by JSEL | Nov 2, 2019 | Highlight
On Tuesday, the National Collegiate Athletic Association (NCAA) made headlines when its governing board voted to “start the process of modifying its rule to allow college athletes to profit from their names, images and likenesses ‘in a manner consistent with the collegiate model.’” This change comes on the heels of California passing the Fair Pay for Play Act into law. This legislation, set to take effect in 2023, would prevent the NCAA from prohibiting college athletes from profiting off of their names, images, and likenesses. I recently wrote a JSEL blog post on the implications of this law on EA Sports’ NCAA Football video game franchise returning; check that out here.
Chris Vannini, a reporter for The Athletic, cautioned on Twitter that mainstream media headlines are overstating what occurred. This news is a big deal, but the NCAA has only agreed to start a process of modifying its rule—a great deal remains to be determined. Key thought leaders in the sports business world, like Professor Andrew Zimbalist, have homed in on a specific clause in the NCAA’s announcement: the new rule will be created “in a manner consistent with the collegiate model.”
What does that mean? We don’t yet know. The “collegiate model” tends to point to the preservation of amateurism in college sports, which some may find incompatible with the concept of compensation altogether. The decision makers are sure to haggle over how the NCAA can reconcile amateurism with compensation in the new rules, consistent with the direction that this vote has given them. This is not the last we will hear of this question.
A recent post on Inside Higher Ed highlighted an interesting division on the political right regarding college athlete compensation following the NCAA vote. U.S. Senator Richard Burr, a Republican from North Carolina, tweeted: “If college athletes are going to make money off their likenesses while in school, their scholarships should be treated like income. I’ll be introducing legislation that subjects scholarships given to athletes who choose to ‘cash in’ to income taxes.”
U.S. Representative Mark Walker, also a North Carolina Republican, responded to his colleague in the upper chamber: “If scholarships are income, that makes them employees, not student-athletes. This isn’t about income. It’s about basic rights that every other American has to their own name.” Rep. Walker is the author of a bill that would amend the Internal Revenue Code to “prevent qualified amateur sports organizations from restricting student-athletes from using or being compensated for use of their name, image, and likeness.” Andrew Distell covered the Walker bill for JSEL back in April 2019. Walker’s point seems to be that the NCAA’s current model is anti-free market.
The NCAA vote likely buys the organization some time to figure out the issue of athlete compensation on its own terms, but the clock is certainly ticking. We are not out of the woods just yet.
Image: “SELU LSU 9718 037” by tammy anthony baker is licensed under CC BY 2.0
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
by JSEL | Oct 28, 2019 | Highlight
The
Copyright Alternative in Small Claims Enforcement (CASE) Act sailed through the House of Representatives last week after a
410-6 vote, a move industry organizations and lobbying firms are calling a major win.
“The Recording Academy applauds the House for passing the CASE Act today, a…victory for music creators,” said Daryl P. Friedman, the Recording Academy’s Chief Industry, Government, & Member Relations Officer.
As its title suggests, the bill would create a small claims tribunal, the Copyright Claims Board, before which musicians, artists, and other content creators would be able to bring infringement claims totaling less than $30,000. Under current copyright law, infringement claims must be brought in federal court, where litigation can be prohibitively onerous and expensive.
Artists “currently have rights but no means to enforce them because federal court is too expensive and complex to navigate,” explains Keith Kupferschmid, CEO of the Copyright Alliance, the Washington-based advocacy organization whose members include the Motion Picture Association of America, The National Association of Broadcasters, and the Recording Industry Association of America.
Critics have voiced fears that the bill would provide copyright trolls with an easy means to bring a wave of opportunistic claims and point to copyright profiteering in the wake of the Digital Millennium Copyright Act as evidence that trolls will similarly benefit from the CASE Act.
Additionally, organizations such as the ACLU have voiced concerns over the bill not creating effective checks on the power of the Copyright Claims Board. Decisions made by the panel would not be subject to broad judicial review, but rather could face such review under limited circumstances enumerated in the bill, such as when decisions were based on “fraud, corruption, misrepresentation, or other misconduct.”
