By: Lance K. Tanaka, Vice President, AAA Commercial Division and Sports Arbitration Practice
Brand and reputation are everything in professional and scholastic athletics. No sports organizations, individual athletes, or coaches want their dirty laundry aired in a public courtroom, where the media can pick it up and broadcast to the entire world.
As in other industries, legal disputes inevitably arise in sports. However, since fan support is key to their survival, negative media coverage stemming from a legal dispute is potentially more devastating to leagues, teams, sponsors, athletes, and coaches than to parties in other sectors.
Alternative dispute resolution (ADR) services—primarily arbitration and mediation—efficiently, cost effectively, and privately adjudicate disputes without sullying the brands of the parties involved.
Beyond the Headlines
It is not only the most visible dealings in the sports arena where disputes arise that need the quick, economical resolution provided by ADR. So do:
- Athlete/agent representation.
- Facility construction and use.
- Franchise and vendor agreements.
- Gaming and gambling.
- Licensing agreements.
- Naming rights for stadiums and arenas.
- Olympic team eligibility and participation: amateur athlete v. the sport’s national governing body (NGB) in the U.S.
- Professional and amateur sporting associations: doping, player integrity, rulebook violations programs.
- Team operations.
Attributes of Arbitration for Sports Disputes
Fair, Expert, Efficient Outcome
Because the basic objective of arbitration is a fair, fast, expert result economically achieved, more and more professional athletes and sports organizations are including clauses in their contracts stipulating that disputes should be resolved via arbitration as opposed to litigation.
Consistent with this goal, arbitration awards are considered final and binding, traditionally set aside in very limited circumstances, such as if a party can prove arbitrator bias. This finality saves parties time and money over the long term, since arbitration is often less expensive and faster than a court trial.
Limited Appeal Availability
However, for parties who both agree they want the option, arbitration can offer narrow access to appeal. Some dispute resolution providers offer an appeal process, with separate panels of arbitrators for first-instance hearings and appellate arbitrations. Parties can request the inclusion of an appellate option in the terms of agreement with the arbitral provider handling their cases or by mutual written submission.
Arbitration offers parties greater flexibility than they would receive if their disputes went to court. Arbitration clauses in contracts may be customized to address numerous facets of the arbitration process, including hearing location, choice of law, selection of arbitrators, scope relief or remedies, discovery, time disposition standards, and appellate arbitration.
Parties can select their decision makers from a panel of specialized experts well versed in the matters at the heart of their disputes, as opposed to a judge or a jury without such subject-matter expertise. Both sides must agree on the makeup of their panel of arbitrators or mediators.
A common complaint among parties involved with U.K. and E.U. professional football (soccer to Americans) disputes is the small number of qualified arbitrators available to hear cases, which can elicit concerns about potential bias among arbitrators. Some arbitration service providers offer a large variety of arbitrators and mediators or require that a panel of arbitrators as opposed to a single arbitrator decide the case.
International Sports Arbitration
Major league sports organizations in the U.S. offer unionization for their athletes. Customarily, the unions’ collective bargaining agreements specify the use of ADR to resolve both contract and grievance matters.
International professional athletic governing bodies, however, such as Fédération Internationale de Football Association (FIFA), do not have player unions, and international sports teams and businesses can benefit from the services of arbitral organizations.
The AAA-ICDR Sports Arbitration Practice handles complex business transactions, Olympic athlete eligibility and NGB disputes, professional and amateur sports association disputes, and doping disputes. The specialized panel of commercial sports arbitrators includes attorneys, executives, professors and former judges. Optional Appellate Rules provide narrow room for appeal.
The content of this webpage is not offered as legal advice or legal opinion and it should not be relied upon for any specific situation. This webpage is for informational purposes only. While the AAA-ICDR endeavors to keep the information updated and correct, AAA-ICDR makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, or reliability of the information contained on this webpage. AAA-ICDR is not responsible for any inaccuracies, errors or omissions, or for the results obtained from the use of this webpage or the content herein.