and price-sensitivity of over-the-top (OTT) streaming introduced uncertainty, change, and opportunity that cemented its role in the sports media market. At the negotiating table this year, media rights were sliced in unprecedented ways for numerous different platforms and several distributors, segmenting games, regions, partnerships, subscribers, and more. In the headlines, we saw cutthroat competition and major budgets from new players like Amazon, Twitter, Facebook, and Google, with Amazon reportedly paying the NFL five times more than Twitter spent last year for streaming rights. The bidding wars will only intensify as the previously finite pool of traditional rights market has been replaced by a broader mix of distribution possibilities, while the market itself is also contracting. Cord shavers, cord cutters, and cord-nevers have fundamentally reduced traditional TV viewership and have fragmented among the seemingly endless options for OTT streams. Meanwhile, the list of distributors has grown beyond major networks to include new streaming platforms, social media, online retailers, and even teams and leagues themselves. As distributors negotiate for new rights opportunities against more rivals, they are also battling for smaller segments of a smaller market.
These new platforms are reimagining how fans follow their teams and engage in sports viewership, and traditional distributors have taken notice, modifying and diversifying their offerings. Looking forward, sports and other live events will continue to draw audiences toward versatile live streams that can also adapt to new viewing experiences such as augmented and virtual reality. Without question, OTT and other new media claimed their stake in the sports industry in 2017.
Attorney at Buckley King, LPA
The deterioration of the relationship between the players and league in the NFL. In an already heightened political and social climate, clear lines were drawn and sides were chosen. The impact reverberated across the entire country, and was used as a reason to spark discussion for change – on one side to limit the speech and actions of players and on the other side to use the platform to bring awareness to much deeper societal issues.
At the center of it all, Colin Kaepernick, who has yet to find employment in the league, has an on-going collusion suit against the League. On a broader scale, how Commissioner Goodell handled the kneeling and player discipline, almost led to a coup amongst the owners. All the while, viewership numbers are down and don’t seem to be recovering. Will 2017 be remembered as the beginning of the end of the NFL’s run on top?
Attorney/Founder at Global Sports Advocates, LLC
Perhaps the biggest sports law story in the US for 2017 was the mass corruption, bribery and wire fraud uncovered by the U.S. government after two years of investigation. Collegiate assistant coaches, investment advisors and business executives face felony charges and jail time. Under NCAA rules, athletes are considered amateurs and not allowed to get paid like pros. The allegations include bribery of star recruits to lure them to certain colleges and bribery of NBA prospects into hiring particular investment advisors. Titans in the college basketball world such as sponsor Adidas and Hall of Fame Coach Rick Pitino (who was fired by the University of Louisville) have been at the center of the storm. The case has revealed an entire underworld to NCAA sports.
The other major sports law story in the US in 2017 was the very public sentencing of Dr. Larry Nassar, the former USA Gymnastics team doctor who admitted to sexually abusing hundreds of underage female athletes including the US’s most famous gymnasts, Aly Raisman and Gabby Douglas among them. Dr. Nassar was sentenced to 60 years in prison after pleading guilty to a variety of charges. The public revelations about USA Gymnastics are part of the larger #metoo movement of women who are speaking out about being sexually abused by powerful men like Dr. Nassar.
Chair, Sports Practice Group at Loeb & Loeb LLP and Office Administrative Partner, New York Office
2017 was the year of headline-making sports stories: scandals involving NCAA recruiting practices and FIFA bribery; the Russian doping charges and the recent International Olympic Committee decision to bar Russia from competing in the upcoming games in PyeongChang, South Korea; and the United States Supreme Court taking up the issue of sports wagering. But while everyone was focused on these attention-grabbing events, a seismic shift has been taking place somewhat behind the scenes that has had an enormous impact in not only the way fans watch sports and engage with their favorites teams, but how the key players in the sports industry do business.
The exponential expansion of OTT (“Over the Top”) platforms has revolutionized – and will continue to revolutionize – the business and legal relationships between sports teams, leagues and players, sponsor and advertisers, and content providers. The “cord cutting” phenomenon, the popularity of the “second screen experience” with key advertising demographics, and the rapid development and deployment of new technology, has opened up more, different and better different ways for teams and leagues to engage with fans – enhancing the game day experience (both in and outside the stadium) or delivering other content – and new opportunities to monetize that content. Feeling the impact of these shifts in content distribution, more traditional sports media and entertainment companies have invested millions (or billions) of dollars – launching their own streaming sports channels (CBS, Turner and NBCUniversal) or partnering with existing sports technology companies (Disney’s $1.6 billion majority investment in live-streaming company BAMTech to create an ESPN OTT service) – to claim their piece of the growing OTT market. The impact of OTT and other new technologies creates myriad legal issues for rightsholders and their distribution partners.
