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February 28th, 2020
February Sports Industry News 2020
Bargaining, Bargaining, Bargaining.
Several major US leagues and their respective players’ unions have wrapped up (or are about to wrap up) negotiations for new collective bargaining agreements. First, the WNBA and the WNBA Players Association reached a new collective bargaining agreement where, in addition to increasing the maximum annual WNBA's player's salary from $117,500 in 2019 to $215,000 in 2020, upgrading travel accommodations, and enhancing family planning benefits, the new CBA also includes marketing incentives to further promote the league and its players. Next, Major League Soccer and the MLS Players Association also reached a new collective bargaining agreement where the minimum salaries have been increased, team salary caps have been increased, travel accommodations have been upgraded (more charter flights than before), and, for the first time, players could also directly share in media revenue (if the new media agreements that will begin in 2022 increase media revenue by $100 million or more, 25 percent of the increased revenue above $100 million will go to player salaries, spread over each team's salary budget). Finally, the NFL and the NFL Players Association are currently negotiating a new collective bargaining agreement, which may include the addition of a 17th regular season game and an additional playoff team in each conference – both of which will increase the value of the league’s next round of media agreements, which will increase revenue for the players as well.
A Bet on Revenue
The NFL, which has long distanced itself from sports betting, will now permit teams to sell official sportsbook sponsorships within their home markets. Teams can now sell venue signage, accept sportsbook advertising on team websites, and designate sportsbook companies as an “official sportsbook partner.” Although these marketing rights have increased, teams are still prohibited from signing a sportsbook operator as a stadium naming rights partner or allowing advertising on team-controlled broadcasts, and active coaches and players are not allowed to appear in sportsbook ads. Much like the expansion into another once-prohibited category - energy drinks - the NFL appears to be embracing another new revenue stream.
Lapsed Permission Leads to Lawsuit
Golf legend Jack Nicklaus sued a golf swing training device maker for using his image to promote the product after Nicklaus withdrew his permission for them to do so. Although he allowed the maker to promote their product using videos and photographs of him as a personal favor to one of the developers of the product, he withdrew such permission – allegedly given via oral consent - once the developer was no longer associated with the company. The parties recently settled the suit, which included claims for false association and violations of Nicklaus’ right of publicity, and the device maker paid $15,000 to settle the claim and removed all photos and videos of Nicklaus from its website. This dispute shows the potential risks of relying on oral permission including the difficulty of identifying binding contractual limitations.
Exclusive Rights Prohibit Even Background Use
Upper Deck, the sports trading card company with exclusive rights to the name, image, and trademark of Michael Jordan, sued competitor Panini for producing retro cards that feature Michael Jordan in the background of the image. Bringing trademark infringement and false advertising claims, among others, Upper Deck alleges that Panini, which is aware that it does not have rights to feature Jordan’s image, intentionally included him in the background of other players’ cards in order to increase cards' value. The company argues that these images of Jordan, even when not the foreground subject of the trading card, harm its exclusive agreement with the Hall of Famer. This suit shows the value of having exclusive rights with a sports superstar – even where a third party competitor’s use of such rights is minimal, the exclusive rights holder may take action.
“I Am More Than An Athlete” Becomes More than Just a Phrase
A Maryland charity sued LeBron James’ Uninterrupted media platform for its use of the phrase “I AM MORE THAN AN ATHLETE,” alleging that it has the exclusive trademark rights in such phrase. James, in response to media criticism that athletes should not take political stands, adopted the phrase in early 2018 as he became more politically active (and Uninterrupted arguably adopted the shorter “MORE THAN AN ATHLETE” phrase several years before that). The charity, which uses a stylized version of the slogan that also includes the charity’s name and logo (GAME PLAN/GP), seeks up to $33 million in profits made by Uninterrupted and third parties to whom the phrase was licensed (such as Nike and Disney’s ESPN), as well as opposing Uninterrupted’s multiple applications for the phrase at the US Patent and Trademark Office. Uninterrupted disputes the facts of the complaint, and argues that Game Plan has not made a “use in commerce” of its trademark, therefore harming its ability to enforce any such rights. Although this appears to be a standard trademark suit with arguments over which party has actual priority of use, it is interesting to see the effect on downstream licensees, who also have to face the complaint.
Noted and Quoted
A Deep Dive Into Rule 40
LawInSport published Christopher Chase’s article “Rule 40 in the United States: new opportunities for sponsors but with strings attached," where he provides insight into the IOC’s revisions of Rule 40, the USOPC’s related guidance, and what it means for Olympic participants and their sponsors.
FTC Review of Endorsement Guides
Want to Learn More?
On March 10, 2020, Kim Maynard moderates “IP Monetization and Licensing Strategies” during the Managing Intellectual Property Global Trademark Forum in New York.
Other Sports Law Alerts
October Sports Industry News 2020
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June Sports Industry News 2020
Here’s what’s happening at the intersection of sports, marketing, and entertainment law as we enter summer. Read more.
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