Worth over US$1 billion in 2020 and projected to be worth US$5 billion by 2026, it is safe to say that sports data rights is a large and growing business which brings cross-industry engagement from sporting leagues, teams and event organisers to sports data companies, gambling operators, video game developers and athletes, to name but a few.
There are currently a variety of legal developments and disputes in train that in some way, shape or form could significantly affect the exploitation and protection of data in sports. These include legal challenges regarding the use of an athlete’s “image rights” and performance data without their consent; a legal dispute as to whether live sports data can be protected as confidential information as recently examined by the Court of Appeal in The Racing Partnership v Sports Information Services, and a competition law claim that exclusive live data distribution agreements (such as those between Football DataCo and its exclusive data suppliers BetGenius and Genius Sports) are anti-competitive. Alongside the legal developments, there are commercial developments that are also having a significant impact on the exploitation of rights in the sports industry.
This article kicks off a series of articles and other content where we will be considering some of the key legal and commercial developments affecting the sports data industry. Some of the topics discussed, include:
The Ownership and Exploitation of Athlete Data: While the traditional methods of exploitation of an athlete’s image and other personal and performance data, including for advertising, performance analysis, betting and video gaming purposes remain prevalent, we are increasingly seeing the innovation of new avenues for exploitation of sports data by different stakeholders. As this innovation develops the question of which stakeholders own the rights to this data, who is permitted to exploit those rights and the terms on which such exploitation can be undertaken becomes more pertinent and more closely scutinised.
The Power Shift: Traditionally it has been clubs, event organisers and governing bodies that hold the cards when it comes to exploitation of athlete image rights and sports data. Increasingly, we are seeing athletes challenging this status quo. Project Red Card and the Gareth Bale and Zlatan Ibrahimović Twitter spat with EA Sports over the use of their image in FIFA video games (both discussed below) are frequently cited examples of this.
Challenges to the Commercialisation of Sports Data: The ongoing disputes relating to live sports data rights have led to ongoing uncertainty with regard to the parties due compensation for exploitation of their data, what consents are required to exploit sports data and the extent to which exclusive grants of live data rights could be considered anti-competitive. These disputes could impact the ability of events organisers, leagues, teams and governing bodies to effectively commercialise sports data. Sports governing bodies, clubs, betting operators, rights holders and data suppliers across the sports industry as a whole will be watching these developments unfold very closely.
Technological Developments: Technological developments within the sports data industry (and more widely within the sports industry) are creating new opportunities for exploitation, generating more data that can be exploited and pose additional challenges to overcome. The global sports technology market was valued at US$17.9 billion in 2021 and is expected to reach US$40.2 billion by 2026. Some of the new technological developments seen over recent years include increasingly sophisticated sports data analytics, smart stadiums, wearable devices and the use of drones.
1. The Ownership and Exploitation of Athlete Data
Athlete data continues to be of significant value to sports teams for performance analysis, betting companies in the provisions of their services, and not to mention the many avid fans of Football Manager. In addition, we are seeing new opportunities for exploitation being pursued by a number of stakeholders. A recent example includes Kevin De Bruyne engaging Analytics FC to assist with his reported £20 million a season contract negotiations with Manchester City. Reportedly, Analytics FC used an algorithm to analyse De Bruyne’s past, present and projected future performance using a range of metrics, such as expected goals and expected assists, worked out De Bruyne’s contribution to his team, and also benchmarked his salary against his peers.
Project Red Card (if it materialises, which is by no means certain) could also potentially have far reaching consequences for the exploitation of sports data, and in particular athletes’ performance data. It is understood that the basis of the dispute is that a footballers’ performance data is personal data under both UK and EU data protection legislation and that this personal data is being exploited for financial gain without the players’ consent. This dispute potentially touches on issues such as the transparency and fairness of the data processing, the legal grounds for processing and whether the compensation for any unlawful processing is limited to nominal damages or more akin to “user licence” type damages (the latter clearly being what the athletes are likely to be seeking).
A further challenge to the traditional ownership and licensing structure of athletes’ image rights is reported to have come from the cricket players’ union, FICA, to the International Cricket Council (ICC) alleging that the ICC is using players’ image rights in a manner which has not been authorised by the players, including for the purposes of fantasy cricket games and behind the scenes documentaries.
