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Season Ticket Holders Sue Houston Texans
The Houston Texans were sued by several individuals and companies accusing the team of fraud, conspiracy, and breach of contract related to Personal Seat Licenses (“PSLs”) and season tickets. Plaintiffs claim they were encouraged to purchase more PSLs and season tickets, which they resold on the secondary market, but after the team's improved performance in 2023, the Texans altered their policies, revoking tenured status and increasing prices. The suit alleges these actions are intended to restrict the free market and increase the team's profits by reclaiming and reselling PSLs at higher prices, in violation of the Texas Free Enterprise Act of 1983. This case underscores the complex dynamics between sports franchises and their fan base, highlighting the potential for legal challenges when business strategies impact consumer rights and market competition.
Season Ticket Holders Sue Houston Texans
MLB’s Automated Balls/Strikes Challenge System
Sports Stocks Lose $318 Billion
Ally & Sports Innovation Lab Launch Club
House v. NCAA Settlement
NFL Can Leverage a Major Court Decision
Sports Team Leaders
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Brian Anderson
Sheppard Mullin's Sports Industry Team is uniquely positioned to address the complex and dynamic needs of our sports industry clientele. Our sports practice offers the expertise necessary to provide full service legal counsel to owners, teams, leagues, governing bodies, facility operators, key rights holders, advertising companies, sponsors and others involved in sports-related transactions or disputes.
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A weekly summary of the key trends and stories in sports business.
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Major League Baseball's introduction of the "ABS" (automatic balls/strikes) challenge system during spring training was intended as a compromise between maintaining traditional umpire control and implementing full automation. Contrary to expectations, Commissioner Rob Manfred revealed that umpires were more open to the ABS system being used on every pitch, while players favored the challenge system because it publicly highlights umpire mistakes. With the current collective bargaining agreement set to expire after the 2026 season, continued testing of the ABS system in the minor leagues is a primary focus for the MLB. The decision to implement this system in the regular season will likely depend on players' consensus, which may be addressed during upcoming collective bargaining negotiations as the current agreement expires after the 2026 season.
MLB’s Automated Balls/Strikes Challenge System Divides Players and Umpires
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The recent global tariffs have led to a substantial decline in sports stocks, with a $318 billion loss in value, marking a nearly 10% drop in the sector. This downturn is attributed to sports stocks being categorized under consumer discretionary, which is particularly vulnerable during economic downturns as discretionary income decreases. The reduced market capitalization impacts sports companies by making debt appear more significant and complicating financial metrics, deterring investors and complicating capital raising efforts. This situation underscores the vulnerability of the sports sector to macroeconomic shifts, highlighting the need for strategic financial planning to mitigate such risks.
Sports Stocks Lose $318 Billion in One Week
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The Women's Sports Club, launched by Sports Innovation Lab and Ally Financial, aims to break the cycle limiting investment in women's sports by uniting businesses that buy and sell sports media. This initiative seeks to address the longstanding issue where brands hesitate to advertise due to insufficient media coverage, and broadcasters hesitate to increase coverage due to a lack of advertising dollars. The club will facilitate collaboration among influential brands and media to enhance the visibility and economic value of women's sports, supported by data showing the rapid growth and engagement of women's sports fans. By fostering strategic partnerships and increasing media inventory, the Women's Sports Club has the potential to significantly boost investment in women's sports, leading to greater parity and opportunity in the sports industry.
Ally & Sports Innovation Lab Launch Women’s Sports Dealmaking Club
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Judge Wilken recently expressed a willingness to approve a potential settlement between the NCAA and D-1 athletes while highlighting concerns about current athletes losing roster spots and the need to protect their interests. While the NCAA's attorney argued that the settlement's benefits outweigh the potential downsides, Wilken remained focused on ensuring that the settlement effectively resolves the antitrust issues without compromising the rights of future athletes. Relating to our past posts about this case, this recent development indicates the parties are nearing a successful resolution. The potential settlement could be a pivotal moment in redefining the financial structure of college sports, influencing how collegiate athletic programs balance revenue sharing and athlete welfare.
House v. NCAA Settlement Nearing Approval
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A U.S. District Court jury ordered the National Football League to pay more than $4.7 billion in damages for antitrust violations. The ruling held that restricting negotiations over rights to broadcast teams’ out-of-market Sunday games to a single, bundled TV package violated competition laws. The lawsuit covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid for out-of-market games from 2011 through 2022 on DirecTV. The plaintiffs claimed that the NFL broke antitrust laws by selling its Sunday games package at an inflated price. While the League plans to appeal the decision, the ruling could prompt changes in how rights to air games are distributed, potentially benefiting football teams and fans alike. If the ruling stands, the NFL could lose out on one big-ticket payday. But dicing up rights could spark a wider feeding frenzy. The pot for sports rights is expected to grow to $30 billion annually by 2024.
NFL Can Leverage a Major Court Decision to Boost How Teams and Fans Watch Games
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Weekly Trivia Question
Weekly Trivia Question
Name the only NFL team that has their logo on one side of the helmet and not on the other side.
Weekly Trivia Question
Answer
Pittsburgh Steelers
REveal Answer
Name the only NFL team that has their logo on one side of the helmet and not on the other side.
Weekly Trivia Question
In which organization are teams individually owned and belong to governing bodies which promote and relegate teams to different leagues based on performance?
Weekly Trivia Question
a. National Football League (American Football)
b. English Premier League (Soccer)
c. Major League Soccer (Soccer)
d. Serie National de Beisbol (Cuba) (Baseball)
Correct!
b. English Premier League (Soccer)
Hide Answer
Incorrect
try Again
Hide Answer
In which organization are teams individually owned and belong to governing bodies which promote and relegate teams to different leagues based on performance?
Weekly Trivia Question
a. National Football League (American Football)
b. English Premier League (Soccer)
c. Major League Soccer (Soccer)
d. Serie National de Beisbol (Cuba) (Baseball)
Correct!
b. English Premier League (Soccer)
Hide Answer
Incorrect
try Again
The recent global tariffs have led to a substantial decline in sports stocks, with a $318 billion loss in value, marking a nearly 10% drop in the sector. This downturn is attributed to sports stocks being categorized under consumer discretionary, which is particularly vulnerable during economic downturns as discretionary income decreases. The reduced market capitalization impacts sports companies by making debt appear more significant and complicating financial metrics, deterring investors and complicating capital raising efforts. This situation underscores the vulnerability of the sports sector to macroeconomic shifts, highlighting the need for strategic financial planning to mitigate such risks.
Sports Stocks Lose $318 Billion in One Week
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