The key American sports law cases in 2016
As we approach the end of the year we are running a series of articles reflecting on the key legal issues in different jurisdictions and regions around the world. For this article we have approached some of the leading sports lawyers in the United States of America to share their views on what they think was the biggest sports law issue of 2016.
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.
Matt Mitten, Professor of Law, Executive Director, National Sports Law Institute and LL.M. in Sports Law Program for Foreign Lawyers, Marquette University Law School
Glenn M. Wong, Professor Emeritus and Attorney, Mark H. McCormack Sport Management Department, Isenberg School of Management, University of Massachusetts & Executive Director, Sports Law & Business Program, Distinguished Professor of Practice - Sports Law. Assisted by Cameron Miller, Master of Sports Law & Business program, ASU.
Jeffrey L. Kessler, Co-Chairman, Winston & Strawn and Chair, Antitrust/Competition Practice
Maureen Weston, Professor of Law, Pepperdine University
Roger Pielke Jr., Professor, Sports Governance Center - Department of Athletics, University of Colorado - Boulder, CO Professor
Paul Anderson, Director, National Sports Law Institute, Marquette University Law School
Darren Heitner, Founder, HEITNER LEGAL
Ellen M. Zavian, Esq., Founder of EZ Negotiation Institute and Professor of Sports Law at George Washington University, DC.
Rich Brand, Chair of the Sports group at Arent Fox
Christina Campbell, Associate at Arent Fox
Daniel Wallach, Shareholder, Becker & Poliakoff, Fort Lauderdale, Florida
Kate Porter, International Arbitration and Sports Law Associate at Skadden, Arps, Slate, Meagher & Flom LLP
Ron Katz, Senior counsel at Manatt, Phelps and Phillips LLP, a Distinguished Careers Institute Fellow at Stanford University, and the Chair Emeritus of the Institute of Sports Law and Ethics at the University of the Pacific
Alan C. Milstein, Chairman Litigation at Sherman Silverstein Kohl Rose & Podolsky
Len Glickman, Head of the Entertainment and Sports Law Practice at Cassels Brock & Blackwell LLP
John T. Wolohan, Professor, David B. Falk College of Sport and Human Dynamics at Syracuse University
Paul Greene, Attorney/Founder at Global Sports Advocates, LLC
Joseph Hanna, Partner, Goldberg Segalla
Daniel Werly, Managing Editor, TheWhiteBronco.com
Ryan Rodenberg, Associate professor of forensic sports law analytics, Florida State University, Tallahassee, Florida, US.
Brian R. Socolow, Chair, Sports Practice Group at Loeb & Loeb LLP and Office Administrative Partner, New York Office
Ryan Hilbert, Attorney at Holley & Menker, P.A.
Onye Ikwuakor, Legal Affairs Director, Emerging & Pro Sports, USADA
The O’Bannon decision & Collegiate athlete rights
Professor of Law, Executive Director, National Sports Law Institute and LL.M. in Sports Law Program for Foreign Lawyers, Marquette University Law School
One of the most significant U.S. sports law developments was the United States Supreme Court’s refusal to consider whether O’Bannon v National Collegiate Athletic Association (NCAA), 802 F.3d 1049 (9th Cir. 2015) was correctly decided, although both the plaintiffs and the NCAA requested its review of this case. In O’Bannon, the Ninth Circuit ruled that NCAA rules prohibiting intercollegiate athletes from receiving any revenue from videogames and telecasts incorporating their names, images, or likenesses unreasonably restrain economic competition among its member universities in the college education market in which these athletes purchase higher education services and sell their athletic services, which violates federal antitrust law. Federal appellate courts have inconsistently interpreted and applied the Supreme Court’s 1984 NCAA v Board of Regents of University of Oklahoma precedent when evaluating the legality of NCAA student-athlete eligibility rules, specifically whether these rules are commercial restraints subject to antitrust law, and if so, whether preservation of NCAA-defined “amateurism” is a legitimate procompetitive justification for their existence and enforcement. The Supreme Court’s refusal to resolve this conflict continues the significant judicial confusion regarding how antitrust law constrains the NCAA’s governance of intercollegiate athletics, which has evolved into a multi-billion dollar part of the entertainment industry with millions of fans and more than 450,000 student-athletes. Its decision not to do creates uncertainty regarding how lower courts will resolve pending antitrust litigation challenging other NCAA rules capping the amount of economic compensation intercollegiate athletes can receive for their playing services and restricting their ability to play sports after transferring to another university.
