With the “most important election of our lifetime” set to unfold this week, Sportico asked industry stakeholders for their thoughts on how the sports business world might be impacted by the results.
The first answer was almost unanimous. The most important and immediate issue for the sports world, as it is across the country, is getting COVID-19 under control. In addition to the trickle-down social and economic effects of the pandemic, COVID-19 has directly impacted every U.S. sports league, its media partners, its sponsors and its fans. Leagues have already lost billions in revenue. Owners have taken on billions in debt.
Many also mentioned the effect the election itself has had on sports viewership, with ratings having declined almost across the board this year. Some of that is due to the compressed calendar and the pandemic, but some is also due to the theater of the election. While baseball suffered its least-watched World Series ever last week, cable news ratings hit historic highs.
Beyond the pandemic and the noise of the election itself, however, there are a number of specific policy disagreements between President Donald Trump and former Vice President Joe Biden that could directly impact sports business. They hang in the balance as Americans head to the polls Tuesday (possibly at a nearby stadium or arena). Here are few of the biggest:
Whether Trump or Biden is president over the next four years, college athletes will be able to profit from their name, image and likeness. The NCAA is expected to authorize NIL rights that would take effect in the 2021-22 academic year. Meanwhile, some state laws guaranteeing NIL rights will become active as early as next summer. Yet Tuesday’s winner will have ultimate say on whether proposed federal NIL laws effectively overrules both state laws and pending NCAA rules changes.
Biden would likely support legislation without “guardrails” sought by the NCAA, such as a prohibition on college athletes endorsing sports betting companies while their schools sign sports betting sponsorships. Biden, coupled with the Democrats maintaining control of the House of Representatives and gaining a majority of the Senate, could pursue far more transformative changes for college athletes—including the explicit recognition of their labor and employment rights under federal law and pathways for their formation of unions or trade associations. Trump, in contrast, would likely refrain from using his political capital to advance proposals that disrupt the traditional model of college sports.
Title IX is among the most impactful civil rights laws, particularly in sports. According to ESPN data, college athletes are three times more likely to be accused of sexual misconduct in Title IX complaints than are other college students. Trump and Biden would pursue very different Title IX regulations. Trump’s Department of Education, led by Secretary Betsy DeVos, has expanded procedural rights for college students who are accused in university proceedings. Those rights include the right to challenge evidence at a live hearing and cross-examine. Trump’s most recent Supreme Court pick, Justice Amy Coney Barrett, authored an influential opinion in defense of these rights. Biden has sharply rebuked these and other changes, saying they “give colleges a green light to ignore sexual violence and strip survivors of their rights.” Biden would seek to restore Title IX procedures as found under the Obama-Biden administration. New interpretations of Title IX create compliance challenges for athletic departments, which rely on stability in rules.
Biden has been adamant that he will try to roll back some of the 2017 Trump tax cuts, a change that would impact the wealthiest Americans. Trump, on the other hand, says he’d like to cut taxes even more. The results could have wide-reaching effects for athletes, executives and especially team owners, for whom capital gains tax, estate tax and gift tax are of constant consideration. How big a deal is this? When the Wilpons were selling the New York Mets, they pushed to close the deal before the end of the year to avoid a potential higher tax bill. The NFL is also bracing for a rush of teams changing their ownership structure, which could happen if Biden and the Democrats win big on Tuesday.
While pro and DI college athletes generally have access to first-rate health care, retired athletes and former college athletes often face more obstacles—especially when saddled with preexisting conditions from the wear-and-tear of sports careers. On Nov. 10, the U.S. Supreme Court will hear oral arguments in California v. Texas, a complex case that centers on Obamacare’s individual mandate. A decision by the Court isn’t expected until next year. One potential outcome is the reduction or outright loss of safeguards for those with pre-existing conditions. Biden vows to protect these persons from health care company discrimination. So does Trump, who hasn’t provided a detailed plan despite issuing an executive order on the issue. Both candidates advocate other strategies that stand to impact athletes, such as Trump’s efforts to compel health insurers to increase transparency in costs and coverage.
