With a constant stream of sponsorship deals, player transfers, disciplinary cases and media rights issues, sports law is big business. Neil Hodge speaks to the lawyers making their mark

For decades, sport has continued to confound the laws of economic gravity that seem to so often drag other industries back down to earth.

Year after year, broadcasting rights escalate – as do sponsorship deals – and ticket prices jauntily rise upwards while the financial fortunes of the millions of fans and spectators that turn out in sunshine and rain have generally stagnated or slumped during the recession.

In short, sport is big business, and lawyers agree that it is a profitable segment of the legal services market to be involved in.

Naturally, London's hosting of the 2012 Olympics made sport a banner industry last year, and law firms happily admit that the Games brought them both profits and profile.

The run-up to the Games saw law firms working on construction and infrastructure deals, while during the event lawyers were on hand to provide legal advice to athletes and sit on both disciplinary and anti-doping panels.

Many firms also represented individual athletes and teams with their contracts and talent representation, and companies with their sponsorship deals and intellectual property (IP) rights.

Of the many firms, Clifford Chance (CC) won the bid to advise the Olympic Delivery Authority (ODA) on the £250m construction of the Olympic Stadium, while Pinsent Masons advised the ODA on planning and other legal issues surrounding Olympic Park venues such as the stadium, aquatics centre and the velodrome, as well as the Westfield Shopping Centre and the Olympic Village.

Meanwhile, Berwin Leighton Paisner (BLP) acted for the UK Government on the legislative framework for the ODA, and also for the ODA on the Games infrastructure.

Elsewhere, property developer Lend Lease instructed Slaughter and May to advise on its negotiations with the ODA to develop the £2bn Olympic Village at Stratford City.

The magic circle firm also advised Lend Lease Europe on its facilities management agreements for the village and for Olympic Park infrastructure with the ODA.

Other deals saw Ashurst and legacy firm Herbert Smith advise on the £1.5bn Stratford City development, while Mishcon de Reya and Olswang teamed up to advise on a joint venture between UK developer Delancey and Qatari Diar on the £557m purchase and long-term management of the Olympic Village (now called the East Village).

Details about the fees that law firms generated from the Games are not readily forthcoming.

But Ian Lynam, partner in Charles Russell's sports practice, which represents Sir Bradley Wiggins among others, puts it succinctly: "If you are a London firm doing sports-related work and couldn't make money out of the Olympics, then you're in trouble."

Lucrative contracts

Several firms were also involved in the disciplinary and regulatory aspects of the events. For example, Pinsents handled some of Team GB's selection process disputes, and was one of 10 firms appointed by UK Sport and Sport England to its legal panel for all governing bodies.

Freshfields Bruckhaus Deringer was the official pro-bono legal services provider to the Olympic and Paralympic Games. The firm says that its work for the London Organising Committee of the Olympic and Paralympic Games (LOCOG) over the past seven years "increased our profile tremendously".

Freshfields wants to sponsor another similar high-profile project in the future and has already been involved with the legal work surrounding future sporting events, including the 2014 Winter Olympics in Sochi, Russia, and the 2022 FIFA World Cup in Qatar. Other firms also admit privately that they are working for clients involved in these events and that they are pitching for further work.

Graham Shear (pictured), partner in the litigation and dispute resolution group at BLP, says that the 2012 Olympics "has been a lucrative piece of work for us" as well as for other UK firms, but adds that they are unlikely to be able to repeat the success in Brazil, the host nation for the 2014 FIFA World Cup and the 2016 Olympics in Rio de Janeiro.

He says: "It made sense that UK law firms would be busy with Olympics-related work in the run-up to 2012 as the event was on our doorstep, but Brazil is a different matter.

"It's a very tough market to try to enter, and Brazilian law firms are likely to carve up almost all the legal work related to both the World Cup and the Rio Olympics, particularly in terms of the construction and infrastructure work and sale of media rights."

