by JSEL | Mar 18, 2020 | Highlight
After Utah Jazz Center Rudy Gobert tested positive for the novel coronavirus known as COVID-19, the National Basketball Association (NBA) suspended its 2019-20 season indefinitely. The move has major implications for the league’s broadcast partners, who stand to lose a serious amount of advertising revenue without games to air.
Having no NBA games also undercuts moneymaking NBA-adjacent programming like “Inside the NBA” and “SportsCenter,” as New York University Professor Lee Igel noted to CNN. In sum, the disruption will significantly impact the bottom line for broadcasters.
Entities like ESPN and TNT may be considering whether there is any legal recourse to recoup some of the millions they stand to lose. For the last couple of weeks, Sports Illustrated’s Michael McCann has been writing about the implications of the NBA’s response to the coronavirus outbreak. On March 7, discussing corporate sponsorships, McCann first raised the specter of force majeure clauses in league agreements playing a role in the resolution of legal claims. Force majeure clauses “allow one side in a contract to suspend or end its obligations on account of an extraordinary and uncontrollable circumstance.” These clauses are usually interpreted to cover natural disasters and other “Acts of God,” under which a global pandemic would almost certainly fall.
In addition to sponsorship deals, McCann speculated that the NBA’s broadcast “contracts might [also] contain a force majeure clause.” If so, “a network could insist it shouldn’t have to pay when the games aren’t being played due to a pandemic.” McCann also noted that even in the absence of such a clause, the “contracts likely contemplate the consequences of suspended games.”
At common law, courts have sometimes excused nonperformance of contracts under the doctrine of impossibility. See, e.g., Opera Co. of Boston, Inc. v. Wolf Trap Foundation for the Performing Arts, 817 F.2d 1094 (4th Cir. 1987). Did the rise of the COVID-19 pandemic make playing the games “literally impossible?” Given the massive drawdown in public gatherings and the fact that multiple NBA players have already tested positive for the virus, the answer might well be “yes.”
Of course, doctrine aside, one must consider that the payments in question would be made to the league in the context of longer-term agreements. And to be sure, “broadcasters don’t want to jeopardize long-term relationships over what will likely be a short-term drop in revenue.” As such, it is unlikely the parties will actually end up in court; particularly against the backdrop of an ongoing national emergency, any litigation on this issue would probably engender a negative sentiment against all involved.
The point is likely moot. Ultimately, it would be a shock if the two parties did not instead quietly negotiate a way forward. The symbiotic relationship enjoyed by the networks and the league has only gotten stronger in recent years, as evidenced by the $24 billion deal that the NBA struck with ESPN in 2014. And while a short downturn in revenue will be a difficult pill to swallow, both sides know there are plenty of billions to be made together going forward.
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first-year student at Harvard Law School (Class of 2022).
“IMGP0307” by joshua_d is licensed under CC BY-NC-ND 2.0
by JSEL | Feb 23, 2020 | Highlight
ESPN’s Adam Schefter is reporting that the National Football League (NFL) is considering some changes to its playoff structure in the new Collective Bargaining Agreement. The NFL’s CBA could be finalized as soon as next week, and it appears that the biggest change will be expansion of the playoffs from 12 to 14 teams.
Traditionally, the NFL has rolled with a 12-team playoff, with six representatives from each of the two 16-team conferences. In each conference, the No. 1 and No. 2 seed enjoy a bye week for the first round of the playoffs, then each play the winner of either the first weekend’s No. 3 vs. No. 6 or No. 4 vs. No. 5 matchup.
To accommodate a seven-team playoff, the league will add another wild card slot and take away the No. 2 seed’s first round bye. The No. 1 seed will retain a first-round bye, and you’ll have a 2/7, a 3/6, and a 4/5 game. If the new structure is otherwise consistent with the current model, the lowest-advancing seed (in order: No. 7, No. 6, No. 5, No. 4) will play the No. 1 seed in the second round, while the other two advancing teams will play one another. If the new structure is otherwise consistent with the current model, the lowest-advancing seed (in order: No. 7, No. 6, No. 5, No. 4) will play the No. 1 seed in the second round, while the other two advancing teams will play one another. As such, the league gets to add a game to Wild Card Weekend (the first round of the playoffs) and give another team a foot in the door.
