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May 12th, 2017
May Sports Industry News
A practice more often found in foreign professional sports has recently made its way to the U.S.: naming rights for leagues and teams. Back in February, the NBA signed an entitlement deal with Gatorade to rename the NBA's Development League (or "D League") the NBA Gatorade League or "G League." It's the first time that a major "stick and ball" league provided entitlement rights to the league name itself. Continuing that trend, the Los Angeles Clippers will likely announce that sponsor Agua Caliente Casino Resort would be the title sponsor of the team's "G-League" affiliate, giving the minor league basketball team the name Agua Caliente Clippers.
Like logo rights on team jerseys, the new trend offers U.S. professional leagues and teams another lucrative sponsorship opportunity, while providing eye-catching marketing for brands — to the consternation of American sports purists.
FedEx recently renewed its sponsorship of the PGA Tour, extending its deal to title sponsor the FedExCup competition for another 10 years. The renewal agreement reportedly includes a category exclusivity clause that would prevent PGA golfers with endorsements from FedEx competitors from competing in the PGA season-long FedEx Cup race. While this may be a reasonable request by a sponsor of FedEx's size, it could harm PGA golfers since it would require them to choose between a potential sponsorship from a competing delivery and logistics company and participating in the $35 million bonus fund that the FedExCup delivers.
Golfer Rory McIlroy reportedly signed a 10 year, $100 million endorsement deal with TaylorMade to use the manufacturer's clubs, ball, and bag, several months after his equipment contract with Nike dissolved when that brand exited the equipment business. McIlroy also extended his Nike apparel deal for 10 years. The ease of such signings are a far cry from the last time McIlroy negotiated equipment and apparel deals, when prior sponsor Oakley sued both McIllroy and Nike alleging that McIlroy breached his endorsement agreement by refusing to comply with Oakley's right of first refusal and that Nike assisted in the breach. The suit was a rare example of a brand suing one of its athlete endorsers, as brands often try to avoid the bad publicity associated with such action. While Oakley and McIllroy settled their dispute, a California federal judge sided with Nike with respect to its portion of the suit.
Plaintiffs Going to Bat.
On behalf of youth athletes, a parent recently filed a class action against Wilson Sporting Goods Co. alleging that the baseball bat maker falsely marketed some of its popular DeMarini baseball bats. The plaintiff claims the bats did not meet the requirements of the United States Specialty Sports Association standards for use in various youth leagues and tournaments. Sheeley v. Wilson Sporting Goods, Co., No. 1:17-cv-03076 (N.D. Ill. April 24, 2017). The class action alleges that although the pricey bats are labeled and advertised as complying with USSSA standards, an audit revealed that this was not the case, preventing the players from using the bats in USSSA sanctioned tournaments. Plaintiff seeks damages or, in the alternative, disgorgement of profits.
Noted and Quoted
Selling Your Story.
Athletes Quarterly recently published Alan Sacks' article, "Selling Your Story: What Are Your Creative Life Rights Worth? More Than You Think," which discusses the valuable opportunity that an athlete may have by selling his or her life rights for a feature film, television series or book based on his or her life.
Want to Learn More?
On May 15, Greg Boyd and Sean F. Kane attend the Video Game Bar Association's Annual Conference at UCLA.
From May 21 through May 25, Christopher Chase, Catherine Farrelly, Kimberly Maynard, Brian Murphy and Craig Whitney attend the International Trademark Association's (INTA) annual meeting in Barcelona, Spain.
If you have questions about sports industry legal matters, please contact Christopher Chase at firstname.lastname@example.org or (212) 826 5568, Alan Sacks at email@example.com or (212) 705 4857, or any member of the Sports Group at Frankfurt Kurnit.
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