Sports Law Ledger - Monday 6 April 2020
Welcome to another socially distant week in sports.
Here's a rundown of the latest news, updates, and alerts in our wonderful wide world of sports law, with a focus on more positive news (where possible):
AUSTRALIA
Governance - Rugby Union: Former Wallabies captains make a move against Rugby Australia leadership, warning of financial crisis
Rugby Australia is headed for insolvency, with serious questions raised over the management of the game by the board and its chief executive, Raelene Castle, according to one of the sport's most revered elders. Former World Cup-winning captain, Nick Farr-Jones, has told ABC's 'The Ticket' that with "ongoing concerns", the board must be wary of being "in breach of the Corporations Act".
Governance - Sports step up bid for survival package
Tennis Australia chief executive Craig Tiley says a combined codes bid for a survival package from the federal government "is not about paying high-profile players more money" but trying to keep the lights on so they can continue to invest in community sport beyond the COVID-19 shutdown. As chairman of the Coalition for Major Professional and Participation Sports (COMPPS), Tiley has met with Sports Minister Richard Colbeck on behalf of the seven biggest sporting organisations in the country – the AFL, NRL, Rugby Australia, Cricket Australia, Football Federation Australia, Tennis Australia and Netball Australia.
Governance, Player Relations - Rugby Union: Player pay talks to continue after "positive and robust" Sunday meeting
Rugby Australia and RUPA will continue pay deal talks into this week after meeting on Sunday. Rugby Australia CEO Raelene Castle and chairman Paul McLean said in a joint statement that "good progress" was made in the meeting but discussions would continue.
Governance, Player Relations - Football/Soccer: FIFA laws allowing free agency won't apply to unpaid A-League players
Under normal circumstances, players who aren't paid for more than two months at any club in the world are free to walk away from their contracts after giving their employer 15 days notice. However, the FIFA regulation won't apply to the six A-League clubs that stood down their players indefinitely while the season remains suspended due to the COVID-19 pandemic.
Governance, Player Relations - Football/Soccer: PFA reaffirms position on clubs standing down players
Professional Footballers Australia (the PFA) notes a second A-League club, Central Coast Mariners, has issued stand-down notices to its players. The PFA has reaffirmed its position on clubs dumping players at this time, serving the Mariners owner Mike Charlesworth with a letter of demand seeking the players’ immediate reinstatement.
Governance, Player Relations - Rugby League: NRL reaches agreement with RLPA
The National Rugby League (NRL) and the Rugby League Players’ Association (RLPA) have reached agreement on financial measures which will be taken while the NRL Telstra Premiership is suspended due to the COVID-19 virus. The deal will see players earn two months wages and payments. Due to the suspension of the 2020 season, players will surrender five out of 12 months’ salary if the competition is unable to resume.
Governance, Player Relations - Cricket: New percentage pay deal on cards for cricketers as cash crisis looms
Cricket Australia may offer players new percentage-based deals rather than fixed salaries in coming weeks as the governing body considers a proposal to re-configure its contracting system in the face of the COVID-19 crisis.
Governance, Commercial - AFL: Only four clubs could survive football-free season without AFL help
The AFL will assume unprecedented control over its clubs as part of the revolutionary new rescue package put forward on Thursday night to the 18 club bosses. In a receivership model that will essentially turn league chief Gillon McLachlan and the AFL Commission into the competition's banker, clubs unable to meet cash-flow demands will now borrow funds previously deemed extra dividends from head office.
Governance, Commercial - NBL: Illawarra Hawks licence revoked
The NBL has taken back the licence for the Illawarra Hawks after the club was placed into voluntary administration. NBL Owner and Executive Chairman Larry Kestelman said: “We thank Simon and Wendy Stratford for everything they have done during their time at the club to advance the interests of the Hawks and the Illawarra region and we wish them all the very best during these unprecedented and challenging times.
Read NBL Statement on LaMelo Ball ownership interest
Governance, Commercial - AFL: How $600m loan deal saved AFL
When a much-loved sport like the AFL shrinks to almost nothing in a matter of days, the idea of the code signing a loan facility worth up to $600m with two major banks seems fanciful. On Monday, however, NAB and ANZ agreed on the terms, prompting new NAB chief Ross McEwan to pen a celebratory message to all staff, with the AFL’s press release attached.