Distinguished Professor of Practice - Sports Law at Arizona State University
Assisted by Cameron Miller
Research Assistant to Glen Wong, Arizona State University
2017 was another banner year for sports law in the U.S.: From the reverberations of Deflategate to the data hacking case involving the eventual World Series champion Houston Astros, the Aaron Hernandez and Ezekiel Elliott sagas, and now the oral argument in the potentially ground-shifting Christie v. NCAA sports betting case, the last 12 months have proven just how varied – and compelling – the intersection of sports and law can be. Arguably the most important
development in this expanding niche, however, came once again from collegiate athletics, which has became increasingly fertile ground for sports law cases in recent memory. This year, the FBI’s investigation of recruiting practices in men’s basketball has shaken the NCAA to its core (though the issue of surreptitiously paying athletes is certainly not new).
In September, the Federal Bureau of Investigation (FBI) announced an investigation into recruiting practices in men’s college basketball. The FBI’s inquiry stretches back nearly a year, revealing the “dark underbelly” of men’s basketball – the NCAA’s crown jewel. With the help of a rogue agent-turned-confidential informant, the FBI exposed several networks comprised of coaches, agents, and shoe company executives working in concert with one another to steer athletes to particular agents and college basketball teams. Hundreds of thousands of dollars exchanged hands, with most of the cash pocketed by the college coaches and future student-athletes. 10 individuals were indicted on a variety of fraud charges, with the legal theory being that the schools themselves were defrauded by playing athletes who were ineligible for collegiate competition due to their receipt of cash and other impermissible benefits. In response, NCAA President Mark Emmert has called for “fundamental change,” and announced the creation of a commission to study the issues uncovered by the FBI. The commission’s membership is challenged by some as too “institutional,” while others question whether the slow-moving NCAA can reach a consensus on the commission’s recommendations. As 2018 unfolds, several questions will undoubtedly arise: Do the suggested changes go far enough in addressing the underlying issues, and can those changes be implemented before the 2018-19 basketball season? Further, how will the substantive changed be studied in order to determine their effectiveness at addressing the root of the conduct uncovered by the FBI? Though the answers to these questions remain unclear, one thing is certain: Amateurism has reached its reckoning.
Sports Attorney at Holley & Menker, P.A.
As someone whose practice straddles the line between sports and intellectual property, I believe 2017 will go down as the year in which the U.S. Supreme Court struck the 70-year-old “disparagement” clause in the Lanham Act, thereby clearing the way for teams to maintain their federally-registered trademarks for ethnically-related team and mascot names.
On June 19, 2017, the Supreme Court decided Matal v. Tam (formerly Lee v. Tam), finding that Section 2(a) of the Lanham Act—which prohibited the registration of any mark “which may disparage . . . persons . . . , institutions, beliefs, or national symbols, or bring them into contempt or disrepute”—was facially invalid under the First Amendment. This was the provision that various Native American groups had been relying upon to invalidate team trademark registrations.
Though the case before the Supreme Court involved a musician who had nothing to do with sports, the effects of the case quickly reverberated throughout the sports world. Nine days later, on June 28, the U.S. Department of Justice conceded that the Washington Redskins should be the victors in the long-running dispute to cancel the team’s federal trademark registrations. A similar result is likely forthcoming in a pending trademark cancellation action involving the Cleveland Indians’ well-known “Chief Wahoo” logo. And these are only the immediate effects.
Prior to the Supreme Court’s decision, a number of colleges and high schools had already responded to overwhelming public pressure by dropping their ethnically-related team names. However, many professional sports teams—including the Kansas City Chiefs, Atlanta Braves and the Chicago Blackhawks and, of course, the aforementioned Washington Redskins and Cleveland Indians—have been reluctant to follow suit. Now that the Supreme Court has removed what was arguably the greatest legal challenge these teams could have faced to their marks, it is even more unlikely there will be any changes going forward.
VP, Business & Legal Affairs, Major League Soccer
Christie v. NCAA – while the issue in front of the US Supreme Court is the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), the practical implications for John Q. Public is whether he will be able to participate in legal sports gambling in the United States. It will be interesting to see how the Court decides on this and - if sports gambling ultimately is legalized on a state level - whether we will have a hodgepodge of different state-by-state solutions.
Of Counsel, GCA Law Partners LLP
The FIFA trial in NYC has revealed major issues of corruption in soccer, as major as knowledgeable people have suspected for many years. The involvement of U.S. prosecutors is what it took to expose this unethical and illegal behavior.
Co-Chair of the Entertainment and Sports Law Practice at Cassels Brock & Blackwell LLP and Chair of the ABA Forum on the Entertainment & Sports Industries.
