Top Pro Sports Law Controversies From 2024

It was a banner year for attorneys who practice in the sports industry. Between deal-making, negotiations and litigation, there was no shortage of billable hours for clients who usually have the money to pay hefty bills. On Monday, Sportico canvassed the key controversies in college sports and now turns to those in pro sports:

·      NFL Wins Sunday Ticket Antitrust Class Action and Beats Jon Gruden in Court

For about a month, the NFL had lost the Sunday Ticket antitrust class action litigation and faced the prospect of being ordered to pay as much as $14.1 billion to classes of more than 2.4 million residential subscribers and more than 48,000 restaurants, bars and other commercial establishments that purchased Sunday Ticket anytime between 2011 to 2023.

Then the NFL suddenly won the case and no longer owes even a dime.

That stunning development happened over the summer. 

In June, a jury in Los Angeles found the NFL violated antitrust law through its 32 teams pooling broadcasting rights for out-of-town fans and, jurors believed, exploiting that pooling to charge higher prices. The verdict reflected the NFL’s use of the Sunday Ticket to distribute games to out-of-town fans. In an alternative arrangement in which NFL teams competed in broadcasting, NFL teams—which make their game broadcasts available to local fans for free (unlike NBA, NHL and MLB teams)—could individually negotiate to broadcast their games to fans living outside teams’ home territories. 

But a month later, the trial judge, Philip S. Gutierrez, granted the NFL a judgment as a matter of law. The ruling was a rarity since it means, as Gutierrez wrote, “no reasonable jury could have found class-wide injury or damages.” Gutierrez concluded jurors, who during a three-week trial heard from 27 witnesses and saw 82 admitted exhibits, were very confused by the case. They mistakenly interpreted a discount on pricing as an overcharge and, Gutierrez concluded, didn’t logically follow expert testimony about hypotheticals involving NFL game broadcasts distributed like college games.

The plaintiffs have appealed to the U.S. Court of Appeals for the Ninth Circuit. The NFL insists its arrangement enhances opportunities for fans to watch games since in the absence of pooling, some fans who live out-of-town could lose access to games or have to pay more to watch them. For the 2024 season, the Sunday Ticket costs $479 via YouTube TV, though the price is much lower for college students—$199—and can be lower through various other discounts/packages. Meanwhile, bars and restaurants pay more for the Ticket so they can show games to customers.

The NFL’s legal success out West was also apparent in May when a panel of three Supreme Court of Nevada justices ruled 2-1 against former Las Vegas Raiders head coach Jon Gruden, who accuses NFL commissioner Roger Goodell or someone on the commissioner’s behalf of tortiously interfering with his Raiders contract. The case centers on Gruden resigning in disgrace from his job in 2021—and walking away from about $60 million remaining on his contract—after The Wall Street Journal and The New York Times published Gruden-authored emails containing racist, misogynistic and homophobic remarks. The problem with Gruden’s case is that Gruden contractually accepted an arbitration clause in his Raiders contract and he can’t sue until he exhausts that clause. The arbitration would be overseen by Goodell, the same person he accuses of misconduct. 

But Gruden still has a chance. In October, other justices agreed to reconsider the case. Perhaps 2025 will be a better year in court for the 61-year-old man who coached the Tampa Bay Buccaneers to a Super Bowl victory in 2003.

·      Michael Jordan Scores Injunction Against NASCAR

23XI Racing, which is owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports sued NASCAR and CEO Jim France this fall in an antitrust lawsuit accusing NASCAR of using monopoly power to suppress competition in ways that limit economic opportunities for premier stock car racing. NASCAR disputes the allegations and argues 23XI Racing and Front Row are upset they didn’t get their way in negotiating a charter agreement. The teams declined to sign a charter, which guarantees a starting position in NASCAR-sanctioned races while restricting a team’s capacity to compete in other circuits and requires them to waive potential legal claims.

The Jordan-led group’s first attempt for a preliminary injunction that would allow the two teams to compete as charter teams and not relinquish legal claims was rejected in November. A federal district judge reasoned that an injunction wasn’t needed since the alleged harm seemed theoretical. U.S. District Judge Frank D. Whitney noted there was no (apparent) forthcoming loss of drivers, sponsorships or fans. 

The second attempt for a preliminary injunction proved successful. A different judge, Kenneth D. Bell, determined that 23XI Racing and Front Row could now show specific harms. Bell noted that 23XI drivers Tyler Reddick and Bubba Wallace sent emails expressing worry and hinting at potential legal action if their team didn’t land a charter. 23XI Racing sponsor Monster Energy and Front Row sponsor Love’s Travel Stops also communicated significant concerns over the lack of charter. The injunction restrains NASCAR from blocking Front Row’s purchase of a Stewart-Haas Racing charter. On Monday Bell denied NASCAR’s motion to stay the injunction as it appeals to the U.S. Court of Appeals for the Fourth Circuit.