Trump’s ongoing trade war with China and the resulting tariffs have impacted businesses in all sectors, including sneaker and apparel makers. Prior to the new duties taking effect, a group of more than 170 footwear companies including Nike and Adidas sent an open letter to Trump calling the plan “catastrophic for our consumers, our companies and the economy as a whole.” Tariffs, they argued, raise costs for the companies, which in turn are passed down to consumers. An industry trade association estimated those costs at an extra $7 billion annually. Biden has called the tariffs “disastrous” and “reckless” and, if elected, is expected to claw back at least some of them.
Trump and Biden differ widely in their views on environmental and climate regulation—a topic of particular interest to those who build and operate sports facilities and those who transport and house athletes. Trump is generally skeptical of limiting economic activity on account of environmental concerns. He worries about potential losses of jobs. Trump’s EPA has rescinded or curtailed numerous Obama-era environmental initiatives. Biden, meanwhile, says he opposes the far-reaching Green New Deal sought by progressives. Still, he promises the country would “transition” away from oil and natural gas under his watch and, in the decades ahead, become both carbon-free and net zero on emissions. Biden’s administration would more aggressively pursue “green sports” policies, including those that mandate reduction of pollution and energy waste. While environmental policies are shaped and enforced by state and local leaders, revised federal measures would impact the design and maintenance of ballparks, arenas and stadiums.
Marijuana and Other Drugs
Both Trump and Biden have expended considerable time discussing the country’s opioid crisis, which has had tragic consequences for athletes who become dependent on addictive drugs. Trump’s multi-faceted initiative to stop opioid abuse has included funding increases to expand access to treatment centers and improve data collection. Biden has offered his own set of measures. He advocates the use of criminal law to hold drug executives more accountable. Both candidates seek measures that would ostensibly reduce the supply of and access to substances sometimes abused by athletes. Trump and Biden hold more contrasting views on marijuana. Although most states permit the use of marijuana under restricted conditions—most often, as a prescribed medicine—cannabis remains listed alongside heroin, LSD, meth and other highly abusive drugs under Schedule I of the federal Controlled Substances Act.
Biden supports decriminalizing marijuana, though he hasn’t clarified the mechanics of decriminalization. Trump hasn’t offered a clear view on marijuana law reform other than insisting that it remain illegal. The fewer legal restrictions on marijuana, the more willing leagues and players’ associations would be to negotiate permissive, if not outright accepting, policies on marijuana—particularly as an alternative to highly addictive painkillers. The NFL no longer suspends players for positive marijuana tests and MLB removed the drug from its list of banned substances.
Antitrust has long been a unique topic in American politics, including in its application to sports. Antitrust gives consumers a legal right to reap the benefits of business competition. It is thus illegal for monopolies and groups of conspiring competitors to deny consumers the fruits of genuine competition—including lower prices, greater choice and more innovation. Trump’s Department of Justice has made Google a target of antitrust enforcement, with the assertion that Google’s dominant market share precludes consumers from having more choice in search engines. If the case leads to the break-up of Google, the sports industry—which relies heavily on Google’s services—would be in for a massive disruption. For decades, the NCAA and pro leagues have been accused of violating antitrust laws. However, neither Democratic nor Republican presidents have done much to address those concerns, and neither Trump nor Biden seems likely to depart from that tradition.
The country’s immigration policies have changed dramatically in four years under Trump, who’s made reinforcing America’s borders and restricting legal entry one of the most important parts of his reelection campaign. The area of the sports world perhaps most dramatically impacted by these policies: esports. A lot of the world’s gaming talent comes from oversees, and visa problems have made it harder for U.S.-based teams and leagues to recruit from countries like China and South Korea. There are also more than 20,000 international student athletes competing at NCAA schools. As foreign students show less interest in coming to the U.S. for college, that could also affect recruiting for athletics programs.
One of the biggest developments of the past few years in sports business has been the increased legalization of sports betting, which stems from a 2018 Supreme Court decision. While sports betting and online gaming aren’t topics that come up often on the campaign trail, Trump’s presidency hasn’t advanced the industry as much as many expected given his longtime ownership of casinos. Last year his justice department tightened the Wire Act, a federal law that now governs all forms of interstate gambling. The change had a dramatic impact on both lotteries and online gaming companies. Biden has said he would reverse the current administration’s Wire Act ruling.