Several lawyers point out that while the London Olympics may have provided a welcome boost to their sports work, firms do not need to bank on an event that takes place only every four years.

"There is plenty of sports work that law firms are being engaged for without having to wait for the next big event like the World Cup," argues Jeremy Courtenay-Stamp, partner and head of the commercial group at Macfarlanes.

"Law firms are involved in everything from advising on commercial IP rights and sponsorship deals, event organisation, player and management contracts, to dispute resolution, disciplinary hearings and tribunals.

"Added to that, more firms are becoming full-service sports law firms, capable of carrying out both contentious and non-contentious sports-related work, and if they do not have a dedicated sports team, they can pull out resource from the rest of the business when necessary."

Advantage: UK

The UK has particular advantages over the rest of the world in terms of becoming a hub for sports law expertise.

Firstly, it is home to Premier League football – the most watched league around the world – so work on transfer deals, player disputes, contracts, event organising and (most lucratively) broadcasting rights, tends to stay within the UK.

As Trevor Watkins (pictured), Pinsents' global head of sport, points out: "Sport is a high profile and profit-making part of the legal business, and football is the real money-maker: in terms of legal spend, football accounts for around 60% of the total globally."

Secondly, many of the most popular sports have their governing bodies based here, where their rules were drawn up and adopted by other countries – for instance, the Lawn Tennis Association, the English Cricket Board, the Football Association, and the Rugby Football Union (RFU).

Thirdly, London's reputation as being the leading centre for dispute resolution is helpful, as the majority of sports contracts outside the US are either written under English law, or have clauses within them that specify that the UK should be the location of choice to settle any dispute.

In addition, the UK's reputation for impartial legal practice has brought it some high-profile international sports disputes cases.

For example, Macfarlanes litigation partner Geoff Steward, who heads the firm's arbitration and contentious intellectual property groups, was acting as a legal adviser for the world cycling governing body Union Cycliste Internationale's (UCI) recently disbanded independent commission set up to examine its approach to tackling doping during Lance Armstrong's Tour de France title-winning streak.

Former Court of Appeal judge and 20 Essex Street member Sir Philip Otton was chairing the commission, which also included House of Lords peer and Paralympian Baroness Tanni Grey-Thompson, and Australian lawyer Malcolm Holmes QC.

It is being replaced by a truth and reconciliation commission after anti-doping agencies refused to co-operate.

"There is no doubt that the UK's reputation as a centre for dispute resolution means that there is likely to be more incidences of sports-related disputes being settled here," says Steward. "The UK has the expertise and clients will call upon that more and more."

While there are many lawyers carrying out sports-related work who are not sports enthusiasts, it appears that the majority view is that most lawyers working in the area are sports fans – or should be.

"A lawyer would have little credibility with the client if they had no interest in the sport, even if the legal work was purely commercial in nature," says Peter McCormick, senior partner at McCormick's Solicitors and chairman of the legal advisory group of the Premier League.

Poaching the best stars

It is perhaps little wonder that the rise of sports law has spawned a number of highly sought-after experts in their field.

For example, last December sports boutique Couchmans signed up Italian lawyer Paolo Lombardi – former head of FIFA's disciplinary and governance department – to help further develop the law firm's sports regulatory and disputes resolution departments.

Around the same time, Squire Sanders welcomed Stuart McInnes, a well-known arbitrator at the Court of Arbitration for Sport (CAS), into its sports law group as a full-time consultant.

Having sat on more than 100 arbitrations at CAS in the past decade, McInnes was more recently one of the 12 arbitrators on the special 'ad hoc' division of CAS for the London Olympics.

One of the key cases he heard was that of the Swedish National Olympic Committee and Swedish Triathlon Federation v International Triathlon Union and others [2012], which centred on a photo finish between the gold and silver medal positions at the women's Olympic triathlon event in London, in which Switzerland's Nicola Spirig (pictured, far right) pipped Sweden's Lisa Norden to the ribbon.

