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Law360 (May 28, 2020, 5:54 PM EDT) --
While many of these proposals have contemplated resuming play without fans in attendance, it is hoped that fans will return at some point. When that day comes, leagues and teams will need to consider not only important health and safety issues but also the accompanying business and legal risks. This article explores some of the issues sports leagues and teams should consider as they develop plans to resume play.
Status of Sports Leagues
At present, all professional and collegiate sports in the U.S. are suspended. However, leagues are currently discussing plans to resume play without fans.
On May 23, the National Basketball Association announced that it was engaged in talks to resume play in Florida at The Walt Disney Co.'s Wide World of Sports complex, where players and team and league officials would be quarantined and tested frequently.
On May 26, the National Hockey League announced that 24 teams will participate in a playoff tournament to be held in two hub cities but did not identify a date to resume games.
Major League Baseball's current proposal appears to have teams open the season at their home stadiums where feasible and permitted by local officials, with the remaining teams slated to play at spring training sites in Arizona and Florida.
On May 7, the National Football League released its 2020-2021 schedule, with the first game set for Sept. 10. It remains unclear when and where fan-attended sporting events will again be possible.
Considerations as Leagues Resume Play and Eventually Welcome Back Fans
As leagues and teams explore plans to resume play and eventually welcome back fans, they need to consider a number of issues to ensure the safety of players, team personnel, stadium staff and fans, as well as the economic viability of staging games with minimal or nonexistent ticket and stadium revenue.
Two legal issues that must be considered are the following: First, the potential liability leagues, teams and facilities face if anyone contracts COVID-19 at a sports facility; and, second, how contractual obligations to players, ticketholders and stadium concessionaires are implicated if stadiums remain empty (or largely empty) and revenues drastically decline. In many respects, steps that will be taken to maintain safety may potentially be inconsistent with the teams' and leagues' contractual obligations to their partners and fans.
Mitigating Liability From COVID-19 Infections
The foremost concern for teams and leagues must be ensuring the health and safety of all participants when games return — including players, team staff, stadium personnel and eventually fans. From a liability standpoint, both stadium employees and fans could pursue claims against a league or team should they contract COVID-19 by asserting that they acquired it while at a team facility. The financial harm from such claims could be especially severe because many general liability insurance policies contain exclusions related to infectious diseases.
Although all successful actions by employees or others would require proof that they were infected at the facility and that the team and facility were negligent in preventing infection, even weak claims create some litigation risk and are costly to defend. The public attention from these lawsuits — even meritless ones — will likely have other damaging consequences, including heightening fans' fear of returning and unwanted, negative publicity.
To reduce potential liability and allay the public's concerns, teams and stadiums must implement new protocols to reduce the risk of infection. As a preliminary matter, any reopening of sports venues — first to teams and then to the public — must comply with federal, state and local health directives. Until the governing health authorities permit such gatherings, teams and leagues will be taking enormous and unwarranted risks.
Once localities meet regulatory guidelines, leagues and teams should continue to work with state and local health officials to implement social distancing and other health and safety directives. While the blessing of health officials will not immunize a team or stadium from liability, it likely will factor heavily in any defense to personal injury claims.
The Miami Dolphins provided some insight into what teams are thinking regarding their reopening plans when the team recently announced possible fan restrictions. In particular, the Dolphins plan to require that spectators: (1) enter at designated times through specific gates, (2) order concessions from their seats and pick them up at a designated concession stand, and (3) wear a mask during the game. The Dolphins are also considering limiting attendance to 15,000 fans in its 65,000 seat stadium.
While the most prudent steps may change over time, we list below some protocols that teams should consider as they contemplate reopening their venues.
Maintain Social Distancing Requirements
Facilities will need to create policies that provide for necessary social distancing between fans, venue workers and others. Protocols to enact include the following:
- Greatly reducing the number of tickets sold;
- Spacing out seat locations;
- Limiting the number of fans, vendors and others on concourses at any given time; and
- Managing entry/exit from the stadium, restrooms and concessions.
