{"id":2494,"date":"2020-03-18T14:51:59","date_gmt":"2020-03-18T18:51:59","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/jsel\/?p=2494"},"modified":"2023-07-25T11:43:08","modified_gmt":"2023-07-25T15:43:08","slug":"forced-blackout-what-contract-law-tells-us-about-coronavirus-and-the-nba-broadcast-deals","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/jsel\/2020\/03\/forced-blackout-what-contract-law-tells-us-about-coronavirus-and-the-nba-broadcast-deals\/","title":{"rendered":"Forced Blackout: What Contract Law Tells Us About Coronavirus and the NBA Broadcast Deals"},"content":{"rendered":"

After Utah Jazz Center Rudy Gobert tested positive for the novel coronavirus known as COVID-19, the National Basketball Association (NBA) suspended<\/a> its 2019-20 season indefinitely. The move has major implications for the league\u2019s broadcast partners, who stand to lose a serious amount of advertising revenue without games to air.<\/p>\n

Having no NBA games also undercuts moneymaking NBA-adjacent programming like \u201cInside the NBA\u201d and \u201cSportsCenter,\u201d as New York University Professor Lee Igel noted to CNN<\/a>. In sum, the disruption will significantly impact the bottom line for broadcasters.<\/p>\n

Entities like ESPN and TNT may be considering whether there is any legal recourse to recoup some of the millions they stand to lose. For the last couple of weeks, Sports Illustrated\u2019s Michael McCann has been writing about<\/a> the implications of the NBA\u2019s response to the coronavirus outbreak. On March 7, discussing corporate sponsorships, McCann first raised the specter of force majeure clauses in league agreements playing a role in the resolution of legal claims. Force majeure clauses \u201callow one side in a contract to suspend or end its obligations on account of an extraordinary and uncontrollable circumstance.\u201d These clauses are usually interpreted to cover natural disasters and other \u201cActs of God,\u201d under which a global pandemic would almost certainly fall.<\/p>\n

In addition to sponsorship deals, McCann speculated<\/a> that the NBA\u2019s broadcast \u201ccontracts might [also] contain a force majeure clause.\u201d If so, \u201ca network could insist it shouldn\u2019t have to pay when the games aren\u2019t being played due to a pandemic.\u201d McCann also noted that even in the absence of such a clause, the \u201ccontracts likely contemplate the consequences of suspended games.\u201d<\/p>\n

At common law, courts have sometimes excused nonperformance of contracts under the doctrine of impossibility. See, e.g.<\/em>, Opera Co. of Boston, Inc. v. Wolf Trap Foundation for the Performing Arts, 817 F.2d 1094 (4th Cir. 1987). Did the rise of the COVID-19 pandemic make playing the games \u201cliterally impossible?\u201d Given the massive drawdown in public gatherings and the fact that multiple NBA players have already tested positive for the virus, the answer might well be \u201cyes.\u201d<\/p>\n

Of course, doctrine aside, one must consider that the payments in question would be made to the league in the context of longer-term agreements. And to be sure, \u201cbroadcasters don\u2019t want to jeopardize long-term relationships over what will likely be a short-term drop in revenue.\u201d As such, it is unlikely the parties will actually end up in court; particularly against the backdrop of an ongoing national emergency, any litigation on this issue would probably engender a negative sentiment against all involved.<\/p>\n

The point is likely moot. Ultimately, it would be a shock if the two parties did not instead quietly negotiate a way forward. The symbiotic relationship enjoyed by the networks and the league has only gotten stronger in recent years, as evidenced by the $24 billion deal that the NBA struck with<\/a> ESPN in 2014. And while a short downturn in revenue will be a difficult pill to swallow, both sides know there are plenty of billions to be made together going forward.\u00a0<\/em><\/p>\n

Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first-year student at Harvard Law School (Class of 2022).<\/em><\/p>\n

“IMGP0307”<\/a>\u00a0by\u00a0joshua_d<\/a>\u00a0is licensed under\u00a0CC BY-NC-ND 2.0\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

After Utah Jazz Center Rudy Gobert tested positive for the novel coronavirus known as COVID-19, the National Basketball Association (NBA) suspended its 2019-20 season indefinitely. The move has major implications for the league\u2019s broadcast partners, who stand to lose a serious amount of advertising revenue without games to air. Having no NBA games also undercuts 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