How Does a Pandemic Affect the Sports Industry?

We can look at the impact of Covid-19 on the sporting industry in two ways.

Firstly, and most importantly from a fan perspective, is that this pandemic is potentially going to change the outcome for all our teams. What will happen should the premier league or any other league be forced to abandon all games for the remainder of the season? Will Liverpool be given the title? Will Leeds and West Brom be promoted? This has already been discussed to death in the media. Everyone has their recommendations and opinions, biased or not. It is something that we cannot predict with certainty because it depends on the status of the virus in the coming months.

It may be worth looking at a previous example of a league cancellation for guidance. In November last year, the Chilean football league was cancelled 6 games before the end of the season due to the riots throughout the country at the time. They decided to award the 13-point-ahead runaway leaders Universidad Catolica the title. Even Liverpool’s most passionate rivals must objectively admit their 25-point lead is deserving of similar treatment. However, more controversially, the Chilean football association also declared no teams from the Primera Division would be relegated and no teams from Primera B would be promoted. At the time Santiago Wanderers sat 4 points clear, by no means a certainty, the same can be said for Leeds and West Brom who are only 7 and 6 points clear respectively.

Secondly, the Coronavirus will affect the sporting industry from a business and legal perspective. Behind all the passion and sweat we forget there are thousands of contracts, agreements and financial deals holding up the industry. For example, if the season is completely abandoned, League One’s Southend are looking at a £750,000 hit. This comes from losing around £450,000 in ticket sales from their five remaining home games and the prospect of having to refund season ticket holders and hospitality packages. This would be a crippling blow for an already cash-strapped team.

Over the coming months, maybe even years, we are going to see a large number of contractual disagreements as a result of Covid-19. Many contracts will be delayed, performed to a lower standard, or even cancelled completely. The doctrine of frustration in English common law means a contract may be terminated if a party is incapable of performing their duties due to it being impossible. However, impossibility and not merely a delay is debatable, even during a pandemic. Most contracts also have a ‘force majeure’ (superior force) clause which comes from civil law. In several countries (not the UK) where force majeure is codified in a civil code, specific legislation could deem an event to constitute force majeure, as the Chinese government has done in response to Covid-19 by issuing force majeure certificates. However, in the UK there is no such legislation, whether an event is force majeure is open to much more disagreement as every contract is worded differently. 

Many simply refer to ‘force majeure events’ without anywhere defining what those events are. An interesting decision from the Court of Arbitration of Sport (CAS) in 2015 was that the Moroccan football association was not entitled to postpone their hosting of the African Cup of Nations due to the Ebola outbreak. CAS held that Ebola was not a force majeure event and it did not make organising the tournament impossible, just more difficult. Of course, there are big differences between Ebola and COVID-19, especially in the fundamental issue of how it is spread. Finishing the fixtures for Premier League clubs arguably may not be impossible should the British Government not actually order the remaining fixtures to be cancelled.

Some force majeure clauses refer to “pandemics” which would apply to Covid-19, but others don’t. For example, clause 5 of Leicester Tigers Seasonal Hospitality terms and conditions lists “strikes, lockouts, industrial disputes, riots, wars, civil disturbance, fire, explosions, storms, power failure, governmental or local authority or rugby authority regulations and requirements, loss of liquor licence and difficulties relating to venues”; while pandemics are not mentioned, governmental or regulatory requirements are. This means if the government or Premiership Rugby ordered that a match must be cancelled or played behind closed doors there undisputedly will be force majeure, but if the club voluntarily cancels a match it is disputable.  

As a result of Covid-19, it is clear there will be many legal disputes like this, as well as many disputes arising from decisions taken by sporting bodies like UEFA or the FA. Ultimately, this virus is going to shape the sporting industry and sports law for the foreseeable future.


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