What the social media revolution means for sports fans and rights holders
This is an extract from the ‘Media Rights’ Chapter of the Sports Law Yearbook 2015/16 - UK, Ireland and EU, an eBook publication by LawInSport & British Association for Sport and Law.
The Yearbook reviews developing sports law trends in the UK, Ireland and Europe. It contains legal commentary and analysis from over 50 leading sports lawyers and will be of use to students, academics, athletes, coaches, the media, sports business professionals, in-house counsel and lawyers worldwide.
The Yearbook can be downloaded for free by all LawInSport Plus members with an annual subscription. To enjoy all the perks of being a LawInSport Plus member, please register here.
Whilst the cultural shift in the way in which viewers access and consume sports content has been developing for a few years - 61% of consumers are reported to follow sport online, with the last 3 years seeing the percentage of fans viewing sports content on their smart devices increase from 21% to 39%1 - 2015 is likely to be seen as the year that this shift was fully embraced by the sports industry.
This was a significant year not only for the sports media industry itself, in which the "anywhere, anytime" requirements of the modern day sports fan were embraced by rightsholders and broadcasters, but also for sports lawyers.
It is not just the medium by which content is accessed that we have seen change, the exponential growth of platforms through which fans can consume sport also had a significant impact on the sports media landscape, with one in four fans accessing sports content via social media.2
This extract will explore the challenges and opportunities that both social media and smart devices have presented over the last 12 months – which, given the cross border nature of social media and new technologies, requires a global review - together with the key provisions that sports lawyers have had to consider when drafting and negotiating media rights agreements in order to appropriately reflect, and deal with, the impact of new technology on sports media rights programmes.
As noted by Simon Greenberg (global head of rights at News Corp), social media platforms and smart devices provide rights holders and broadcasters with a number of important opportunities, including,
"the connectivity you get with the user, the speed you can get to the user, and the way you can target the [sports] fan."3
This has driven rights holders, particularly in the US (such as the NBA and the NFL), to increase the quality of the engagements and interactions with fans via social media by expanding existing relationships with various digital platforms including Twitter, Facebook, YouTube and Snapchat to make official in-game video clips and fan-generated content more widely available online4.
As detailed in section one, 2015 also saw the NBA launch a new service utilising its presence on Twitter and Facebook to drive fans to their OTT “League Pass” product by incorporating links at the bottom of its posts and tweets, directing fans to pages where they could buy access to the individual game that the post/tweet related to.
Social media platforms themselves are also beginning to view the provision of sports content as a key component of their service to drive users to their platforms, with Facebook seeking to take on Twitter in the sports arena with the recent launch of a new platform called "Facebook Sports Stadium", where Facebook users will be able to access “real-time updates on games, popular posts from other fans, statistics and commentary from experts”.5
We have also seen the opportunity afforded by social media to provide a platform for “consumers [to] react to live sports”6, demonstrated by the increase in the use of so-called "second screens" by sports fans (e.g. the use of computers, laptops, smartphones or tablets whilst watching sport on television). There is also the provision of interactive features by licensees (e.g. red button services) for additional sports content (e.g. text commentary, live scores, clips and/or live footage), in-match betting, engaging with teams, athletes and other fans about the content being broadcast and accessing match statistics.
This increased connectivity presents a range of opportunities for rights holders and licensees to provide added-value not only to their fans and consumers, but also to their commercial partners, for example through access to additional premium content, competitions, in-play fantasy games, targeted advertising, sponsor-led content and as a mechanism for extending the commercial reach of commercial partners.
In 2014, we saw the launch of CityMatchday, a dedicated second screen match day app, which allowed users to watch live footage from the players’ tunnel, the post-match managers’ press conference and in-match and half-time commentary from pundits, fans and special guests7 together with access to a highlights channel and "Tactical Cam". This was not the end of Manchester City’s innovation as 2015 saw them become the first football club to develop a wearable technology companion app, which granted fans access to matchday stats and commentary via their Android smartwatch8.
Whilst the use of "second screens" or interactive services presents a fantastic opportunity for rights holders and licensees, it does need to be carefully managed within the relevant media rights agreement.
In particular, rights holders need to ensure that the integrity of their product (e.g. sport, league, team etc.) and the rights granted to their commercial partners are not compromised by any additional content and/or services provided by their licensees.
As such, rights holders look to impose strict conditions and/or ensure that they retain approval rights over what can be broadcast as part of a licensee's interactive services. Furthermore, particularly where an interactive service relates to a category of rights already granted to an official sponsor (e.g. official data partner or betting partner), the media rights agreement will seek to prohibit the applicable licensee from exploiting the service during its coverage unless licensed through the relevant official partner (e.g. a licensee should be prevented from providing match statistics unless that data is licensed from the official data partner).
In addition, where a rights holder is seeking to exploit rights itself (e.g. Manchester City’s distribution of content via its mobile and smartwatch apps), it is critical that this exploitation is carved out of the media rights agreement (e.g. as part of the reserved rights).