The proposal does not seem to be a contentious one. Indeed, Schefter’s article quotes a source who stated about the playoff expansion: “That’s been agreed to for a long time. There wasn’t a lot of disagreement to that issue.” The contention between the league and the players union (the two relevant parties for ratification of the new CBA) is likely to come from the prospect of expanding the regular season from 16 to 17 games. The owners are offering to bump the player revenue share from 47% to 48.5% if the players will agree to another game. There is likely a wage premium at which the players would agree to the shift, but it’s unclear what the number is.
As for the playoff expansion, it’s obvious why the NFL is making the move. This year, viewership for the NFL’s Wild Card Weekend reached a four-year high. Fan interest in these games is increasing, and the NFL is well-positioned to increase the supply of postseason games given the obvious demand. Adding two playoff teams allows the league to keep two more markets engaged for another (particularly significant) weekend of football, and could further increase league parity.
Other leagues feature large playoffs. More than half of the teams (16 of 30) in the National Basketball Association make the postseason, and Major League Baseball (another 30-team league) just proposed moving to a 14-team playoff format of its own. To be sure, there is probably a point for the NFL at which the number of teams in the playoffs diminishes the importance of the regular season, undermines the impressiveness of a postseason berth, and hurts the league. 14 teams is probably not it, but 16 might be and 18 almost certainly is.
Let’s look at the last five years (The Ringer looked at the last ten, which basically tracks with the below observations): In 2019, the AFC and NFC additions would have been the 8-8 Pittsburgh Steelers and the 9-7 Los Angeles Rams. In 2018, the No. 7 seeds would have been the 9-6-1 Steelers and the 8-7-1 Minnesota Vikings. The 9-7 Baltimore Ravens and 9-7 Detroit Lions would have made it in 2017. 2016 would have seen the 9-7 Tennessee Titans and the 9-7 Tampa Bay Buccaneers. And the two extra teams in 2015 would have been the 10-6 New York Jets and the 8-8 Atlanta Falcons. Fortunately for the proposal in question, a strong majority of these teams had winning seasons; the two teams that didn’t were both .500.
But in three of those five seasons, if the playoff had been 16 teams, one of the No. 8 seeds would have been a team with a losing record. Expanding to that point would cheapen the playoffs; the NFL’s sweet spot for playoff expansion is probably 14 teams.
Owners recently voted (though not unanimously) to advance the CBA, and now the players will consider the proposal. While the two sides iron out other issues, the playoff question appears settled. So get ready for bigger graphics on ESPN from Weeks 14 to 17, depicting which NFL teams are still fighting for playoff spots—with this shift, more football clubs will now be listed in these graphics under my favorite phrase in football: “In the Hunt.”
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first-year student at Harvard Law School (Class of 2022).
“Open end to the Allegheny River” by R.A. Killmer is licensed under CC BY-NC-ND 2.0
by JSEL | Feb 5, 2020 | Highlight
Disney has unleashed a wave of takedown notices targeting vendors who are selling merchandise featuring “Baby Yoda,” the viral breakout character from its new streaming series, The Mandalorian, on DIY sales site, Etsy. The studio becomes the latest company to struggle to protect its intellectual property on the site, despite its formidable legal resources and penchant to fiercely guard its properties.
Disney’s woes began shortly after the character debuted in December, when fans of the character, officially known in the series as “The Child,” started selling homemade Baby Yoda shirts, mugs, dolls, ornaments, and backpacks, in violation of Etsy’s IP policies. Disney specifically delayed manufacturing and selling products featuring the character until well after the premiere of the show, due to fears that the merchandise release would spoil plot details for the series. Despite Disney’s efforts to ban alleged infringers from the site, as of this month, Etsy searches for “Baby Yoda” still return over 11,000 results, raising several questions:
Why is one of the most powerful entertainment organizations in the world unable to stop such rampant infringement? And, if Disney cannot solve IP concerns created by sites like Etsy, who can?
