Top 10 Legal Challenges for the Sports Industry in 2025

As the media environment continues to develop, sports organizations face challenges resulting from the fragmentation of regional sports networks and the shift towards streaming models. Additionally, the relaxation of rules regarding private equity investments and recent tax changes are transforming professional sports ownership, requiring legal acumen to navigate these new dynamics.

Emerging sports leagues like LIV Golf and the Professional Pickleball Association (PPA) face unique legal challenges in their formation and operation, while athletes venturing into entrepreneurship encounter issues related to investment and influencer marketing. The incorporation of artificial intelligence (AI) technology in sports operations introduces uncertainties, particularly around data privacy. This year will also underscore the importance of brand protection through morals clauses, the growing digital presence of sports entities raising privacy concerns, and the legal hurdles facing the expansion of fantasy sports and sports betting.

With 2025 underway, we highlight the most pressing legal issues facing the sports industry this year.

The sports industry’s media landscape is undergoing a transformation, moving from traditional over-the-air broadcast models to digital and streaming platforms. The shift is driven largely by changing consumer preferences and technological advancements, offering leagues, teams, and other rights holders new opportunities to reach global audiences directly. Examples include Major League Soccer’s partnership with Apple TV+ and the National Football League’s (NFL) streaming ventures with Amazon Prime Video. Additionally, the fracturing of regional sports networks in Major League Baseball highlights the challenges faced by traditional models as consumers increasingly opt for streaming services. Virtual reality is also emerging as a new frontier, providing immersive experiences that enhance fan engagement, although its widespread adoption remains in the early stages.

This evolution presents several legal challenges for stakeholders to navigate. The shift to streaming raises complex issues around broadcasting rights, as seen in the NFL’s Sunday Ticket litigation involving antitrust claims. Contractual and licensing disputes may become more common as leagues, teams, and other rights holders negotiate new streaming deals, with potential disagreements relating to revenue sharing and territorial rights. Intellectual property protection will remain crucial to prevent piracy and unauthorized streaming, while data privacy regulations like the General Data Protection Regulation and California Consumer Privacy Act require compliance to safeguard consumer information. Additionally, as sports content becomes more global, leagues, teams, and other rights holders must ensure regulatory compliance across different international jurisdictions. Addressing these challenges with robust legal strategies is essential for stakeholders to capitalize on growth opportunities while ensuring sustainable success in the rapidly changing media landscape.

Private equity has increasingly become a significant source of influence in the sports industry, providing capital and strategic expertise to sports teams, leagues, and related businesses. Driven by the need for heightened liquidity and rising franchise valuations, several major sports leagues now permit private equity investment in team ownership. These investments have sometimes supported improved marketing strategies and infrastructure development – such as stadium renovations and development of state-of-the-art training facilities – and allow for private equity firms to hold minority stakes in many different teams, profiting from growing franchise values.

However, the influence of private equity is not without controversy. Some stakeholders have expressed concern over the potential prioritization of financial gain over team success. Anticipated tax reforms, such as President Trump’s proposal to eliminate the carried interest tax break, could dramatically impact the existing franchise ownership model. The carried interest “loophole” allows private equity fund managers, including those investing in sports teams, to pay a lower tax rate on their earnings. Eliminating this tax break may lead team owners who rely on private equity investments to face higher tax liabilities, potentially reducing the appeal of such investments. This shift could affect the financial strategies of sports team owners and investors, prompting a reevaluation of investment structures and possibly impacting the overall valuation and liquidity of sports franchises. Ultimately, the interplay between regulatory changes and tax reforms will play a role in shaping the future dynamics of sports team ownership and investment strategies.

The emergence of new start-up sports leagues, such as LIV Golf, the PPA, the Association of Volleyball Professionals, Tomorrow’s Golf League, and Grand Slam Track, feature new models and structures to attract new audiences and investors, offering alternatives to traditional sports leagues. For example, LIV Golf’s team-based format and shorter tournament schedules appeal to younger audiences, while the PPA capitalizes on pickleball’s growing popularity.