Glenn M. Wong
Professor Emeritus and Attorney, Mark H. McCormack Sport Management Department, Isenberg School of Management, University of Massachusetts & Executive Director, Sports Law & Business Program, Distinguished Professor of Practice - Sports Law
Assisted by Cameron Miller Master of Sports Law & Business program, ASU
2016 saw significant developments in the legal battle over amateurism in college athletics. The long-running O’Bannon case finally came to and end in early October, when the U.S. Supreme Court elected not to grant certiorari in the case, preserving the Ninth Circuit’s September 2015 ruling (affirming the National College Athletic Association’s violation of the Sherman Antitrust Act but vacating an order than would have allowed colleges to compensate athletes for the use of their names, images, and likenesses). Although O’Bannon was not as impactful as many player advocates would have hoped, the fact that the federal courts upheld the NCAA’s liability under American antitrust laws was a significant shift in the legal status of pay-for-play.
The other antitrust lawsuits implicating pay-for-play looming on the horizon include the Jenkins and Alston cases, both of which have been consolidated into a multi-district litigation now called IN RE: NATIONAL COLLEGIATE ATHLETIC ASSOCIATION ATHLETIC GRANT-IN-AID CAP ANTITRUST LITIGATION. The plaintiffs, seeking to enjoin the NCAA from enforcing its current limits on player compensation, survived a motion to dismiss in August, and the case is set for trial in 2017. Per the precedent set in the O’Bannon case, however, any additional benefits college athletes receive pursuant to the GRANT-IN-AID CAP litigation would be required to be educationally-related—not the pay-for-play system the case initially aimed for. Nonetheless, if decided in favor of the players, the GRANT-IN-AID CAP case could fundamentally alter the relationship between college players and their institutions.
Jeffrey L. Kessler
Co-Chairman, Winston & Strawn and Chair, Antitrust/Competition Practice
Perhaps the biggest sports law issue in the US in 2016 in terms of potential impact was the ongoing legal battle of how the antitrust laws should be applied to the NCAA's regulation of Division I football and basketball. During the year, the district court denied the NCAA's renewed attempt to dismiss the injunctive class actions by players seeking to strike down the NCAA's rules prohibiting any form of compensation or benefit to the athletes beyond a grant-in-aid, and the Supreme Court declined to grant review of the court of appeals decision in O'Bannon. These two events have set the stage for a trial of these issues in either late 2017 or early 2018. Depending on the outcome, principles of competition law may finally come fully into play in the multi-billion dollar college football and basketball businesses.
Professor of Law, Pepperdine University
Top sports law issues in the United States on the inter-collegiate sports level rather obviously is the U.S. Supreme Court’s decision to not take up certiorari review in O’Bannon v. NCAA. After years of litigation challenging the NCAA’s bylaws restricting compensation to student-athletes for use of their publicity rights in video games, broadcasting or bans on payments, players achieved an apparent albeit limited success in the Northern District of California where Judge Claudia Wilken found the NCAA practices subject to and in violation of the U.S. Sherman Act antitrust laws and ordered a remedy to allow students to offer stipends up to the full cost-of-attendance as well as to permit payments to student-athletes up to $5,000 per year. The Ninth Circuit vacated the order but agreed the NCAA is subject to the antit-trust laws. The looming uncertainty is how.
Roger Pielke Jr., Professor
Sports Governance Center - Department of Athletics, University of Colorado - Boulder, CO
For the biggest sports law issue of 2016, I nominate the continuing legal wrangling over the issue of compensation for college athletes. In 2016, as in past years, this issue was the subject of numerous court cases and administrative actions, the most notable of which was the US Supreme Court’s decision not to take on the O’Bannon case, which began when former UCLA basketball player sued over the use of his name, image and likeness in a video game. The Supreme Court’s decision ended that case, which in recent years helped to motivate the NCAA to increase scholarship athlete compensation to include so-called “cost of attendance” stipends. That was a significant action that increased college athlete compensation. The increased compensation revealed, whether anyone admits it or not, that the NCAA and college athletes are engaged in a labor negotiation. The O’Bannon case also set the stage for a set of other lawsuits challenging the NCAA’s model of amateur sports. These legal challenges may yet breach the amateurism wall that the NCAA has used successfully to fend off past challenges.