The following steps related to ticketing can be taken to promote health and possibly reduce liability:
- Assigning designated times on tickets for fans to enter the venue: This will ensure an orderly and manageable procession of fans into the venue without causing a crowd to form immediately before the game.
- Requiring advance sales only: This will allow venues to fix attendance in advance and allow for proper spacing and staff.
- Providing notice to all incoming fans of the risks of entering the facility, including the potential to become infected by COVID-19: Likewise, signs should be posted outside the venue warning fans of the possible risk of becoming infected and emphasizing the need to maintain social distancing and practice necessary health protocols (e.g., wearing a mask, frequently washing hands).
- Prohibiting fans from entering a facility if they have recently tested positive for COVID-19, are sick, or are in quarantine due to possible exposure: To promote responsible decisions by fans, venues should offer to exchange tickets to a future game for fans who are sick.
Venues should promote required health precautions, including:
- Requiring that everyone wear a mask: To increase compliance, venues could offer them to fans upon entry to the venue.
- Taking the temperature of everyone entering the facility and precluding entry of anyone with a fever: This will require trained medical personnel to conduct these tests. Fans and employees showing signs of illness may also be prevented from entering. Of course, all decisions in this regard should be made consistently and by medical professionals.
- Cleaning and disinfection must be increased, including for seats, railings, bathrooms and concession areas.
Concessions and food and drink stands will be particularly problematic areas at mass gatherings, as fans and venue staff will be in close contact with each other. The following protocols should be considered:
- Keeping concession areas closed or limiting them to prepackaged items;
- Placing barriers between concession workers and fans;
- Limiting concession lines on concourses: One option to limit concession lines is to increase in-seat food ordering through an app.
- Limiting communal self-serve food stations that fans typically have access to, such as condiment and napkin dispensers; and
- Increasing/promoting fans paying for concessions through their phones to limit the handling of cash and credit cards.
Precautions are especially important for venue staff and vendors. Not only must venues provide safe work environments for staff, they must also work to ensure that fans or others who enter the facility do not become infected from venue workers. The following protocols should be considered:
- Temperature checks should be administered to all venue workers to ensure they do not have a fever. In future months, as testing become more readily available, it may become possible to test venue workers. At this time, however, it seems premature to indicate how venues could or should deploy testing and venues are best situated to await more definitive guidance from governing authorities.
- Keep at home any workers who recently test positive for COVID-19, are sick, or are in quarantine due to possible exposure. Venues can encourage self-reporting by offering paid sick time.
- Require mask-wearing, glove-wearing and frequent handwashing, especially for those who handle food items.
- There is no way to completely eliminate the potential risk of liability should someone contract COVID-19 while at a sports facility. However, teams and facilities can reduce their liability risks by taking the above steps — and new ones as they are developed — to attempt to keep all who enter the facility safe and healthy.
Contractual Implications of Taking Safety Precautions
While player, employee and fan health concerns should be paramount in developing plans to bring back sports, precautions to promote safety will almost certainly impact every team's existing commercial relationships. Among other things, contracts may need to be renegotiated to handle this new landscape to provide for a safe environment while also making the return of sports with fewer or no fans economically viable.
Player Compensation and Working Conditions
As discussed above, some of the proposals the leagues are considering to resume play would require playing games in neutral locations without fans in attendance. This could affect players most acutely in two ways.
First, players may be required to stay quarantined — possibly without family members — at hotels near venues of neutral-site games for a number of months.
Second, players may be forced to accept a diminution in pay in the absence of ticket and concession revenue.
For games to take place in this changed landscape, it appears that the major sports leagues will need to enter into new agreements with their players, as the collective bargaining agreements of the sports currently implicated by COVID-19 — baseball, basketball and hockey — do not contemplate the current scenario in which gate revenues are nonexistent and players must be quarantined and play at neutral facilities.
