Happy Spring! After an especially long winter throughout several parts of the country, it is a welcome sight to see many of the familiar hallmarks of this time of year (even as our daily lives remain markedly different from this time two years ago): MLB Spring Training, Awards season and busted brackets (thank you, Oral Roberts).Without further ado, below is a sampling of the latest for you to tuck away in your bonnet:
- Notwithstanding the successes of the NCAA Men’s and Women’s Basketball Tournaments to this point, the NCAA and its Commissioner, Mark Emmert, have had a full-court press put on them while in the limelight of the tourneys. For decades, the relaxation or roll-back of amateurism rules in collegiate athletics has at times seemed to be a chimera, but given the prominent student-athlete activism proliferating across social media, and more states enacting measures that claw back publicity rights for student athletes, we appear to be close to (if not at) a tipping point.
- For some time we’ve been reading about Special Purpose Acquisition Companies (SPACs) and just how popular they’ve become among athletes and entertainers, and retail investors looking to ride the wave of increased democratization during the pandemic – but now we see the data and the trend is astronomical, with fundraising up 2,000 percent since this time last year. While there is no sign of slowing down, athletes, entertainers and investors alike are well advised not to lose sight of the investment risk involved.
- Non-fungible tokens (NFTs), the other asset that has been red hot in the increased digitization of the world wrought by the pandemic, produced another eyebrow-raising first – the sale of an NFT house for half a million dollars. At that price, I would make my digital guests take off their NFT shoes at the front door.
Welcome back and to those of you who celebrated a belated Happy St. Patrick’s Day. While I can’t promise that this installment of the Spotlight will be the “hair of the dog,” it should still make for a great accompaniment with your coffee(s). Without further ado, here is a sampling of what I found at the other end of the rainbow:
- Former NFL greats (and momentary draft day teammates) Eli Manning and LaDainian Tomlinson are the latest big name athletes to get into the SPAC game, backing a $200 million blank check company in its pursuit of a consumer-oriented company that can leverage “influence driven purchases” and “talent as brands.”
- Music streaming service SoundCloud appears to be experimenting with a new per-stream royalty structure, marking a deviation from the model favored by streaming giants Apple Music and Spotify. Pay-per-stream certainly seems like it could go a long way to provide transparency and allow more artists to garner meaningful streaming income.
- The Non-fungible Token (NFT) market remains hot, with more influencers and institutional players adapting to take advantage of the new crypto opportunities in the sports, arts and entertainment world, while others sound the alarm on the viability of NFTs as an asset. Only time will tell whether we are witnessing a passing fad or a sign of things to come.
- After a two-year hiatus because of the COVID-19 pandemic, the National Collegiate Athletic Association (NCAA) Men’s and Women’s Basketball Tournaments will be (fingers crossed) set in motion, and due to recent legislative developments in New Mexico and Maryland, it appears that at least some of the players and their fellow collegiate athletes will soon be able to be compensated for the use of their name, image and likeness (NIL). Until the ever-elusive federal legislation is passed, collegiate athletes (and the NCAA) will have to deal with a patchwork of laws and regulations in the near term.
Welcome back to another week in the Spotlight. It is truly remarkable to think that it has (already? only?) been one year since the World Health Organization’s declaration of the COVID-19 pandemic, shuttering sports arenas, film sets, theatres, concert venues and disrupting people’s way of life – that of course is nothing in comparison to the human toll of the disease. Still, the beat goes on…
At any rate, below is a sampling of some developments that caught my attention this week:
- Non-Fungible Tokens (NFTs) continue to gain traction in the sports, entertainment and art world, with one notableheadline that Twitter CEO and Founder Jack Dorsey is making waves by putting the world’s first-ever tweet (his own) up for auction as an NFT—current bid stands at $2.5 million. The jury remains out on bidding for last week’s very first Sports & Entertainment Spotlight.
- Another emerging trend is that a growing number of so-called blank check companies or Special Purpose Acquisition Companies (SPACs) are hitching to celebrities’ stars and grabbing headlines for taking private companies public in multibillion dollar transactions. Consequently, regulators’ warnings to speculative retail investors looking to get in on the action are to focus on the associated fundamentals – not the number of social media followers.
- Lastly, it appears that the next time a social media personality/influencer plugs a skincare routine, a new piece of workout equipment or even the latest entrant into the chicken sandwich war, they may be doing so as a guild or union member. Whether and how that will affect brands’ marketing strategies remains to be seen, but it will be interesting to watch it play out. Now if you’d excuse me, it’s time for my seven-day union break.
Greetings, and welcome to the inaugural edition of the Sports & Entertainment Spotlight series! The product of my unrequited desire for human interaction nearly one year into the COVID-19 pandemic, this weekly feature will endeavor to bring readers up to speed on new, noteworthy and/or cutting-edge business and legal developments in the sports and entertainment industries. I hope you find it informative and fascinating, as I certainly do. If there are any topics you’d like to read more about, please feel free to let me know.
This week’s installment spotlights some noteworthy trends and developments, including:
- The anatomy of a successful branding and investment empire;
- The relatively nascent world of non-fungible tokens (NFTs) and the exciting opportunities for athletes, entertainers and brands to monetize digital assets through the use of blockchain technology;
- The hot market for music copyright acquisitions; and
- The latest legislative proposals that move collegiate athletes one step closer to having the right to profit off of name, image and likeness (NIL) rights while many athletic programs remain on the sidelines.
The Sports, Arts & Entertainment group at Foster Garvey provides full service legal representation on sports, entertainment and business matters, including handling transactions related to brand management, licensing, joint ventures, venture capital, private equity, technology, the Internet and new media.