Data collection from sports events: a nonexclusive future?

Football stadium and data graphs
Published 09 August 2018 | Authored by: Andrew Nixon

With the UK football leagues entering the final year of their current data partnerships and the ever-increasing focus on data as critical sports content, the time is right for the model for data commercialisation in sport to be critically evaluated.

The danger of information monopolies

Anyone close to the commercial side of sports content is likely to know that certain leagues, competitions or event organisers see the data generated during the course of their events as an important part of their commercial portfolios, and understandably so: data, and in particular live data, collected from a sports event has become a valuable commodity from a media perspective, and from a betting perspective. It is also well-known that certain event organisers take the view that the best way to extract maximum value from their data is to enter into exclusive data partnerships (more of the writer’s views on that below). In my experience, what is perhaps less well understood is the correct legal status of the data, underlined by the wrongly-held assumption that just because an event organiser has entered into an exclusive data partnership it is somehow permitted to prevent other parties attending stadia, or arenas, and collecting their own data in an unofficial capacity.

The starting point here is that there is no intellectual property in sports data. It is only the database created from the sports data, by the event organiser (or a third party), which benefits from intellectual property protection1. And it is precisely because the database benefits from intellectual property protection that it is critical that no restriction is placed on third parties accessing the live sports data. To do so would prevent others from benefiting from the right to create their own commercially valuable databases of information. This is particularly the case for significant sports and sports events which are not substitutable.

This principle was explained by Floyd J, back in 2012, in Football DataCo v Sportradar and others [2012] EWHC 185:

….if one allows a database right to attach to data which is created by the maker of the database the creator obtains a true monopoly in that data. Such a result would be inconsistent with the objectives of the [EU Database] Directive. The Directive should not be construed in a way which gives a party a monopoly in facts….where a database consists of data obtained from sources available to the public, such as existing published data, the balance of policy considerations is different. There is (or should be) nothing to prevent the public from investing in obtaining those data for themselves...."

But what does this mean in the context of event organisers entering into exclusive data deals and using, say, terms and conditions of stadia entry to exclude or prevent a third party "from investing in obtaining those data for themselves"? In my opinion the answer is clear: by seeking to enforce exclusivity and seeking to restrict the collection and exploitation of sports data, an event organiser would be engaging in conduct which has been impugned by the High Court and which is clearly anti-competitive (see further below): namely, the event organiser would be attempting to exert a stranglehold over facts.

It is correct that a landowner is entitled to control access to its land, or in the sporting context, stadium or arena. But any such control cannot be used as a way to create and enforce a single source information monopoly and thereby dampen, or even eradicate, competition. Generally speaking access to the relevant stadia will be indispensable to a data company’s ability to compete in downstream markets (for example, the betting market) because fast and accurate real-time data is a central component of any downstream service, particularly in the context of in-play betting). The important and established legal principle here is that the competition law principles override an event organiser’s desire to impose restrictions, even where the event organiser’s justification is to extract maximum profits.

Article 101 of Treaty of the Functioning European Union (TFEU), for example, prohibits agreements which have as their objective or effect the preventing or restricting or distorting of competition. In the context of sports data, the packaging of live "data rights", selling them to a single operator to the exclusion of all others, and relying on such "access restrictions" is potentially anti-competitive. So, if an event organiser grants a right to collect data to only one data collection company a distortive effect will prevail, as other data collection companies will not be able to access information which is essential to enable them to compete in the market of providing data products to bookmakers.

In this scenario, the event organiser also occupies a dominant position in the market, underscored by its ability to control access through related ticketing terms and conditions. As such, an event organiser would be open to challenge for a violation of Article 102 TFEU2 if it were to abuse its dominant position in the market by seeking to prevent third parties collecting publicly available information and creating their own exploitable databases (and enabling only one party to do so, exclusively). This is particularly egregious when it comes to the practice of refusing access to, or ejecting, sports data collectors by relying on terms and conditions which contain restrictions on data collection.

By the same token, any attempt to engage old-fashioned "trespass" law is destined to fail if the third party is entitled to be there. It is well established that rights over land can place the land owner in a dominant position in a market, and that it is therefore necessary for the dominant undertaking to provide competing undertakings with access to its property on fair and reasonable terms, and that a refusal to do so will be abusive. This is an issue which has been particularly prevalent in relation to airports, where access is controlled by the airport operator. For example, in Aeroport de Paris v Commission3 the Court of Justice upheld the finding that ADP, as manager of the Paris airports, was dominant in the upstream market for the management of airport facilities which were indispensable for the provision of ground handling services in the downstream market, to which ADP controlled access. Similarly, in Purple Parking v Heathrow Airport4, the High Court treated the operator of Heathrow as dominant in the upstream facilities market, which was defined as the provision of access to Heathrow's facilities, including roads and forecourts.