The litigation has a long way to go, and NASCAR is armed with persuasive defenses as to claims it is violating antitrust law. It’s also possible the parties could reach a settlement. But at least in the near term, the GOAT of basketball is showing he’s also pretty skilled as a team owner who’s willing to challenge the system.

·      UFC Settles Le Antitrust Class Action Lawsuit

It took a decade and persuading a skeptical judge, but UFC and UFC fighters resolved Cung Le et al. v. Zuffa, a class action antitrust litigation involving fighters who were in one or more UFC bouts that took place, or were broadcast, in the U.S. from Dec. 16, 2010, to June 30, 2017. The two sides agreed on a $375 million settlement, which was a revision from an earlier settlement rejected by a judge. 

The fighters accused UFC of suppressing economic competition for their services and demanded billions of dollars in damages. UFC denied the allegation and argued the antitrust arguments were nonsensical, saying that while fighters argued they deserve a greater share of UFC revenues, there is no precedent in the U.S. legal system for a non-unionized workforce to be owed a certain minimum percentage of an employer’s revenue. UFC still faces a very similar case, Kajan Johnson et al. v. Zuffa, which concerns fighters who fought in UFC bouts from July 1, 2017, to the present. Johnson is early in the litigation and could eventually settle as well.

·      Venu Sports Blocked as ESPN, Fox Appeal

Venu Sports, a live sports-centric streaming platform with a price tag of $42.99 a month, was supposed to be released in the fall, but in August U.S. District Judge Margaret M. Garnett granted FuboTV’s motion for a preliminary injunction to bar Walt Disney, ESPN, Fox, Warner Brothers Discovery and Hulu from moving forward with Venu Sports. The U.S. Court of Appeals for the Second Circuit is now reviewing Garnett’s ruling.

Garnett found it problematic that competing companies would pool their content on one platform and shut out other options, as that might lead to higher prices for consumers. ESPN and the other defendants disagree, stressing that content on Venu Sports would be non-exclusive and the platform would provide sports fans with something they lack: an affordable live sports streaming platform. The outcome of the case will have major ramifications for sports fans as well as in shaping the relationship between antitrust law and sports broadcasting.

·       NBA Settles Dispute With TBS, Warner Bros. Discovery, Saves Inside the NBA

Sometimes it’s hard to hear “no” for an answer. That principle seemed crucial to the short-lived but acrimonious contract dispute pitting the NBA on one side and TBS and Warner Bros. Discovery on the other. The two sides were at odds over whether TBS and Warner Bros. Discovery could, and did, match the terms of Amazon’s offer to broadcast games from 2025-26 through 2035-26. 

The NBA contended TBS and WBD couldn’t match because Amazon’s offer is about streaming, and that even if they could, they didn’t since they changed numerous terms. WBD, in contrast, reasoned that Amazon’s offer provided for cable TV rights since the offer contemplates games that TBS distributes on TNT via non-broadcast TV, a term that includes both cable and internet distribution. Was there a match or a counter-offer? We’ll never know because they settled in November, preserving WBD’s 35-year relationship with the NBA. The settlement calls for Inside the NBA to continue as a TNT Sports production but aired on ESPN/ABC.  

·      Scandals Brings Harsher Light to Sports Betting

The legalization of sports betting, and the embrace by leagues of the activity, had been on a roll since 2018, when the U.S. Supreme Court ruled in Murphy v. NCAA that it was unconstitutional for Congress, through the Professional and Amateur Sports Betting Act of 1992 (PASPA), to compel states to deny sports betting when there was no accompanying federal standard. 

Thirty-eight states have legalized sports betting, advertisements for which flood broadcasts of games. But 2024 featured developments that have sparked more scrutiny of the practice. They include the NBA banning Jontay Porter, who has pleaded guilty to conspiracy to commit wire fraud, for partaking in a scheme where he bet against himself in games where he feigned injury, and Shohei Ohtani’s interpreter, Ippei Mizuhara, pleading guilty to bank fraud and tax fraud charges over his scheme to steal nearly $17 million from Ohtani to pay off sports betting debts. 

Members of Congress are now weighing the SAFE Bet Act, which would require states to gain approval from the Justice Department to offer legalized sports gambling and limit sports betting advertising. NCAA president Charlie Baker, on behalf of his association and its member institutions, has aggressively lobbied states to ban or limit prop bets, which are wagers on specific events or outcomes in a game.

