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The highest courts in Europe and the US now appear to agree on a basic principle in determining whether a sports rights holder may charge a license fee for information about an event, including the scores.
The courts have focused on how much investment the rights holder has made in gathering and disseminating information. IF the rights holder has made a significant investment of money, technology and staffing to provide information, then they more than likely can license that information. But if it is simple information like listing the year’s schedule of events then, no, they can’t.
The European Court of Justice – the highest EC legal body -- ruled in four cases this month against sporting organizations that complained their information was being used by commercial entities without payment. The court chose the specific case of companies in Europe printing English football schedules to make the specific point. “Neither the obtaining, verification, nor presentation of the contents of a football fixtures list attests to substantial investment which could justify protection” for the so-called sui generic protection given for information whose creation required substantial investment.
The British press greeted this ruling with glee since it was embarked at the time in a rights battle of its own with the football authorities. But in fact it really is not good news for the media because the court does seem to confirm that if a sporting organization does make a substantial investment to provide certain information then it can indeed license that information. Compiling a list of football games is not a substantial investment; providing a real-time scores service for all of those games could well be a “substantial investment”.
And that is exactly the point made by the 11th US Circuit Court of Appeals in a ruling FOR the Professional Golf Association (PGA) and against a media organization earlier this year. The US Supreme Court in October confirmed that ruling by refusing to hear an appeal filed by several media organizations.
The US court specifically ruled that the PGA had made a significant investment of money, technology, and staffing in order to provide a real-time scoring system, and that significant commitment justified the selling or licensing of that information to others. A media company had claimed it had the right to sell the golf scores it received from a tournament to web sites. The PGA wanted a built-in delay on those web sales unless the web site took out a license with the PGA for the results.
Thus, a coming together of legal principles in basically uncharted territory on both sides of the Atlantic. Basically, if it doesn’t take much effort to provide information such as the year’s schedule of games, tournaments etc, then the sporting organization can’t license such information and it is in the public domain. But if the rights holder shows it has made a considerable investment to provide that information, such as real-time scores, then it can justify licenses.
The US case is of great interest to Europe, too, because it concentrated on media organizations selling sports scores onward, in real-time to third parties (web sites). The court ruled those scores were the PGA’s to license to the third party and did not belong to the media entity that had actually gathered the scores at the tournament site.
While this has caused some fuss in actual fact the media has been living with such restrictions and applying such rules for a very long time in disseminating shares prices from around the world to personal finance web sites.
Ever wonder why most free personal finance web sites say their financial information is delayed by 15-20 minutes? Because the various stock exchanges around the world have declared they will charge for their information (the price of a share at a specific point in time) unless that price is at least 15-20 minutes old (depending on each individual stock exchange).
He who has information first is all-powerful. He who has it second is powerless.
These personal finance sites therefore sign two contracts – one with the vendor (such as Reuters) to deliver the financial information with a given time delay, and the other agreement is with the exchange itself that it may publish the information within given time restraints.
This actually suits vendors such as Reuters. In the financial world there is a saying that he or she who has information first is all-powerful; he or she who has it second is often powerless. Thus the world’s financial institutions pay Reuters a fortune to have real-time delivery of share prices. The last thing those financial institutions would want is for you and I to have instant access to that same information for free via the web.
So having accepted the precedent in the financial world, wholesalers must now live with it in the sports world.
But does that mean the rights organizations have it all their own way? In France, when the federation that included many of the fashion design houses told the media they could only file a very limited number of pictures of their fashion shows onto the Internet or they would lose their accreditation to attend the shows, the media buckled and agreed.
But when the English Football Association (FA) tried similar tactics this Fall by trying to restrict digital publication of match pictures by two hours to third parties and also wanting a 7% cut of media “fantasy” football games which earn around GBP 30 million a year the British media fought back. And within three weeks the FA gave up most of what it wanted although final details have not been released as this is written.
How did the media win? Because it suddenly remembered “The Power of the Press”. The tabloid
Sun, owned by Rupert Murdoch, started the fight. The newspaper, which has a large daily diet of football coverage, decreed it would not mention any football sponsor, such as Coca-Cola and Barclays Bank, within its coverage. That meant that the Barclays Premiership League became known in the
Sun just as the Premiership; the Coca-Cola Championships were now the Championships. Barclays and Coca-Cola had paid millions of pounds to the FA to have their name associated with those products, knowing full well their brand would be mentioned many times a day on sports pages, and for
the Sun to withdraw naming their brand caused a deep loss of value for the sponsorship.
The Sun went even further. Picture editors were told to pick those pictures that did not show, or at least minimized, the logo of any sponsor. So if there was a picture of a player running straight towards the camera with the brand emblazoned across the jersey, or a picture of the player running to the right and the brand on the jersey could not be seen, then the latter picture got used.
Data Co, the company representing the FA in the discussions, did not take kindly to the tactics and threatened to sue for breach of copyright. That prompted even more media to omit sponsor names. Within three weeks a deal, which had been stalemated for many weeks, was done.
The American media should take note. They could easily use similar tactics against the PGA. The first five PGA tournaments in 2005 are: The Mercedes Championships, The Sony Open, The Bob Hope Chrysler Classic, the AT&T Pebble Beach, and the Buick International. Those sponsors pay a fortune to have their names affiliated with those tournaments. What would happen if the media referred to those tournaments as, say, The Championships, The Open, The Bob Hope tournament, the tournament at Pebble Beach, and The International? And they didn’t run any pictures or brand symbols, cars, electronics and the like?
The copyright lawyers might huff and puff but one thing for sure – the PGA would have a lot of very angry, high-paying sponsors on its hands who were not getting the publicity they were counting on. And what pressure would they put on the PGA to let the media have its way?
And that’s the real moral of this whole sports rights issue –it is Big Business vs Big Business. Event organizers do a fine job of organizing events. The media does a fine job of disseminating the news. Each should keep to what it does best!
© Philip M. Stone of Stone & Associates, a partner in followthemedia.com