Last December, the British and Irish Lions rugby union team appointed Bird & Bird's Max Duthie as legal officer for their June-July 2013 tour to Australia, where he will be principally responsible for advising and representing the Lions players on rugby disciplinary matters.

Duthie has played rugby union professionally in England and France, and has extensive experience in rugby disciplinary work, having worked for (among others) the International Rugby Board, the Six Nations, the European Rugby Cup, Celtic Rugby, the RFU and the Welsh Rugby Union.

Not to be outdone, Watkins from Pinsent Masons has a CV that sets him apart from most of his contemporaries. He was formerly chairman of Bournemouth Football Club between 1997 and 2001.

A childhood supporter, in 1996 Watkins helped bring the club back from near-bankruptcy by forming a company voluntary arrangement (CVA) with its creditors.

By June the following year, he was chairman of Europe's first community-run club after it was 15 minutes from extinction four months earlier.

The achievement saw him win BBC South's Sports Personality of the Year – ahead of 400m Olympic silver medallist Roger Black – and all while he was still doing the day job as a litigator at legacy firm Hammonds.

Watkins is certain that it is this background experience that has propelled him into being one of the UK's top sports lawyers: "I had no experience as a sports lawyer at that time – I was just doing litigation work.

"However, there is a relatively small pool of legal experts working in sport, and obviously very few with the kind of hands-on, frontline experiences that I've had, so since then I've become known for football and sports-related work."

Watkins also believes that in several cases, clients are hunting key legal experts to work with, rather than the firms they work for: "While the firms are busy promoting themselves as having sports industry expertise, it is the lawyers themselves that have the credibility.

"More often than not, if a lawyer is known for expertise in a particular sport – or has close links with sports talent – then clients will go to the same lawyer for advice time and again, irrespective of which firm he works for."

While individual lawyers may be highly regarded, some firms have also become known for their particular focus.

Bird & Bird, for example, which works on a wide range of contentious and non-contentious sports work and has a team of 10 dedicated sports lawyers, helped set up UK Anti-Doping, the national anti-doping organisation for the UK under the World Anti-Doping Code, including drafting the National Anti-Doping Policy. The firm now prosecutes their major cases for them.

Another client is the World Anti-Doping Agency (WADA), which the firm acted for against the British Olympic Association (BOA) and succeeded in overturning the BOA's lifetime ban on drugs cheats, as CAS ruled that it contravened the WADA code.

The decision meant that sprinter Dwain Chambers (pictured), banned by the BOA for doping offences, could join the Team GB squad for the 2012 Olympics.

Leading the pack

DLA Piper, which has the largest sports and gambling team of any UK firm, has become a leader in selling media rights for sporting events and organisations.

Some of the firm's more recent high-profile broadcasting rights work includes advising the Football League on its overseas rights sale to the Capital One Cup and the Football League competitions, as well as advising LOCOG on exploiting media rights for the Paralympic Games.

But it is its work advising the Premier League on all aspects of its UK/overseas broadcasting and media rights strategy up until 2016 that stands out – producing the largest media rights deals in world sport outside the US.

Broadcasters bid for seven packages of live rights to Premier League matches, concluding with a £3bn (71%) revenue increase over three years for the Premier League and its member clubs through the award of five packages to BSkyB and two packages to BT.

DLA Piper's team structured the deals in such a way as to allow cross-platform exploitation by licensees while providing sophisticated protections against the threat of piracy.

However, commentators expect the rights to be worth up to £5bn following a tranche of sales to the Far East.

To put the scale of the increase in such rights into perspective, the first Sky television rights agreement in 1992 was worth £304m over five seasons.

Nick Fitzpatrick, media and sport partner in DLA Piper's intellectual property and technology (IPT) group, says: "Broadcasting deals are a good earner for lawyers.

"The sports associations and event holders need proper legal expertise to secure the best price and, in the past 20 years, broadcasting rights have just grown and grown. We specialise in this kind of work and have a successful track record, so it is an area we want to continue to grow in."

