Real-time Sports Data and the First Amendment

• Jurisdiction: United States,Federal
• Publication year: 2015
• Citation: Vol. 11 No. 2

Washington Journal of Law, Technology and Arts Volume 11, Issue 2 Summer 2015

Real-Time Sports Data AND THE First Amendment

Ryan M. Rodenberg, John T. Holden and Asa D. Brown© Ryan M. Rodenberg, John T. Holden and Asa D. Brown

ABSTRACT

Technological advancements have created an emergent challenge for organizations attempting to monetize realtime information. Real-time data as a commodity is especially relevant in the sports industry. Sports leagues increasingly seek to control the dissemination of real-time data in conjunction with lucrative distribution agreements. We analyze the legal status of real-time sports data under both intellectual property law and the First Amendment, with our case-by-case analysis extending to spectators, gamblers, journalists, and non-gambling entrepreneurs. Although we conclude that the First Amendment protections are broad across all four categories, particularly when the underlying sporting event takes place on public land, we find discrete areas where sports leagues and event organizers may claim certain types of real-time data as proprietary, bolstering their ability to sell such data and preventing others from doing the same.

TABLE OF CONTENTS

Introduction .................................................................................... 65

I. First Amendment Free speech Protection Generally .............. 69

A. State Action Doctrine ........................................................ 71

B. Tiers of Free Speech Protection ......................................... 73

II. Courtsiding and Monetizing Real-Time Sports Data ............. 75

A. Real-Time Data Dissemination and Sports Gambling ...... 79

B. Intellectual Property Concerns .......................................... 82

1. Overview of Intellectual Property Law and Related Rights ....................................................................... 83

2. Trilogy of Sports Data Cases ................................... 86

a. NBA v. Motorola (1997) .................................... 88

b. Morris v. PGA Tour (2004) ............................... 92

c. CBC v. Major League Baseball Advanced Media (2007) ................................................................ 95

C. First Amendment Rights and Real-Time Sports Data ....... 96

Conclusion ................................................................................... 101

INTRODUCTION

"We're incredibly protective of our live game rights . . ."

- NBA commissioner Adam Silver(fn1)

"It's a particularly Orwellian concept to 'own data' . . ."

- Journalist Will Leitch(fn2)

The commodification of real-time information is one of the most important business issues in the global sports industry.(fn3) An outgrowth concern is the ability of sports organizations to control the dissemination of real-time data, especially when sports gambling is involved. This paper examines the First Amendment implications of sports organizations' attempts to monetize the distribution of real-time sports data while simultaneously trying to limit others' ability to do so.(fn4)

Technological advancements have allowed spectators, professional sports gamblers, journalists, and business-minded innovators to attend sporting events and disseminate real-time information through several mediums. Such transmission of data from inside the stadium to outside the arena is faster than a television broadcast, which is subject to a multi-second delay while censors screen for prohibited material.(fn5) Some sports leagues momentarily embargo the public domain distribution of such data to protect lucrative revenue streams derived from the direct sale to time-sensitive third parties, such as betting companies.(fn6) These delays allow gamblers, for example, to place wagers in a dead space in time where sportsbooks, exchanges, and fellow gamblers may be reacting late to what is taking place in real-time.

The high-speed dissemination of real-time data, in the wagering context, acts to "predict the future" by allowing the gambler to place bets before the information is absorbed by others, in terms of accurate odds or prices. This practice has been termed "courtsiding," with the most coverage to date in tennis.(fn7) The term "courtsider" has almost exclusively been associated with gambling. In this paper, we use the word "courtsider" generally to denote someone disseminating real-time sports data, whether there is any nexus to wagering or not. Sports organizations have alternatively deemed the dissemination of real-time data by unapproved third parties as impermissible, illegal, or a threat to sports' integrity.(fn8)

We examine the practice of courtsiding from a United States legal perspective. Recent statements by NBA commissioner Adam Silver advocating for the adoption of a nationwide legalized sports wagering scheme have brought increased attention to sports gambling and, in turn, have generated considerable discussion regarding the ownership of data.(fn9) Disputes over proprietary data and game-related rights have been litigated for decades, resulting in sometimes conflicting decisions.(fn10) In order to inhibit the transmission of real-time data by others, sports leagues have attempted to incorporate (quasi-)contractual terms in their ticket purchase agreements,(fn11) spectator notices,(fn12) and media credentials.(fn13)

We discuss the scope of relevant free speech protections and differentiate between the various types of protected speech. Our analysis adds a sports-specific layer(fn14) to the growing literature on First Amendment considerations in connection with data,(fn15) software,(fn16) prediction markets,(fn17) algorithms,(fn18) machines,(fn19) and the marketplace of ideas.(fn20) We also provide an illustration of how a courtsiding conflict may arise with respect to the dissemination of real-time sports data and competing claims of ownership. Finally, we critically analyze four primary scenarios regarding the use of real-time sports data and the resulting free speech implications.

I. FIRST AMENDMENT FREE SPEECH PROTECTION GENERALLY

Free speech protections under the First Amendment are vast. The Supreme Court recently held that "speech on public issues occupies the highest rung of the hierarchy of First Amendment values, and is entitled to special protection."(fn21) In the same case, the Supreme Court found:Speech deals with matters of public concern when it can be fairly considered as relating to any matter of political, social, or other concern to the community, or when it is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public.(fn22)

Citing three cases,(fn23) Fox Broadcasting and the Big Ten Network, as amici in In Re NCAA Student-Athlete Name and Likeness Licensing Litigation, recently posited that "[c]ourts broadly construe 'matters of public concern' to encompass news reports about all manner of subjects of interest to substantial portions of the public, including news about sports and entertainment."(fn24)

The decision in Snyder v. Phelps established a two-prong test for the determination of when speech is a matter of public concern.(fn25) The Court found that speech is of a public concern "when it can 'be fairly considered as relating to any matter of political, social, or other concern to the community,'" or when the speech is "a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public."(fn26) The challenge left after Snyder, as set forth by Professor Clay Calvert, is that the Court's decision neglects to differentiate between the two prongs.(fn27) One of Calvert's critiques is that the second prong of the Court's test does not define "legitimate news interest," which raises ambiguity as to whether the Court is describing a "reasonable" news interest or whether alternatively, the Court is describing a news interest that abides by professional journalistic standards.(fn28)

According to Calvert, the Supreme Court's decision in Snyder may have also expanded the bounds of what constitutes matters of public concern.(fn29) Calvert notes that in a recent case involving a televised suicide on Fox News, an Arizona judge determined that the First Amendment and newsworthiness of the preceding car chase protected Fox News from claims that they had subjected a viewer to a tort of intentional infliction of emotional distress ("IIED").(fn30) While the two-prong test utilized in Snyder may have expanded the scope of First Amendment protection for media companies, and even granted additional protection to defendants in IIED claims, the Snyder progeny has done little to explore the scope of legitimate news interests and whether an individual live reporting sports scores is engaged in a form of protected speech.(fn31)

A. State Action Doctrine

Whenever there is discussion of free speech protection, the threshold issue of governmental action must be analyzed.(fn32) The state action doctrine requires a governmental actor to be infringing on an individual's free speech.(fn33) Without this initial step, there can be no constitutional issue.(fn34) The United States Constitution is "not intended to protect individual rights against individual invasion."(fn35) Regarding courtsiding at live sporting events, the state action concern would play a pivotal role for a court's analysis. A court would have to determine if the location where...