The coronavirus pandemic has sent shockwaves around the world, leading to a public health emergency and plunged the global economy into a sharp downturn.
COVID-19 has had a direct and negative effect on the sports industry and has led to a suspension of the sporting calendar, with professional leagues everywhere suspending their activities to limit the spread of the virus. Even the Summer Olympics, typically one the world’s most-watched sporting broadcasts, has been pushed back a year.
After decades of fast economic growth, not many would have thought the sports industry could be shaken to its core by a health emergency. The essence of the sports industry is to provide a show for mass viewers and spectators around the world. In these uncertain times, such popular gatherings are no longer possible which is thus affecting the sports industry to an extent that remains unknown.
It is of the utmost importance for the participants of the sports industry to sail through this storm without losing the right cape.
The need for qualified strategic, legal and financial advice is consequently stronger than ever in the sports industry and so we speak to Rodrigue Sperisen about how the issues the sports industry face are unique.
Some would say that the sports industry is like any other industry.
What are the main requirements the actors of the sports industry should look for when undergoing a new deal or contract?
Some would say that the sports industry is like any other industry. That is partially true, but no one should underestimate the particularities of the sports industry. It is a highly emotional and passionate business. It is also governed by very specific rules and goes by a close-end circuit. The business is not open to disruptive competition like any other trade since it is organised by federations, associations and leagues around the world.
Even the wealthiest and most powerful company or individual in the world would not be able to set up a team and win the football champions’ league, for example. A football team must be a member of a national association, which must be a member of the continental association which thus is a member of the FIFA. Then, the such team would have to play into the country’s top league and then qualify for the UEFA Champion’s league before even planning to win it. Such a process would take years before being materially possible.
The sports industry is organised as an ecosystem gathering the sportspersons, the clubs, the federations, the agents and the sponsors/investors that have all a common objective and interest in bringing their sport and their name the biggest value and audience.
The employment aspect deals with every type of litigation related to the wage, breach of contract, transfers and with questions of social legislation which differs from one country to another.
The common interest and objective is to give value and growth to one sport, then to a team and then to an individual.
You will, therefore, end up finding conflicting personal interests between the actors of the sports industry. When it comes to undergoing a new deal or contract, there is a balance to be found between the common interests of the actors of the sports industry and the individual interest.
The main focus will be on the image rights, the economic substance of the contract and the specific rules applying to sports, which are governed by private federations and whose disputes are arbitrated by specialised courts.
What kind of legal issues are most likely to arise for sportspersons?
The ones that come to mind are: naming rights/endorsements, employment laws and tax issues.
The contract and image rights deal with the protection and the exploitation of distinctive marks of important figures in the sports industry (image, brands) and the exploitation of rights regarding events and competitions (ticket sales, hospitality, broadcasting rights contracts and other related rights).
The employment aspect deals with every type of litigation related to the wage, breach of contract, transfers and with questions of social legislation which differs from one country to another.
Athletes usually have a short professional career and need to make the best of it financially. They are looking for professionals to help them optimise and secure their revenues (such as the creation of an image consulting company, aggregation of professional activities) and save them from poor investments and violating tax laws.
Employment law in sports is highly regulated by specific rules.
What challenges arise with corporate sponsorships and naming rights? What should companies/sportspeople look out for here?
It is of the utmost importance for both the clubs/federations and the sportspeople to only associate their names with brands/sponsors and respectively the sportsperson(s) that would fit their message and image.
That is the key issue.
The sponsors need to find their “Federer”, the reliable, safe and consensual profile.
Sportspeople need to find the sponsor/brand that will help them cultivate their image, make them become a brand and get international acknowledgement.
What about employment law? What unique requirements does sports law have in this area?
Employment law in sports is highly regulated by specific rules. The competition is also particular as sports’ leagues are monopolies. And most employment disputes are settled by sports’ leagues/federations and/or by specific courts, in particular the Court of Arbitration for Sport in Lausanne, Switzerland.
How do you ensure you get the best deal for both parties – the employer and the employee?
Lawyers cannot play both sides. We are always on one side but, of course, we keep changing sides.
The employer and the employee have the common interest of making their sport and their team as successful as possible. Both of them will benefit from greater cover, popularity and economic growth.
But they also have conflicting interests. It is always a negotiation regarding the team budget, the allocation of resources, the duration of the contract, the image rights, etc.
We have been witnessing over the last years a growing gap between the top athletes and the support athletes receive. There is more money going in to the sports industry, but much of the growth is monopolised by the top athletes.
As an adviser, it is of the utmost importance to help and assist the athlete in shaping their personality, developing their skills and making the right decisions to give them the chance to join the top tier of their sport.
When it comes to clubs, our duty is to help them find the best allocation of the financial resources, the long-term sports strategy and the development of a powerful brand.
Rodrigue Sperisen
PB Montaigne Avocats SA
118, rue du Rhône
1204 Geneva
phone +41 22 577 66 00
Our clients at PB Montaigne Law Firm are sportspersons, sports clubs, agents and local and international companies willing to invest or provide sponsorships to sports entities and individuals. The clients are mostly active in ice hockey (NHL & Swiss league), football and tennis.
They ask for our professional advice regarding any issues related to the protection and exploitation of their naming rights/brands, the employment negotiations and disputes and for financial and tax advice.
The players involved in the sports industry appreciate our long time experience and knowledge of the particularities and specific rules of their trade and our capacity to take care of their issue in Europe (through our main office in Geneva and our affiliated office in Monaco) and in the USA.
Switzerland is the seat of most international sports federations (including the UEFA, the FIFA and the IIHF) and the International Court of Sports Arbitration (CAS-TAS), while Monaco is the home of most of the top tennis players and also of the top football agents.
Most of the legal needs of our clients are related to sports arbitration, contractual advisory and disputes and regulatory developments.
I have been personally active in the Sports industry for more than 15 years, offering legal and strategic advice to many participants involved in the sports industry and also investing and managing a player’s agency company in Switzerland.
