Sports without fans and the rise of streaming in the times of COVID-19
Sports have often been viewed as a sort of escapism, distracting its multitude of fans from crises, whether personal or global. On March 11, 2020, the sports world was rocked by the announcement by the National Basketball Association (NBA) that the season would be suspended until further notice. Other professional leagues followed suit, including Major League Baseball (MLB) and the National Hockey League (NHL). Even the NCAA Men’s Division I Basketball Tournament (commonly referred to and branded as NCAA March Madness) was forced to cancel its tournament after previously deciding it would still occur, just without any fans in attendance.
Sports without fan attendance
Although in March playing without fans was still considered to be an improbable and unsafe solution, today, it seems like more of a possibility for North American sports leagues. MLB has submitted a proposal to its players to begin a shortened season (82 games instead of 162 games) in July, without any fans in attendance. The NBA is also contemplating resuming their season, by having the remainder of the games played in Disney World in Orlando, Florida without any fans in attendance. On May 26, 2020, the NHL became the first major North American sports league to announce a plan to resume playing, of course without any fans in attendance. Certain international football leagues, such as the South Korean K-league, have already resumed.
What’s the link with IP?
With all these sporting events taking place without any fans in attendance, the attention of many fans will now turn to streaming sporting events, sometimes illegally. Illegally streaming sporting events is not a “victimless crime” as some may suggest. In fact, IP rights are essential in bringing in revenue for sports leagues. In times where a major sports league such as MLB is expecting to incur losses of $640,000 per game, the question of illegal streaming is all the more pertinent. Streaming, broadcasting and advertising revenue for sports will become the lifeblood for more sports leagues and organizations. Consequently, two things will undoubtedly happen: (1) there will be a higher degree of monitoring of IP rights belonging to the stakeholders and (2) there will be a greater focus on removing illegal streaming sites.
Intangible assets, IP and Sports
Intellectual property is fully entrenched in the sports world; whether it be concerning patents, trademarks, industrial design rights, trade secrets and/or copyright, as well as other forms of intangible assets, such as: team and player social media accounts, image rights, and the like.
Patents will normally be acquired on the sports equipment that is constantly being developed and improved upon. In addition, patents are also acquired on software apps and wearable devices, like Fitbit® monitors. Companies, like Stokely-Van Camp Inc., owner of Gatorade®, even hold patents on energy drinks and supplements.
One domain of intellectual property that is visibly ingrained into the sports world is trademarks. Many teams and leagues will invest significantly “in enhancing the goodwill” associated with their “branding, generally through community outreach and sports-related activities designed to pique interest in the sport and inspire new generations of athletes”. In addition, athletes will use their “personality rights” (or image rights) to commercialize their “personal attributes” and develop their own brand and products. Examples include the Air Jordan sneakers and the TB12™ brand, which are owned by Nike Innovate C.V. and TEB Capital Management, Inc., respectively.
Industrial design rights are equally pertinent in the sports world. “Companies spend vast amounts of resources on understanding consumers’ tastes and developing stylish and attractive product designs to capture valuable market segments”. As an example, Lucio Tortola had created a new bicycle frame with the goal reducing back pain, as the new frame allowed for better shock absorption.
In an environment where competitiveness reigns, it is only natural that trade secrets form an essential part of this domain. Competitors will “gather proprietary information in the form of statistical analysis, scouting reports, dietary regimens, physiological metrics, and psychological assessment techniques—all to gain potential competitive advantage over their rivals”.
Lastly, the sports world would not be able to function without the protection granted from copyright. This sector of intellectual property applies to “the promotion and marketing of championships and sporting events, the artistic designs of the logos of sports teams and sports competitions, the literature contained in game-day programs sold to fans and supporters, the merchandise, and the software of computer and online games”. However, most importantly, copyright protects the broadcasting and streaming rights related to sporting events, which are essential sources of revenue for sports leagues.
Broadcasting, Streaming, Advertising and IP
Protecting IP rights has becoming increasingly challenging due to the amount of readily available illegal streaming sites. As explained by the chairman of the Sports Rights Owners’ Coalition, an organization tasked with representing over 50 sports bodies, “the expansion of high-speed Internet around the world, the proliferation of portable devices and the rise of online streaming platforms and IPTV technologies, have made tackling the illegal exploitation” of IP rights belonging to sports leagues much more difficult. These websites even accrue considerable revenue from the advertisements they display to their users.
