Sports Law And The Competition Act

• Published date: 14 September 2021
• Subject Matter: Anti-trust/Competition Law, Litigation, Mediation & Arbitration, Media, Telecoms, IT, Entertainment, Antitrust, EU Competition , Class Actions, Sport
• Law Firm: Gardiner Roberts LLP
• Author: Mr Stephen Thiele

Sports law is not just about representing athletes in their contract negotiations with teams, providing advice and legal services on marketing agreements for amateur or professional athletes or representing businesses engaged in the operation of sports facilities. Among other things, sports law also includes issues related to competition law. In Canada, the Competition Act contains specific provisions dealing with sports. Section 6(1) of the Act expressly states that the legislation does not apply to amateur sport, which is defined under section 6(2) as a sport in which the participants receive no remuneration for their services as participants (This, of course, begs the question of what is "remuneration"). Meanwhile, section 48(1) specifically deals with conspiracy relating to professional sport.

In the recent case of Mohr v. National Hockey League, 2021 FC 488, the court was required to consider the scope of sections 48(1) and 45 of the Act in connection with a motion to strike a class action claim brought against a number of professional sport leagues. and the representative plaintiff's motion to amend the statement of claim to add 148 new defendants to the action. The amended claim referred to multiple alleged illegal agreements and added particulars about various issues, including remuneration, player restrictions and benefits obtained by clubs and leagues within the hockey hierarchy. There were also new requests for declaratory and injunctive relief and remedies justified by certain non-criminal provisions situated in Part VIII of the Act.

The class action was brought on behalf of all major junior hockey players who signed a standard player agreement ("SPA") with the defendant hockey leagues. At its core, the claim alleged that the defendant leagues conspired to limit unreasonably the opportunity of class members to negotiate and play with teams in the respective leagues and that the defendants conspired to impose unreasonable terms and conditions on the class members, which included the imposition of "nominal wages" and "the loss of rights to market their image, sponsorship and endorsement opportunities." The claim sought damages for conspiracy in the amount of $825 million.

With respect to the motion to amend pleadings, the defendants argued that the amendments disclosed no reasonable cause of action, that it was an abuse of process, that it was frivolous and vexatious, and that it would not survive a motion to strike under Rule 221 of the Federal...