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Impact Of The Pandemic On Sports Law

The onset of the Novel Coronavirus or COVID19 has taken a toll on almost all the sectors of the economy across the globe. However, in the context of the sports industry , the virus is set to take a serious toll as all the sporting activities are at a complete halt. Sports industry is said to have an effect, for a longer period, on its activities with social distancing being the new normal of today. With the announcement of the nationwide lockdown by the government of India w.e.f 24th march 2020, all the upcoming sporting activities stands postponed until further notice.

This interlude of sporting activities will have impacts on multiple fronts - financially, legally, and socially. It is also speculated that even with the recommencement of the other sectors, the sporting industry is said to have a more long lasting impact of this pandemic. Today, the use of sanitizers, masks and gloves seems to be a very normal concept but the question here is how will the sports industry adapt itself with the new normal which is the need of the hour.

Financial Impact

COVID 19 has practically had a huge impact on the professional sporting sector. Each and every individual in the value chain of this industry has been affected and impacted hugely because of the global virus, from the athletes to the players to the agencies to the broadcasters, no one has been spared.

According to a report of the World Economic Forum , the global value of the sports industry was estimated to be $471 billion in the year 2018, which was an increase of 45% since the year 2011 and it was approximated that the profits will only go uphill since then[1] but now, that certainly cannot be ascertained in the context of the current scenario.

This impact is seen on multiple fronts. A bunch of sports academies and agencies had to stop their business and as a result of which all the revenue generation from these businesses has come to a pause. This also implies to the fact that no new recruits can be appointed to the academies until further notice.

Cancellation of all the upcoming tournaments since March 2020 has resulted in a great fall in revenue from its largest revenue streams broadcasting and sale of tickets. As we all are aware that sports all over the world had a huge fan base and people were giving in themselves for tickets at really high prices, just to watch their favourite game or favourite player live, in the stadium. This effect of loss in sales has not only affected the sponsors but also the individual players.

Unlike any other industry, the sports industry does not have a fixed monthly or an annual salary or income, it solely depends on the individual player, his contract and his performance as an individual on the ground, therefore until the games resume, no player or athlete is likely to receive any monetary compensation for the same. Moreover, the sports industry for females is more adversely affected than the men's sports industry as it was more of a growing industry and lacked reserve funds as compared to the men's sport industry.

Impact Of Cancellation Of The Olympic Games 2020

The Tokyo Olympic Games 2020 was the first ever postponement of an Olympics and it will have an impact on a very large scale. The financial impacts related to this postponement are enormous. Reports have estimated a financial loss of $22-$28 billion and further an extra loss of $2.7-$4 billion after the cancellation [2].

NBC Universal was holding the media rights for Tokyo Olympics and the company is under a huge loss of revenue, it is reported that due to the postponement NBC universal is estimated to lose $1.5 billion in advertising revenues [3]. Such a huge amount of revenue being put up at stakes is a very risky business.

This delay has also caused sufferings for the logistics providers as the accommodation and transportation of the players and athletes were a major source of income for the host country and an opportunity for small business houses to grow. However the mostworst affected ones, by this decision, are the athletes and the players as they are not only financially affected but their eligibility and credibility for the next Olympic games is also a question mark as there is no surety as to the selection and qualification for the 2020 Olympic games does not necessarily give a ticket to the 2021 Olympic games as well.

New Guidelines For The Indian Premier League 2020

The Board of Control for Cricket in India (BCCI) has set up an exhaustive set of guidelines for the upcoming Indian Premier League which is to commence from 19th of September 2020 in the UAE. The SOP issued by the BCCI includes a lot of health and safety protocols for players as well as the staff to be followed on all the match and non match days.

This exhaustive document of 16 pages has been sent to all the franchises participating in the league and includes all the do's and don'ts of the match procedure. The foremost guideline mentions about the 5 mandatory Covid tests that the players and the support staff need to undergo before entering the secure environment in UAE and further each player is supposed to undergo this test on every 5th day of the tournament.

