Partial Summary Judgment Granted to U.S Soccer

On Friday, May 1, 2020, Judge Gary Klausner of the United States District Court for the Central District of California granted partial summary judgment to U.S. Soccer in a pay equity class action lawsuit brought by members of the U.S. women’s national soccer team. In his ruling, Judge Klausner dismissed the U.S. women’s argument that U.S. Soccer systematically underpaid the women in relation to the earnings of the U.S. men’s national soccer team. This decision vitiated nearly $66 million in claimed damages on behalf of the women. Judge Klausner also dismissed a claim sounding in unsafe play as a result of training and playing on artificial turf. The women’s remaining claims include: (1) assorted personnel and support services issues (i.e. medical and training support), and (2) discriminatory working conditions based on travel accommodations (i.e. transportation via charter plane and lodging). The remaining claims will be tried in front of a jury, with a court date tentatively set for June 16, 2020. Although Klausner’s findings are a blow to the women’s soccer team, the players still have a right to appeal the decision to the United States Court of Appeals for the Ninth Circuit.

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FIFA issues guidelines on dealing with COVID-19 related regulatory issues

On Tuesday, FIFA published a set of guidelines to address some of the practical issues that have arisen as a consequence of the COVID-19 crisis. The key areas of focus were: (1) expiring agreements; (2) frustrated agreements; and (3) registration periods. A number of other issues were also considered in brief.  

It is important to note that the guidelines in respect of (1) and (2) are “non-binding” and simply assist interpretation of the FIFA Regulations on the Status and Transfer of Players (“RSTP”). As such, stakeholders should not take any precipitous action based on these guidelines, but should keep them in mind when taking essential decisions related to the COVID-19 crisis. In particular  clubs unable to satisfy contractual obligations should pay close attention to what is suggested will be considered as ‘reasonable’ by FIFA tribunals where contractual amendments are made without the agreement of employees, including players and coaching staff.

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A Season in Flux Due to COVID-19: Major League Baseball Players and Owners Reach Agreement on Player Service-Time and Salary Terms.

Like every other professional sports league, Major League Baseball has been forced to postpone its games due to COVID-19.  Rather than beginning the season as scheduled on March 26, MLB franchise owners and the MLB Players Association were busy negotiating player service-time and salary issues, as well as a framework for a hopeful return to play this year. The deal finalized on March 27 carries important implications for players, teams and fans alike.

On the service-time front, the players and owners agreed that even if the season were abbreviated or altogether cancelled because of the virus, the 2020 season will still count for purposes of calculating players’ service time. By way of background, service-time determines when players are eligible for salary arbitration and free agency.  Basically, each day on an MLB roster earns a player one day of service time.  A player on a roster (or a team’s injured list) for at least 172 days in a given year is entitled to a year of service time.  After six years of Major League service, a player becomes eligible for free agency, which means that he can be signed by any team in the league for any amount of money.  During the first six years, salaries are largely regulated by the Collective Bargaining Agreement, subject to potential salary increases through arbitration after Year 3 or re-negotiation of player contracts at the discretion of the team and the player.   In the case of young star players, the CBA minimum salaries based on seniority are well-below what they would make on the open market, so there is every incentive to hit free agency as soon as possible.  As smaller market teams are frequently unable to afford a star player that hits free agency, they often keep a player in the minor leagues for a year or two longer just to postpone the triggering of the service-time clock.

The deal that was just reached means that players will not lose a year of service time, meaning they will still be eligible for free agency on the same timeline.  While a lost or shortened season will impact all teams with young players who have yet to hit free agency, smaller market teams may be particularly impacted based on the economic realities outlined above.

As for the deal’s salary provisions, the players agreed to forego any potential suit against the league for full salaries in the event that the 2020 season does not take place.  Instead, MLB will advance players $170 million over the next two months, which the Players Association will divide among its members.  MLB salaries are paid on a per game basis, so to the extent that games are missed due to COVID-19, there is a legitimate argument that players would not be owed their contractually-agreed upon salaries.  Perhaps recognizing the uncertain legal landscape at play here and the bad optics of litigating over millions in salaries at this time of mass unemployment, it would appear that both sides determined that a swift resolution to the matter was in everyone’s best interests.

Finally, as far as actually getting back on the field, owners and players both want to play as many games as possible, subject to various conditions.  These conditions include no travel restrictions throughout the U.S. and Canada, no bans on mass gatherings that would limit the ability to hold games, and medical experts’ determination that there would be no health risks for players, staff or fans.  In the event that the season does go forward, it will be unlike any that has ever occurred.  If games were to somehow start by mid-Summer, the regular season would need to be cut down to a much shorter amount of games than the standard 162-game schedule, and many doubleheaders will likely be played to fit in as many games as possible.  Additionally, the Playoffs would likely occur in November instead of the traditional October.  This could also entail playing some or all of the Playoffs at warm weather neutral-sites to avoid inclement conditions in East Coast and Midwest cities.

At this point though, with most of North America on lock-down, any baseball that can be played this year will undoubtedly be met with great enthusiasm by fans, players and franchises alike.