Widespread infringement on Etsy is facilitated by the fact that, unlike sites like YouTube, which use automated features capable of mechanically identifying possible instances of infringement, Etsy requires users to identify and report each instance of potential instances themselves on a case-by-case basis. Relying on the so-called Safe Harbor provision to the Digital Millennium Copyright Act (DMCA), which relieves sites of the responsibility to aggressively and proactively police and remove infringing content, Etsy employs a reporting system which would require Disney representatives policing infringement to manually search through the over 10,000 potential instances of Baby Yoda infringement on the site at any given time. On top of this, Disney also must target infringers who aim to evade detection by avoiding key words explicitly linked to Star Wars, selling items under descriptions such as “Baby Alien” and “The Baby Child.” Even for a company like Disney with vast resources, effectively policing this much content via human-led searches and assessments could be difficult, if not impossible.
With official Disney Baby Yoda merchandise not set to hit the market until this March, Disney could stand to lose lots of potential revenue if the Etsy infringement is not stamped out. However, many scholars, such as Texas A&M law professor Glynn S. Lunney, warn that draconian policing on the part of Disney could potentially be harmful to the company. Lunney explains that “because it’s an avid fan base” creating the merchandise, Disney could upset and “alienate” future potential customers.
While Disney has turned to takedown notices to deal with unlicensed Baby Yoda merchandise, it is yet to be seen whether, moving forward under the current DMCA regime in a cultural landscape in which “meme-able” overnight stardom is possible, what future strategies the company will employ to protect its IP.
Matt Shields is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and current second year student at Harvard Law School (Class of 2021).
Image: “Yoda – Gentle Giant – Mini Bust” by fs1997 is licensed under CC-BY-NC-SA 2.0.
by JSEL | Dec 15, 2019 | Highlight
Another NFL season, another chance that (as of the start of Week 15) an 8-8 or 7-9 makes it into the playoffs (and hosts a game on Wild Card weekend). One of the Dallas Cowboys/Philadelphia Eagles will take the NFC East title this season, and it is possible that a record under .500 will be enough to get the job done. Winning a division entitles a team to one of the NFL’s 12 (out of 32) playoff spots, along with home field advantage in the team’s first playoff matchup on Wild Card Weekend.
Denver Broncos head coach Vic Fangio is sounding the alarm on this set-up, which he said in a recent press conference leads to “the problem which is going to happen this year where probably an 8-8 team is hosting a 12-4 team.” In the alternative, Fangio proposes eliminating divisions and having each team play one game against each of the other 15 teams in its conference, plus a 16th game against a “natural rival” from the other conference, suggesting Jets-Giants, Eagles-Steelers, and Texans-Cowboys. From there, the “six best” teams make the playoffs.
Coach Fangio has no skin in the game for this year—his 5-8 Broncos have been mathematically eliminated for the 2019 postseason. But he makes an interesting point worth considering.
NFL Commissioner Roger Goodell took the opposite view: “This is not the first time this conversation has occurred or this situation’s occurred. Teams go into the season [and their] first objective is to win the division. That’s what they work on — we win the division and get into the playoffs. That is something we’ve considered over the years. I have not heard that this year and I don’t anticipate hearing it again. It’s been discussed in the past but I don’t see that as an issue. If it comes up we’ll certainly have a conversation. I don’t anticipate it.”
Since the strike-shortened 1982 season produced two sub-.500 playoff teams, only two NFL teams have made the playoffs with a losing record: the 2010 Seattle Seahawks (7-9) and the 2014 Carolina Panthers (7-8-1). Each team won its respective division that year, made the playoffs, and hosted an opponent on Wild Card weekend. You probably remember that Seahawks game—Marshawn Lynch’s “BeastQuake” run (enjoy at 0:17) ignited the Seahawks crowd of 66,000+ (at what was then Qwest Field) and propelled the Hawks to an upset victory over the highly touted 11-5 New Orleans Saints.
