Bad Moves Cited in a Bad Arbitration Decision for Bad Bunny: Rimas Sports v. MLBPA
By Fred N. Thomas IV
New York arbitrator Ruth Moscovitch has ruled against Bad Bunny and Rimas Sports in their dispute with the Major League Baseball Players Association (MLBPA).
In recent weeks, the arbitration between a Puerto Rico-based sports-agent firm co-founded by global music star Bad Bunny three years ago, and the MLBPA, has captured significant attention in both the worlds of sports and entertainment over the Oct. 30 arbitration award on sanctions administered by the MLBPA against several Rimas player-agents. Ronald Blum, "Arbitrator upholds 5-year bans of Bad Bunny baseball agency leaders, cuts agent penalty to 3 years," ABC News (Nov. 13, 2024) (available at https://bit.ly/3ZcNGBj).
The 80-page decision became public on Nov. 12 after the players’ union filed to enforce the award in a New York state court. (The New York state arbitration award confirmation proceedings are available at https://bit.ly/4fFi6lo; the direct link for the decision is https://bit.ly/3Ok1GDh.) In fact, it was the second arbitration decision in the case this year—the agency and its principals were denied an emergency arbitration request for an injunction in April, shortly after the release of the MLBPA’s Notice of Discipline with the penalties against them—including a bar on representation.
This dispute arose from a MLBPA investigation that found that Rimas agents failed to adhere to the union's regulations that “set out detailed rules for agent representation, disciplinary procedures, and mandatory arbitration.” Major League Baseball Players Ass’n v. Arroyo, No. 24-cv-3029, 5 (LJL) (S.D.N.Y. July 24, 2024) (available at https://bit.ly/3CEkBpB).
While the MLBPA has expected certain obligations and conduct standards to be met as part of agents’ contractual agreements, Rimas set out a case that the union stepped beyond the bounds of its authority by its examination of Rimas practices and issuing sanctions—specifically, according to Arbitrator Moscovitch’s decision, that “the investigation was biased, included factual inaccuracies, and failed to treat each Claimant individually, and because the penalty is unreasonable and unrelated to culpability.”
Rimas Sports challenged the agent-certification terms of the MLBPA—which is the exclusive bargaining agent for the players--in what has become a complex case at the crossroads of celebrity culture and professional sports.
Rimas’s contentions revolved around the overreach of the MLBPA regulations beyond their agent certification rules for dealing with the players’ on-field contracts to their endorsement and entertainment deals. As a result, at least at its outset, the challenge carried potential implications for the players’ association certification process. Chris Deubert, “MLBPA Defeats Challenge to Its Authority by Bad Bunny Would-Be Agents,” Forbes (Nov. 19) (available at https://bit.ly/4fBawIz).
What Is Rimas Sports?
Bad Bunny co-founded the agency, Rimas Sports, with the principals of his management company, Rimas Entertainment, in 2020-2021, to represent promising new athletes. With headline-inducing success in the music and entertainment industries, they sought to use those same skills to bring in athletes and help them grow and reach their greatest potential in sports-adjacent fields.
Bad Bunny—a 30-year-old whose real name is Benito Ocasio—is an international music star who was Spotify’s most streamed artist from 2021-2023, and who also has participated in sports entertainment events with WWE, including the company’s 2021 Wrestlemania show.
Global pop-stars have often used their platforms to add representation for up-and-coming athletes—for example, Jay Z with Roc Nation Sports (its sports roster is here: www.rocnation.com/sports) and Kanye West with Donda Sports. While their backgrounds and music may be vastly different, one thing they and Bad Bunny have in common is their desire to represent and protect minorities where they have often been taken advantage of.