By leveraging digital platforms and social media, these leagues enhance fan interaction and broaden their audience base, creating new revenue streams and sponsorship opportunities. Businesses may benefit from focusing on strategically positioning these ventures for success by effectively navigating the complexities of league formation and operation in a competitive landscape. This involves developing vigorous governance structures, crafting comprehensive rules and regulations, negotiating favorable broadcasting rights, and establishing strong sponsorship agreements to ensure sustainable growth and competitive advantage.

Athletes often leverage their public profiles to explore new business ventures, aiming to diversify their income and capitalize on their influence. However, these opportunities come with unique challenges, particularly with respect to risks associated with investing in new ventures. Navigating complex areas like due diligence and contract negotiation with expertise is crucial for athletes looking to protect their interests and reputation.

Influencer marketing adds another layer of complexity as endorsements can have significant personal and professional consequences. The fallout from FTX’s collapse underscores the importance of understanding the implications of endorsing certain products or services. Athletes should carefully consider how their endorsements align with their values and public image to maintain credibility with fans and consumers.

Athletes engaging in influencer marketing must also ensure compliance with applicable advertising and consumer protection laws, including the Federal Trade Commission’s Endorsement Guides. A core requirement of the Endorsement Guides is that influencers must disclose any “material connection” to the company whose products or services they are promoting. A “material connection” exists if the influencer has been paid by the company, received a free product or other benefit, or otherwise has a relationship with the company that would impact the weight or credibility attributed to the endorsement by consumers. Such disclosures must be “clear and conspicuous,” considering all relevant factors, including the design of the social media platform and the timing and placement of the endorsement in the post. The Endorsement Guides also require influencer endorsements to reflect the influencer’s honest opinion based on their actual experience with the product or service.

The integration of AI technology into the sports industry is revolutionizing operations, from venue management to on-field performance. AI offers the opportunity to enhance venue operations with advanced entry systems, ticketing, and security measures like facial recognition and biometric systems, streamlining processes and improving safety. In business operations, AI can optimize ticket sales through dynamic pricing models and personalize marketing strategies by analyzing consumer data, enhancing fan engagement and overall experiences for fans. Some emerging companies also utilize AI to boost on-field performance by analyzing player data and developing sophisticated training programs, offering teams a competitive edge through improved performance analysis and preparation.

The sports industry’s rapid adoption of AI tools and increased digital presence creates legal challenges and uncertainties, particularly concerning data privacy due to the volume and nature of personal information collected via these technologies. Sports teams and sponsors, in particular, should be aware of comprehensive data privacy laws taking effect this year, as more states aim to protect consumers’ personal data. In January, five new laws became effective in Delaware, Iowa, Nebraska, New Hampshire, and New Jersey. Similar to the other 13 state-level comprehensive privacy laws enacted so far, these laws seek to prevent the misuse of consumers’ personal information, mandate specific privacy notices, limit certain data collection, and grant consumers more control over their personal information. However, there are some notable differences in these five new laws, which we have outlined here.

Three additional laws will become effective this year in Tennessee (July 1), Minnesota (July 31), and Maryland (October 1, applicable to data processing beginning April 1, 2026). Companies should have a good understanding of the data privacy laws applicable to each state in which they operate and a comprehensive strategy to regularly review and update their data privacy policies and processes to ensure compliance with the new laws and changes to existing laws.

The integration of major sponsors into sports venues and teams has evolved into a comprehensive strategy that goes beyond traditional signage, embedding sponsors into the operational and experiential aspects of sports entities. The increased level of integration makes sponsors more engrained in the identity of venues and teams, with exclusive rights to supply goods and services such as food, beverages, merchandise, and technology solutions, ensuring brand presence at nearly every consumer interaction point.

