Who's on First? – The Fight Over Official Sports Data After Murphy
When the U.S. Supreme Court struck down the Professional and Amateur Sports Act (PASPA) on May 14, 2018, prognosticators stated that a wave of legalized sports betting would unfold across the United States1. This forecast has mostly come true, as several states have authorized intrastate sports betting.
Several professional leagues that are publicly concerned about widespread gambling have decided that they too should have a role in the future of sports betting. One avenue considered by the leagues is to use official data. In this context, official league data would mean statistics, data, and information that bears the professional leagues’ stamp of approval. With this information, the leagues assert that they can provide consistent betting information across different marketplaces. But does that data belong to the league or the player? Can that data be copyrighted? How can that data be used? These questions are more prevalent in a post-Murphymarketplace.
THE LEAGUES CAPITALIZE ON OFFICIAL DATA
Official sports data is immensely valuable. In July of 2018, the NBA and MGM Resorts announced a partnership that involved data and sports betting.2 For $25 million dollars, MGM became NBA’s official gambling partner for three years, with MGM receiving troves of league verified data.3 With this data, MGM could provide bettors with more unique odds, different proposition bets, and most importantly, back up MGM’s bets with fast, accurate real-time official NBA data.4 The partnership deal between the NBA and MGM is not exclusive, with the NBA leaving the door open for the league itself as well as individual teams to distribute data to other platforms.5Shortly thereafter, other professional sports leagues, such as the NHL and MLB, followed suit, signing similar agreements with MGM.6
WHO OWNS SPORTS DATA?
But who owns data that is generated during a sports contest? The fight over this valuable property interest is not novel. In 1997, the first iteration over official data was litigated. In NBA v. Motorola, Inc., the NBA became concerned about a Motorola pager that received in game, live scoring and statistics. In particular, the Motorola pager relied on data that was supplied by third-parties that watched or listened to the games in real time. The NBA sued Motorola on the grounds that the transmitting of live scores and statistics violated the NBA’s copyrights. However, the Second Circuit held “underlying [matches, games, etc.] do not fall within the subject matter of federal copyright protection because they do not constitute ‘original works of authorship.’”7 Moreover, the court noted that while the broadcasts themselves were protected under copyright law, that the facts themselves were not copyrightable.8
Several years later, another court evaluated the legal ownership of live in-game data. In Morris Communications Co. v. PGA Tour, the Eleventh Circuit evaluated whether the PGA could restrict the reporting of information from its Real Time Scoring System (RTSS). The PGA’s RTSS provided for the reporting of in-gaming scoring in real time. In order to create data for the RTSS, volunteers on each hole visually captured each golf stroke, and reported that information to a centralized location. This data was then compiled at the PGA Tour’s media center at the golf course. But in order to access the RTSS live scoring, journalists needed to access the media center. The PGA prohibited journalists from reporting live scoring from the RTSS. Instead, the PGA stated that the journalists could not report on live scoring until the earlier of (1) 30 minutes after the shot has taken place or (2) when the information become part of the public domain (i.e., posted on the PGA website). The journalists brought suit on the basis that the reporting restrictions constituted an antitrust violation. However, the court held the PGA possessed sufficient business justification to prevent free-riding.9
The problem of free-riding (gaining a benefit from someone else’s investment) is at the heart of the struggle over sports data ownership. Sports leagues, who assert ownership over sports data as intellectual property, worry that sports betting platforms that use the data without compensation undermine the value of the leagues themselves.10 As noted above, the law may not support this position of outright intellectual property ownership. While the broadcasts themselves or services that collect the data may deserve copyright protection, the games or statistics underlying sports betting do not deserve such protection.11
Even though the argument for outright ownership of sports data is unsettled, the sports leagues are lobbying aggressively for royalties from sports betting. MLB Commissioner Rob Manfred stated that as “[w]e spend the money to produce the product…[sports betting] presents a threat to the integrity of that product that will require us to spend money in order to protect that integrity.”12 The NBA adopted a similar position, although resisting the label “integrity fee,” preferring to refer them as royalty rights.13 Even with deals in place between the sports leagues and major sportsbooks, however, some sportsbooks may still resort to the route of hiring courtsiders to report data from games, instead of dealing directly with the leagues.14
Beyond the traditional types of sports data, such as in-game statistics, the advent of player wearables presents even more opportunities and potential for conflict between the leagues and betting platforms. Fantasy sports and traditional sports betting platforms could add more exotic and advanced gambling around player biometric data.15 An early deal in this space was the NFL Players Association’s partnership with the biometrics and wearable company Whoop in 2017, which provided players with the wearable bands but retained the rights to monetize the data through third parties.16 Still, ownership and rights over the wearable data is “still something of a Wild West,” with concerns over data privacy and bargaining leverage.17 Indeed, both the MLB and the NBA prohibit using players’ wearable data commercially or in salary arbitrations and contract negotiations.18
The effect of Murphy on the sports landscape is still developing, and the unsettled law regarding the ownership of sports data will certainly affect relations between sports leagues and sports books. As the value of legal sports betting continues to increase, both sides have much at stake. The sports leagues will continue to push efforts to capitalize on their potentially tenuous hold on data from their matches, while sports books and fantasy leagues will look to increase their leverage in negotiations with the sports leagues by undermining the leagues’ case for exclusive data ownership.
1Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018).
2 Kevin Draper, N.B.A. Makes MGM Resorts International Its First Gambling Partner, THE NEW YORK TIMES (July 31, 2018).
3 Michael McCann, What the NBA and Its Players Stand to Gain From Partnership With Vegas-Based MGM, SPORTSILLUSTRATED.COM (July 31, 2018).
5 Eben Novy-Williams, NBA Makes Deal With MGM for Betting, First for a U.S. League, BLOOMBERG.COM (July 31, 2018).
6 Adam Candee, MGM Inks Another Major Deal To Become Official Sports Betting Partner Of The NHL
Eric Ramsey, LEGALSPORTSREPORT.COM (Oct. 29, 2018); MLB Makes MGM Resorts ‘Official Gaming Partner’ As Sports Betting Deals Proliferate, LEGALSPORTSREPORT.COM (Nov. 27, 2018).
7 105 F.3d 841, 846 (2d Cir. 1997).
8Id. at 847. Courts have also held that the publicly available names, likenesses, and statistics of athletes are not copyrightable. See C.B.C Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818, 823 (8th Cir. 2007); Daniels v. FanDuel, Inc., 909 F.3d 876, 877 (7th Cir. 2018).
9Morris Communications Co. v. PGA Tour, 364 F.3d 1288, 1298 (11th Cir. 2004). The court stated emphatically that the case was “not about copyright law, the Constitution, the First Amendment, or freedom of the press in news reporting.” Id. at 1293.
10See Mark A. Lemley, Property, Intellectual Property, and Free Riding, 83 TEX. L. REV. 1031, 1040 (“The professed fear is that property owners won’t invest sufficient resources in their property if others can free ride on their investment.”)
11 See John Holden, Are Sports Betting Companies Catching A Free Ride From Leagues?, LEGALSPORTSREPORT.COM (July 2, 2018).
12 Joe Lemire, MLB’s Manfred Discusses Betting for First Time since SCOTUS Decision, SPORTTECHIE.COM (May 22, 2018).
13 Buck Wargo, NBA says don’t call it an integrity fee; league argues it deserves “royalty” for casinos profiting off its product, CDCGAMINGREPORTS.COM (April 23, 2018).
14See Behind the Shadowy Practice of “Courtsiding” at the US Open, TENNIS.COM (September 8, 2017).
15 Eric Fisher,Data in Motion: Leagues and unions balance players’ interest in push by companies and investors to commercialize information produced by wearable technology., SPORTSBUSINESSJOURNAL.COM (Oct. 22, 2018).
16“WHOOP Strikes Landmark Deal As The Officially Licensed Recovery Wearable of the NFL Players Association."
17Data in Motion, supra note 15.
18 Joe Lemire, Baseball’s CBA Bans Wearable Data from Arbitration, Commercial Use, SPORTTECHIE.COM (July 28, 2017); Rian Watt, The New NBA CBA Addresses Wearable Technology, But What Does That Mean?, VICESPORTS.COM (Feb. 1, 2017).