Welcome to the inaugural issue of The Sports Law Playbook, Loeb & Loeb’s quarterly update bringing you the latest legal developments in sports, from business trends to key cases, brought to you by the firm’s Sports industry group. The Sports Law Playbook seeks to become a leading resource for in-house practitioners, athletic directors, team executives, league officials and other critical stakeholders in the sports industry.

In this issue, we examine major developments set to shape the year in sports law and business and break down the Cleveland Browns' legal battle over their potential relocation and the constitutionality of Ohio’s Modell Law. We also explore how financial pressures and the House v. NCAA settlement are driving collegiate athletic programs to consider private equity investments as a means to bridge revenue gaps, sustain competitive programs and navigate the evolving landscape of college sports funding.

Sports Law Trends Expected in 2025

By Brian Socolow, Co-Chair of Loeb's Sports industry group, and associate Alexander Loh

As we step into 2025, below are the key trends expected to shape the sports industry this year. 

Artificial Intelligence (AI) in Sports

The use of AI in sports—including player performance, sports analytics and fan engagement—will continue to expose stakeholders to legal risks and liabilities across copyright law (e.g., potential infringement of copyright owners’ rights involving generative AI tools), rights of publicity (e.g., AI-generated deepfakes and associated fraudulent conduct), and data privacy and protection laws (e.g., potential misuse of player health data and fan insight data).

Globalization of American Sports

American sports leagues continue to expand their global footprint. The NBA is in talks to potentially launch its own league in Europe, while the NFL plans to host regular season games for the first time in Madrid, Dublin, Berlin and Melbourne. In addition, Netflix’s continued foray into live sports will allow American sports leagues to expand their reach to international audiences.

The State of College Sports

The House v. NCAA settlement (pending final court approval on April 7, 2025) will allow colleges to directly compensate athletes for use of their name, image and likeness (NIL) pursuant to a revenue-sharing model and “salary cap.” As to third-party NIL compensation that does not come directly from colleges, athletes will have to report such compensation that exceeds $600 to a newly-established clearinghouse that will assess the fair market value of such deals. 

However, stakeholders with varying interests will complicate this new framework. For example, the Ivy League has chosen to opt out of the House settlement. And given the lack of a federal NIL framework, the states’ continued enactments and refinements of state NIL laws may create tensions with the House settlement framework. 

Notably, while the House settlement will move college sports closer to a professional sports model, the settlement does not decide whether college athletes are recognized as employees. Accordingly, look out for continued litigation involving this key issue. 

Private Equity in College Sports

Against the backdrop of the changing economic landscape of college sports, expect continued discussions surrounding private equity deals in college sports across both leagues and individual colleges. Former Milwaukee Bucks owner Marc Lasry has started to construct investment proposals for college football programs, while conferences like the Big Ten have reportedly started taking bids from private equity firms. Loeb Entertainment partners Scott Zolke and Derek Crownover delve into the issue in the third article below. 

The Cleveland Browns, the City of Cleveland and the Constitution

By Brian Socolow and Alexander Loh

The NFL’s Cleveland Browns and the City of Cleveland are currently embroiled in a dispute regarding the Browns’ potential move out of Cleveland. The Browns are seeking to build a $2.4 billion stadium and surrounding entertainment complex in Brook Park, Ohio—about 15 miles away from Cleveland. However, the city publicly opposed the move, stating that it would harm the city’s economy by depriving hotels and restaurants of potential business. Notably, the city mentioned that it would enforce Ohio’s Modell Law to bar the move.

The Modell Law was enacted in response to the Browns’—then owned by Art Modell—move from its tax-supported stadium to Baltimore in 1995. The Modell Law prevents any Ohio professional sports team that uses tax-supported facilities and receives government “financial assistance” from playing “elsewhere”—unless the city consents or the team provides six months’ notice and the opportunity for the city or local buyers to purchase the team.