Whilst social media clearly provides an effective method for enhancing the quality of the engagements between a rights holder and fans, it also provides an incredible platform for exponentially increasing a rights holder’s reach. For example, 3 tweets sent by Cristiano Ronaldo relating to the 2014 UEFA Champions League Final reached an estimated 113,000,000 people, 135 countries and 43% of twitter users9.
However, social media does not only provide a platform for increasing an official sponsor’s fan reach. It also enables third parties that are not officially associated with an event to use the goodwill created by that event to increase its brand exposure.
For example, research carried out by Repucom relating to the use of social media during the 2014 FIFA World Cup, highlighted the fact that Nike (who was not an official sponsor of the tournament) received 213,965,724 views on social media during the course of the tournament compared to 100,242,944 received by Adidas (who was an official FIFA partner).
Whilst there will obviously be a number of factors that contribute to Nike’s ability to generate significant social media exposure, it also highlights the fact that brands that are not official sponsors or partners of events can use the interest surrounding a major tournament to develop its own social media presence, particularly where that brand is associated with stars of the tournament (e.g. Nike and Cristiano Ronaldo).
As such, it is important for rights holders and official partners to engage proactively with each other to produce premium additional content that official partners can use as part of their activation of the relevant rights.
As discussed above, this enables official partners to provide higher quality engagements with consumers (e.g. behind the scenes interviews and footage, access to archive content and competition prizes10 etc.) and demonstrates value to official partners, who may otherwise look at the fact that non-partners are able to generate increased exposure around events without having to pay substantial rights fees and decide that there is no need to become an official sponsor.
Consequently, official partners and licensees (including broadcasters, as part of the relevant media rights agreement) will often now seek to impose (and the rights holder may be willing to accept) various obligations to provide additional rights (e.g. in addition - in the case of media rights agreements - to the principal right to distribute the match footage) including: making players and officials available for exclusive interviews; providing tickets and hospitality places to the rights holder’s events; rights for the partner to organise competitions (e.g. ‘goal of the month’) and; distribution of the partner’s marketing materials to the rights holder’s database (e.g. season ticket holders).
Enhanced rights fees
The sale of media rights is of fundamental importance to the commercial programmes of most (if not all) rights holders, and generally represents the single most important source of revenue.
The emergence of new technology provides rights holders with an opportunity to exploit new packages of rights11, and encourages new entrants to enter what has traditionally been a closed marketplace12, thereby enhancing the revenue that a rights holder can generate from its packages.
Also, the increase in new platforms for viewing content provides a vast increase in the opportunities for the distribution of sports programming by enabling content to be accessed in more territories around the world and facilitating increased exposure for less mainstream sports and/or content for which broadcasters do not provide linear television coverage13.
The potential for the creation of new packages of rights means (now, more than ever) that lawyers need to pay careful attention when defining the scope of rights in the relevant media rights agreement so that the exclusivity afforded by each package does not overlap or conflict with the exclusivity afforded by any other package.
For example, convergence has meant that the lines between "television", "internet" and "mobile" are quickly disappearing, making it very difficult for rights (in particular the exclusivity of these rights) to be granted by reference to technology. As such, media rights sales are now generally made on a technology neutral basis (which allows rights to be exploited on all platforms and via all devices14), with exclusivity granted on the basis of the following:
- type of programming (e.g. live, as-live, highlights, clips etc.);
- payment mechanism (e.g. free, pay-per-view and pay); and
- transmission type (e.g. linear or on-demand).
It is also important, particularly when dealing with long term agreements, that potential rights are not locked away, for example it is important to ensure that where (at the time of the deal) certain rights are not able to be exploited, these are reserved for potential exploitation in the future. As such, when drafting media rights agreements, it is vital to consider the long term commercial plans of the rights holder and to ensure that the grant of rights does not restrict the potential opportunities afforded by new technology.
Whilst new technology and new media platforms provide rights holders with a number of opportunities, they also create additional challenges and risks.
As discussed, the speed of getting content to, and interacting with, fans can offer rights holders and licensees with a fantastic opportunity to engage with their fans on a real time basis, thereby offering a way of enhancing the fan experience.
However, these real time interactions also pose a significant threat and challenge to those same rights holders and licensees. The FIFA World Cup in Brazil and the start of the new Premier League football season in 2014 provided perfect examples of this, through the emergence of users posting so-called "goal Vines" on Twitter (six second video clips of goals via Twitter’s Vine application).
The development of new technologies, in particular the ability to pause and rewind live television broadcasts has significantly contributed to the prevalence of "goal Vines" on social media by making it much easier for television viewers to film footage from live broadcasts. 2015 has continued in a similar vain with the NFL, UFC and the Big 12 requiring Twitter to remove various links to pirated audio-visual coverage and highlights made available on the platform.15
However not all rightsholders view the availability of fan-generated content on social media as a threat, the NBA allow fans to post GIFs on Twitter or highlights on YouTube on the basis that “that fans either seeing tonight’s highlights, or things from each other showing their joy and love of the game, is going to compel other people to watch”16.