The President has already signaled his support for broad copyright reform last year by signing into law the Music Modernization Act. It is expected that the Senate will also act quickly in confirming the bill. If the Senate acts as decisively as the House, a veto-proof vote passage of the CASE Act could make the creation of the Copyright Claims Board a near inevitability.
Matt Shields is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and current second year student at Harvard Law School (Class of 2021).
Image: File:US Congress 02.jpg, Bjoertvedt, CC BY-SA 3.0
by JSEL | Oct 25, 2019 | Highlight
Electronic Arts (EA) CEO Andrew Wilson recently expressed interest in bringing back the once-popular NCAA Football video game franchise, if the legal framework governing college athletics changes in such a way that would permit its existence. Wilson made the comments at the WSJ Tech Live conference in California, favorably citing a newly signed California law that, starting in 2023, would allow college athletes to profit off of their name, image, and likenesses. The hope is that such a law could “clear the way” for NCAA Football’s return. To be sure, the NCAA opposed the California law and prefers to solve the issue of athlete compensation on its own terms.
EA Sports, a division of EA, last released NCAA Football in 2013—reporting indicates that the game was immensely “popular, ranking behind the FIFA soccer game and the NFL Madden game among EA Sports’ titles[.]” In 2013, the NCAA allowed its licensing deal with EA Sports to expire, citing “the current business climate” and litigation, like the Ed O’Bannon lawsuit, that challenged the revenue scheme related to the usage of college players’ names, images, and likenesses in broadcasts and video games.
The NCAA Football franchise is definitely still on the minds of some at EA Sports headquarters. As Business Insider recently pointed out, EA folded some college football gameplay into its latest installment of Madden NFL—Madden 20—but safely included it in a pre-set, scripted mode (QB1: Face of the Franchise) which does not allow for player customization.
It seems unlikely that EA Sports would spite the NCAA and bring back some iteration of NCAA Football with only California schools. After all, EA jeopardizing its relationship with the NCAA could complicate future efforts to re-introduce NCAA Football in full if the legal landscape settles in such a way that creates the conditions necessary for the franchise’s return. Further, given the opposition to the California law from “[t]he University of California system, California State University schools, Stanford and USC[,]” it would be quite a reversal for the schools to come together and make their own deal with EA Sports for a video game, independent of their governing body.
The possibility of NCAA Football returning is sure to excite football fans and sports gamers (this author included). However, given the uncertain legal future of compensation in college athletics, it remains too early to tell if the once-prominent video game franchise will be making its way back to the shelves of local game stores anytime soon. If profit is any incentive, however, there certainly appears to be a deal waiting to be struck here.
Image: Photo a day project: December 2005, Jenny Lee Silver, CC BY-NC 2.0
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).
by JSEL | Sep 18, 2019 | Highlight
August was dominated by reports that Spider-Man would be leaving the Marvel Cinematic Universe following an impressive theatrical run of the newest movie “Spider-Man: Far From Home.” Spider-Man’s possible departure is due to Disney and Sony failing to reach an agreement on funding and revenue sharing for future Spider-Man films. The very concept of this kind of split raises wider questions regarding intellectual property law and the future of the entertainment industry.
Fictional characters are often protected by copyright laws. An author’s copyright over a character provides them with the exclusive right to use, adapt, or market the character as they see fit. Because the rights are exclusive, no one can use the character unless they are given explicit permission from the author. However, permission is not all or nothing, and authors can place conditions on how the character is used and how long the permission lasts. This kind of permission is referred to as a license and is what Marvel originally sold to Sony in 1999. At that time, Marvel sold Sony Pictures an exclusive license to make Spider-Man movies. Because the license was exclusive, Marvel lost the right to produce its own Spider-Man movies. Marvel had previously granted merchandise rights to Sony in 1995. Because of the agreement, Marvel received 5% box office revenue of Sony-produced Spider-Man pictures while Sony was entitled to 5% gross of all Marvel merchandise sales.