In 2010, two 10-6 teams (the New York Giants and the Tampa Bay Buccaneers) watched the BeastQuake run from their couches while the Seahawks were in the playoffs. And in 2014, the Panthers got into the postseason at the expense of the 10-6 Eagles (how the tables have turned). This year, both the Chicago Bears and the (defending NFC Champion) Los Angeles Rams could miss the playoffs with winning records while the NFC East winner advances. Is that fair?
The benefits of Fangio’s proposal are simple. The six most deserving teams would make the playoffs each season, seeded according to their record with no regard to arbitrary geographic divisions. He likened his idea to the way the NBA administers its playoffs—there, eight teams from each conference make it in. Adding to its fairness factor would be the fact that using in-conference record as a first tiebreaker would provide a metric that is the same for each team—everyone plays the same opponents. (That might cheapen the proposed one-off rivalry matchup, however, as “in-conference” record would just be the record from the other 15 games.)
I am, however, more inclined to agree with Commissioner Goodell’s position for three reasons:
First, divisions are good for the league because rivalries add to the intrigue. Jets-Giants, Eagles-Steelers, and Cowboys-Texans are exciting in-state games, but they are not the storied rivalries that make the league so interesting. Here, I am thinking about Steelers-Ravens, 49ers-Seahawks, Bears-Packers, and many others. These rivalries have endured for so long because these teams have routinely beat the snot out of each other, year in and year out, in pursuit of their respective divisions’ titles. And fans get to see these games twice a year, one at each team’s field, often with one of them in Week 17 carrying playoff implications. It is the NFL equivalent of the divisional rivalries that built college football: Texas-Oklahoma, Michigan-Ohio State, USC-UCLA, and many others.
Sure, some rivalries come along that last for a few seasons, such as Patriots-Colts at the height of Tom Brady and Peyton Manning’s dominance. But the ones that endure for decades are based not on players, but on the divisional set-up of the league. There is an elegant simplicity to having one team you root for, and two or three teams you root against. Fangio’s proposal would completely blow that up. A little friction and conflict is a good thing, especially in a sport like football.
Second, inter-conference play is a good thing. Isolating the NFC and AFC from one another, which the Fangio proposal would inevitably do, disincentivizes following the other conference and prevents fans from seeing other franchises, as happens when out-of-conference opponents get scheduled against these fans’ favorite teams. This is arguably irrelevant in an era of fantasy football, Madden, and NFL RedZone, but it is something to consider. We like inter-conference play because it changes up the schedule, adds some unpredictable match-ups to the season, and may even afford fans the opportunity to see (in person) a superstar player who wouldn’t otherwise come to their team’s stadium—think Patrick Mahomes’ Chiefs playing the Lions in Detroit earlier this season.
Third, what are we really talking about here—upending everything because a 10-6 team or two, which already didn’t win its division and lost out to two other 10-6 or better teams in the Wild Card race, might miss the postseason here and there? Do we need to fundamentally realign the carefully crafted NFL scheduling system, build in multiple mandatory cross-country road trips for certain teams every season, end inter-conference play, and strike a death blow to the league’s great rivalries all because the Bears might go 9-7 this year?
My answer to that second question is no. Commissioner Goodell is right: If you want to guarantee you will make the playoffs (a means to an end to winning the Super Bowl), go be the best in your division first. Complaining about the Cowboys because you could not secure one of the three playoff slots available to you (the division title and either of the two Wild Cards)? To borrow a phrase that Ravens quarterback Lamar Jackson has championed in recent weeks: Nobody cares, work harder. The existence of the “Wild Card” itself, a way to bail out teams that did not win their divisions, was a post-AFL/NFL merger compromise. It started as one team per conference, and the Pro Football Hall of Fame’s website admits that adding a second Wild Card team was primarily about increasing television revenue and streamlining a complex tie-breaking system.
