Costa Rica: COVID-19: its impact on sports and related businesses

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The world of sports has been impacted by COVID-19 and causing the rescheduling of the majority of events and championships. This situation generates consequences not only in the sports calendar at a global level but also in sports and commercial contracts.

The Olympic sports movement has as a maximum entity the International Olympic Committee, which is on top of other international, regional, local federations and the National Olympic Committees, who together plan the international calendar, to which the national committee must align. In this context, by not carrying out the competitions and having restricted the practice, training, and access to facilities for the athletes, Since the restrictions of movement and practice of sports vary from country to country, certain federations are discussing with their National Olympic Committees, and the International Olympic Committee, the need to reorganize the international sports calendar under the protection of the material impossibility of being able to practice sport, given that due to the measures implemented unevenly between nations, there is no equal access or fair play possible. Thus, not only are the Olympic Games suspended, but the entire national and international calendar must be readjusted, safeguard the interests of the athletes, their health and to meet the principle of equal access.

As for contracts related to sports, among others, audiovisual rights, image rights, sponsor rights, "ticketing" rights, these stoppage implies that the organizers of events, leagues, championships, sports teams, and even athletes are materially unable to fulfill their contractual duties due to a situation beyond their control, for which they are already or are about to enter into a breach of contract.

This type of situations has to be analyzed on a case by case basis and if possible determine if already the contract has provisions that regulate the breach of obligations, for example, the NBA in its statutes and sports contracts includes a force majeure clause that would allow it to gradually reduce the economic impact and proceed to reduce the wages of its players without generating liability or greater harm.

Now, in cases where there are no such provisions, we suggest that the parties talk and reach an agreement that is mutually beneficial to both and allows the commercial relationship to develop under new conditions.

At a critical moment like the one we are facing, the sports industry and its actors must exemplify the values of solidarity, fair play, union, respect, and teamwork to confront and emerge victorious from the pandemic and its economic effects. Additionally, this moment may serve so that our institutions, athletes, and sponsors, rethink their contracts for the future so that in an emergency, they are prepared and protected as much as possible financially.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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