Sony’s Spider-Man license came with numerous conditions, including one stating that it would lose the license unless it releases a new Spider-Man movie every 5.75 years. Over the course of the last several years, Marvel and Sony have renegotiated the terms and conditions of the film license on numerous occasions. In 2015, Sony hit a snag and struggled to produce commercially successful Spider-Man movies. Marvel, which had been recently acquired by Disney, gained considerable bargaining power and negotiated a new deal. In this deal, Marvel would assist Sony in production of Spider-Man movies in exchange for 5% gross revenue and the right to use Spider-Man in Marvel produced movies (MCU), while Sony would retain creative control, marketing and distribution. Marvel was also able to re-acquire all merchandising rights, generating an estimated $200 million per year.
This resulting deal is a shared license agreement. A 2011 amendment made to the license agreement between Sony and Disney lays down the groundwork for what the deal entailed for Sony and Marvel. The leaked documents reveal a series of conditions that limit how Sony can depict Spider-Man, including requiring that the character be a heterosexual male and abstain from sexual relations before the age of 16. The leaked documents also provide a precise account of exactly which characters are covered by the license — including a test that could be used to determine whether future characters would be covered. Those terms provide some insight into how Sony and Disney approached the character-sharing question and accounted for the possibility that Spider-Man would join the MCU for just a limited time. The agreement states that Sony “holds exclusive film rights to all characters in the Spider-Man universe,” and refers to an explicit list of characters covered by the agreement. This list includes 627 covered characters (Black Cat/Felicia Hardy, Mysterio, Electro, etc.), 70 “Teams/Groups/Gangs” (The Sinister Six), 544 “Supporting Characters” (Uncle Ben, etc.), and 82 businesses (Oscorp, etc.).
Finally, the agreement contains provisions that apply to new characters, which are defined as “characters first appearing” after the agreement becomes effective. The agreement states that Sony has the rights to any new character who first appears in a work with “Spider,” “Spider-Man,” “Peter Parker,” or another Sony-exclusive character in its main title, and to new characters who shoot webs, have “Spider” in their name, or have a spider or spider web on their costume. While the specific terms of the leaked draft agreement are five years old and may not have ended up in the final agreement, it nevertheless provides a high-level understanding of how Marvel and Sony approached the license negotiations. It is clear that both studios had a plan for what they would do if their Spider-Man-sharing agreement broke down.
This shared license agreement initially seemed like a win-win: both companies would enjoy increased revenue at the box office in their respective productions through the shared-use of characters. However, in 2019, renegotiations collapsed and the exclusive film rights to Spider-Man reverted to Sony with Sony Pictures CEO stating that the “door on any potential deal is closed for now.” This may signal a permanent divorce between Sony and Disney.
Naz Khan is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current LLM Candidate at Durham University.
Image: Miles Morales Spider Man, Pat Loika, CC BY 2.0.
by JSEL | Apr 26, 2019 | Highlight
The relationship between the Washington Nationals and Baltimore Orioles has been fraught ever since baseball returned to DC in 2005. Because the Nationals (formerly the Montreal Expos) would be tapping into a major chunk of the Orioles’ formerly exclusive television market, an unwieldly and tenuous deal was brokered: The Mid-Atlantic Sports Network (MASN). Since its creation, it has been the cause of much litigation.
The Orioles were given ninety percent ownership of MASN, and the Nationals the remaining ten, despite the fact that the media outlet would broadcast both teams’ games. Under the agreement, the Nationals would gain an additional percentage point of ownership each season until 2032, when they would be capped at a lowly 33% interest .
Also as part of the deal, MASN pays the same amount in rights fees to the Orioles and Nationals each season. On top of that, MASN distributes to the teams shares of the broadcast profits, most of which goes to the Orioles as MASN’s majority owners.
Because the Nationals get so little in terms of MASN profits, the team has been fighting for years for greater rights fees. In 2012, the dispute went before baseball’s Revenue Sharing Definitions Committee (RSDC), made up of representatives from the Pittsburgh Pirates, Tampa Bay Rays, and New York Mets. The three-person panel ruled that MASN owed the Nationals $298 million for the team’s 2012-16 television rights. The Orioles sued, and the New York Supreme Court Appellate Division sent the decision back to a reconstituted RSDC, this time made up of representatives from the Milwaukee Brewers, Seattle Mariners, and Toronto Blue Jays.
