Kanika Corley is a partner and litigator with Akerman LLP in Los Angeles. Barbara Edwards is a partner with the corporate practice group of Akerman in New York. This piece was originally published in the Sports Business Journal on February 6, 2023.
In 2016, a South African leader pushed the need for diversity in sports forward in a big way. Years after the fall of apartheid, South African Sports Minister Fikile Mbalula banned four of South Africa’s leading sports federations from hosting or bidding for major international events. He argued they had failed to create enough opportunities for Black players. The denizens of the four leading sports federations — rugby, cricket, track and field, and netball — scrambled to comply.
Here in the United States, one might wonder what new strategy might persuade the corporate sports world to move expeditiously toward effecting change in hiring decisions relative to diversity, equity, and inclusion. A small but mighty group of athlete-owned companies believes it may have a solution: incorporating into standing business deals a mutually beneficial “Diversity, Equity and Inclusion Rider.”
What It Is
This type of rider is an add-on to a sponsorship or other sports-related contract. Diversity riders will require business partners to account for diversity, equity, and inclusion in their respective enterprises. A directive to a sports venue or brand sponsor, for example, will be that the business partner ensures, at a minimum, that at all hiring levels that relate to the business deal there are specific measures taken to consider diverse applicant pools, that individuals from underrepresented backgrounds are actually hired, and that there are meaningful contributions made to support the retention and promotion of people from underrepresented backgrounds.
This concept has been around for a while. However, the utilization of such riders has grown in power and visibility in the last few years. Indeed, Olympic swimmer Simone Manuel, along with many others in the sports and entertainment industries, ranging from talent to worldwide media agencies, have made major, notable contributions to date.
Manuel appears to have been the first to make public a sports-related diversity rider. With five Olympic medals in her pocket, Manuel signed with sponsor swimwear brand TYR Sport in 2018. Through negotiation, her sponsorship agreement obligated TYR to extend meaningful opportunities to underrepresented groups, and to reflect diversity in the creative efforts she took on with the brand.
Since Manuel, prominent professional athletes by and through the companies they own and control have more often worked behind the scenes, quietly insisting to those who seek to partner with them that such entities extend meaningful opportunities to traditionally underrepresented groups.
Diversity riders establish a guiding principle for fostering diversity, equity and inclusion, stipulate representation of a proportionate number of underrepresented groups, seek to have measurable metrics, and implement some level of negotiated consequence in the event of failure.
In our own bi-coastal practice at Akerman, we are finding that more athlete-owned businesses each year are seeking ways to be a driving force to effect similar change. Since much of this is occurring behind the scenes, we can see that companies agreeing to be bound are not doing it to “win points,” but to actually make a difference. Consequently, diversity riders are most often effectuated in private, with both sides rooting for the other to succeed at all costs.
When resistance surfaces, it almost always revolves around a single, supposedly insurmountable obstacle:
Executive: “We’re sorry, (business partner),” goes the objection, “but there simply isn’t the talent pool we’re looking for, when it comes to (above/below-the-line/on-screen talent/ sports agents/marketing experts/play-by-play announcers/you-name-it).”
To which the savvy business partner replies: “It just isn’t so. You have artificially and needlessly limited your search pool.”
And, if there is a failure to comply? The beauty of the diversity rider is that its underlying goal is not to encourage litigation, but rather, to cause a paradigm shift — to ensure opportunities to marginalized people who have been treated as though their worth is less than their majority counterparts.
How We Know It Works
The pushback from the corporate side is less than one might expect — corporations like Coca-Cola, with moves to attract diverse hires and to crack the “glass ceiling,” and United Airlines, with DEI apprenticeships and outreach program to recruit minority pilots, have already expressed a wish to both achieve and to be seen as achieving better diversity, equity and inclusion in their ranks; they know full well it’s what many current and prospective consumers want of them, what prospective athlete-partners need to see and perhaps what greater society has come to expect.
The fact is that even if there is an existing shortfall of underrepresented people in certain job categories, the hunt is not over. Athletes and fans alike want the corporate sponsors and agents to respond in the only reasonable way: Look for the talented people. Identify them. Recruit them. Train them. Employ them. Retain them. Advance them.