A Primer on Broadcast Rights for Sporting EventsPDF
Professional sports leagues and major collegiate athletic conferences have dealt with broadcast and multimedia agreements for many years. Now, with the increase in cable television channels and technological advances in Internet video streaming, sports promoters and organizers that never have had to deal with such issues (entities such as state high school basketball holiday tournaments, and smaller colleges and universities) are licensing the rights to broadcast on television or the Internet coverage of games organized by the promoter.
The issues faced by these promoters are not significantly different from those encountered by professional sports leagues and major collegiate athletic conferences. The following article answers some basic questions associated with these broadcast agreements.
What law gives the promoted the authority to grant the broadcast rights? The initial off-the-cuff answer to this question would be copyright law, but the correct answer is the promoter's property rights. A promoter does not own a copyright in the game itself. Copyrights exist only in "original works of authorship fixed in a tangible medium of expression" (for example, recorded video or audio descriptions).
Instead, in licensing the right to broadcast coverage of a game, the promoter is granting the broadcaster access to the arena in which the game is played and placing restrictions upon the use of video coverage created during that access. Other examples of conditions placed on access to the game arena are press credentials and the fine print on the back of game tickets, each of which typically place restrictions on use of video coverage created by the licensee (i.e. the press or ticketholder).
Who will own the video coverage produced by the broadcaster? Absent an agreement to the contrary or a "work-for hire" arrangement, the copyright in an original work of authorship (i.e. the video coverage of the game) is owned by the person or entity that created the work, which in this case, would be the broadcaster. For many years, it was typical for the broadcaster to retain the ownership in the copyright of the game broadcasts it produced. That paradigm has shifted in recent years, and now larger multimedia deals provide that the applicable professional sports league or collegiate athletic conference owns the copyright in the broadcasts. In smaller deals, it is simply a matter of negotiation between the promoted and broadcaster.
What rights will the broadcaster have while the game is being played (i.e. during the "live window")? A broadcaster will typically want exclusive rights during the live window to broadcast the game on any platform (e.g., television, Internet, mobile). The promoter usually is willing to grant such rights, but may want a covenant requiring that coverage only be available on a specific network or website.
What about "in-venue" rights? This may be the next hot area in multimedia agreements negotiations. Obviously, a promoter should reserve the right to display highlights on its video boards within the arena during the game, and that is not typically an issue. However, a promoter also may want to reserve the exclusive right to transmit footage from the game via Wi-Fi enabled smart phones and devices that may be available for rent or sale in the arena for use by game spectators. Broadcasters will argue that these rights are part-and-parcel of the exclusive live window rights that they have been licensed.
What about "data" rights? A broadcaster will sometimes request that the promoter license it exclusive "data" rights, which is often a misunderstood concept. The promoter certainly can agree to provide to the broadcaster the official scoring and statistics it creates for use in the game broadcast (or perhaps on the broadcaster's website or mobile application), and the promoter can also agree not to provide that data to another entity. However, the promoter cannot agree that the broadcaster will have the exclusive right to display data from a game because once those scores are broadcast or otherwise distributed, they become part of the public domain as information -- which is not protected by copyright -- and thus freely usable by anyone.
What rights will the broadcaster have after the live window? The answer to this question is influenced greatly by the answer to the copyright ownership question above. If the promoter owns the copyright to the broadcast, the broadcaster may negotiate for a license from the promoter to allow it to use highlights and full game re-broadcasts of the game, preferable in perpetuity but at a minimum for some reasonable period. The promoter may be willing to allow the broadcaster to use footage on broadcaster-branded networks and platforms, but the promoter will want to restrict the broadcaster from sublicensing game footage to third parties to preserve those rights for the promoter.
What obligations will the broadcaster have with respect to the game? For most promoters, the license of broadcast rights for a rights fee is only part of the value of entering a broadcast agreement. Most promoters also want assurances that the broadcaster will produce a quality broadcast of its game and distribute that broadcast via a television network and/or digital platform that can be received by the promoter's intended audience to ensure maximum exposure of the game. If a broadcast agreement addresses only the rights to broadcast without setting forth the obligations, the broadcaster may "squat" on the rights, meaning that if circumstances change, the broadcaster could choose not to incur the additional expense over and above the rights fee necessary to produce and distribute the game.
What other issues should a promoter expect to encounter? There are a host of other issues including:
- Who supplies the production facilities and other things necessary to produce a quality broadcast, including lighting and electrical power?
- Who controls the right to sell arena signage, such as a scoring-table type signage at a basketball game?
- What rights will the broadcaster have to use the trademarks of the participating teams in promoting the broadcast, and does the promoter have the right to grant such rights?
- Will the promoter have approval rights over certain aspects of the broadcast, such as the play-by-play and color commentators or on-screen graphics, particularly those promoting other broadcaster programming?
- If the promoter is a college, university or other tax-exempt entity, does the broadcast agreement create any tax considerations, including unrelated business taxable income?