David Zeffman (pictured), partner and head of the sports group at Olswang, agrees that being specialised and known for work selling broadcasting rights can pay dividends: "Most people think of us as a media law firm and that is how we got into the sports arena 12 years ago when we worked on the deal to give Channel 4 broadcasting rights for Test cricket.

"Since then, we have worked for several sports governing bodies, such as FIFA, selling their broadcasting rights.

"The revenues generated from broadcasting rights are only going one way – up. You only need to look at the latest figures with regards to the Premier League to see that.

"New technologies and the way that sports content is being broadcast and watched worldwide mean there are always new opportunities to exploit on behalf of clients, so that expertise is in demand."

Lawyers believe that the sports law market is set to develop further. Jon Taylor, head of the sports group at Bird & Bird, says that the sector is more mature now, as well as more professional: "We work on both the commercial side of the sports sector – M&A, financing, contracts and so on – as well as the regulatory aspects of particular sports, such as doping.

"I think firms will need to offer all these capabilities going forward as the market expands. Firms will also need to call in their international expertise as sport is a global business."

China and south-east Asia are on firms' radars for future sports work, as is the Middle East, given the World Cup in Qatar in 2022, the growing interest in watching and hosting sports events, and the region's deep pockets.

Pinsents has already been appointed by the Emirates National Bank of Dubai and Hero Investments to advise on the creation of an initial £100m fund for investment in sport.

Stephen Sampson, head of Squire Sanders' sports law group, agrees that the business of sport is becoming increasingly global. "US and European sports are all looking for new markets to enter and generate revenues, which is why Asia is such a target," he says.

"Firms need to display their expertise in commercial law to ensure that clients get the best deal possible to properly exploit their rights, and to keep pace with how new technologies and media may affect those rights in the future."

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Size isn't everything

While the UK's largest law firms may be enjoying their spoils from the Olympics and high-profile work for the Premier League, several small practices have become internationally renowned in the field.

Last September, north-west firm Brabners Chaffe Street confirmed its position as a leading football law firm in the UK by advising on more than 50 deals in the summer transfer window, the most high-profile being Manchester United's – a long-standing client of the firm – signing of Robin van Persie (pictured) from Arsenal.

Matthew Bennett, partner in Brabners' sports team, says although the firm has a long-standing relationship with Manchester United: "It does not mean we are a sports law practice that only operates in Manchester or just in football.

"We act for sports clients around the world who operate in a variety of sports, including numerous federations, sponsors, leagues, clubs and players.

"We have also undertaken several Olympic-related projects over the past 12 months, so while the north-west is an active and prosperous market for us, our reach is global."

Nic Couchman, executive chairman of London-based boutique Couchmans, says in the early 1990s he saw that sport was developing as a serious business, but that few lawyers were taking the industry seriously.

He later left Townleys – which had established a reputation for working with sports clients – and set up his own firm in 2000 to focus on sports law. He says his client base is split roughly 50-50 between UK and overseas clients.

"I guess I stole a march on a lot of the competition by striking out to specialise. But the move has paid off.

"A lot of our work now comes from personal recommendations and word of mouth, and with our team of 13 sports lawyers we are able to offer expertise not only in the commercial aspects of sport, but also represent clients in regulatory and disciplinary disputes."

Peter McCormick, senior partner at McCormicks Solicitors in Harrogate, north Yorkshire, set up his practice in 1983.

A keen Leeds United fan, in 1987 when the team were on the skids he decided to splash out £10,000 on an executive box at Elland Road, telling his wife it was part of the "marketing budget".

Slowly, he started to invest more in the club through advertising and sponsorship, and the gestures were noticed by the club's chairman, who passed him some legal work. Within four to five years, he was doing all the club's legal work, and in 1996 he joined the board as the only non-executive director.

McCormick, who this January acted on behalf of Gordon Strachan (a friend from his days at Leeds) to negotiate his contract for the Scotland football manager job, says: "Forming personal relationships is vital. Sports people – whether they are players, managers, agents, board directors or association officials – want to see you get actively involved, and they will all see right through you if you don't show the same understanding or passion for the sport that they do.