I will acknowledge that Fangio makes an argument that is difficult to overcome, however, and that is the issue of home field on Wild Card Weekend. It does seem a bit ridiculous that the Seahawks, at all of 7-9, got to enjoy the benefits of playing in front of the 12th Man (especially post-BeastQuake) against the 11-5 Saints in the 2010-11 playoffs. And no, if the second-place NFC West team ends up with 12 wins, it should not have to go on the road against a .500 or worse NFC East winner.
So here is a compromise for the Fangios and Goodells of the football world: Let’s keep the six teams the same, but re-seed ahead of the playoffs once we have the six. If you win your division, you’re in, but it is not a sufficient condition for home field on Wild Card Weekend. And if you’re so good that despite not winning your division, you are one of the two best non-division winners in your conference, you still have a shot at a first-round bye. If the Seahawks, for example, end up being the second-best team in the NFC this season, it doesn’t mean we kick the Cowboys or Eagles out of the playoffs. But it wouldn’t radically alter the league to treat them like the second-best team and give them a bye, while making this year’s NFC East winner the sixth seed and making the team to go on the road to stay alive.
If the third losing team this decade makes it into the 2019-20 NFL playoffs, expect this debate to crop back up. When it eventually does, this year or in the future, this idea should a balance between the two well-reasoned viewpoints currently in the public sphere.
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
“NFL Network ID” by Brett Morris is licensed under CC BY-NC-ND 4.0
by JSEL | Nov 19, 2019 | Highlight
The National Football League and Major League Baseball’s players associations have entered into a deal with RedBird Capital Partners to maximize profits from player likenesses, the Wall Street Journal reports. This agreement is a major milestone in cross-sport partnerships, as it “marks the first time players unions have joined forces across sports in this way.” With the amount of money that the players and RedBird are putting together, the possibilities are likely endless. I would recommend players focus on replicating the success of athletes like JuJu Smith-Schuster in reaching new fanbases across different platforms to truly see the biggest gains from this new arrangement.
The RedBird deal creates a new company called OneTeam Partners LLC—the company will look to facilitate revenue generation from player portrayals. Bloomberg notes that “[t]he sports unions will have 60% of [OneTeam’s] equity, with RedBird taking the rest.” These intellectual property rights are no joke; from video games to trading cards: usage of player names, images, and likenesses is the cornerstone of various sports products that third-party companies offer (Bloomberg cites Electronic Arts and Nike; while WSJ mentions Sony and Panini America). As the frequent JSEL reader knows, the NCAA has recently taken note of how important these name, image, and likeness rights can be for players.
That the NFL and MLB players are coming together demonstrates a shared understanding among players that pooling resources can have a profoundly positive impact on the overall bottom line. NBA players just “reclaimed their group licensing rights in the last round of labor talks with the league,” and could therefore be next in line to join. One could also imagine a scenario in which other players (such as those in the Women’s National Basketball Association, Major League Soccer and on the U.S. women’s national soccer team) join OneTeam, and the WSJ article states that some are already slated to be OneTeam investors.
RedBird will pool an initial investment of $125 million with annual revenue from the two players associations to get the company going. The players associations make roughly $120 million per year from standard licensing agreements—the players “will still receive their standard annual payouts from the deals, but RedBird will use the funds to invest in other opportunities.” The well-financed company will begin to pursue various opportunities, and in so doing, I would encourage the dealmakers to “Be like JuJu.”
Building a fanbase is key to financial success in the age of athlete celebrities on social media. One great example of this phenomenon is JuJu Smith-Schuster, a young wide receiver for the Pittsburgh Steelers who has already established himself as the third-most popular NFL player on social media. Smith-Schuster’s superstardom is actually no surprise when you consider how he has creatively expanded his potential fanbase past just Steelers or NFL enthusiasts. Smith-Schuster is a well-known Fortnite player and was part of a record-breaking 2018 Fortnite stream (with hip hop artists Drake and Travis Scott, along with streamer “Ninja”) that garnered over 600,000 viewers. As a result, he is reaching consumers that many other NFL players never would.