·      Diamond Sports (Bally Sports) Survives Bankruptcy to Live On

Bankruptcy proceedings often resemble negotiations, with the judge attempting to serve as a facilitator of a deal between creditors and a debtor. That dynamic has proven true for Diamond Sports Group (Bally Sports) and its petition for Chapter 11 bankruptcy protection. In November, U.S. Bankruptcy Judge Christopher Lopez approved a plan that will enable Diamond to continue in the TV and streaming business for the foreseeable future. The reorganization involves Diamond distributing in-market games for its 13 NBA, eight NHL and six MLB team partners in 2025 and beyond. 

The subtext of Diamond’s proceeding is how regional sports networks will operate in a world where more and more fans are watching sports through streaming apps in lieu of cable or satellite, a technological change that will have profound consequences not only for companies that broadcast and stream games but also for the teams and leagues that rely on that revenue.

·      Dearica Hamby Sues WNBA and Aces, Alleging Pregnancy Discrimination

Los Angeles Sparks forward Dearica Hamby sued the WNBA and her former team, the Las Vegas Aces, for employment retaliation in August. She accuses the league and the Aces of discriminating against her on the basis of being pregnant, with the team allegedly trading her for that reason. The Aces dispute the allegation, as does the WNBA, which also emphasizes that Hamby was an employee of the Aces and not the league—a point that has triggered a legal debate about whether a league is a joint employer of a player. 

·      Fate of an NBA Franchise and WNBA Franchise Rests in Hands of Arbitrators 

It’s not too often that a legal decision will decide who owns the franchise of one of the major sports leagues, yet that is happening with the Minnesota Timberwolves and Minnesota Lynx. Three arbitrators will decide whether current owner Glen Taylor or prospective buyers Alex Rodriguez and Marc Lore control the team. Taylor contends he nixed the deal, but Rodriguez and Lore argue otherwise. An arbitration decision is expected in 2025, and it could then be challenged in federal court.

·      Shannon Sharpe Defeats Brett Favre in Defamation Lawsuit

In September, the U.S. Court of Appeals for the Fifth Circuit affirmed a trial judge’s ruling to dismiss Brett Favre’s defamation lawsuit against Shannon Sharpe. While co-hosting FS1’s Skip and Shannon: Undisputed with Skip Bayless in 2022, Sharpe said that “Brett Favre is taking from the underserved” and “[Favre] stole money from people that really needed that money.” The fundamental problem with Favre’s case was that statements of opinion—as opposed to objectively untrue statements—are not defamatory. Sharpe, the court reasoned, merely offered a hot take based on publicly disclosed materials. 

·      Jim Trotter and NFL Settle Employment Discrimination Case

Former NFL Media reporter Jim Trotter, who argued the NFL violated Section 1981 of the Civil Rights Act of 1866 by declining to extend his employment contract in alleged retaliation for him publicly challenging the league and especially NFL commissioner Roger Goodell about race discrimination and lack of diversity, reached a settlement with the NFL in October. The settlement included the creation and NFL funding of Work, Plan, Pray Foundation, a scholarship foundation for journalism students at historically black colleges and universities.

·      Cleveland Browns Sue Over ‘Art Modell Law’ in City Stadium Dispute 

The Cleveland Browns are pursuing a move to a nearby city, Brook Park, but the City of Cleveland contends the team can’t move under Ohio Revised Code 9.67, the so-called “Art Modell law.” The law bars Ohio-based pro teams that use a “tax-supported facility for most of its home games” and that “receive financial assistance” from playing home games “elsewhere” unless several benchmarks are met. The Browns sued Cleveland in October claiming the law, which Ohio adopted in the mid-1990s after then-Browns owner Art Modell moved the franchise to become the Baltimore Ravens, is unconstitutional because it allegedly interferes with interstate commerce and private contracts. The case will make for an interesting controversy to follow in 2025.

·      Zion Williamson Wins Agency Lawsuit at Federal Appeals Court

New Orleans Pelicans forward Zion Williamson defeated a lawsuit brought by his former marketing agency, Prime Sports Marketing, which sued Williamson for more than $100 million. Prime argued Williamson breached a binding contract he signed after he had declared for the NBA Draft while he was still a freshman at Duke in April 2019. In May, the Fourth Circuit upheld a judgment for Williamson, who successfully argued he could lawfully void the contract. Prime, the court held, violated North Carolina law by failing to include a warning in the contract that Williamson would lose NCAA eligibility to compete as a student-athlete by signing. It may have been a case of “form over substance,” since Williamson, who was set to drafted first overall in the 2019 NBA Draft, was clearly not returning to Duke, but in law complying with form matters.