NHL Expansion Draft: An Opportunity for Rapid Competitiveness?

On July 21, 2021, the Seattle Kraken, the newest franchise in the National Hockey League (NHL), stocked its roster through what is known as an expansion draft.  The consensus seems to be that the Kraken used the draft to select a solid, if not star, roster whilst leaving flexibility to sign higher profile free agents before the start of the season.  All eyes will now be on the Kraken’s debut against the Golden Knights in Las Vegas on October 12th.

In this article, we examine the background and rules to the expansion draft, as well as well as the rationale for these rules and their potential impact on the fortunes of new franchises.

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Supreme Court Finds For NCAA Student-Athletes on Antitrust Issues

NCAA student athletes are entitled to education-related benefits, such as paid post-graduate internships, scholarships for graduate school, tutors, laptops, science equipment, musical instruments, and annual awards for academic achievement up to $5,980. Justice Neil Gorsuch wrote the opinion for the unanimous Supreme Court ruling, holding that the now-former NCAA prohibition for such things violated antitrust laws.

NCAA v. Alston began seven years ago as a class action against the NCAA brought by Shawn Alston and Justine Hartman as representatives for a class of former men’s and women’s college football and basketball players. They alleged that the NCAA’s limitation on the types and amounts of compensation student-athletes can receive violates Section 1 of the Sherman Antitrust Act which prohibits the unreasonable restriction on competition among the states. The District Court and Ninth Circuit both resolved that there was an antitrust violation when applying the applicable “rule of reason” test and the Supreme Court did not depart from those decisions.

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Controversy in Horse Racing: A Race to Lift a Suspension

The crown jewels of American thoroughbred horseracing are the Kentucky Derby, Preakness Stakes, and the Belmont Stakes.  Together, they are known as the “Triple Crown,” and winning all three in a single year—an immensely difficult feat—is the pinnacle of horseracing in the United States.

Robert Baffert, a seven-time Kentucky Derby winner, is one of only a few racehorse trainers who have won the Triple Crown, and one of only two trainers to have two horses win the Triple Crown.  Recently, however, Mr. Baffert has made headlines not for the success of his thoroughbreds, but for controversy surrounding them.

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European Parliament proposes new regime to combat piracy of live sports content

Pirate Key on a Keyboard

Scale of the piracy problem

The threats posed to the funding of sport by media rights piracy is nothing new.  However, as recognised by the European Parliament in its resolution published 19 May 2021, developments in digital technology and the proliferation of access to digital content (in particular through IPTV) have, in turn, increased the potential exposure of sports fans to pirated content.

In its report[1] prepared in December 2020, the European Parliamentary Research Service found that in 2019:

  • 6 million subscriptions were made to illegal broadcasting platforms in the EU;
  • these subscriptions generated illicit subscription revenues of an estimated 522 million EUR; and
  • if the same number of subscriptions were made legally, authorised broadcasters’ revenues could increase by 3.4 billion EUR each year.

Furthermore, a report published this year by Synamedia and Ampere Analysis has found that sports rights holders and streaming services lost $28.3 billion globally as a result of piracy in 2020.

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Given Out on Appeal – An Occupier’s Duty

Cricket bat and ball

As recreational sport returns to local parks and commons, a recent High Court ruling has served as a useful reminder to occupiers of their duty of care owed to visitors. The case considers, amongst other things, the requirement of reasonableness under the Occupiers Liability Act 1957 (the “OLA 1957”) as well as the concept of remoteness.  It is also notable for revisiting points to be distilled from the seminal House of Lords decision in Bolton v Stone.[1]

Facts of the Case

In August 2014, the claimant in Lewis v Wandsworth London Borough Council[2] was walking through Battersea Park, along a path that bounded a small cricket pitch. Upon hearing a shout, she turned her head and was immediately struck on the eye by a falling cricket ball, causing her serious injury.

The claimant brought a case against the local authority. She claimed that they should have put up signage that warned that a cricket match was being played with hard balls and/or prohibited the path from being used during matches. Had there been such signs, she claimed that she would have paid greater attention to the match and would have been able to dodge any stray cricket balls.

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Does the buyout market reflect a competitive imbalance in the NBA?

Basketball Money and Finance Concept

Last Thursday marked the NBA trade deadline, meaning teams can no longer trade players on their rosters. However, after the deadline, there remain no restrictions on teams signing free agents. Coincidentally, after the trade deadline, some players and teams enter into buyouts whereby that player is bought out of his current contract and becomes a free agent. This happens where a team is usually unsuccessful in trading a player on a high salary or a player refuses to play for the team for the rest of the season.

The buyout market can make or break a team’s season. This year, the Brooklyn Nets fortified an already stacked roster by signing two all-star free agents whilst the reigning champions, the LA Lakers, signed the league’s leading rebounder. These signings come somewhat at the expense of small market franchises who lose a star player and get nothing in return. One general manager reportedly described the buyout market as “helping the rich get richer.”

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Another COVID-19 By-Product: A Reduction in the NFL Salary Cap

Owing to a 92% drop in attendance during the COVID-19 pandemic, the National Football League (NFL) salary cap will be 8% lower this season, going from $198.2 million in 2020 to $182.5 million in 2021. The NFL has had a salary cap since 1994.  The cap regulates the amount that teams can spend on players in a given year.  This amount typically changes every year, and, in fact, cap limits had been going up every year since 2011 when the cap was at $120 million. The final number for 2021 was the result of negotiations between owners and the players union based on projected revenues and other factors. Continue Reading

The Future of Sports – Cryptocurrencies and Blockchain Technology

Sports as an industry has realised the potential that cryptocurrencies and blockchain technologies can bring to further monetise fan engagement, attract sponsors and engage a global market in ways that were unimaginable decades ago. Passionate fans, each a citizen of digital technology, consume sports and related content beyond the actual duration of a match. Teams, clubs and sporting bodies are innovating to survive in the new digital age and meet fan expectations.

With the limitations brought upon the industry due to the COVID-19 pandemic, the sports industry has responded and devised new strategies to ensure clubs and fans remain connected in a socially distanced world. The industry has recognised that blockchain is capable of revolutionising revenue streams and the fan experience through increased crypto-sponsorships, fan tokens, non-fungible tokens (“NFTs”) or even by entrance of blockchain providers into the market.

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Private Equity Investment in Sport

Rugby country flags

Private equity firm CVC Capital Partners has purchased a 14.3% stake in the Six Nations rugby tournament, putting pen to paper on a deal, which will see CVC pay approximately £365 million over five-years.

The deal, subject to regulatory approval, sees CVC target the tournament’s commercial rights. In return, the governing bodies of England, Scotland, Wales, Ireland, France and Italy are set to receive an important financial boost, which is hoped will ensure growth to the game for years to come.

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HANDBALL!!! I think… (Part 2)

Football’s handball law has been under scrutiny from pundits, players and fans alike for some years now. Last year, Sports Shorts assessed the controversy of the new handball law, which has continued to depend on interpretation with little uniformity in its application across world football.

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