Playing for Keeps: Is Sport's Endgame a Slice of the Action?Published: August 22, 2011 in Knowledge@Australian School of Business
Twenty years ago there were less than a handful of options for sports fans who wanted to keep close tabs on their pastime of choice. For those who couldn't catch the action live, there was only TV, radio or the next day's newspaper to fill the void.
These days fans who miss watching the game streamed to their computers in real-time could be reading play-by-play descriptions and using social networks to discuss the match as it unfolds, and later blogging about the result. A "tweet" from a favourite player may subsequently deliver the devastating news that he's out for the season. Then dedicated footy fans can re-cap the tackle that caused his injury on YouTube.
New media not only has changed the way devotees access leisurely pursuits, it also has sport's stakeholders hot to trot as well. While television remains the ultimate platform for "live" sport, there's growing commercial value for other content, and many major sports are bundling Internet and TV together when selling media rights these days.
With the rollout of the National Broadband Network (NBN) in Australia, it's thought that improved streaming services, the advent of Internet protocol television (IPTV) and ever-improving smart phones will drive up the patronage and value of new media channels. Sports governing bodies, individual teams or clubs, stadia owners, the media and third-party businesses are eager for a slice of the digital pie in an increasingly fragmented sporting market. But in the emergent world of the Internet, this has brought a range of legal implications and simmering tensions between media outlets and peak sports bodies. Ultimately, it begs the question, can anyone actually own sport?
Increasingly sporting organisations will seek to protect their intellectual property to maximise the value for rights holders and to limit or stop use for those who haven't paid for it, according to Deborah Healey, a lecturer in Law at the University of New South Wales who has viewed the radical changes to sports media first hand over the past two decades as both an academic and a solicitor.
"Growth in alternative media means that whereas broadcast contracts used to be far more simple … there are now so many ways of conveying information," Healey notes. "What rights' holders want to do is package it up and slice it and dice it in ways that give them an optimum return for selling their product. And once you start doing that, it becomes far more complex because you've got to decide what you have given and to whom you have given it, and exactly what they are allowed to do with it."
While copyright laws are clear-cut, the exceptions for fair use in areas such as research, study, criticism, parody, satire and reporting are very much dealt with on a case-by-case basis, Healey says. "There is not a bright line. It depends on the circumstances."
A court decision in 2007 in favour of subscription TV channel operator, Premier Media Group (PMG) against Australia's dominant telco, Telstra, gave insight into the current state of play. The latter, which owned the Internet rights to broadcast footage of the National Rugby League (NRL), had sought to limit the excerpts of NRL games that PMG could use and broadcast on websites such as foxsports.com.au. Finding in favour of PMG, the court assumed that exceptions for usage would be applied similarly to established media – which was allowed to broadcast several minutes of highlights – and the new media. The judge did not specify exact usage limits in that particular case.
But as PMG's representative Andrew Stewart, partner at law firm Baker & McKenzie, later noted in the Communications Law Bulletin, it's far from the endgame for this complex issue. "The fact that Telstra was moved to attempt to protect its rights in NRL content in the new media space demonstrates that there is significant commercial value in new media rights," he wrote. "How parties may value those rights, particularly clips rights, after this case remains to be seen, but it is likely that this will not be the last case to consider what is fair in the new media space."
The new media paradigm
The latest Australian Football League media rights deal shows just how far stock in new media for sport has come. Announced in April 2011, it is worth a total of A$1.253 billion over five years. From a base of nothing about a decade ago, the selling price for the Internet and mobile rights component, bought by Telstra, was A$155 million, about three times what the telco paid for the rights for 2007 to 2011. At the time of the recent sale, Telstra chief executive David Thodey remarked: "This agreement represents the coming of age for mobile technology and IPTV [internet protocol television]."
The new five-year NRL media rights deal to start in 2013 is expected to fetch anywhere between A$800 million to A$1 billion, with the Internet and mobile rights slice of the pie likely to look similar to the AFL deal.
