Prof Calls Fan Ban, Canceled Tourneys a Potential Legal Mess
Nathaniel Grow is associate professor of business law and ethics at IU Kelley School of Business (photo courtesy: IU)
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowAs the NCAA and multiple collegiate sports conferences cancel their championship tournaments in response to COVID-19, the economic implications are vast. But beyond the revenue losses associated with fans canceling hotel rooms or watching games at sports bars, there are also potential legal implications.
One business law expert from Indiana University’s Kelley School of Business says it’s mind-boggling.
“Legally speaking, it’s a mess,” said Nathaniel Grow, associate professor of business law and ethics. He’s a nationally recognized expert in the field of sports law.
Grow said the NCAA had little choice in banning fans, which later included the complete shutdown of NCAA winter and spring championships for all sports.
“If I’m a player and I get exposed to something and I get gravely ill because my university or conference is forcing me to play, there are those types of issues,” said Grow. “Then there’s the exposure to the fans, and potential lawsuits falling out of that.”
The NCAA is facing millions of dollars in losses in ticket sales alone. Grow says he would expect tickets would be refunded since the fans are banned from attending the tournament games. But recouping losses, including fan travel expenses, are just that – losses.
“It is probably a bit more speculative about whether I could sue because I bought plane tickets to go see the Final Four in Atlanta and now, I’m not going to be able to attend it.”
But some of the biggest battles that may play out involve television contract rights. Networks pay millions of dollars, if not billions for long-term contracts, to carry the tournaments. With the NCAA outright canceling the men’s and women’s basketball tournaments, losses will mount.
“They’re around a billion dollars roughly give or take per year on that. So, there’s obviously massive amounts of money that the organization itself depends on to fund most of its operations. That would have huge ramifications for the NCAA,” said Grow. “There are potential legal ramifications for the television contracts perspective, the marketing activations that are pre-planned for a big event like that.”
Grow says it really depends on the terms negotiated and written in a contract, such as an ‘Act of God’ provision, known in legal circles as force majeure. The legal clause removes liability for natural and unavoidable catastrophes that prevent or restrict participants from fulfilling obligations.
But that’s not so clear either, according to Grow. It depends on what’s negotiated.
“In order for that to apply, it has to be declared a pandemic by a certain organization like the CDC. So, if the World Health Organization says that this is a pandemic, but the CDC hasn’t declared it as such yet, the clause may not apply.”
Grow says different parties could say it was unavoidable, but this is unchartered territory.
“My sense would be that there’s enough money at stake here, depending on how clean the contracts are written, if there’s any ambiguity there, that that’s something that you could definitely see litigated for the next few years.”
Editor’s Note: Inside INdiana Business conducted the interview with Grow two hours prior to NCAA’s announcement it was canceling March Madness.
In an interview with Inside INdiana Business reporter Wes Mills, Nathaniel Grow legal battles could last for years.