Cracks may be starting to appear. For instance, late in 2016 a three judge panel ruled that three non-scholarship track and field athletes at the University of Pennsylvania were not employees, citing the NCAA's “tradition of amateurism” as a reason for upholding that tradition. (If that sounds a bit circular, it is.) However, in a concurring decision 7th Circuit Judge David Hamilton wrote that he was “less confident … that our reasoning should extend to students who receive athletic scholarships to participate in so-called revenue sports like Division I men’s basketball and [football]. In those sports, economic reality and the tradition of amateurism may not point in the same direction.” Several lawsuits currently being heard may find judges with similar view who are more receptive to changing tradition, especially as related to men’s basketball and football. What may ultimately force change however is not simply the application of law, but as Judge Hamilton suggests, the economic reality of modern college sports, characterized in 2016 by an eye-popping rising tide of revenues. That trend doesn’t look to stop. College sports traditions are changing, the law may well follow.
Professor Paul Anderson
Director, National Sports Law Institute, Marquette University Law School
American collegiate student athletes have brought claims seeking to be designated as employees for the past 70 years. These claims began in the 1950s when injured student athletes sought workers’ compensation benefits and the majority of courts found that there was no employment relationship between the university and injured athletes. A new claim was brought in 2014, when college football players at Northwestern University brought similar employment claims, but this time under the National Labor Relations Act (NRLA). Although initially successful, their claims also failed on appeal in 2015 as the full National Labor Relations Board found that it would not “promote stability in labor relations” for the board to assert jurisdiction and consider the student athlete’s employment claim. Although this seemed to be the end for student athlete claims under the NLRA, on August 23, 2016, the Board found that student assistants working at Columbia University were employees under the NLRA. Although not involving student athletes, the Board determined that permitting student assistants to form a union and engage in bargaining with a school over terms of employment would actually further the goals of the NLRA, therefore, perhaps opening the door once again to student athletes to make claims under the NLRA.
While one door opened, another door closed at the end of the 2016. A similar claim involved female track and field athletes who sought to be declared employees under the federal Fair Labor Standards Act (FLSA) so they could receive wages for time spent practicing and playing college sports. On December 5, 2016, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of these claims, noting that “student participation in collegiate athletics is entirely voluntary. . . [and] student-athletic “play” is not “work”". At the end of 2016 although no courts have held American collegiate student athletes to be employees, future employment claims will continue as student athletes continue to seek more benefits in exchange for their participation in collegiate athletics.
Daily Fantasy Sports & Gambling Laws
Founder, HEITNER LEGAL
After hundreds of millions of dollars in venture capital fundraising, the daily fantasy industry found itself defending against state attorneys general (with the most prominent attack initiated by New York State Attorney General Eric Schneiderman), numerous civil lawsuits filed by individuals and politicians who wondered whether services ran afoul of existing state laws. In addition to shifting major marketing dollars to legal warchests, FanDuel and DraftKings, as industry leaders, also spent exorbitant sums of money on lobbying state legislatures to alter existing gambling laws to create more clear carve outs for their services.
The biggest sports law issue in the U.S. in 2016 dealt with the fate of the daily fantasy sports industry, which survives after many brutal battles. Going into 2017, it sees industry juggernauts FanDuel and DraftKings determined to merge and cut costs while on a mission to finally move to profitability. Meanwhile, legal challenges remain on a state-to-state level. Concurrently, there appears to be a growing push to legalize sports gambling from the federal level.
Ellen M. Zavian, Esq.
Founder of EZ Negotiation Institute and Professor of Sports Law at George Washington University, DC.
Sports Gambling. How the sports industry in Europe and the UK is engaging and embracing gambling vs. the US keeping the status quo which drives much of the sports betting "underground". The US has had plenty of law suits filed over gambling in the past few years, trying to expand jurisdictions that permit gambling (New Jersey leads the way), trying to expand the definition (50/50 raffles getting an exemption in some States) and the many issues with Fantasy Online Sports (FanFuel and Draft Kings). This all comes at the backdrop of the Commissioner of the National Basketball Association coming out suggesting the US to rethink the relationship between sports and gambling. This activity, below or above ground, truly impacts the integrity of the game. Fans flock to sports because they enjoy the ‘unknown’ of the outcome of the competition. Once the integrity of the sport is impacting by point shaving, bad calls form officials, match fixing, and spot fixing, to name a few, fans will disengage from the sport as a competition on a level playing field. Examples are rampant, but one that is well known is the 1919 World Series in Major League Baseball.
The betting needs to be deemed fair and the game needs to be played out fairly in order to sustain the popularity of sport and the ancillary sports business that financially supports the industry. In order to achieve this, it would be productive for a global solution to be developed, rather than a country by country initiative. See my recent authored article on this topic.