Assisted by David Singh
Articling Student, Cassels Brock & Blackwell LLP
Between Deflategate, NFL concussion litigation, Colin Kaepernick’s collusion grievance against the NFL and Ezekiel Elliott’s dust up with the League, the NFL has been front and center in the most significant sports law cases of 2017. One of the most talked about sports law stories of 2017 was Ezekiel Elliott’s recently abandoned lawsuit confirming the broad powers of recently extended League Commissioner Roger Goodell under the NFLPA Collective Bargaining Agreement (CBA). Elliott, who received a 6-game suspension as a result of domestic abuse allegations made against him in 2016, was ultimately forced to abandon his lawsuit after both the Southern District of New York and 2nd U.S. Circuit Court of Appeals in New York rejected his contention that he didn’t receive a fair appeal from the League. In coming to a decision, Judge Failla of the Southern District of New York found that the league did enough to comply with their obligations outlined in the CBA, even if they could be viewed as minimal, and that courts have very narrow room to interfere with arbitral decisions. Judge Failla also rejected the argument that Elliot’s accuser should have been compelled to testify during the League’s investigation, siding instead with the position that requiring accusers to testify against alleged abusers could hurt the League’s ability to root out domestic violence – an initiative that the League has made a priority in recent years. With his lawsuit now at an end, Elliott joins both Adrian Peterson and Tom Brady on the roster of players that have filed unsuccessful federal lawsuits challenging the broad authority of the League Commissioner under the CBA.
Director, Sports Law program and National Sports Law Institute of Marquette University Law School
In my mind the most important issue to hit sports in the USA in 2017, was about inclusion, and specifically how the sports world would include transgender individuals. Since 2011 high school and collegiate associations have crafted policies in order to find ways to include transgender individuals, however, many of these policies have set incredibly high bars for the transgender individual to meet, often forcing children to prove that they have undergone serious medical procedures before being allowed to participate in the sport for their self-identified gender. These types of policies have led to unintended consequences as for example in Texas high school wrestling, where the state policy forced a transgender boy to participate as a girl (his birth sex), and then he won the state girl’s wrestling championship.
In 2015 and 2016, the federal government put forth guidance making clear the schools and their athletic programs must provide inclusive environments for transgender students. In response, many schools began to allow transgender access to locker rooms as part of their efforts to allow them to participate in the full educational environment. This clarity was short-lived as the current administration withdrew that guidance in February of 2017. Adding more confusion, in May, United States Court of Appeals for the Seventh Circuit ruled in support of these inclusive policies schools began to adopt in the past few years in a case involving a student in Kenosha, Wisconsin (Whitaker v. Kenosha Unified School Dist., 838 F.3d 1034 (7th Cir. 2017)). As a result, the future of transgender access to the full sport experience, including locker rooms, is unclear as there is currently no federal guidance in support of these individuals, and few courts have supported inclusive policies in education or sport.
Co-Executive Chairman, Winston & Strawn LLP
While there are several contenders, I believe the biggest sports law issue in 2017 was the changing legal landscape re gambling on sports. A combination of the Supreme Court taking up New Jersey’s challenge to the federal law banning sports book gambling in most states, the many state law challenges and then state statutory changes regarding daily fantasy, and the government’s opposition to the merger of Fan Duel and Draft Kings, appears to signal a legal tidal change that is likely to result in major developments in this area. Add to this the move of an NHL and NFL team to Las Vegas, and it is apparent that the firm legal taboo separating professional sports from gambling has begun to fray.
Shareholder & Chairman Litigation at Sherman Silverstein Kohl Rose & Podolsky
Without question the answer is the same with respect to the key sports law issue in 2017 and what to watch in 2018: sports gambling.
In 2017, the state of New Jersey failed in its attempt to convince the lower federal courts to allow it to permit betting on sports at its casinos and race tracks. Its attempt was thwarted by the continued viability of the Professional and Amateur Sports Protection Act or PASPA. The United States Supreme Court surprised everyone in agreeing to hear the appeal. Argument was held on December 4, 2017, and the Justices seemed certain to invalidate PASPA as unconstitutional Commandeering, meaning Congress impermissibly enacted a statute requiring the states to enforce certain criminal statutes at its own expense without a federal regulatory scheme.
If the Supreme Court, as expected, rules in favor of New Jersey, the floodgates will open and states will be free to permit betting on sports at licensed and regulated venues, ending the monopoly of this billion dollar business by the Las Vegas casinos and betting parlors.
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- Key sports law cases and developments to watch in 2017 - USA
- Key sports law cases of 2017 - UK & Ireland
- Key sports law cases of 2017 – Central & South America
- Key sports law cases of 2017 - Europe, Middle East, Africa, Asia and Australia
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About the Author
Manali is the COO at LawInSport and executive contributor of the editorial board for LawInSport. She holds an LLM in Sports Law from Nottingham Law School (Nottingham Trent University).