LOS ANGELES – One of many potential consequences due to the COVID-19 pandemic is a potential wave of sporting event-related lawsuits involving season tickets, broadcast rights, real estate issues and even athlete endorsements.
Recent reports suggest that billions of dollars are at stake.
As the immediate future of sports remains uncertain into the spring, contracts are likely to be breached or even terminated during one of the normally busiest sporting seasons of the year, led by the NBA and NHL playoffs, as well as the on-hold MLB regular season, the NFL draft and the Kentucky Derby.
“Because these are consumer contracts and you want their repeat business, there’s a policy of giving folks money back. It seems like the right thing to do and the smart thing to do from a business perspective,” said attorney Kent Schmidt of Dorsey & Whitney LLP in an interview with the Southern California Record regarding some of the easier cases that are currently being presented.
However, it’s a slippery slope in the sports endorsement business that can quickly become much more complicated, he said.
“The more difficult issues that we’re facing now are having to do with things like endorsement contracts that still have some validity. It’s not like people don’t recognize a sports figure’s face anymore just because they’re not playing their sport right now,” said Schmidt. “But at the same time, it arguably has been impacted significantly. And then you think about the endorsement issues that relate to stadium rights and signage and things like that; do those things need to be adjusted?
“I just think there are so many sort of middle-ground type of issues with sports that will be a much more difficult point of contention between the parties.”