It's hardly surprising the key players in Australian sports are becoming increasingly protective of their digital patch. With the assistance of cyber-professionals, the NRL tracked and shut down the operation of a 20-year-old from Sydney's inner west who was illegally streaming matches to a client base of about 12,000 people.
Cricket Australia (CA) says it has lost millions in revenue due to pirated Internet feeds around the globe, while the AFL has shut down streams of matches online and issued cease-and-desist letters to websites it deems have misused its intellectual property.
While electronic rights issues appear largely related to revenue streams, there's an argument brewing about the freedom of the press and independence of the information the public receives if sporting bodies are controlling too much in the digital domain. English Premier League club Manchester United – estimated by Forbes magazine to be the most valuable sporting entity in the world, worth about $US1.84 billion in 2010 – makes almost all of its announcements and conducts interviews through www.manutd.com. Directing traffic to its own website not only makes financial sense, it also enables strict control of the club's and its players' media engagement.
Australia may be headed the same way. "In terms of controlling the message, it's actually worked enormously in favour of sporting organisations and the AFL clubs have done it pretty well," says senior News Limited sports journalist Malcolm Conn. "They have their own big media departments, they do their own interviews, they load their own videos."
Cricket Australia also goes straight to Internet or TV with fresh "news" content, which Conn likens to the politicians' practice of "feeding the chooks", providing quick grabs for electronic media, "but not so great for written media looking for substance".
Chief executive of the Newspaper Publishers' Association Mark Hollands does not believe that controlling the media is the primary motivation of sports bodies, but he is opposed to giving them further influence. "If a sports organisation owned everything that happened in a stadium, would we have seen footage of the anti-apartheid riots during the South African tour of New Zealand in the '70s?," he asks. "Would we have seen footage of Mike Tyson taking a chunk out of Evander Holyfield's ear? Would we have seen what happened at Hillsborough (where 96 people died when a stadium collapsed during a 1989 FA Cup football match) – and if we had not seen it, would the British government have forced football stadiums to be updated to all-seaters? No, we wouldn't have. It is very important that news is brought to society by those who have no vested interest."
Cricket Australia and the AFL have been among the most active sporting organisations in Australia to pursue their intellectual property rights with media companies. Both have had disputes with major news entities in the last four years resulting in lockouts for media at matches. Australian Associated Press and Getty Images photographers were refused entry to fixtures for two years before they could reach agreement with the AFL over the redistribution of images, while coverage of Australia's cricket Tests in the 2007–2008 season was disrupted because international wire services and a number of other media outlets could not agree to accreditation terms.
After a senate inquiry in 2009, leading sporting administrators and media outlets struck a deal about how sport could be reported on in 2010. The upshot was an agreement that allowed news organisations to use whatever platforms they wished for the reporting of news, while sports entities could draw the line at content used for purely commercial gain. This agreement seems to mirror the copyright law, Healey points out, so it's not clear what it has added.
More battles could be around the corner as some sporting bodies suggest copyright laws are not up to speed for the Internet age. There continues to be no clear definition of fair use for digital purposes and how it might apply from one sport to another – which in itself is no easy matter – so the potential for an issue remains, says Stephanie Beltrame, general manager of media rights at Cricket Australia.
While recognising the role media plays in promoting the game and hence increasing its commercial value, she says the notion of charging news organisations to cover sport is not such a big leap. It was suggested by International Rugby Board chief executive Robin Miller in 2007 as the body looked to the 2011 World Cup in New Zealand this September and early October. "If you step back and analyse the principles, it does have some logic and merit as everyone is charged a fee to enter major events, including fans who buy tickets and including Cricket Australia because we pay venue hire fees, but news organisations are the exception. At the end of the day, they are commercial entities … But it's not something we are actively considering," Beltrame says.
Hollands, who was brokering a deal with the IRB over accreditation terms for the 2011 World Cup at the time of writing, suggested that kind of payment would not be required and that sporting bodies would need to look elsewhere to make up any perceived financial shortfall. "The idea that somehow newspapers are publishing sport and making bucks out of it is complete and utter nonsense," he says.