This reconstituted panel heard the case this past November and released its findings on Tuesday. An attorney from the Nationals immediately filed a motion in New York Supreme Court in Manhattan asking that the RSDC decision be confirmed and submitted under seal. Only time will tell which details, if any, are released to the public.
Thomas “Buddy” Bardenwerper is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2021).
Image: Royals at Orioles 5/8/18, Keith Allison, CC BY-SA 2.0.
by JSEL | Apr 26, 2019 | Highlight
Last week, a Los Angeles Superior Court judge denied a motion for summary judgement submitted by Stranger Things creators, Matt and Ross Duffer, in a breach of implied contract suit filed by independent filmmaker Charlie Kessler. Kessler claims the Duffers stole the idea for their show after he pitched his own project to the brothers at the 2014 Tribeca Film Festival.
With sky-high ratings, an accompanying book deal, and a PlayStation VR game in the works, Stranger Things has made its mark as the single most popular streaming show of all time. Based in small-town 80’s America, the series (originally titled The Montauk Experiments) focuses on the disappearance of a young boy and the dark forces that unfurl as his family and friends search for answers. What starts as a simple missing persons case develops into a supernatural mystery that includes top-secret government experiments, children with extraordinary psychic abilities, and a monster from another dimension. Though viewers have embraced the innovative premise of the Duffer Brothers’ creation, filmmaker Charlie Kessler alleges that the idea was taken directly from his short film, Montauk, as well as his accompanying feature-film screenplay, The Montauk Project. Like the Duffers’ story, Kessler’s work centers on the search for a missing boy, a battle against paranormal forces, and the discovery of an abandoned military base that conducts secret experiments on children.
It may seem odd that Kessler chose to bring an implied-contract claim, rather than a copyright infringement complaint. However, under federal copyright law, Kessler has no case. Ideas – even those that are finely detailed and significantly developed – cannot be copyrighted. This means that a film idea, and “any of the characters portrayed [with]in it” is largely free for the taking, regardless of who thought of it first. Under the contract claim, however, Kessler can (and does) allege that there was a “mutual [understanding]…that [the Duffers] would not disclose, use, and/or exploit” Kessler’s ideas. The Duffers aim to show that they independently created Stranger Things prior to meeting Kessler, a complete defense against the filmmaker’s claims in the state of California. (See Teich v. General Mills, 170 Cal.App.2nd 791, 799 (1959)).
While the Duffers’ motion for summary judgement cites emails from 2010, three years before Kessler’s alleged pitch, that detail their plans for a supernatural film project, Judge Michael L. stated that the brothers provided insufficient “verifying evidence of the originality of their idea,” raising several issues surrounding the ownership of original work. The emails directly reference central elements of Stranger Things, such as a protagonist who is “[a]bducted with a group of other psychically gifted…children,” a “[s]ecret underground research facility,” and the “opening up another dimension” that leads to a “creature…escap[ing].” Considering the specificity of these plot details, one must wonder: what doesconstitute sufficient, unrebutted evidence of the originality of a creative idea?
The answer to this question could have a serious impact on Hollywood’s creative circles and the manner in which artists develop and pitch their ideas. With the possibility of an implied contract breach stemming from standard mingling lurking on the horizon, industry movers may become more hesitant to hear casual pitches from relative unknowns. This, of course, could make it increasingly difficult for independent artists to break into the Hollywood sphere and secure financing for their projects. On the flipside, the protections Kessler seeks to establish may give emerging writers and directors some comfort that, should they manage to pitch their next big project to potential collaborators, sponsors, or producers, their work will be safe from copycats.
The trial, now with a May 7th start date, is set not only to provide insights into the development of Netflix’s runaway series, but may also serve as an indicator for how the entertainment industry as a whole could evolve to regulate the free exchange of creative ideas.
Matt Shields and Susannah Benjamin are Entertainment Highlight Contributors for the Harvard Journal of Sports and Entertainment Law and current first year students at Harvard Law School (Class of 2021).
Image: Lowtrucks, Stranger Things logo, CC BY-SA 4.0