Chair of the Sports Group at Arent Fox
Associate at Arent Fox
For better or worse, 2016 was the year of daily fantasy sports. The daily fantasy sports industry made its mark on the business of sports by churning through legal and regulatory challenges. It also continued to become economically intertwined with the all of the major professional sports leagues. More specifically, each of the NBA, the NHL, MLB and MLS is sponsored by either DraftKings or FanDuel. The NFL, while not sponsored by either company on a league-wide basis, has 28 of its 32 teams in sponsorships agreements with one of the two entities.
2016 has been a rollercoaster year for the DFS industry. At the beginning of the year, media coverage focused on the reported $107 million spent on advertising by DraftKings and FanDuel in September 2015 alone, and the estimated $1 billion valuations of each company. After many twists and turns since then, current headlines alone include the settlement of a false advertising claim for $12 million in the State of New York, a merger that was recently announced between DraftKings and FanDuel, and a multidistrict class action suit alleging consumer protection violations.
With the announcement of a merger between DraftKings and FanDuel in December 2016, the instability of the DFS industry will continue to be an issue to watch in 2017. Concerns of anti-trust violations will be at the forefront of the conversation. If you do not think we will be hearing about DFS in 2017, FanDuel CEO Nigel Eccles has other plans: “Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry,” he said in a statement. DFS may be a relatively new industry, but it is certainly one that will continue to impact the sports industry for years to come.
Shareholder, Becker & Poliakoff, Fort Lauderdale, Florida
The ongoing quest to legalize sports betting in the U.S. continues to remain one of the most important and dynamic issues affecting our domestic sports industry. In August, a federal appeals court rejected the State of New Jersey’s plan to legalize sports betting through a “partial repeal” law that would have decriminalized sports betting at the state’s casinos and racetracks. Due to New Jersey’s efforts, a number of pathways have emerged for legalizing sports betting in the United States. First, New Jersey has asked the United States Supreme Court to review the constitutionality of PASPA. We will learn by the middle of January whether the Supreme Court will take the case. But this is a long-shot, since fewer than 2% of all petitions are granted. A second option for New Jersey would be to enact another “partial repeal” law, though perhaps one not nearly as targeted or selective as the law that was recently struck down (which decriminalized sports gambling only for casinos and racetracks). A third option—and one completely within New Jersey’s control to pull off—is the so-called “nuclear option,” e.g., a complete decriminalization of sports betting statewide. While this option may seem less than ideal for both political and practical reasons, it does offer one immediate advantage for New Jersey: it would likely withstand a legal challenge from the sports leagues. This is because the Third Circuit’s opinion in Christie II makes clear that a complete repeal by New Jersey of its ban on sports betting would not violate PASPA. With necessity being the mother of invention, New Jersey may be left with little choice but to pursue the “nuclear option” if it wants to legally offer sports betting in 2017.
Widening the lens beyond New Jersey, a number of different sports betting initiatives are expect to emerge nationally in 2017. The American Gaming Association—the lobbying arm of the U.S. casino industry—will begin intense lobbying efforts aimed at persuading Congress to repeal PASPA. The AGA believes that three to five years is a realistic timeline for legalizing sports betting. While the AGA pursues a legislative path to sports betting, a number of different states may emerge as courtroom challengers to PASPA, hoping to replicate New Jersey’s efforts but with a different result. New York and Mississippi are shaping up as the two most likely possibilities, with both states looking to press the issue in 2017. By this time next year, we may have several new PASPA lawsuits. The combination of litigation and lobbying could ultimately end up accelerating the timetable for sports betting legalization in the U.S. The first state that succeeds in overturning PASPA—and all it takes is one—will open the proverbial floodgates to expanded legal sports betting nationwide, leading eventually to federal legislative reform. For more on how this could play out in the coming years, please check out my recent Deadspin article, aptly titled “How to Legalize Sports Betting.”
International Arbitration and Sports Law Associate at Skadden, Arps, Slate, Meagher & Flom LLP
The legality of sports gambling and fantasy sports in the United States continued to be one of the biggest sports law issues in the United States in 2016. Under the U.S. Professional and Amateur Sports Protection Act (“PASPA”), state-sanctioned gambling on amateur and professional sporting events in the United States is illegal, and therefore states are prohibited from enacting legislation that would authorize sports betting. The prohibition against sports betting was upheld earlier this year when a federal appellate court once again affirmed a decision striking down a New Jersey state law that sought to permit sports gambling in the state.
