The Complications of COVID-19’s Legal Effects on Live Events
Wimbledon is the latest in a long list of events to be canceled in the wake of social distancing measures to combat the spread of COVID-19.[1] And now, with the cancellation of nearly every public live event comes serious legal ramifications for ticketholders, employees, and employers.[2]
The theme running through the effects of COVID-19 on ticketholders, employees, and employers is the contract between all three parties and the existence of force majeure clauses. Force majeure, also called “act of God,” is a general principle of contract law in which performance becomes impossible due to events, usually unforeseen, outside of the parties’ control.[3]
First, for ticket holders, the legal question is: can we get our money back, even without insurance for canceled events? The answer hinges largely on which platform someone purchased the tickets on, the terms and conditions assented to, or the event itself. Three of the biggest ticket platforms—Ticketmaster, StubHub, and SeatGeek—offer varying timelines in which consumers will receive refunds, from seven days to three to four weeks, though all are currently offering refunds for canceled events.[4]
Second, for employees, the most important legal question is: will we be paid? That answer rests largely on the contracts signed. For Broadway performers, The Broadway League and the Coalition of Broadway Union and Guilds (CBUG) reached an agreement that will pay out performers for the performance weeks cut short under Governor Andrew Cuomo’s mass-gathering ban and give union members continuing healthcare coverage through April 12.[5] An issue remains over the amount to be paid to Broadway actors performing under an open contract, which has no end date, as opposed to a closed contract, which has a final date for employment of the stage actor, when negotiations resume to discuss measures past the April 12.[6]
In the NBA, discussions between the league and the NBPA may lead to 25% of player salaries being withheld.[7] If the NBA season is canceled instead of resumed later, the collective bargaining agreement between the NBPA and the NBA contracts that players lose approximately 1% of salary per canceled game based on the agreements force majeure provision—which covers epidemics and pandemics.[8] A 25% reduction of player salary to the $3.8 billion owed in contracts for this year would mean NBA players would be out of $947 million dollars in payments.[9]
Third, and finally, for employers, the virus and government measures have led to major financial losses. On Broadway, the productions Hangmen and Who’s Afraid of Virginia Woolf? shuttered during preview performances and before their official Broadway opening nights.[10] Since having had to shut down, Broadway producers are looking to the government to step in and provide unemployment and healthcare to employees after the April 12 agreement with CBUG so that investors are able to use funds later to restart shows instead of having to shut down.[11] For the NBA, ownerships’ projected loss in ticket sales alone is $500 million.[12]
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