Governance, Commercial - US buyers ready to pounce on Australian teams, says investment banker
The head of a major American investment bank has cashed-up clients ready to buy Australian franchises – and even entire sporting leagues – that may not otherwise survive the coronavirus shutdown. Andrew Kline is the founder and managing director of Park Lane, a firm that specialises in helping high net-worth individuals become owners of sporting franchises. The former St Louis Rams NFL draftee has facilitated deals for his clients to buy and sell teams across all the major American sporting leagues.
Player Contracts - NRL: trade circus ahead of 2021 season to have roster implications
Tyson Frizell will be unable to leave St George-Illawarra until January next year – under an NRL proposal that will descend the entire player market into contract chaos. In a major decision that would trigger serious roster ramifications for every club and 180 off-contract players, the NRL has proposed in readiness for a protracted 2020 season, that all player contracts be extended until December 31 this year.
Integrity - Rugby League: Bulldogs players found to be in breach of NRL Code of Conduct
The National Rugby League (NRL) has cancelled the registrations of Canterbury-Bankstown Bulldogs players Jayden Okunbor and Corey Harawira-Naera. The NRL’s show-cause process found the behaviour of each player in the lead-up to a trial match in Port Macquarie on February 29 constituted very serious breaches of the league’s Code of Conduct.
Commercial, Sponsorships - Rugby Union: Qantas confirm jersey sponsorship deal will be honoured
In further good news, major partner Qantas, the Wallabies' front of jersey sponsor, confirmed it would honour its two-year deal with RA. A Qantas spokesman confirmed their partnership, which came under significant pressure amid the Folau saga over the past two years, was renewed at the end of last year and would run until the end of 2021.
Commercial, Broadcasting - Motorsport, Esports - McLaughlin wins digital Indycar race
Virgin Australia Supercars Champion Scott McLaughlin has claimed the first victory in his IndyCar career after taking out the second round of the INDYCAR iRacing Challenge. Achieving the feat on a simulator half way around the world, McLaughlin was too good against the fancied competition after edging out teammate and Australian Will Power, as well as three-time Global RallyCross champion Scott Speed to win the Virtual Honda Indy Grand Prix of Alabama.
Media Rights, Broadcasting - AFL live on YouTube? It could all be part of sport's post-coronavirus future
In 2016, Twitter forked out $US10 million to stream 10 weekly NFL matches on its social media network, all over the world. It was one of the first big signs for sports administrators, including those in Australia, that the way live sports broadcasts were valued, was starting to change. Experts say the leagues that rely on traditional media for revenue could benefit from a different approach.
Media Rights, Broadcasting - Nine expects to save $130 million from the NRL
In a presentation to JP Morgan Virtual Conference, the media company outlined $266 million in cost savings, the bulk of it coming from its rights deal with NRL should the games be called off. The costs are split for each half of the year, saving Nine $65 million should the competition be played in the second half of 2020.
Media Rights, Broadcasting - Australia’s Broadcasters Foresee Savings From Canceled Sports Events
Powered by massive commodity exports and close business links to China, Australia had enjoyed some 18 years of economic expansion. That has almost certainly come to an end, as the world heads for a recession caused by travel restrictions and stay-at-home measures ordered by governments to combat the spread of the virus.
Sports Gambling - BetEasy sued for $1.2 million after punter landed monster multi-bet
In Supreme Court documents filed on Wednesday, punter Renee Bell claims BetEasy, formerly CrownBet, was deceptive and misleading when it accepted $500 worth of multi-bets with a potential return of $1,443,695.90 before claiming it had a maximum payout limit of $250,000.
GLOBAL
Governance - Football/Soccer: Premier League support to void season grows but legal minefield awaits if EFL are cut adrift
At least four clubs believe scrapping the 2019/20 campaign is a realistic option as the money saved by staying in the Premier League outweighs what broadcasters would be owed, but the EFL’s desire to finish the season causes multiple problems.