It seems that the only possible cause of action in trespass may arise where the individual collecting the data behaved in a way which engaged the Public Order Act. To be guilty the offender must not only (a) trespass but (b) do so with the intention of either obstructing or disrupting the "lawful activity" taking place on the land. A data collector is not and would not be intending to interfere in any way with the lawful activity i.e. the relevant sporting event. Indeed, he or she needs the game or event to happen and they attend these matches in a peaceful manner in order to carry out legitimate commercial activity. The same point applies in relation to any allegation of criminal activity, such as an offence contrary to section 6 and 7 of the Fraud Act 2006. For any such allegation to be remotely sustainable there would need to be dishonesty, but data collectors who attend events or stadia on behalf of established and sophisticated data companies do not make any kind of false representation. The fact is they have a valid ticket and they are entitled to attend the match and they are entitled to collect publicly available information. As set out above, any allegation of "false misrepresentation" would, presumably, be predicated on the terms and conditions of event entry which are themselves being used to create an illegitimate information monopoly.

The author has also noted a "likening" of collecting data from sports events to that of piracy, intellectual property theft or copying a film by entering the cinema with a camcorder. There are no similarities whatsoever. A motion picture is a copyright work. A sporting contest is not. There is no more legal right to protect the data related to a sports event as there is to protect data related to the weather outside. To put it bluntly, "data rights" do not exist: the “database right” does exist but its purpose is to recognize the investment that is made in compiling a database and protects the database itself, being the product of the creator’s input. So, data collectors are there to create a database which they are entitled to do thereby serving to avoid infringing someone else’s database right.

The Future

There can be no monopoly in facts, and to seek to create such a monopoly engages Competition Law. It would likely be acceptable for the event organiser to charge a fair and reasonable fee for access rights to data collectors: they are, after all, the "landowner". What the event organiser cannot legitimately do is licence access rights to one undertaking, to the absolute exclusion of all others.

The irony is that a non-exclusive model, as well as having better prospects of being compatible with EU competition law, is likely to be more lucrative, in the longer term, to an event organiser, or rights owner, than seeking to squeeze maximum rent from one exclusive partner. It is also likely to have a positive impact on an event organiser’s ability to protect its event from an integrity perspective:

The author therefore believes that the future modelling of "data rights" deals between rights owners and data companies should (and will) be based on a non-exclusive structure.

How this will work in practice will obviously need to be considered on a sport by sport basis, but it is not (or should not be) complicated.

For instance, a non-exclusive model with multiple accredited data collectors, but one having an "official" status (which may attract a slightly higher fee) could be one option. This is similar to the model already adopted by the Bundesliga in Germany. Another (and probably preferable) option would be a fully non-exclusive model, with multiple data providers getting access to the stadia or events on equal terms. This is similar to the progressive approach adopted by the European Professional Football Leagues in the last two seasons. Either way, this set-up would undoubtedly be more conducive to better market outcomes for consumers and more extensive access to the downstream bookmaking market for event organisers. Under these models, not only would the market function effectively, but the event organisers could extract commercial value by charging data collectors a fair and reasonable access fee and, of course, the event organiser will be in a better position to protect the integrity and use of the data which is, or should be, one of the primary objectives.

Andrew Nixon is Head of Sport and Esports at Sheridans, and advises both rights holders and data companies.

References

1 A database right subsists when the maker of the database has made a substantial investment, either qualitatively or quantitatively or both, in the obtaining, verification or presentation of its contents. Infringement of the database right occurs when a third party without authorisation extracts or re-utilises the whole or a substantial part of the contents of the database. "Substantial part" can be evaluated qualitatively or quantitatively (Article 7(1), Database Directive). The term "extraction" means "the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form" (Article 7(2)(a), Database Directive).

2 The has been well established in non-sporting case law: for example, in Arriva the Shires v London Luton Airport Operations [2014] EWHC 64 (Ch)) the High Court determined that the grant of exclusivity to a single downstream provider of rights has a distortive effect on competition where competitors cannot enter the downstream market to compete with the undertaking to which the rights have been granted, and this in turn leads to market foreclosure

3 [2002] ECR I-9297 (Case C-82/01P), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=ecli%3AECLI%3AEU%3AC%3A2002%3A617 (last accessed 9 Aug 2015)

4 [2011] EWHC 987, https://www.bailii.org/ew/cases/EWHC/Ch/2011/987.html (last accessed 9 Aug 2015)

5 One such example is Sportradar, a data company which invests heavily in its market leading fraud detection system.

6 Court siding, in effect, means that bets can be placed on information obtained directly from someone at the event before data feeds from the data companies gets through to the bookmaker.

7‘Ghost Matches’ are matches or events which are offered by bookmakers, but which do not actually take place: BBC (2015), ‘Ghost games’ betting scam costs bookie thousands of pounds’, 2 March, available at: https://www.bbc.co.uk/sport/0/football/31692786.

Related Articles

About the Author

Andrew Nixon

Andrew Nixon

Andrew Nixon is a Partner in the Sport Group at Sheridans. Referred to in this year's Legal 500 as a “very bright and talented sports lawyer” Andrew's practice focuses principally on regulatory, governance, disciplinary, arbitration and dispute resolution within the sport sector. Andrew's clients include governing bodies, sports clubs, sports agencies and individual athletes.

  • This email address is being protected from spambots. You need JavaScript enabled to view it.

Leave a comment

Please login to leave a comment.