In contrast to sports betting, fantasy sports – in which users win prizes based on individual or team performances over the course of a season or a portion of a season – are considered to be games of skill rather than gambling and therefore are legal. Indeed, the Unlawful Internet Gambling Enforcement Act (UIGEA), which prohibits business from accepting online payments for unlawful internet gambling (including online sports betting), contains an express exception for fantasy sports. However, daily fantasy sports websites, which award cash prizes to users based on individual sports performances in games or matches that take place on a specific day, such as DraftKings and FanDuel, have been challenged in some states as more closely resembling gambling than a game of skill. For example, in 2015 Nevada – one of the four states that has legalized sports betting under PASPA’s exemption – declared that daily fantasy sports websites are gambling operators and therefore must obtain gambling licenses to operate within the state. Additionally, in November 2015, the New York Attorney General declared that DraftKings and FanDuel constituted illegal gambling under New York state law. Despite this initial challenge by the New York Attorney General – which saw DraftKings and FanDuel’s activities temporarily halted in the state – New York Governor Andrew Cuomo signed a bill into law on August 3, 2016 legalizing daily fantasy sports, declaring that, assuming certain criteria are met, “interactive fantasy sports do not constitute gambling in New York state.”
As the sports betting and fantasy sports industries continue to flourish, however, it appears that popular opinion regarding sports betting may be softening in some circles. In October, U.S. Rep. Frank Pallone Jr. announced that the House Energy and Commerce Committee will conduct a review of and propose amendments to existing federal gambling laws, including those governing sports betting, and introduce new legislation to address daily fantasy sports. While it remains unclear whether sports gambling will be legalized wholesale in the United States in the future or whether existing restrictions will be relaxed, the issue is likely to remain at the center of debate in the years to come.
Senior counsel at Manatt, Phelps and Phillips LLP, a Distinguished Careers Institute Fellow at Stanford University, and the Chair Emeritus of the Institute of Sports Law and Ethics at the University of the Pacific
Sports has traditionally been considered a wholesome activity. Las Vegas, on the other hand, has traditionally been considered a place where "what happens in Vegas, stays in Vegas." Therefore, the fact that the NHL is starting a franchise in Las Vegas and the NFL is considering moving a franchise there is one of the biggest developments in 2016.
First, it demonstrates that the long-standing opposition to gambling by organized sports has deteriorated dramatically. Regardless of any attempt to put a positive spin on the subject, gambling is clearly the main, if not the only, industry in Las Vegas, which is known worldwide as a gambling Mecca.
Whatever one's opinion is of gambling, the major problem that it causes for sport is the danger of match-fixing and other forms of corruption. The danger is that sport will become more of an entertainment than a competition. Las Vegas is a perfect breeding ground for that development.
The NFL’s Concussion Litigation
Alan C. Milstein
Chairman Litigation at Sherman Silverstein Kohl Rose & Podolsky
There were without question a plethora of important sports law stories in 2016. Just a few examples:, the NFL settled its concussion litigation for a billion dollars all but admitting it covered up evidence of CTE for years; the two fantasy sports sites faced numerous lawsuits by both state and civil litigants contending the companies were engaged in illegal gambling not games of skill; and more than one professional athlete faced serious criminal charges for his actions off the field.
Despite the importance of these case which raised issues critical to how society views sport and sportsmen, the top sports law story was full of sound and fury but signified nothing. In what became known as Deflategate, one of the NFL’s all-time top quarterbacks and its biggest star was charged with participating in a scheme to take a minute quantity of air out of the footballs he used in the game. Though the NFL had no scientific proof that this had occurred, and though the air pressure in the footballs, whatever it was, played no part in the lopsided score of the game, Tom Brady served a four game suspension imposed by the Commissioner after numerous court hearings, thousands of hours of expensive legal time, and opinions by virtually every pundit in the game. In the end, even the suspension was meaningless since his team won three of the four suspension games anyway and it was the Commissioner’s reputation, not Brady’s, who suffered the biggest body blow.
Head of the Entertainment and Sports Law Practice at Cassels Brock & Blackwell LLP
The NFL is in the midst of class action lawsuits relating to the long term affects of concussions on players. The first class action, originally filed in 2011 on behalf of over 4,500 former NFL players, was finally settled in December of this year after the United States Supreme Court declined to review the appeals of several players and their families of a $1 billion dollar settlement offer. While the payouts will commence in the new year, a key part of the settlement was that the NFL did not admit any guilt. The newest class action suit was filed in November of this year, as a group of 38 former NFL players have asked the U.S. District Court for the Southern District of Florida in Fort Lauderdale to force the NFL to recognize chronic traumatic encephalopathy (CTE) in living players as an occupational disease. If successful, these players would become eligible for workers compensation benefits. Concussion litigation is ongoing in other sports such as hockey where the NHL is facing a similar class action suit by former players.