Governance - Rugby: USA Rugby files for Chapter 11 Bankruptcy protection
Following detailed consultation with legal advisors, the USA Rugby Board of Directors and Congress voted to officially file Chapter 11 bankruptcy as a result of compounded and insurmountable financial constraints. The current suspension of sanctioned rugby activities caused by the ongoing COVID-19 pandemic has accelerated the existing financial challenges facing the Union, and a reorganization process will now be progressed with input from World Rugby.
Governance - Democracy delayed – key elections as well as sports events could fall victim to the virus in 2020
The postponement until July/August 2021 of the Tokyo 2020 Olympics would appear to place a large question-mark over the timing of the scheduled International Olympic Committee (IOC) Session in June 2021 where IOC President Thomas Bach is expected to come up for re-election.
Governance, Commercial - Football/Soccer: Liverpool under fire for furloughs while PFA points to pay-cut tax trap
The Professional Footballers’ Association has invited further criticism of its response to the coronavirus crisis by claiming it would be detrimental to the NHS for Premier League footballers to take a pay cut of 30%. The union’s defiance in the face of a pandemic that has claimed more than 4,300 lives in Britain coincided with Liverpool becoming the latest high-profile club to put non-playing staff on furlough.
Governance, Commercial - Football/Soccer: FIFA dusts off $4.5 billion war chest amid virus
FIFA is looking to tap into its vast financial reserves to assist a football industry ravaged by the coronavirus pandemic wiping out games and creating unexpected economic hardship in the world's biggest sport.
Governance, Media Rights, Broadcasting - 'Major' Premier League broadcast partner threatens to sue over 'disdainful' handling of coronavirus crisis
One of the Premier League’s broadcast partners is threatening to sue it over its response to the coronavirus crisis, according to a leading media lawyer who says he has been instructed by the network. Mark Stephens, of London law firm Howard Kennedy LLP, told Telegraph Sport that the unnamed “major” overseas rights holder could seek damages from the world’s richest league even if the season is completed. Stephens said his client was upset at what he claimed had been a lack of engagement by the Premier League during the current crisis, one that has virtually wiped out live sport worldwide.
Integrity - Baseball: Gattis admits 2017 Houston Astros 'cheated baseball and cheated fans'
One former member of the 2017 Houston Astros team at the center of a sign-stealing scandal has issued a wide-ranging apology and acknowledged the team deserved to be punished harshly. Appearing on The Athletic's "755 Is Real" podcast, catcher/designated hitter Evan Gattis said he understood why baseball fans are so angry, especially since the Astros went on to win the World Series.
Integrity, Anti-Doping - Survey shows many potential doping whistleblowers unsure where to turn
A groundbreaking survey of more than 400 British and US elite athletes and coaches has found that fewer than half feel their sport actively encourages them to report doping. The study, conducted by Leeds Beckett University on behalf of the World Anti-Doping Agency, also discovered that nearly a quarter of athletes surveyed feared they would be labelled as a “snitch” if they expressed their suspicions.
Integrity, Match Fixing - Match-fixers accused of running 'ghost tournament' during COVID-19 crisis
With betting markets idling through the COVID-19 pandemic and punters desperate for something to bet on, match-fixers got creative last week in order to cash in. They created a ‘ghost tournament’ comprising of ‘ghost games’, supposedly played by obscure teams from the regional leagues of the Ukraine.
Commercial - Football/Soccer: West Ham plan £30m rights issue to cover revenue shortcomings
West Ham’s board plans to inject at least £30m into the club by launching a rights issue in response to the financial problems caused by the coronavirus pandemic. With English football suspended because of the crisis and Premier League footballers yet to agree to reduce wages, there is growing concern within boardrooms about income. Some clubs have reacted to the postponement of the season by placing non-football staff on furlough.
Commercial - Rugby: RFU faces major financial blow as Australia warn of Europe tour cancellation
The Rugby Football Union is facing the prospect of a further major financial blow because of the impact of the coronavirus outbreak after Rugby Australia warned it may be forced to cancel the Wallabies' tour of Europe in November. The match against Australia would expect to raise at least £10 million in revenue for the RFU, with the most expensive corporate hospitality tickets currently on sale for £1,199 each.