Rimas Sports has been successful. It signed a number of young Latin baseball phenoms. “Among its clients are up-and-coming players Francisco Alvarez and Ronny Mauricio of the New York Mets … and Colorado Rockies shortstop Ezequiel Tovar”—and also have included Ronald Acuña Jr. of the Atlanta Braves; Santiago Espinal, Cincinnati Reds; Yonathan Daza, a former Colorado Rockies player; Wilmer Flores, San Francisco Giants, and Liván Soto, Baltimore Orioles, just to name a few. Elaine Briseño, “Bad Bunny’s Sports Firm Says MLBPA Gave It ‘Death Penalty,’” Law360 (May 16, 2024) (available at https://bit.ly/3V2kiuW).
But once Rimas Sports was subject to scrutiny by the MLBPA, its solid start was called into question by its client-recruiting tactics. It was sanctioned by the union, which was backed in the arbitrator’s merits decision.
The Dispute
In 2022, the MLBPA “opened an investigation" into William Arroyo, a Rimas Sports agent who was certified by the MLBPA, and the agency itself, for “conduct surrounding their representation” of players that previously were represented by several other agencies. Major League Baseball Players Ass’n, No. 24-cv-3029 at 5. The union, in its Notice of Discipline, said that the players had agreed to be bound by the rules and regulations in authorizing the union’s representation, and sanctioned Rimas Sports for violating those rules, which the MLBPA maintains are necessary to protect the players.
On April 10, the MLBPA subjected Rimas to disciplinary actions for violating a number of regulations, which, in relevant part, prohibit player-agents from providing “any money or any thing of value to any player, or any person related to or associated with such player … to induce or encourage such player to use or continue to use any person’s or firm's services.” Id. at 3.
Arroyo was decertified after he allegedly lured players with forbidden gifts, including concert tickets, $19,500 in cash, and a $200,000 interest-free loan. Associated Press, “Five-Year bans remain for Bad Bunny baseball agency execs,” ESPN (Nov. 13, 2024) (available at https://bit.ly/3ZgrPcb).
Moreover, Rimas Entertainment co-founders, CEO Noah Assad and President Jonathan Miranda—who had failed the MLBPA agent certification tests—were denied the ability to reapply for five years. See, e.g., David Steele, New Bad Bunny-Led Sports Agency Aims To Rep Latino Stars, Law360 (Apr. 10, 2023) (available at https://bit.ly/490v3nn). The MLBPA also prohibited other certified agents from other firms from working or associating with the agency, potentially locking Rimas and its agents out from having access to clients.
Rimas was adamant that these sanctions were improper and unprecedented, so it sought relief in a Puerto Rico court. Under its parent company, Diamond Sports LLC, Rimas Sports subsequently brought suit against the MLBPA, and in its complaint, the businesses alleged that these restrictions exceeded the scope of authority that the MLBPA had to regulate its agents.
In Count I, Rimas alleged damages from the MLBPA’s actions. The complaint argued that the MLBPA exceeded its authority by prohibiting any of their certified agents from working with, or even associating with Rimas, thus resulting in “immediate and permanent loss of its ability to operate its business.” Complaint ¶¶ 71-73.
In Count II, Rimas alleged tortious interference with its contracts, arguing that the union “knowingly interfered with existing contracts by extending the disciplinary penalties” against both Rimas and foreign players “for the improper purpose of preventing Rimas Sports from participating in the sports agency market.” Complaint ¶¶ 80-81.
In Count III, Rimas sought a declaratory judgment “to determine the scope of the MLBPA’s authority” under the National Labor Relations Act. Complaint ¶¶ 84, 87.
The complaint is posted here: https://bit.ly/4fHkKqY.
At pre-trial, the MLBPA filed a Motion to Compel Arbitration on the grounds that their agent contracts contained an arbitration clause that required any dispute to be resolved in arbitration. On Aug. 15, the judge ruled against Rimas by staying the case and ordering the parties into arbitration, granting the MLBPA’s motion. Diamond Sports, LLC v. Major League Baseball Players Association, Civil No. 24-1222 (CVR) (2024) (available at https://bit.ly/3ZmmvUV). The opinion reasoned that Rimas could not simultaneously seek relief in court for a violation of a contract while failing to abide by the arbitration clause in that very same contract. Id.; see also the docket proceedings, available here: https://bit.ly/4eLKC3H.