Broadcasting deals tend to bring in large sources of revenue for sports leagues. As an example, the National Football League (NFL) concluded a three-year deal with Amazon, giving Amazon broadcasting rights to the Thursday Night Football games and even the exclusive right to broadcast a regular season game on a Saturday at the end of the season. Although the exact terms of the agreement were not disclosed, it was reported that the deal was concluded for more than the previous deal of $130 million USD concluded in 2018. As another example, during the 2020 Super Bowl, a 30-second advertisement cost $5.6 million.
One should also not discount the impact that streaming deals have in sports. More specifically, the streaming service known as DAZN has announced itself to be the “Netflix for sports”. It is available for less than $20 a month and offers U.S. viewers primarily boxing and MMA matches but also intends on broadening its line-up of sporting events. In Canada, DAZN holds the streaming rights to women’s tennis, apart from Grand Slam matches, NFL, MLB and Major League Soccer (MLS). DAZN is not done yet as it aims to continue to obtain streaming rights for additional sporting events. The introduction of DAZN into the sports realm has begun what is now dubbed as a “streaming war” as companies, like ESPN+, are adapting and becoming more aggressive in obtaining the rights to stream sports content. In fact, just recently, ESPN+ concluded an agreement with the PGA TOUR, granting the streaming service with exclusive rights to all golf tournaments from 2022 to 2030. In comparison, in 2018, a deal concluded between MLB and DAZN began in 2019 and is set to last for just three years.
The impact of broadcasting, advertising and streaming, as a major source of revenue for sports leagues should not go unstated. This revenue is considered to be the “life-blood of sports at all levels” as the earnings are used to support the “grassroots levels” of sports. This income is thus necessary to help further develop sports and finance them at a micro level. The financing acquired from these agreements is also necessary to provide “a polished and modern viewing experience” by employing the latest technology and utilizing graphics to present a detailed analysis of the game, in addition to having adept sports casters to provide said analysis.
As the deals used to secure these IP rights are so crucial to sports in general, it further supports the notion that protecting these rights is just as essential. Without such protection, illegal streaming “undermines the revenue potential that broadcast rights offer, and stunts the growth of the sports sector”.
Monitoring and enforcement
There are different legal recourses available to rights owners’, such ranging from injunctions, infringement and damages actions, Norwich orders to determine the identity of the wrongdoer, as well as a new mechanism of site-blocking order, which would render the site inaccessible to Internet users. The first of such orders was issued by the Federal Court of Canada in Bell Media Inc. v. GoldTV.Biz. In this decision, the Federal Court established that it had the authority to issue such an injunction. In order to obtain such an order, the following criteria must be present: “(1) there is a serious issue to be tried; (2) irreparable harm will result if the injunction is not granted; and (3) the balance of convenience favours the plaintiff”. Regarding this final criterion, the Court also enumerated a non-exhaustive list of factors to take into consideration:
Necessity: the injunction must be necessary to protect the plaintiff’s rights;
Effectiveness: the order must effectively limit infringements;
Dissuasiveness: the order must dissuade others from infringing;
Complexity and cost: the complexity and cost of enacting the measure must be taken into account;
Barriers to legitimate use or trade: the injunction should not create barriers for those who want to act legally on the Internet;
Fairness: the injunction must create a fair balance between the rights of the parties, third parties and the public;
Substitution: the website must not be easily replaceable;
Safeguards: the remedy should have safeguards against abuse.
The sports world depends on the revenue brought in by their broadcasting and streaming rights. While the sums involved often seem exorbitant, it is important to retain that the funds help develop the sport at all levels, encouraging even local leagues and sporting events.
In the COVID-19 era, where financial losses will undoubtedly occur, it is all the more important to ensure the respect of the broadcasting and streaming rights associated with sporting events. Sports tend to bring communities together in difficult times. Instead of harming that which brings joy to many, individuals should ensure that the rights associated with sporting events are respected to ensure that the maximum benefit is earned by those who hold these rights.
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