Daily temperature checks will be a must and this will be monitored by a medical team that will be assigned to each team participating in the league. The guidelines put a ban on the saliva that was used by the bowlers to bring the ball to a good swing . Also, social distancing measures will be followed in the dugout too and each staff member and player will be given a designated seat. The 12th man will have to wash their hands before and after the drinks break and the drinks and towels will have a name tag in order to avoid sharing of the same. The BCCI has also banned the customary handshakes between players and staff.

We are yet to witness this new normal in cricket and further a lot of improvisation and innovation is required. Previously, the stadium used to be packed with spectators cheering out loud for their teams and players; however now there will only be dummy spectators on the stands. This scheme of dummy spectators did not really go well with the series that was started in March between Australia and New Zealand and later the series was called off. Let us keep our fingers crossed for the upcoming Indian Premier League and hope it goes all well.

Contracts And Insurance: Force Majeure

Force Majeure is a French term which basically means 'a superior force'. It is a contractual provision that allows the parties in a contract to terminate the performance of its obligations when certain circumstance beyond their control arises, making the performance of the contract impossible.

A Force Majeure clause requires the presence of the following elements in it:
  • Definition of Force Majeure events
  • What happens on the occurrence of such event
  • Who has the right to suspend or terminate the obligatory performance
  • What would be the consequence if the Force Majeure event continues for more than the specified period of time.
In the ongoing scenario the question of legal disputes and ambiguities related to non performance of contracts and legal rights and responsibilities there has been a sudden focus on the Force Majeure contractual provision. But the mention of pandemic as a Force Majeure clause in the contract is found very rare. The courts will have to narrowly interpret this clause regarding the present situation. A Force Majeure can only be invoked to suspend all contractual obligations when either it is specifically listed at the time of contracting or when the defence can prove extraordinarily that 'an act of god' destroyed the contractual subject matter making the performance of contact an impossible event.

Another doctrine which can cause relief from the contractual obligation is the doctrine of frustration mentioned in section 56 of the Indian Contract Act,1872. However , this statutory relief can only be provided to the parties when the remedy could not be achieved by a 'Force Majeure' event.

The parties also have the option to suspend or terminate their obligations through mutual agreement and understanding until the situation renders back to normal.
Many Agencies and Sporting Institutes as well as Leagues are covered under some or the other financial insurance in order to avoid any financial crunch however, ironically, only a few insurances cover 'pandemics' under their insurance policies.

Conclusion
Just a few days before the official announcement of the global pandemic NBA superstar LEBron James quoted in an interview:
I ain't playing if you don't have the fans in the crowd. That's who I play for. I play for my teammates, I play for the fans. That's what it's all about. So, if I show up to the arena and there ain't no fans in there? I ain't playing. So, they can do what they want to do.[4]

Little did he know about the near future. Sporting leagues and premiers without spectators is going to be a difficult road ahead but keeping in mind the health and the safety concerns, this is the need of the hour and has to be followed.

Every industry is deeply affected by the pandemic and is now being forced to bring about changes as to the practice of conducting business activities. This pandemic will bring about a massive change in the process of conducting business by various industries. New and innovative methods will be encouraged and a more tech savvy environment will be created for such activities.

Sports was not just 'any regular game' but was a society and a community altogether but with the hope of the world resuming back with the 'normal' and certain sporting activities bouncing back, we eagerly await for the games to resumeonce again, with gloves and masks this time, of course!

References:
  • https://www.weforum.org/agenda/2020/04/sports-covid19-coronavirus-excersise-specators-media-coverage/
  • https://www.forbes.com/sites/mikeozanian/2020/03/25/postponement-of-tokyo-olympics-expected-to-increase-its-cost-by-27-billion/#87d101d1b7c1
  • https://money.cnn.com/2018/02/24/media/nbc-olympics-ratings-12-billion-rights/index.html
  • https://www.latimes.com/sports/lakers/story/2020-03-07/lebron-james-on-games-without-spectators-i-aint-playing

Written By: Ishita Singh, KIIT School of Law
The aim of this article is to make the readers aware about the ongoing global crisis and how profoundly it has affected and impacted the sports industry in general. The cancellation of almost all sporting activities worldwide has brought about financial as well as legal implications on the entire value chain of the sporting industry. The article deals with the upcoming challenges and the lessons that can be learnt from this crisis.

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