"They're not interested in a guy in a suit to represent them – they want someone they can trust and who has been personally recommended or who they've known or heard of for years."

Most big commercial firms readily admit there is room for smaller practice to play a part.

Mark Gay, partner in the dispute resolution group at Burges Salmon, says: "A lot of the transactions that sports organisations and clients need are usually no different than a typical lawyer would provide for most commercial clients – tax, contracts, property deals and so on – so there is room for smaller law firms to get into sports work at a local or regional level."

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Lance Armstrong – can sponsors sue?

On 17 October 2012, six days after a report from the US Anti-Doping Agency labelling him a "serial cheat" was published, seven sponsors dropped US cyclist Lance Armstrong.

These included key accounts such as sportswear giant Nike, cycle maker Trek and Budweiser brewer Anheuser-Busch.

At the time, it was estimated to have cost the cyclist $30m (£18.9m). But in a recent interview with Oprah Winfrey, Armstrong (pictured) said it was about "$75m (£47.4m) day". Could his disclosure cost him even more if sponsors have grounds to pursue past payments?

At the time of going to press, Texas-based SCA Promotions said it plans to file a lawsuit to recoup $12m (£7.6m) after it insured performance bonuses paid to Armstrong when he claimed his fourth, fifth and sixth Tour de France wins.

SCA initially refused to pay out money covering the bonus for Armstrong's sixth Tour win in 2004, totalling $5m (£3.16m), because it argued he was not a clean rider.

Armstrong took the company to an arbitration hearing in Dallas in 2005 and won because the contract between the parties stipulated the insurance money would be payable if Armstrong was the 'official winner' of the Tour.

Nick Johnson, head of advertising and sponsorship law at Osborne Clarke, says athlete endorsement deals will usually include a so-called 'morals clause' that allows the sponsor to walk away if the sportsman becomes the subject of public disrepute or a scandal that affects the brand's image or goodwill.

These are sometimes backed up with a right for the sponsor to recoup monies already paid, particularly where there is a large upfront element to the fee.

But, says Johnson: "Where remuneration is spread over time, most athletes' agents and lawyers would argue against a contractual repayment clause on the basis that the sponsor will have had the benefit of association over a period.

"Slightly different considerations arise where the sponsor pays a bonus based on the athlete's performance. In those circumstances, there's a much stronger case for repayment where the athlete's achievements have involved cheating."

Andrew Nixon, a senior associate at Thomas Eggar, says companies would have a strong case to seek recovery of sponsorship and bonus payments if such payments were made on the basis of performance and success, and that the sponsors can demonstrate that being a clean athlete was

a fundamental term of the contract. A further claim may also arise in restitution, as Armstrong would not have received those monies but for the misrepresentations that induced the sponsor into making payments. 

Recovering all monies paid over is trickier, he says. To succeed, a sponsor must demonstrate it has suffered a loss flowing directly from the breach of contract, and show that it would have likely generated profits from backing a clean athlete instead. "If they can demonstrate all of that, then they may be able to successfully argue that only damages from Armstrong would put them back into the position they would have been but for the breach," says Nixon.

Bethan Walsh, a solicitor at Dolmans who works in the firm's sports law team, says sponsors may have a claim for breach of contract – depending on the contract's terms.

"Sponsors would have to show what loss they have suffered as a result of the breach – how the breach has affected sales of the particular goods that the athlete was contracted to promote."

Walsh says the issue of recouping sponsorship money is complicated by the fact that the sponsor has already derived a benefit from the contract entered into with the athlete for the period over which the agreement existed: "The sponsors would have likely already had their money's worth. From a public relations point of view, if the sponsorship deal has already ended, sponsors will likely want to distance themselves from the athlete.

"Bringing a claim at a later stage may only remind the public of the past association between the sponsor and the athlete."

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