Leagues, Player Unions Could Find Common Ground On Sports Betting, Prior Court Filing Reveals

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Leagues and unions common ground

Six sports leagues — the WNBA, NBA, NHL, NFL, NASCAR and PGA Tour — took a firm stance 12 years ago on the dividing line between free speech and making money off of data in the sports gaming context.

“The First Amendment does not protect the unauthorized commercial exploitation of another’s intellectual property rights,” wrote lawyers for the six leagues on Dec. 22, 2006.

The brief was filed in a lawsuit pitting a fantasy sports operator against Major League Baseball’s media company and the Major League Baseball Players Association (MLBPA). The legal filing was recently obtained by Legal Sports Report.

The stance of the six leagues overlaps somewhat with the already-announced position of certain player unions, suggesting the two sides could collaborate on certain sports betting lobbying activities moving forward.

Primer on the prior fantasy lawsuit

When fantasy operator CBC sued MLB’s media entity, Major League Baseball Advanced Media (MLBAM), the case quickly took a unique posture: MLBAM was joined by MLBPA after the union intervened in the case.

The two co-defendants — MLBAM and MLBPA — would defend the case together, an alliance that is far from commonplace in the sports industry.

With sports leagues and player unions frequently on the opposite sides of key issues, the commercial exploitation of data in sports gambling is one issue where the two appear to be on the same page.  

Indeed, the CBC v. MLBAM/MLBPA lawsuit saw the National Football League Players Association file a brief in support of the two defendants. When the case was pending at the US Court of Appeals for the Eighth Circuit, the six sports leagues opted to file a joint amicus brief to help boost the position of MLB and its union too.

After losing the case at both the district court and appellate court, MLBAM and MLBPA asked the Supreme Court to review the decision, but were turned down.  As a result, CBC was permitted to use performance statistics attached to player names without pre-approval from either the league or the union.

Six sports leagues join forces to take a stand

A major issue in the CBC v. MLBAM/MLBPA litigation was whether the First Amendment’s free speech protections trumped the ability to monetize publicity rights and data in fantasy sports.

The six sports leagues answered in the negative.

“The First Amendment is no defense if the predominant character and purpose of the unauthorized use of another’s intellectual property rights is commercial exploitation,” wrote lawyers for the WNBA, NBA, NHL, NFL, NASCAR, and PGA Tour in their 2006 amicus brief.  “In this case, the unauthorized use predominately exploits the commercial value of an individual’s identity, and is not protected by the First Amendment.”

The brief by the six leagues pinpointed one specific aspect of the lower court decision that they thought was incorrect.

“The district court compounded its error by concluding incorrectly that CBC’s unauthorized use of player names to market and promote its fantasy games was not predominately commercial in nature, but was akin to news dissemination,” wrote the leagues’ lawyers.    

A common thread

The six leagues hired Jeffrey A. Mishkin as their lead lawyer for purposes of filing the 2006 brief in the CBC v. MLBAM/MLBPA dispute.

The name is instantly-recognizable to followers of litigation about real-time data and sports betting.

Mishkin served as counsel to the NBA in the NBA v. Motorola/STATS case and was the PGA Tour’s lawyer in Morris v. PGA Tour. The two cases resulted in a split decision of sorts — the NBA lost, but the PGA Tour prevailed.

More recently, the five leagues who sued then-New Jersey Gov. Chris Christie and other state officials in 2012 and 2014 — the NCAA, NBA, NHL, NFL, and Major League Baseball — hired Mishkin to handle both cases, working alongside Paul Clement, who argued the case before the Supreme Court in December 2017.

If (or when) there is future lawsuit about sports betting data in the US, sports leagues may look to Mishkin again given his 20-plus years of experience litigating the relevant issues.

On the same page moving forward?

Prior court filings from leagues and player unions suggest that both share common ground about the commercial opportunities stemming from the dissemination and use of data in sports betting.

But one factor — money — could keep the frequent adversaries at a distance.

Each league in the professional team sports context has entered into a collective bargaining agreement (CBA) with the tethered players union. How sports betting revenues are, or will be, classified under the respective CBAs will be key in terms of gauging the relative levels of cooperation between the leagues and unions.  

For example, if some states acquiesce to lobbying and statutorily mandate the payment of a so-called ‘integrity fee’ to one or more sports leagues, how the governing bodies’ accountants label the funds could be dispositive for treatment under the CBA.   

There is no CBA to share revenue in the college sports context, as college athletes have no union to negotiate with the NCAA. Likewise, there is no CBA in individual contractor sports like tennis and golf that do not have a formal union.

In a press release earlier this month, the four largest team sports unions in the US — MLBPA, NHLPA, the National Basketball Players Association, and the National Hockey League Players Association — made clear that they wanted a role in “controlling how [sports betting] would be ushered into our businesses.”

Prior on-the-record court filings indicate the leading US sports leagues could move in lockstep with the unions on the issue.