How to start a Sports League? Sports League Management, Top Con…

Contracts required to set up a Sports League

Sports have become big sources of revenue and entertainment world over.

Last year IPL was valued at US $10.7 Billion, turning into a decacorn. Same year Wimbledon viewership generated over US $95 Million in sponsorships. The broadcast rights of Wimbledon 2024 were itself sold for 66 Million US Dollars and those of US open were sold for US $75 million.

Apart from the better marketing and better level of the sport, this is because of the 'Ease of Broadcast, where every sporting event can be seen by thousands of people from across the globe. Professor Steve Greenfield, Law School, University of Westminster says:

Traditionally Sports Leagues were based on the Commissioner Model where a Commissioner would serve as a guardian of the game and a business champion employed by team owners. However this dual responsibility would often prevent the commissioner from acting impartially. Hence new models of the business are followed today. The most popular being the Pure Corporate Model. Subsequently some leagues also follow the Hybrid Model or the Panel Model.

In our opinion the Pure Corporate Model gives the organizers greatest Ease of Business, greatest control over assets and an overall easier management and maximum profit.

Today we are going to explore what legal hurdles are faced by corporations setting up a Sports League in the Pure Corporate Model and how they can solve it. Let us begin by understanding what is the Pure Corporate Model in the Sports Industry:

Council of Members at the IAAF

The pure corporate model proposed for sports leagues involves adopting a structure similar to a traditional business corporation. In this model:

Ownership and Governance: Team owners act as the board of directors, exercising exclusive decision-making authority over league affairs. They establish league policies and appoint a Chief Executive Officer (CEO) to execute their decisions in the day-to-day business operations of the league.

CEO's Role: The CEO, appointed by the team owners, is responsible for managing the business affairs of the league. The CEO acts under direct control and general supervision of team owners. The CEO's role is to represent the owners' interests and make decisions aligned with their preferences.

Decision-Making Process: The board of directors (team owners) formulates league policies without fear of second-guessing by the CEO, as the board's decisions are considered definitive. This centralized decision-making process is expected to result in more predictable, certain, and efficient league decisions.

Accountability: The CEO is accountable only to the team owners, and the owners, acting collectively as the board, maintain control over the CEO's appointment and termination. This structure aims to increase the accountability of the owners for both popular and unpopular decisions, as the CEO serves as the face of the league.

The Pure Corporate Model emphasizes efficiency and centralized decision-making. It is usually the preferred model for most League Owners, Franchise Owners, Investors and Sponsors alike.

Let us now examine how to set up a sports league, Sports League Management and the arsenal of Crucial contracts and Top Legal Documents you will need in order to start a Sports League:

Neymar signing Sports Contract

Lionel Messi Signing League Contract

Sports player signing league contract

Lakers player signing league contract

It is imperative to draft and optimize your contracts and other policy documents by a Lawyer who is well-versed in the field. Lawyers can anticipate the possible hurdles the you may face in the future.

Lawyers are also able to better understand the trends in the market and hence can safely predict your expected revenue. This way they can help you plan for maximum profit and minimum complications from Day 1.

Reach out to our Sports Attorney today! And Sign-up for our Newsletter below for more such regular legal content.

Credit:

1. The European Super League from a Sports Law Perspective | Different Conversations 008

2. Gregor Lentze, The Legal Concept of Professional Sports Leagues: The Commissioner and an Alternative Approach from a Corporate Perspective, 6Marq. Sports L. J. 65