Whilst the approach of the NBA is certainly admirable, it is not surprising that other rights holders view the threat differently. For example, the availability of Premier League goal clips on Twitter poses a particular threat to News International, the official clip licensee for the 2013/14 – 2015/16 cycle.
Obviously, the fact that goal Vines are freely available, while subscribers to News International's Sun+ app are required to pay £8 per month, is a significant factor in drawing subscribers away from the official licensee’s product. More importantly, however, are the restrictions under Article 48 of the UEFA Statutes17 – under which UEFA’s member associations (e.g. The Football Association in England) can impose restrictions on the availability of coverage of football matches during so-called blocked broadcasting hours (14.45 – 17.15 on a Saturday in England) - which prevent News International from distributing video content during such blocked broadcasting hours.
Whilst News International is prevented from exploiting its clip rights during the blocked broadcasting hours, licensees in other European countries are able to broadcast live coverage, thereby allowing viewers/subscribers in those countries to record clips from such television broadcasts (e.g. on a mobile phone) and, via Twitter, share those clips around the world (including in the UK) within seconds of the goal being scored. Therefore, fans in the UK are able to view content via Twitter before the exclusive Premier League licensee is able to distribute its official content.
The unauthorised availability of footage on social media is a difficult issue to remedy, particularly due to the speed at which content can be uploaded and then widely disseminated across various platforms. However, we now see licensees look to negotiate (within their media rights agreements) obligations on the rights holder to actively take steps (as soon as it becomes aware of the availability) to bring such unauthorised availability to an end (e.g. sending pre-agreed cease and desist letters and engaging third party anti-piracy providers to remove content), and to notify the licensee about the steps that have been taken.
This obligation is often extended to include employing technology to bring the availability to an end. There are also companies that employ video fingerprinting technology to enable rights holders to determine if any content shared online contains content registered with the fingerprint service. If registered content is detected, the rights holder can then determine the appropriate action to take, which may include removing the content or serving advertising of its official partners around it.
Whilst the opportunity for a rights holder to share live content on social media sites allows it to provide its commercial partners with an enhanced commercial offering by enabling its commercial partners to sponsor the relevant content and to insert pre-roll (i.e. appearing before a video starts), post-roll (i.e. appearing after a video has finished) and/or in-skin (i.e. appearing around the video player) advertising, it also raises important issues relating to ambush marketing.
For example, 2015 saw the launch of an enhanced offering for the Twitter Amplify service (the service which allows users to watch live clips and content (including of sports events) in real-time without leaving Twitter), to enable “publishers and creators to monetize their video content on Twitter”18, by allowing advertisers to “run video ads against premium content automatically based on their preferred content categories.”19. This enhanced service automates the advertising process around that video content, with Twitter “dynamically inserting pre-roll ads into the most relevant videos being watched by [the advertisers’] target audience”20.
Whilst this obviously provides a significant opportunity for rightsholders to effectively monetise their content, it will be important for Twitter to have appropriate procedures in place to guard against: (i) the monetisation of unofficial and/or unauthorised content; and (ii) advertisers who are not official partners of the relevant event directly associating themselves with major sports events through this process.
As such, it is important (in order to ensure the integrity of the marketing rights packages offered to its commercial partners) for rights holders to look to strictly control the ability of a licensee to exploit its rights in connection with the relevant event.
Rights holders will generally look to reserve the broadcast sponsorship rights when concluding media rights agreements, in order to pass them on for their commercial partners to exploit - as happens with the UEFA Champions League - or (if the relevant licensee is unwilling to accept such as reservation of rights) to require that any broadcast sponsorship packages and advertising spots are first offered to the event's official commercial partners on a product or service category exclusive basis.
Where a licensee is seeking to exploit content by means of the internet (including via social media sites or through smart devices), provisions can be included in the media rights agreement which contractually oblige the licensee to ensure that the content is shown free of any third party commercial identification (i.e. prohibiting the use of pre-roll, post-roll and/or in-skin advertising in conjunction with such content), unless such third party is an official sponsor.
This is an extract from the Sports Law Yearbook 2015/16 - UK, Ireland and EU, an eBook publication by LawInSport & British Association for Sport and Law.
The Yearbook can be downloaded for free by all LawInSport Plus members with an annual subscription. To enjoy all the perks of being a LawInSport Plus member, please register here.
- 2014 FIFA World Cup Brazil Ambush Marketing Broadcasting Football Media Rights National Basketball Association (NBA) National Football League (NFL) Premier League Social Media The FA UEFA UEFA Champions League UEFA Statutes UFC United Kingdom (UK) United States of America (USA)