Smith-Schuster’s example is one to follow. NFL players should look into their contracts with Electronic Arts and see whether Madden NFL has the exclusive right to their portrayal in video games. If so, OneTeam could perhaps figure out a way to structure a limited use arrangement in which the players can become bonus characters in games like Fortnite or other popular titles. For example, maybe Call of Duty could add—as an in-game purchase—an unlockable Lamar Jackson character with turbo speed and extra distance/accuracy on grenade throws (thereby exposing Jackson to CoD players who might otherwise not ever hear of him or interact with him or his likeness in any meaningful, goodwill-inducing way). CoD has already included NFL players Le’Veon Bell and Alejandro Villanueva in a prior game, but it doesn’t appear they are playable characters. Another possible crossover would be encouraging more players to start streaming certain non-sports video games on Twitch, with a special card reward in Madden Ultimate Team (MUT) for those who subscribe to the player’s stream. Related to this, perhaps OneTeam cuts a deal with Panini and Electronic Arts to start putting special cards in actual trading card packs, redeemable for virtual cards on MUT (thus encouraging trading card buyers to buy and play Madden with this new found favorite player, and vice versa).
RedBird may have struck gold with this investment, if player rights stay as lucrative as they have been. With the right awareness of how to build fanbases up over time, OneTeam should be a highly profitable endeavor.
“JuJu” by Brook-Ward is licensed under CC BY-NC 2.0
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
by JSEL | Nov 6, 2019 | Highlight
With the 2019-2020 NCAA College Basketball season tipping off, most would expect the Kansas Jayhawks to be looking to make a run at the National Championship. However, amidst program allegations, could Kansas’s performance in the courtroom be more important than its on-court performance for the future of Kansas Basketball? When the National Collegiate Athletic Association (NCAA) handed down allegations on the storied, blue-blood basketball program of the University of Kansas in September, the administration at Kansas quickly acted not just to deny the claims, but to go on the offensive and point the finger elsewhere.
On September 21, the University of Kansas received notice of a list of violations against their basketball program citing recruiting violations and a lack of institutional control. The Hall of Fame coach of the Jayhawks basketball team, Bill Self, was also levied with a responsibility charge. These charges are the result of a “pay-for-play” investigation by the NCAA that was sparked by an FBI investigation into Adidas, where employees testified to making payments to college basketball recruits. Kansas has pointed blame at Adidas, insisting their own involvement is as a victim of the same Adidas scheme that the FBI investigated.
At this time, it is uncertain the exact defense that the University of Kansas will employ, but experts look to a similar defense the University of Missouri employed to represent themselves during their similar allegations scandal in early 2019. The University of Missouri, amid allegations of academic fraud with respect to their football program, hired a Kansas City law firm that specializes in cases involving the NCAA. More specifically, Missouri was looking to the expertise of Mike Glazier, who spent seven years at the NCAA dishing out allegations to collegiate sports teams and has since represented over 100 schools and coaches in NCAA related cases. Though an expensive defense to put on, costing the University of Missouri over $350,000, that was pennies in relation to the potential lost revenue the university could suffer depending on the severity of potential penalties. The University of Kansas will similarly have to weigh these options when deciding how to proceed with their defense.
As the Jayhawks gear up for their season, it will be interesting to see what happens as the NCAA continues to investigate and the University of Kansas begins to put on its defense. Will Kansas be willing, like Missouri, to pay hundreds of thousands of dollars to bankroll its categorical denial of the allegations, or will we see a new legal strategy, ushering in new standards for dealing with NCAA regulations? The allegations against the university are serious, and if Kansas is found guilty, the NCAA could choose to make an example out of them and impose strict penalties, thereby broadcasting to other schools that pay to play behavior will not be tolerated. In the end, Kansas’s most important victories this season might not end up coming from the hardwood.
“Basketball vs. Emporia State” by Kelsey Weaver is licensed under CC BY-NC-ND 2.0
Jason Fitzgerald is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
