Who owns real-time sports data?

By Ryan Rodenberg , written on February 6, 2014

From The News Desk

Daniel Dobson attained his 15 minutes of fame in the spotlight last month during the Australian Open tennis tournament in Melbourne. Dobson, a British national, was arrested on-site and accused of “courtsiding” in violation of a new law centered on betting integrity. The practice of courtsiding in tennis dates back to at least 2008 and involves the clandestine transmission of real-time data. The recipients of such transmissions are often those involved in high-stakes sports wagering.

The usefulness of courtsiding stems from its speed. By communicating on-court events as they happen, the recipient can exploit the 5 to 10 second delay attached to data transmissions from “official” mediums or the accompanying television broadcast. A sophisticated sports gambler in possession of information about what has happened on-court before betting odds change is at a decided advantage when live-wagering on a peer-to-peer exchange or via an online sports book. Think of it as arbitrage for sports.

The Dobson kerfuffle is the most recent example highlighting a lingering question that permeates sports analytics of the type to be discussed at the upcoming MIT Sloan event: Who owns sports data?

It's complicated and involves two potential paths. One path pertains to historical data. The other is concerned with real-time sports data. The legal status of the former is fairly well-settled. Newspapers and other media outlets have been publishing box scores from sporting events for over a century without having to pay any type of licensing fee to the league, teams, or athletes involved in the underlying games. In the United States, the First Amendment clearly attaches to the dissemination of factual information about newsworthy events in the public domain.

The second path is trickier. What if live data are gathered by screen scraping copyrighted broadcasts or via on-location courtsiders hired to opaquely re-transmit the information? Certain sports leagues have seemingly taken the position that such data are proprietary. A spokeswoman for the ATP World Tour, a governing body for men’s professional tennis, provided the following illustrative quote when interviewed by Bloomberg’s Danielle Rossingh in 2011 (Note the revealing use of the possessive “our”):

There are a lot of unauthorized people out there collecting our data, either scraping it off our websites or television or sitting in the stands, keying in every shot, often with errors, and selling it for substantial profit.
Last year, a top PGA Tour executive issued the following edict directed towards credentialed golf journalists:
As you know, our media regulations prohibit the use of real-time, play-by-play transmission in digital outlets.  In order to enforce these regulations, beginning this year, we will revoke the on-site credentials of all journalists affiliated with outlets that post play-by-play coverage, whether those posts are originating from tournament site or otherwise.
A number of legal decisions cast doubt on the scope and permissibility of real-time data ownership, making the move towards monetization by sports leagues uncertain. Two cases stand out. The first was decided in 1918 (not a typo). In International News Service v. Associated Press, the U.S. Supreme Court conferred a limited property right in what was described as “hot news.” Nearly a century ago, the hot news involved the AP’s reporting from the European battlefields of World War I. Plaintiff AP sued its competitor, alleging that INS misappropriated news the AP had originally gathered by repackaging the material as its own and selling it in different time zones. Ruling in favor of the AP, a splintered Supreme Court concluded that defendant INS was “endeavoring to reap where it has not sown.”

The near-identical issue was litigated in the sports industry 80 years later. In NBA v. Motorola, the league sued over a Motorola mobile pager service that offered statistics from basketball games in progress. Motorola was joined in the litigation by co-defendant STATS, a Chicago-based data company. The NBA made a half-dozen legal claims, including misappropriation, false advertising, copyright infringement, and unlawful interception of communications. The only claim that stuck at the trial court level was the NBA’s misappropriation claim, but it was enough for the league to get an injunction barring the service.

On review before the U.S. Court of Appeals for the Second Circuit, Motorola and STATS argued that the NBA should not be protected under the narrow safe harbor enunciated in the 1918 Supreme Court case. Several factual findings proved dispositive. First, the appellate court found that the NBA’s primary products involved “producing basketball games with live attendance and licensing copyrighted broadcasts of those games.” Second, the three judge panel determined that “Motorola and STATS expend their own resources to collect purely factual information generated in NBA games to transmit to [the] pagers.”

These findings moved the court to conclude that the NBA suffered no damage based on any purported “free-riding” by Motorola and STATS.  The NBA v. Motorola case remains a hurdle for sports entities looking to commodify real-time data.

Sports leagues are trying to effectuate an end run around the precedent in at least three ways. First, they are investing in their own analytics infrastructure. The NBA is a leader in this field, as evidenced by its move to install motion-tracking cameras in every arena and create a vast statistical database for media and fans. By doing so, the NBA will be able to more forcefully posit that it is a direct competitor of a company offering a service similar to Motorola.

Two, numerous sports leagues are making a huge push into the lucrative and data-rich fantasy sports space.  This calculated move arose after Congress passed the Unlawful Internet Gambling Enforcement Act in 2006 and included a narrow carve-out for fantasy sports.

Third, some leagues have moved to partner with former courtroom adversaries.  Who is the NBA’s collaborator in connection with the high-tech cameras? None other than STATS.

As Pando’s James Robinson detailed last month, the evolving live sports watching experience is being infused with real-time data. Live wagering and quasi-gambling fantasy sports also drive consumer interest in sporting events.

But don’t expect the real-time sports data monetization movement to be smooth – the law usually lags behind technological developments.

[image via Phil Roeder]