Venues and teams often enter agreements requiring them to purchase goods and services from sponsors, leading to cost savings and operational efficiencies while offering sponsors increased brand visibility and fostering consumer loyalty. This full-spectrum brand incorporation signifies a shift towards strategic and symbiotic partnerships, where sponsors become essential contributors to the sports ecosystem. Stakeholders should carefully negotiate these partnerships to ensure that there is an alignment of interests between all parties involved.

Collegiate sports are experiencing transformative changes driven by two major trends; conference realignment and the evolving Name, Image, and Likeness (NIL) framework, both of which present new opportunities and legal hurdles for institutions and athletes alike.

Conference realignment is reshaping collegiate sports as institutions seek better financial opportunities and competitive advantages, which often involve complex legal considerations such as exit fees and penalties. For example, schools leaving a conference may face substantial exit fees, potentially leading to legal disputes if these fees are not clearly defined or are contested. Additionally, realignment impacts commercial transactions like media rights and sponsorship agreements, necessitating careful legal planning to manage uncertainties.

At the same time, the NIL framework has revolutionized collegiate sports by allowing student athletes to profit from their NIL. Institutions must navigate varying state laws and National Collegiate Athletic Association regulations, establishing clear policies to ensure athletes’ NIL activities do not conflict with existing sponsorships or violate amateurism rules. Athletes may benefit from legal representation to negotiate fair contracts and protect their rights, while institutions would be well-served to monitor NIL activities to prevent conflicts of interest and ensure compliance with Title IX regulations.

The popularity and growth of women’s professional sports are gaining significant momentum, driven by increased revenue and investment. This year, women’s sports are projected to generate $2.35 billion globally, marking a 25% increase from previous years. This surge is fueled by rising viewership, attendance, and lucrative sponsorship deals. Brands and investors are striving to elevate women’s sports, evidenced by the creation of new professional leagues and the growth of existing ones, such as the National Women’s Soccer League and the Women’s National Basketball Association.

However, this growth is not without its challenges as legal issues related to equal pay, contractual rights, and gender discrimination continue to surface, requiring ongoing advocacy and legal intervention to ensure fair treatment and opportunities for female athletes. Some key challenges include debates over transgender athletes’ participation and the implications of Title IX in ensuring equal resources for women’s sports. Navigating these legal challenges while capitalizing on burgeoning business opportunities will be crucial for the sustainable growth of women’s professional sports, ensuring they remain both a model of fairness and a profitable investment landscape.

As the commercial landscape in the sports industry continues to grow and evolve, it is more important than ever for rightsholders — teams, venues, brands, and athletes — to maintain significant control over their IP when engaging in commercial transactions with counterparties. As the volume and value of transactions allowing for the use of another party’s IP continues to grow, so too does the risk of misalignment and reputational harm. Ensuring that one’s image and brand remains credible and consistent across all associations is very important, not only to preserve current value, but also to support long-term viability and audience trust.

To protect this value, thoughtful structuring of commercial agreements is critical. This includes negotiating clear approval rights over how and where IP may be used, establishing collaborative usage plans that align with the rightsholder’s marketing and brand strategies, and evaluating the need for clear termination rights to ensure one’s image and brand can be protected if a partnership becomes misaligned or begins to deteriorate. These elements provide important safeguards to preserve the integrity of a brand and the associative value that underpins its appeal, particularly as the sports industry continues to navigate complex societal dynamics.

The fantasy sports and sports betting spaces are experiencing rapid growth, driven by increased internet and mobile access, the continued popularity of major sports leagues, and advancements in AI and machine learning. Since the landmark 2018 US Supreme Court decision in Murphy v. National Collegiate Athletic Association, which allowed states to regulate sports betting individually, the industry has undergone transformative changes. As of 2025, sports betting is legal in 38 states, Washington, DC, and Puerto Rico, with more states considering regulatory frameworks.

Despite the industry’s promising revenue potential, it faces significant legal, operational, and business challenges such as expansion hurdles, tax implications, complex regulatory compliance requirements, concerns about revenue cannibalization from traditional casinos, and the operational complexities of online betting.