North of the border, the Canadian Football League (CFL) is facing two similar cases – one individual claim by former player Arland Bruce, and a class action suit brought forward on behalf of roughly 200 former players. Bruce’s case was dismissed earlier this year due to a ruling by the British Columbia Supreme Court, which stated that it lacked the requisite jurisdiction to decide the case and that the issue must be resolved through the grievance and arbitration process outlined in the collective bargaining agreement. While Bruce has filed an appeal of the decision, the result of this case will have a significant impact on the viability of the class action suit.
John T. Wolohan
Professor, David B. Falk College of Sport and Human Dynamics at Syracuse University
The biggest sports law story in the United States in 2016 (and maybe 2015) was the NFL’s “Deflategate” case. The case, which began back in May 2015 when the NFL commissioner Roger Goodell suspended New England Patriots quarterback Tom Brady for four games after the league determined that it was “more probable than not” that Brady was aware that footballs the Patriots used in their AFC Championship win over the Indianapolis Colts were deflated. Brady and the NFL Players Association challenged Goodell’s ruling in Federal Court and Judge Richard Berman threw out the NFL suspension in September 2015, ruling that Goodell had overstepped the disciplinary bounds outlined in the league’s collective bargaining agreement with players. That decision allowed Brady to play throughout the 2015-2016 season.
The NFL Appealed the district court’s decision to the Second Circuit Court, and in April 2016, the court overturned the lower court decision and restored the suspension, ruling that Goodell had acted appropriately. In July, 2016, Brady announced that he was not going to petition the Supreme Court to hear his case. Instead, he agreed to accept the suspension and miss the first four weeks of the 2016 season.
Although the NFL can victory in the case and point to the fact that the league’s CBA with the players’ association gives the NFL Commissioner the power to discipline players, in fact there were no winners. The NFL and the Commissioner came across looking vindictive and petty, while dragging one of the all -time greatest players through the mud and accusing him of creating. While not the only reason, it is probably no coincidence that since “Deflategate” NFL television rating have suffered historic lows. However, as every casual sports fan in the United States will agree, we are all happy to see the end of 2016 and the “Deflategate” case.
Attorney/Founder at Global Sports Advocates, LLC
The biggest sports law issue of 2016 was the Deflategate saga and the ongoing debate over how much unilateral power a sports commissioner should wield. The NFL Commissioner Roger Goodall appointed himself to preside as the arbitrator over the case of Tom Brady, the Patriots star QB who appealed a 4 game ban levied by the NFL.
Goodell upheld the NFL’s 4 game ban. Brady and the NFL Players’ Association successfully appealed Goodell’s decision to the United States District Court, where Judge Berman overturned the decision and vacated Brady’s 4-game suspension. But this past summer, the United States Court of Appeals for the Second Circuit reinstated Commissioner Goodall’s decision. The Second Circuit reasoned that the NFL Players were stuck with the dispute resolution system they collectively bargained for that permitted Goodell to serve as arbitrator.
Brady abandoned his appeal without seeking review by the United States Supreme Court and was banned for the first 4 games of the 2016 NFL season.
The NFL boasted of increased power in Deflategate’s aftermath, but this is a topic that will undoubtedly be revisited the next time the NFL and NFLPA negotiate a collective bargaining agreement.
Joseph M. Hanna
Partner, Goldberg Segalla
The following are a few impactful cases that came to an end in 2016:
New Jersey Sports Betting
- While not surprising, a Third Circuit en banc panel put an end to New Jersey’s attempts at legalizing sports betting in its casinos. Since this decision, the state of New Jersey has asked the US Supreme Court to review the constitutionality of the federal Professional and Amateur Sports Protection Act, which prohibits states from authorizing sports betting. New Jersey has received plenty of support behind its cert petition, including West Virginia, Arizona, Louisiana, Mississippi, and Wisconsin.
- In the labor arbitration dispute of the century, a Second Circuit panel issued a decision in April reinstating Tom Brady’s suspension and affirming Roger Goodell’s authority to serve as an arbitrator in employment disputes under the NFL and NFLPA’s collective-bargaining agreement. A request for rehearing was denied, and Tom Brady ultimately dropped his legal fight against the suspension. The players union would not rule out a Supreme Court push, even without Brady pursuing the case, as it maintains its position that Goodell overstepped his authority and conducted a biased investigation. Similar legal battles could arise out of this “grey area” of Goodell’s authority, and this will likely be a point of contention when the current CBA expires in 2020.
