Q&A: No contractual clause could have foreseen the impact this pandemic is having

From broadcasting contracts to player wages, sports is facing a legal minefield when the lockdown ends. Michael Moynihan spoke to Professor Jack Anderson of Melbourne Law School about the ramifications of the pandemic for m’learned friends.
Q&A: No contractual clause could have foreseen the impact this pandemic is having
Professor Jack Anderson

From broadcasting contracts to player wages, sports is facing a legal minefield when the lockdown ends. Michael Moynihan spoke to Professor Jack Anderson of Melbourne Law School about the ramifications of the pandemic for m’learned friends.

Q: Is the current situation so out of the ordinary that we’re in unknown territory legally when it comes to sports law?

A: Yes, it is extraordinary — contracts in sport, from player contracts to contracts that underpin major sporting events such as the Olympics, have clauses that allow for force majeure, Act of God, and unexpected events. Some sports have insurance but the scale of this pandemic is having an impact on sport that no contractual clause could ever have foreseen or now cater for.

Q: Is there anything remotely comparable that might be a template — the hurricane at the Rugby World Cup, maybe?

A: No, Olympics have been cancelled because of war, but back then the Olympics was not surrounded by the commercialism of today.

The foot and mouth disease in 2001 had some impact in the UK but most events were simply postponed to a date later in the year and similar to SARS and other virus outbreaks, the impact was relatively localised, at least compared to this global pandemic.

Q: If a league or competition is cancelled, does the previous year/season’s champion retain the title or is it void?

A: That will all depend on the league or competition rules.

The default position would likely be that if a league is cancelled, then no champion is declared.

Some leagues have taken the position — for example in Belgian soccer — that planning for the resumption of the league in, say, June, is pointless as no one knows what the public health situation will be like even then.

There they simply declared Bruges to be the winners and they will sort out promotion/relegation by select committees. The majority of clubs were in agreement.

That is likely not to be the case in the Premier League, for instance: expect them to try and finish this season in some form.

Q: Is there likely to be chaos with contracts between sponsors/broadcasters/sports organisations when the crisis ends?

A: Already broadcasters in many countries have said that if there is no sport to televise, then they do not, for the moment at least, have to honour their contracts with leagues.

This is causing immediate cashflow problems for many clubs and sports, particularly here in Australia, where professional sport is effectively underwritten by TV money.

Sponsors have generally not withdrawn in the hope that sport will resume this year or, as in the case of the Olympics, many of the major sponsors will simply roll over their contracts till 2021.

The big issue for sport is whether key sponsors and broadcasters will either (a) be around post-virus, given the commercial pressures many businesses are under right now and (b) if they are, will they be willing to fund sport to the same extent as before?

Q: Would an athlete be entitled to refuse to play on safety grounds when competition resumes?

A: This will be interesting. If a sport decides that based on government guidelines it can resume — albeit behind closed doors — then the contractual expectation would be that the player must play or otherwise be in breach of contract.

In practice, though, this means that if a sport gets the go-ahead to resume, then a key partner in all of this will be the player union or association.

Leaving aside contractual obligations, a sport’s decision to return will have to be a collective one involving the league, clubs and players.

Q: What organisations/sports have impressed you in terms of their approach to this (not necessarily legally, maybe in terms of administrative efficiency)?

A: The most ruthlessly commercial leagues in the world are in the US but the speed with which the NBA moved to shut down when a Utah Jazz player tested positive was remarkable and they led the way.

The NBA’s Commissioner Adam Silver is arguably the best sports administrator globally right now.

Q: What, if any, are the legal ramifications from this crisis that nobody has really considered yet because we’re still in the middle of it?

A: There is lots of talk at the minute about the legal actions that clubs might take if the English Premier 2019/2020 season is suspended and their title/promotion hopes are thwarted.

An interesting example here is Leeds, who might argue their case relating to promotion to the Premier League, but in all of these cases there are two points that are being slightly forgotten.

In Leeds’ case, for example, there is absolutely no guarantee that even if the season was completed that they would have secured promotion.

Lots of these cases will be based on loss of chance and in a sporting and legal context that is a difficult concept to sustain — put simply, sport is full of “we would have won/got promoted but for…”.

Second, in all of these cases clubs will have to realise that the reason a season may have had to been cancelled in full is because of the unprecedented public health crisis we have all faced and that to take a legal case in those circumstance based on loss surrounding a few games of football, would be seen as insensitive.

Moreover, as we have seen from the scale of the economic stimulus that governments have had to create in last few weeks, football as an industry is not as big as it thinks.

Q: If you had one piece of legal advice for the GAA/IRFU/FAI/small NGOs at this time, what would it be?

A: Don’t rush back.

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