The Stakes
The arbitration proved to have significant legal stakes for both parties involved. For Rimas Sports, which prides itself on its ability to negotiate high-value contracts and endorsements for its clients, Arbitrator Ruth Moscovitch’s ruling in the MLBPA’s favor will severely limit the agency’s ability to function within the MLB ecosystem, potentially forcing the agency to conform to a set of regulations it finds restrictive or counterproductive. At the same time, the players’ union view that it was necessary to uphold its regulations as a key component in its effective representation of its members’ work rights was vindicated.
The stakes also were high financially. Player-agent representation is a multi-billion-dollar industry, and any shift in the status quo would create a ripple effect that reshapes how players negotiate salaries, sponsorships, and endorsement deals. Moscovitch’s Oct. 30 decision maintains the MLBPA’s and the players’ longstanding views on representation regulation, much to Rimas Sports’ dismay.
For the MLBPA, maintaining its stronghold over player representation was vital not just to preserve its influence within the sport but also to ensure that it can continue to advocate effectively for future player rights and benefits.
In fact, Moscovitch followed and incorporated a previous arbitration conducted in April, shortly after the sanctions were handed down by the MLBPA. Rimas and the agents filed for arbitration for a substantive review of the Notice of Discipline—which ultimately was Moscovitch’s efforts resulting in the Oct. 30 decision favoring the players’ union—but also simultaneously filed for an emergency arbitrator requesting a temporary restraining order and staying the discipline.
That arbitration before Georgetown University Law Center Prof. Michael Gottesman denied the stay—a request renewed before Moskovitch, who also denied it. The Gottesman arbitration opinion is detailed in the New York Southern U.S. District Court opinion cited above, which also declines to confirm an award on behalf of the MLBPA because the substance of the dispute was, at the time, still before Moskovitch in the merits arbitration and, therefore, there wasn’t a final award to confirm. “Simply put, an order of confirmation would give [the MLBPA] nothing more of consequence than the rights it already possesses under the Regulations.” Major League Baseball Players Ass’n v. Arroyo, No. 24-cv-3029, linked above, at *14.
As a result of Arbitrator Moscovitch’s decision siding with the MLBPA, Rimas's William Arroyo cannot become a certified MLBPA agent again for three years, and the Rimas co-founders are barred from re-applying for five years.
While Moscovitch upheld the suspensions, she lowered Arroyo’s to three from five years. This leniency was not shown for Rimas co-founders Noah Assad or Jonathan Miranda, however. In addition to upholding their five-year suspensions, she also sustained a $400,000 fine to the company. See the award linked above; see also Evan Drellich, Arbitrator sides with baseball union over Bad Bunny’s agency in gift violations flap, The Athletic (Nov. 13, 2024) (available at https://bit.ly/4eFjhQH). Moscovitch also dismissed Rimas's charges that the union’s investigation was biased.
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At its core, the arbitration was about the future of player recruitment and the extent of representation. The broader implications are clear: the dispute between Rimas Sports and the MLBPA marks a pivotal moment in the evolution of professional sports representation, and it will likely influence the future of athlete contracts, union rights, and agent conduct across sports.
Players have long relied on the MLBPA to ensure fair treatment and to advocate for their rights, both on and off the field. This decision has effectively reinforced the MLPBA’s role as the central governing body for player representation and delayed the implementation of a more centralized model that Rimas Sports sought, where independent agencies gain greater influence. This could also have broader implications for other professional sports leagues, where similar tensions between independent agencies and players’ unions have begun to surface in recent years. Chris Deubert, “Decision Creates Potential Split Between MLBPA And NFLPA Agent Regs,” Forbes (Aug. 16) (available at https://bit.ly/3CHQJZG).
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The author is a second-year law student at the Howard University School of Law in its ADR Consortium Program in Washington, D.C., and is CPR’s full-year program representative.
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