Commercial - Sports Industry Reels From Coronavirus Fallout
The story of international sports over the past decade was one of unlimited growth, unrestrained spending and unwavering popularity. Coronavirus brought the sports business to an immediate standstill. The boom times went bust overnight. Now, for the investors who plowed their fortunes into team ownership and the leagues that have gotten used to a gusher of money, the crisis risks turning into a reckoning.
Commercial - How federations share the revenues from the Olympic Games
A number of international sports federations are financially heavily dependent on their share of the revenues from the Olympic Games. This could be different after Tokyo, because the corona crisis and the relocation of the Games to 2021 also lead to extra costs.
Commercial - Football/Soccer: Player transfer market could lose €9bn+ of value
The value of player transfer market will fall 28% if no more matches are played and no player contracts renewed until June 30, according to an analysis by the CIES Football Observatory.
The total transfer value of big-5 league players would plummet from €32.7 billion to €23.4 billion, ripping the heart out of a transfer business that has been a financial life support system for many clubs who survive on selling their best talents to bigger clubs.
Commercial, Broadcasting - Esports: As Stadiums Go Quiet, Esports Are Having a Moment
One form of sporting event lives on in the age of social distancing: Esports, or competitive video gaming, is on the rise, with people tuning in to everything from Counter-Strike to League of Legends. Viewership on Twitch, the go-to site for game streamers, is up 31% in March, by one estimate. People stuck inside are playing more video games, no doubt. But they’re also watching the world’s best gamers take one another on, too.
Major Events, Commercial, Broadcasting - Cycling: Belgium holds virtual Tour of Flanders as coronavirus shuts down main event
Belgium's famed Tour of Flanders cycle race went virtual on Sunday after being postponed due to the coronavirus pandemic, with 12 cyclists pedalling it out in isolation on stationary bikes hooked up to a video-game recreation of the Belgian countryside.
Media Rights, Broadcasting - DAZN won’t be paying sports leagues during coronavirus pandemic
The worldwide streaming service is suspending payment while games aren’t taking place. While DAZN isn’t offering refunds to customers who have purchased annual subscriptions, it is allowing members to pause their membership for up to four months.
Media Rights, Broadcasting - How Coronavirus-Hit Europe is Navigating the Loss of Live Sports
A continent mad about sports has gone mad without sports. This past weekend was the first in which nearly all public sporting events across Europe were canceled or postponed in an effort to mitigate the spread of Covid-19. Cancellations left rightsholders in the lurch with hours to fill from a normally packed weekend schedule, while sports package customers were left wondering what they’re paying for.
Discrimination, Disputes - Law firm criticized by USSF asks to withdraw from lawsuit
Seyfarth Shaw, the law firm whose arguments critical of American women’s players led to the resignation of U.S. Soccer Federation president Carlos Cordeiro, has asked to withdraw from representing the federation in the lawsuit. Members of the women’s national team filed a gender discrimination suit against the USSF last year under the Equal Pay Act and the Civil Rights Act of 1964. They claim they have not been paid equally to the men’s national team and asked for more than $66 million in damages. A trial is scheduled for May 5 in U.S. District Court in Los Angeles.
Ethics, Integrity, Discrimination - USA: Idaho is First State to Bar Some Transgender Athletes
Idaho has become the first state in the United States to bar transgender girls from participating in girls’ and women’s sports and to legalize the practice of asking girls and women to undergo sex testing in order to compete. The house bill, known as the 'Fairness in Women’s Sports Act', was signed by Gov. Brad Little on Monday. Governor Little also signed a bill that prohibits transgender people from changing their birth certificates to match their gender identities.
Over updates? Check out our new Podcasts.
Many thanks, as always, to Prof. Jack Anderson for continually bringing important sports law topics, from near and far, and brilliant insights and analysis to our attention.
Contact us to discuss these issues further and how they may apply to your sport, or email Mat Jessep at: mat @ wegotgame.com.au