- While some believed the US Supreme Court would handle the issue of whether college student-athletes can receive compensation for their publicity rights, the Court ultimately denied the petitions from both the NCAA and former college athletes. The O’Bannon case simply did not get to the heart of the much broader issue of amateurism under antitrust regulations. Notably, the Court could potentially handle this overarching issue in the ongoing grant-in-aid litigation.
Managing Editor, TheWhiteBronco.com
In my view, the biggest sports law issue in 2016 was player discipline in professional sports. Headlined by the NFL’s curious legal crusade against one of its biggest stars, Patriots quarterback Tom Brady, over deflated footballs (commonly referred to as Deflategate), player discipline remained in the spotlight throughout 2016. The NFL scored convincing victories in two federal appeals decisions, Deflategate and Vikings running back Adrian Peterson’s lawsuit, and further cemented commissioner Roger Goodell’s disciplinary power over the players.
We also saw a focus on how players are disciplined for off-field conduct, most notably domestic violence. MLB commissioner Rob Manfred suspended three players under the league’s new domestic violence policy, for a total of 163 games. The effectiveness of the NFL’s policy, the first one of its kind implemented by a U.S. sports league, also came under heavy fire after the NFL only suspended Giants kicker Josh Brown one game after documents revealed that Brown’s abuse of his then wife was more severe and numerous than the NFL’s initial investigation revealed. The NFL is re-investigating but has not announced if Brown, who is no longer in the league, will face additional discipline. With several active cases and players always pushing the limits of the Leagues’ ability to act as a judiciary, player discipline promises to continue to be a headline issue in 2017.
Professor of Law, Pepperdine University
After Deflategate properly deflated in the Second Circuit, due to the basic rule that arbitration is subject to limited judicial review and the evident partiality of the Commissioner’s role as arbitrator was not directly challenged by the union, the case mostly in the court of public opinion involved San Francisco 49’rs second-string quarterback Colin Kaepernick made headlines in refusing to stand during the national anthem during NFL game. The Kaepernick Effect protest spread to professional soccer as U.S. Women’s National Team player Megan Rapinoe decided to “stand or kneel” during the anthem at a Seattle Reign game. The protest symbolism spread to high school and college sporting events, even local City Council meetings and wherever the Pledge of Allegiance or National Anthem were heard. Many have invoked the saying that “I disapprove of what you say, but I will defend to the death your right to say it.” But whether professional athletes have a “right” to political protest doesn’t necessarily involve a First Amendment right of political speech due to lack of state action and ownership by a private league. Even in the case of a public college, playing sports may be considered a privilege rather than a “right” and players subject to conduct rules set by the team. The Olympics have their more than fair share of restrictions on athlete speech, dating back to the sanctions against 1968 Black Power Salute to modern day social media and dress codes. But the concerns of human rights and freedoms of political protest and speech have the attention of the players, the public, and the sponsors, and whether a team has a right to restrict speech is different from whether they should.
The effects of the “data revolution” in American sports
Associate professor of forensic sports law analytics, Florida State University, Tallahassee, Florida, US.
The most important 2016 US sports law issue is the extent to which sports leagues can control the dissemination of real-time data via lucrative distribution agreements. Sports governing bodies have long sought to monetize real-time data as a commodity. Indeed, the NFL, NHL, and MLB jointly filed a 1996 court brief that posited: “The most valuable economic asset of any professional sports league is live sports competition.”
Technology has now caught up with leagues’ pecuniary aspirations. Advancements such as motion-tracking digital cameras and biometric athlete monitors have resulted in certain realms where sporting event organizers may be able to claim resulting data as proprietary, boosting the ability to sell such data and bar others from competing in the same space. However, there may be roadblocks. In a 2014 court filing, the US Department of Justice argued: “When a television network broadcasts a live sporting event, no underlying performance precedes the initial transmission—the telecast itself is the only copyrighted work.”
Real-time sports data issues have been litigated for decades. The NBA lost a real-time data case in 1997, but the PGA Tour prevailed in a related case seven years later. The split decisions have resulted in legal uncertainty. A new case from the world of chess could clear the haze. The lawsuit—filed 7 November by the organizer of the recently-concluded 2016 World Chess Championships in New York City—sought to prevent certain non-approved websites from publishing updates while the chess matches were live. On 22 November, a judge denied the plaintiff’s request for a preliminary injunction, but the overall case remains on-going. A resolution on the full merits will provide useful guidance on this key sports law issue.