Victory for Opponents of the Pro/Rel Model: the Court of Arbitration for Sport Determines There is No Obligation to Implement Pro/Rel in the United States   

Last month, the Court of Arbitration for Sport (“CAS”) handed down a decision in a case of significant import for professional soccer in the United States.[1]  At issue was whether FIFA’s rules and regulations require the implementation of promotion and relegation in the United States’ soccer hierarchy.

After a protracted dispute that involved numerous briefs, hearings, and documents, the CAS panel issued its decision and determined that neither the rules and regulations of FIFA, nor those of the Confederation of North, Central America and Caribbean Association Football (“CONCACAF”) and the United States Soccer Federation (“USSF”), require the implementation of promotion and relegation in the United States, and that the United States’ “closed league” system does not violate said rules or any governing law.

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Coronavirus and its effect on world football

Italian football

Last weekend, four Serie A fixtures were suspended. This weekend, five Serie A fixtures taking place in affected territories in the north of Italy will be played behind closed doors in response to a new decree passed by the Italian government. This will have a direct impact on the clubs’ revenue. Clubs will miss out on ticket and other match day revenue for games played behind closed doors.White lines on grass

Inter Milan are reportedly refunding fans who purchased tickets to their Europa League game, which is also being played behind closed doors. Juventus, however, are reportedly not refunding fans for tickets purchased for the Derby d’Italia against Inter in Turin on Sunday. Last season, the same fixture at the Allianz Stadium generated revenues of €3,100,000 for Juventus. Juventus may be able to rely on force majeure provisions in their ticketing terms and conditions if they decide not to refund fans for their tickets (if they included such provisions in their terms and conditions). Force majeure clauses allow the party seeking to rely on the clause to exclude its liability for not being able to perform the contract due to events beyond their control. If this type of clause is contained within the ticketing terms and conditions, subject to any limitations under Italian law, it would permit Juventus not to refund fans for tickets they have purchased, because the requirement to play the fixture behind closed doors is an event beyond their reasonable control – it is mandated by a decree passed by the government. Our sister Global IP & Tech blog discusses the interaction between the coronavirus and force majeure, and the effect it could have on your commercial contracts, in greater detail.

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Wales. Golf. Madrid. Esports. In that order? Gareth Bale sets up a new esports team

Last year, Sports Shorts reported on the opportunities for football clubs looking to get involved in the world of esports. Recent news indicates that other footballing stakeholders are also alive to these opportunities; earlier this month Real Madrid and Wales star Gareth Bale launched a new esports team called ‘Ellevens Esports’. Bale co-founded the new venture with 38 Entertainment, a specialist esports and entertainment company. Continue Reading

Trademark Showdown: Inter Milan and Inter Miami Battle over the Rights to “Inter”

America’s top-flight soccer league, Major League Soccer, is set to begin regular-season play on February 29, 2020.  Excitement among American soccer fans is palpable, due in no small part to the debut of two new clubs beginning their inaugural seasons: Nashville SC and Inter Miami CF.

While both clubs represent equally the continued growth of MLS and soccer in the United States, it is arguably Inter Miami that will have a greater international draw.  Located in the vibrant and global city of Miami, Florida, Inter Miami promises to be “multilingual and omnicultural,” and bring “world class futbol to [a] world class city.”  With a proposed 25,000-seat soccer stadium and mixed-use complex in development, and an ownership group spearheaded by soccer legend David Beckham, Inter Miami is ready to make a name for itself in the soccer world.

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Shall we go Dutch? Belgian Pro League clubs mull over merger with Dutch Eredivisie

Last year, Sports Shorts reported on proposals for a combined Dutch and Belgian football league – a so-called ‘BeneLiga’. Talks of a merger appear to be gathering pace in the early part of this year, with Inside World Football reporting that a meeting recently took place between the Belgian and Dutch footballing authorities, alongside eleven clubs from across the Belgian Pro League and the Dutch Eredivisie. Perhaps unsurprisingly, the clubs in question are traditionally the most successful and best supported teams across the two leagues, with Ajax, Feyenoord, PSV Eindhoven, Club Brugge, RC Genk, AA Gent, Standard Liege, AZ Alkmaar, FC Utrecht, Anderlecht and Vitesse Arnhem all reported to be in attendance. Continue Reading

Saracens’ relegation and the knock-on effects

Saracens scraped through into the quarter-finals of European rugby’s Champions Cup after a win over Racing 92 this weekend.  However, even if the three-time European Champions were to retain their crown, the club will not be competing in the competition next season.  This is because, after reaching agreement with the governing body of Premiership Rugby, Premier Rugby Limited (“PRL”), to accept automatic relegation, Saracens will not be a Premiership club next season (a requirement for Champions Cup eligibility).  Instead, they will be playing the likes of Coventry, Jersey and Doncaster in the English Championship.  Continue Reading

New Year, New Deal in the WNBA

A new and historic agreement has been reached between the Women’s National Basketball Association (WNBA) and the Women’s National Basketball Players Association (WNBPA), which includes higher salaries, improved benefits and better work and travel conditions.

Following the 2018 season, the WNBPA exercised its option to opt out of the collective bargaining agreement (CBA) with the WNBA. As discussed previously on Sports Shorts, the CBA is an agreement between the league and the players association. It governs the rules of the league and competition format as well as the revenue splits and benefits conferred onto the players.

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