These disputes over the ownership and licensing structure of performance data and “image rights” are no doubt driven in part by the significant value of those assets to all stakeholders, and the athletes’ desire to obtain their share of the commercialisation of “their” data. As the value of the industry continues to increase, it seems likely we will continue to see significant disagreements over such issues, which will have a real impact on the avenues and innovation of rights exploitation. Indeed, there are concerns from data collectors and suppliers that Project Red Card will have a significant impact on sports data businesses and their relationships with their clients (for example, in the betting industry). In an SEC filing ahead of its IPO with SPAC partner dMY Technology Group II, Genius Sports stated that if Project Red Card materialises into a legal action ‘it could significantly alter the way we collect and use sports data relating to players, and could materially affect the sports data industry as whole’ and ‘could impact the validity of…contractual arrangements’.
2. The Power Shift
Athletes of the past did not have the same platform and influence as today’s sports superstars. Athletes are now demonstrating their willingness to use these platforms to advance a commercial agenda that could benefit all athletes going forward. Project Red Card (as discussed above) is a prime example of this in action. Footballers, including Gareth Bale, Zlatan Ibrahimović and even the late Diego Maradona in 2017, in addition to cricket players via the FCIA (see above) have also publicly questioned the use of their image in video games. Major game developers like Electronic Arts have acted quickly to state that all rights were properly acquired from leagues, players associations and athletes themselves. Despite this position, the bargaining position of athletes, especially in sports like football and American football, may lead to a change in landscape in the future.
3. Challenges to the Commercialisation of Sports Data
As the value and exploitation of sports data rights has increased in recent years, unsurprisingly so has the number of disputes relating to the exploitation of sports data rights. Issues currently being decided include the case of The Racing Partnership v Sports Information Services, where the Supreme Court is poised to decide whether to grant permission to appeal the decision of the Court of Appeal. The case relates to live sports data (the lifeblood of gambling operators), and is of relevance to the practice of “courtsiding” where data scouts attend live sporting events as spectators and use their phones or other means to relay action in the ground as it happens in order to circumvent the rules and other legal obstacles used by event organisers and official data providers to protect the value of their live data rights. Historically, event organisers and official data suppliers have relied on a combination of database rights, website terms and conditions and event ticket terms and conditions to do this. The Racing Partnership, which supplies live betting and horseracing data collected at racecourses to off-course bookmakers, brought a claim against Sports Information Services which provides an unofficial feed of raceday information. The Court of Appeal reversed the judgment of the High Court and held that Sports Information Services was not liable for breach of confidence in collecting and distributing key 'raceday' data from racecourses in respect of which The Racing Partnership had the exclusive contractual right to do so, however the Court of Appeal did find SIS liable for conspiracy to injure TRP by unlawful means.
This case underlines the extreme complexity and uncertainty which arises in relation to the legal protection which can be afforded to types of commercially valuable information which is not subject to protection by traditional intellectual property rights. The outcome and implications of this dispute are also far from clear, not least because SIS has filed an application to appeal the finding to the Supreme Court.
A further example of ongoing legal action is relation to exclusive data supply arrangements is a competition law case brought by Sportradar against Genius Sports, BetGenius and Football DataCo. In this case, SportRadar is challenging the legality of the grant by Football DataCo to Betgenius and Genius Sports of a long-term exclusive right to collect, collate and supply data in-stadia from Premier League, English Football League and Scottish Professional Football League matches for onward supply to bookmakers for live, or “in-play”, betting.
The outcome of all of these proceedings could have a material impact on the manner in which sports data suppliers, sporting bodies, sports teams and bookmakers are able to monetise and commercialise all categories of sports data.
4. Technological Developments
The sports data industry continues to be driven by innovation which frequently opens new avenues for exploitation and revenue streams. Examples include the trend for wearable technology, which creates even more data points for exploitation, and the rise of ‘smart stadiums’ which aim to increase security, combat the Covid-19 pandemic and enhance the commercial offerings to fans in attendance via a data driven approach.
Incorporation of sports data with machine learning and AI will also allow for advancements in coaching by increasing the number of tracked data points and facilitating the provision of advice and understanding for human decision makers within sport.
The much-publicised explosion of non-fungible tokens (“NFTs”) has also taken the sports industry by storm with multiple major sports organisations, events and governing bodies now being in the process of developing NFT portfolios to offer to both investors and fans. It is possible that NFTs will see use beyond the sale of digital collectibles and is potentially going to be used by events organisers to capture revenue from, for example, second hand sales of e-tickets which are sold as NFTs.
The confluence of these various commercial and legal developments demonstrate an industry that has experienced rapid growth in opportunities for exploitation and will continue to experience significant growth in the future, which has brought with it numerous challenges for stakeholders to overcome.
In this series, we will examine these key challenges and opportunities in more detail and offer our views on how stakeholders might navigate this precarious, but valuable, minefield.