New deals | 23 MAY 2019

How intellectual property rights are driving global sports

  • Mark Lichtenhein, Chairman of the Sports Rights Owners’ Coalition (SROC), explains the threats of intellectual property (IP) theft to the sports industry and subsequent effect on national economies.
  • The SROC works with competition organisers to bring the dangers of IP theft to wider attention and demand action at a government level.

“Everyone’s doing it”. “It does not do any harm”. These are common refrains when discussing the issue of illegal online streaming of sports content. There is a widespread perception among the general public that intellectual property (IP) infringement is a victimless crime, but this is not the case. It is important to consider the real value that IP rights bring to the sports sector and why we need to protect them effectively.

As the Sports Rights Owners’ Coalition (SROC), we represent more than 50 international, European and national sports bodies across a diverse range of sports. As such, individually and collectively, we represent a majority of international sports and competitions. Therefore, we are well placed to underline the importance of protecting our IP rights so we can best serve our fans and the sports community as a whole.

IP protection becomes ever more challenging
With every passing year comes new challenges in terms of how our IP rights can be infringed, making the task of protecting them ever more difficult. In large part, this is because of the major technological advances of recent years, which are transforming the way people consume entertainment content. The expansion of high-speed Internet around the world, the proliferation of portable devices and the rise of online streaming platforms and IPTV technologies, have made tackling the illegal exploitation of our rights much more difficult.

We must now confront thousands of websites that illegally stream content in real time. These sites are accessible to everyone with an Internet connection and almost as quickly as they are taken down, they can be put back up in a different form.

Add to this the significant advertising revenues these sites and related intermediaries generate from the huge volumes of traffic they receive, and it is easy to understand why illegal streaming has become so lucrative. The hosting of these illegal websites in multiple locations around the world requires a harmonized international approach.

Investing in grassroots
News headlines often highlight the significant sums that broadcasters are paying to secure the rights to broadcast sports competitions. However, what the money from the sale of these rights enables the sports sector to achieve often goes unmentioned.

The sale of the media rights for sports competitions is the life-blood of sports at all levels, from the elite athletes down to amateur grassroots participants. In several communications, the European Commission has underlined that “the exploitation of intellectual property rights in the area of sport, such as licensing of retransmission of sport events or merchandising, represents important sources of income for professional sports. Revenue derived from these sources is often partly redistributed to lower levels of the sports chain”.

Across the markets in which our members operate, investment in grassroots sports is directly and proportionately dependent upon the value of sports IP rights, particularly media rights. A 2011 study by the European Commission and partner organizations revealed that grassroots sports in Europe receive some EUR 500 million every year from the sale of media rights. It concluded that “the effective protection of these sources of revenue is important in guaranteeing independent financing of sports activities in Europe”.

Securing the value of those media rights is not only important for organizers of professional sports competitions, it is also fundamentally important to the sustainability of grassroots sports and the significant positive contribution that sports bring to people’s health and well-being. Without the full revenue redistribution from organizers of commercially successful sporting events, the development of grassroots sports would suffer the loss of a critical source of financing. That is why SROC is supporting on-going negotiations at WIPO to update the rights of broadcasting organizations.

Investment in technology and innovation
Our members attract millions of spectators and seek to engage sports fans across multiple technological platforms and to ensure that they can access the content of their choice and at the highest quality on offer. For the viewing public, the money they pay to watch premium sports content goes towards a whole host of services around the match or game they want to see.

Beyond the athletes themselves, there is a huge network of individuals working behind the scenes, and a broad range of technologies deployed to ensure delivery of content of the highest possible quality. All of this needs to be paid for. Our members pride themselves on providing a polished and modern viewing experience for fans both attending live events and watching on TV or online. This includes using the latest high-definition cameras, developing advanced graphics to display analysis around the sports event and employing experts and pundits to discuss what is happening on and off the field. If the IP rights of sports organizers are infringed, this valuable source of revenue could all but disappear, diminishing the quality of the content that we are able to produce.

Counterfeiting
Beyond the challenges we face in protecting our broadcasting rights, the rise in counterfeiting and the ease and speed with which items can be copied also has a significant impact on our members’ revenues. A recent study published by the European Union Intellectual Property Office (EUIPO) estimated that 6.5 percent of sales and EUR 500 million (approximately USD 560 million) of revenue are lost annually by the sports goods industry due to counterfeiting. Those figures correspond to 5,800 direct and indirect jobs lost.

Potential policy solutions
As clearly outlined above, sports rights owners rely heavily on the protection afforded by copyright law to protect competitions from infringement and to preserve their value. That is why there is a clear need for a robust, updated and enforceable copyright framework, both offline and online, to ensure that the revenues of sports IP rights owners are not put at risk.

In the European Union, we recently saw legislative efforts to achieve this through the proposal for a Directive on Copyright in the Digital Single Market. The European Parliament initially put forward a positive position in support of creators and rights holders, including a suggestion to create a neighboring right for organizers of sports events.

This would have fundamentally strengthened the way in which we protect our IP rights. However, this effort was undermined and did not appear in the text of the Directive that was finally agreed.

We feel this was a missed opportunity and we hope that legislators will continue to work to address the imbalances in our sector in the future. We also hope that efforts to protect the organizers of sports events will be mirrored elsewhere. In similar vein, SROC members strongly support ongoing efforts at the European Union and at WIPO to address the issue of advertising on IP infringing websites and mobile apps.

Protection of IP rights is critical for the future of sports
According to the European Commission, “around 2 percent of global GDP is generated by the sports sector.” Moreover, sporting competitions have an important economic impact at the national level.

As sports are a valuable contributor to the global economy and the enjoyment and well-being of people, it is imperative that the sports sector can continue to thrive. In order to do so, and to invest in the current and next generation of sporting heroes, whether in front of 90,000 fans at Wembley Stadium in London or in your local youth team, we need to ensure that the sector’s IP rights and the revenues that flow from them are protected. That is why members of SROC are seeking proper recognition of the value of sports and effective protection of our IP rights under the law from governments around the world.

This article was originally published on the WIPO website.

© LaLiga - Año 2019
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