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The impacts of the coronavirus on sports law are far-reaching, with many stakeholders financially affected by cancellations. This article takes a look at some of the broader legal issues coronavirus has brought for the sports sector.
Many different stakeholders. These include:
There’s a huge number of people affected and many contracts will need reviewing to identify who exactly is entitled to compensation. For some stakeholders such as fans, the event cancellation policy will be outlined in the terms of sale.
Other stakeholders will turn to the legal sector for advice. Solicitors will examine the legitimacy of any invoked force majeure clause, which, given the unexpected nature of a global pandemic, is likely to be a quick process. Thought will also go to whether the termination of the contract hits the very high threshold set by the laws of frustration and to notice obligations, representations, warranties and conditions.
Some of those events postponed were international eg. UEFA’s Euro 2020 and the 2020 Tokyo Olympics. These contracts will need reviewing, taking into account the many jurisdictions affected. Organisers will hope that renegotiations will be in good faith and along the same lines as the original contract. Otherwise, there could be substantial litigation. This will engage the dispute resolution teams at law firms who will work to arbitrate and/or mediate.
There may be a large rise in the number of insurance cases law firms see. There is also uncertainty over the treatment of a postponement as opposed to a cancellation. The insurance companies that sold policies to the IOC and local organizers for the 2016 Rio de Janeiro Olympics spent $14million in insurance against cancellation. Those who have insurance contracts with the IOC for the planned 2020 games may be forced to foot the bill for many cancellations/postponements for other stakeholders.
Some sports clubs may not be able to cope with the significant loss of income, and subsequently may seek to terminate (either mutually or unilaterally) some of their more lucrative player contracts. Additionally, some football players trigger bonuses for international appearances, therefore losing out from the postponement of the UEFA Euro 2020. Athletes are also unable to work from home. Therefore, employment teams at law firms will have plenty of work, alongside business immigration for sports players who had previously been given a visa to work in the UK because of their football contracts, for example.
For already struggling clubs, coronavirus may result in insolvency and so could provide work for the eponymous teams within law firms.
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