This year was another interesting year in sports law, highlighted by the Supreme Court’s rejection of certiorari in O’Bannon v. NCAA – marking an end to six years of litigation over whether the NCAA can prevent colleges from sharing licensing revenues with their athletes.
2017 figures to be just as exciting year, with a series of new lawsuits related to college athletes’ rights, sports gaming, and labor law.
Here are the top five stories that should appear on the ‘sports law docket’ in 2017:
1. College Athletes Continue their Fight for Free Markets in Jenkins v. NCAA. Lurking behind O’Bannon v. NCAA case on the college sports antitrust docket is Jenkins v. NCAA – a class action lawsuit filed on behalf of FBS football and Division I men’s basketball players by renowned sports-antitrust attorney Jeffrey Kessler.
The Jenkins lawsuit seeks to overturn NCAA rules that place “a ceiling on the compensation that may be paid to [college] athletes for their services” and thus may have far broader implications for college sports than the O’Bannon ruling. If the plaintiffs in Jenkins fully prevail, colleges may find themselves bidding for college athletes’ services in a similar fashion to how colleges already bid for research instructor and Ph.D students’ services.
2. Plaintiffs Lawyers Continue to Argue for the “Employee Status” of College Athletes. Since Region 13 of the National Labor Relations Board found Northwestern University’s grant-in-aid college football players to constitute “employees” under labor law, numerous other lawsuits have attempted to gain for college athletes the status of employee under employment law.
Although the U.S. Court of Appeals for the Seventh Circuit recently denied claims in Berger v. NCAA that the University of Pennsylvania women’s track and field team were employees entitled to the benefit of minimum wage under the Fair Labor Standards Act, plaintiffs’ lawyers have since requested an en banc review.
Meanwhile, in the U.S. District Court for the Northern District of California, a different set of class action plaintiffs have asked the court in Dawson v. NCAA to hold that Pac-12 conference football and men’s basketball players constitute employees under employment law. Given the limited nature of the plaintiffs’ class, success by the Dawson plaintiffs seems somewhat more likely.3. Potential Antitrust Challenge to the FanDuel and DraftKings Merger. Back in November, daily fantasy sports operators FanDuel and DraftKings announced a proposed merger that, if approved, would yield a single company with upwards of 95 percent market share in the daily fantasy sports category, as well as align the MLB, the NBA and NHL as partial owners of a single, dominant daily fantasy sports sports company.
This proposed merger is very likely to face antitrust scrutiny from either the Federal Trade Commission and Department of Justice. If the companies still plan to move forward with their merger after such scrutiny, it is reasonably likely that one of the agencies would file an antitrust lawsuit to enjoin the merger. (Disclosure: The author consults for a fantasy sports provider that is in current litigation against DraftKings).
4. Renewed State Efforts to Legalize Sports Gambling. Last year, the U.S. Court of Appeals for the Third Circuit rejected yet another attempt by the State of New Jersey to overturn the Professional and Amateur Sports Protection Act (“PASPA”) and bring sports gambling to New Jersey casinos.
With some of the U.S. professional sports leagues now softening their stance against sports gambling, some legal commentators believe another state will attempt to bring a Constitutional challenge to PASPA this year. While such a lawsuit represents a somewhat dubious use of state money, a more practical alternative may be for state congresspersons to unite behind the repeal of PASPA.
5. Deteriorating Labor Relationship in the NFL. Finally, in late 2016, both Major League Baseball and the National Basketball Association extended their collective bargaining agreements — a clear sign of labor stability in thoee sports. However, in the National Football League, labor relations could not be worse. Beyond issues of allocating league revenues, bona fide concerns about the league commissioner’s power emanating from disputes over recent-year suspensions of Ray Rice, Adrian Peterson and Tom Brady have further hurt the union’s working relationship with the league.
The time may have come for NFL Commissioner Roger Goodell to humble himself on certain suspension powers and seek to repair the league’s relationship with the union. If that fails to happen, continued labor strife and litigation between the NFL and its players seems inevitable.
Marc Edelman (Marc@MarcEdelman.com) is a Professor of Law at Baruch College’s Zicklin School of Business and the founder of Edelman Law. He is the author of “A Short Treatise on Amateurism and Antitrust Law.”