In response, the Browns filed a lawsuit in Ohio federal court seeking a declaratory judgment that the Modell Law is unconstitutional. Specifically, the Browns allege that the Modell Law is too vague because—among other things—it does not specify exactly what is meant by “financial assistance” and “elsewhere.” The Browns also allege that the Modell Law violates the Contract Clause as found in Article I, Section 10 of the U.S. Constitution, because the Modell Law impairs the contract between the Browns and the NFL that allows the Browns to relocate with the NFL’s consent. 

The City of Cleveland moved to dismiss, arguing that the Browns lack standing because they have not suffered an actual, concrete injury and are thus merely seeking an “advisory opinion” from a judge. The city also argued that this case belongs in state court—where the city has filed a separate lawsuit alleging that the Browns violated the Modell Law—because the parties are from Ohio and the dispute involves the interpretation of Ohio law.

This case will potentially finally decide whether the Modell Law is constitutional. The only other time the constitutionality of the Modell Law was close to being tested was in litigation over the potential move by the Columbus Crew of Major League Soccer to Austin, Texas—but the case settled prior to a decision on the issue. The implications of a decision on this issue could be major—the outcome could indicate the extent to which states can protect hometowns and their fans by enacting laws that curtail the freedom of professional sports owners to relocate their teams.

Private Equity Will Be Entering College Athletics

By Derek Crownover, vice chair of Loeb's Music industry practice, and Entertainment partner Scott Zolke

The collegiate athletic programs’ “arms race” has been in full swing for more than 30 years. Programs require funding not only for operations but also to cover the rising costs of “state-of-the-art” athletic training facilities, stadium expansions, rising coaches’ salaries, increased recruiting costs, and now, name, image and likeness (NIL) settlement payments to settle lawsuits. The most recent House v. NCAA settlement plan and these escalating expenses are forcing athletic departments to take a serious look at new corporate structures and creative funding solutions—enter private equity (PE).

The proposed settlement of House v. NCAA, if approved, will allow those schools opting in to the settlement to pay a total of $2.8 billion, which will be paid out $20 million to $23 million annually by the schools for the next 10 years to former collegiate athletes (back to 2016). Starting with the 2025-2026 school year, those schools opting in will also share 22% of various defined revenues—including media rights revenue, ticket sales and sponsorships—largely with their athletes. 

Many of the schools in the Power Four conferences have already announced that they will opt in to the settlement, while the Ivy League schools have announced they will opt out. If a school opts in, it will subject them to stricter roster management, “fair value” NIL compensation rules and even more penalty payments if the schools go above fair value limits. Multiple objections to the settlement have been lodged, the workings of the “fair value” portions of the settlement have been questioned, and the settlement’s future as a final document that will create closure for universities and conferences remains very unclear. Schools that opt in to the settlement may face significant budget gaps, making alternative revenue sources crucial for the “arms race” and some sports within their systems may not survive over time if the schools do not fill the revenue gaps.  

PE firms traditionally find growth companies that have solid or upward-trending revenues but need more funding to grow faster or make an exit. These current athletic departments, for the most part, fit the PE firms' target profile already, but due to the House settlement revenue gaps, athletic departments are clearly in the PE crosshairs, and schools will be looking for more revenue to fill the House settlement gaps. PE deals (whether in the form of partial purchases, convertible notes or even simply secured lending) will help to offset athletic departments’ upcoming financial shortfalls and/or increase their resources for the “arms race” that is bound to continue.

While PE investments in college athletics may encounter restrictions similar to those in professional sports, college PE deals are more likely to feature non-traditional deal structures. Initial investments are expected to focus on the Power Four conferences and their members. The valuation of college athletic departments and the structure of PE deals will depend on factors such as alumni support, conference affiliation, fan engagement, NIL spending, media exposure, intellectual property rights availability, venue capacities and even entertainment and real estate opportunities surrounding the venues. State laws governing public universities and ongoing conference realignment will also impact and shape investment opportunities. As financial pressures mount, athletic programs will need innovative revenue strategies to stay competitive—making private equity an increasingly viable solution.