Brian R. Socolow
Chair, Sports Practice Group at Loeb & Loeb LLP and Office Administrative Partner, New York Office
The single biggest sports law issue for 2016 is data – the use of data by sports organizations, the myriad legal issues that arise as a result, and the fact that with the development of technology in sports, the law has not yet caught up. This has left everyone involved – teams, leagues, players, and other stakeholders – struggling to find surer legal footing while trying to organize, use and monetize vast amounts of data.
Data is enormously important to sports organizations. Teams and leagues are collecting vast quantities in a variety of ways, using new – and not so new – technologies, including sensors, beacons and wearable technology. They are trying to figure out the practical issues involved with the data – how to use it effectively, who should have access to it, in what form and when; and how to maintain privacy and restrict access to it – and how to monetize this valuable content – without doubt data is content – to maximize revenue streams.
The upside of the data revolution is that sports organizations are using data in a myriad of new and amazing ways, including collecting player performance data in – and outside of – practices and games, and using it to improve training, injury prevention and coaching. Depending on the sport, they can measure – in real time – variables like speed, power and torque, as well as heart rate, muscle load, fatigue and hydration. The data is also being used to improve game performance and fan engagement. Fans have an insatiable appetite for information about what’s happening on the pitch or floor, and sports organizations want to maximize that opportunity across as many channels as possible – sharing data with broadcast partners, fantasy sports platforms, and even creating their own content platforms and uses.
The challenge for sports organizations is trying to accomplish these goals within a legal framework that hasn’t caught up with the technology. The use of data in these new ways brings with it unanticipated legal questions and consequences. Probably foremost is who owns or controls that data – and as a corollary – what can they do with it? These are big legal issues without clear-cut answers. It implicates privacy and data security issues for athletes and data ownership and IP issues for teams and leagues. It implicates employment, player contract and collective bargaining issues for everyone involved. And neither self-governing industry standards nor general laws on privacy, IP or employment currently exist to guide stakeholders in resolving these issues.
The First Amendment & trademarks in American sports
Attorney at Holley & Menker, P.A.
As a sports and IP attorney, I think the biggest sports law event in 2016 was the U.S. Supreme Court's September 29, 2016 announcement that it would hear the "Slants" case about whether a federal law banning the registration of offensive or disparaging trademarks violates the First Amendment. On its face, this case has nothing to do with sports law. The Slants are an Asian-American dance-rock band whose application to register THE SLANTS was rejected by the U.S. Patent & Trademark Office on the ground that the mark was disparaging to Asian-Americans.
So what does this have to do with sports law you ask? For starters, the Supreme Court's ruling in the "Slants" case will have a significant impact on the Washington Redskins' long-standing dispute over the registrability of the team's name. Perhaps more importantly, it could also embolden, or dissuade, others from seeking to challenge other arguably offensive sports trademarks. (By way of example, a legal attempt to cancel the Cleveland Indians' well-known "Chief Wahoo" trademark registration is currently suspended pending a resolution of the "Slants" case.) The U.S. Supreme Court is scheduled to hear oral arguments in the "Slants" case in January 2017.
The Introduction of the UFC Anti-Doping Program
Legal Affairs Director, Emerging & Pro Sports, USADA
When it was launched in June 2015, the UFC Anti-Doping Program became the first independent anti-doping program in major professional sports. Driven by a mission to ensure that every UFC fighter has the opportunity to compete in a clean Octagon, the program is designed to protect the health and safety of athletes, while also preserving the integrity of competition.
To introduce and familiarize athletes to the program, the UFC and USADA embarked on a joint education campaign, meeting athletes for in-person education sessions at gyms and events around the world. To date, the Program has hosted at least 25 in-person education seminars in countries around the globe, including Japan, Ireland, Australia, and Brazil - often working with translators to overcome language barriers. In many ways, the program represented a significant culture shift for many fighters, and in order to help ease the transition, athletes have been provided access to numerous anti-doping resources in a multitude of languages – both print and online.
Along with its education initiatives, the UFC Anti-Doping Program started testing athletes both in and out-of-competition, and to date, more than 2,000 tests have been completed. The Program’s testing pool has also grown to include around 550 athletes worldwide, with tests collected in nearly 20 countries. As the Program continues to evolve, athlete education will become increasingly targeted and test planning will become even more data-driven.
From the outset, the goal of the UFC Anti-Doping program was to be the most comprehensive of its kind in all of professional sports. And while there is still much to accomplish, the last year and a half have shown that the implementation of an independent anti-doping program is one of the most effective ways for sports organizations to invest in athlete health and wellness.
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