For example, the MLB reached an agreement with the MLB Players Association in March that guarantees the players $170 million if no games are played this year and that pays them only a prorated portion of their salaries based on the number of games played this season.
That deal did not address whether the MLB can demand further player salary reductions if games are played in empty stadiums — and league revenue is significantly reduced — or new health policies or restrictions that may be imposed on players to maintain a safe work environment (e.g., quarantine hotel rules, restrictions on dining at restaurants, ability to bring family to team hotel).
The landscape is slightly different for the NBA and the NHL, as both completed the overwhelming majority of their regular seasons when games were suspended, and players in both leagues are guaranteed a certain percentage of league revenues. The NHL collective bargaining agreement requires the owners and players to renegotiate salaries in the event of a reduction in operations, and the league and players have not yet reached an agreement on compensation as part of the league's resumption plan.
Meanwhile, the NBA CBA includes a force majeure clause that specifically covers epidemics and allows the league to reduce salaries based on the number of games missed. The clause also grants the NBA the ability to terminate the CBA after 60 days and mandate that the league and players negotiate a new agreement, though the two sides recently agreed to extend this deadline to September. Similar to the MLB, both the NHL and the NBA will need to reach agreements on player compensation and working conditions for the remainder of their seasons.
A number of the recommendations to promote social distancing at sporting events involve reducing the number of fans admitted, spacing them out, and refusing admittance to fans who are sick. This could require ticketholders, including those with season ticket licenses, to have their seats either revoked or moved.
As stated on the back of all tickets, teams have the ability to revoke the rights of ticketholders to their seats. Although all teams should be able to use this language to withdraw tickets or move fans as needed, the agreements for some teams specifically contemplate a situation where health or safety dictates that tickets must be revoked or seats reassigned.
The license for the New York Yankees, for example, states that the team is not liable to fulfill its obligations as a result of a force majeure event, including an epidemic, while the license for the Los Angeles Dodgers allows the team to revoke the license to ensure the public's safety. In all cases, teams must abide by applicable consumer protection laws and offer affected fans the ability to exchange their tickets to a different game or seat location, or allow for a refund.
Stadium Agreements and Force Majeure Provisions
If stadiums are closed to fans, a number of stadium agreements could also be impacted, including those with companies that provide concessions, parking or other services. Disputes could arise if games are played but vendors cannot generate revenue — either because they are prohibited from working due to social distancing rules or because their services are unnecessary. For these types of disputes, the negotiated terms of each contract will be critical to determining liability.
For instance, a party seeking to void a services contract will be far better off if the applicable contract contains a force majeure clause that expressly contemplates an epidemic as a triggering event or includes a catch-all phrase intended to capture events beyond the control of the parties. If the contract does not contain such protections, the parties likely will be engaged in far more protracted litigation over how certain provisions affect these unprecedented events.
Courts have not yet addressed how contractual rights and obligations might be affected by COVID-19, so it remains to be seen whether parties will be able to extinguish their responsibilities under contracts that did not address anything close to the current situation. Given the uncertainly posed by COVID-19 and the outstanding legal questions regarding potential contract relief, it may make sense for teams and stadiums to reopen contracts with their vendors now to address the changing circumstances and avoid future litigation.
As sports leagues and teams begin to explore plans to resume play and eventually welcome back fans, they will need to consider a number of safety and business issues to ensure the health of players, team personnel, stadium staff and fans, as well as the economic viability of staging games with minimal or nonexistent ticket and stadium revenue.
By adopting new health protocols, teams can work to keep all who enter their facilities safe while reducing the risk of liability of potential infections. And in light of new protocols to keep everyone safe — including eliminating or reducing the number of fans — leagues and teams may need to work with their business partners to make the return of games economically viable. Only by taking both steps will the day come when sports are able to return — including eventually with fans cheering in the stands.
Christopher Conniff is a partner and Nicholas Macri is an associate at Ropes & Gray LLP
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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