The Media—Old and New
Sports and the media have a symbiotic relationship because they need each other. The media publicize the athlete, team, league, or other orga- nization, and in many cases pay considerable rights fees to broadcast or otherwise distribute sports content. The media gain by obtaining more viewers and listeners, which helps their bottom line. Without the role of the media, the sports business would not attain its scope and power.
Sports media can be divided into “traditional” and “new” media. Traditional media include print, broadcast, and cable and the business model is tried and true. Broadcast and cable pay the bulk of rights fees to teams and the leagues. Additionally, cable sports networks, most notably ESPN, have a specialized twenty-four-hour all-sports niche carrying news and highlights as well as play-by-play content. The role of sports radio has saturated the air waves with constant talk (including second-guessing and criticism) about athletes and teams. Although too scarce, more and more print articles and a few broadcast/cable programs are devoted to the business of sport.
“Newer” media, such as the Internet, are different in that athletes, teams, and leagues have limited control over content. Websites and blogs have contributed to a huge variety—informative, entertaining, outrageous, unfair—of information, keeping sports in the consciousness of millions of fans and adding to the headaches of owners, managers, coaches, and ath- letes. As is the case with politicians and entertainers, this has resulted in a diminution of an athlete’s privacy, discussed in more detail in chapters 9 and 13.
12 Intellectual Property and Sports
Unlike a business that produces machinery or apparel, a league, team owner, college, or individual athlete does not need an engineering plant, heavy equipment, or a fleet of trucks to manufacture or transport its product. Instead, the leagues, teams, athletes, colleges, conferences, and independent tournaments possess rights to “intangible” property—the trademarked names, logo designs, and general rights to license and repro- duce those items for merchandising purposes. Over the last quarter-cen- tury, the marketing and sale of the team names, designs, uniforms, and player images have constituted a lucrative revenue base.
The licensing and merchandising of sports properties has been trans- formed from a relatively small and fragmented sideline into a highly profitable $19 billion global industry. Retail sales of sports licensed goods account for 15 percent of worldwide retail sales of licensed mer- chandise (Brochstein, 2008). Owners of the intellectual property enter into licensing agreements that account for the bulk of the revenue. In 2006, the National Football League (NFL) led the major leagues, earn- ing $3.25 billion, followed by Major League Baseball ($2.2 billion) and college basketball ($3 billion) (Freedman, n.d.). It has been reported that in 2007 the National Basketball Association (NBA) received $2.5 bil- lion, the National Association for Stock Car Auto Racing (NASCAR) $2.1 billion, and the National Hockey League (NHL) about $1 billion (Lindeman, 2008).
What is licensed? Merchandise carrying the names, logos, and designs associated with a particular sport, league, team, college, athletic confer- ence, or other governing body. The licensee, often a firm manufacturing clothing, shoes, or sports equipment, contracts with the intellectual prop- erty owner or licensing firm for the use of its names, logos, and designs on items sold to the public. The licensor often receives a stated percentage of the sales, and, even more importantly, has control over the production, design, and overall quality of the product. The major aspects of these agreements are discussed later in this chapter.
Intellectual Property and Sports 293 Trademarks
Intellectual property contains a broad category of rights; the most impor- tant for sports purposes is trademark protection and licensing. All too often, writers and broadcasters confuse trademarks with copyrights. They are quite different. Defined as “any word, name, symbol or device used to identify and distinguish goods from those manufactured or sold by others” (Trademarks, 2010), a trademark is a brand name, design, symbol, shape, color scheme, slogan, or even smell for use in commerce. For example, the brand name Coca-Cola identifies a particular soft drink. The name Coca- Cola is trademarked—a rival cannot use that name without permission. If the rival does, it faces severe penalties, including civil fines, injunctions, even criminal prosecution (Trademarks, 2010). The law requires that a trademark owner use the mark. An unused mark loses protection after a certain period of time, opening it up for use by another entity.
Most U.S.-based trademarks are registered with the U.S. Patent and Trademark Office in Alexandria, Virginia. In order to obtain trademark protection, the mark has to be “distinctive.” Examples of distinctiveness involving sports-related marks include “arbitrary” titles—common words applied in an unfamiliar way. The Detroit Tigers and the Carolina Panthers come to mind. In the context of their sport, these words connect a fan’s mind to the particular team. There are also “suggestive” marks—those requiring imagination, thought, and perception, such as the New York Yankees. Another basis for distinctiveness comes from “fanciful” marks— made-up names with no dictionary meaning. “Super Bowl” is a trademark of the NFL (although it did not coin the term and was hesitant to use it at first).
A generic term cannot be trademarked, as it lacks distinctiveness. The terms football and baseball themselves have no protection, so, if anyone wanted to design a sweatshirt with those terms, no trademark infringe- ment would result. The NFL and Major League Baseball cannot own those terms.
Once a trademark is registered, the owner uses a circled R (®) as evi- dence of the existence of the mark. A protected trademark cannot be used for a commercial purpose without the owner’s permission. Trademark infringement occurs when one improperly uses another’s protected trade- marks or uses a mark “likely to cause confusion about the source of a product or service.” The focus of trademark infringement analysis is on the confusion of actual or potential customers. Accordingly, an infringer’s products or services need only be sufficiently related to the trademark owner’s products or services so that it is likely that both are promoted to and/or used by common customers (inta.org, 2010). This rule protects consumers from being misled by the use of infringing marks and also pro- tects producers from unfair practices by an imitating competitor.

13 Traditional and New Media in Sports
Dissemination of sporting events through any one of various media out- lets constitutes the single most important source of revenue for profes- sional and amateur sports organizations. For sports leagues and individual events, fees earned from media rights bring in billions of dollars per year. The media also have benefited, since sports events constitute an important source of programming. Marquee sports events such as the Super Bowl draw large numbers of viewers or listeners, resulting in premium fees charged to advertisers.
This chapter examines the basics of the business of sports broadcasting, both involving the “traditional” media (defined for our purposes as radio, broadcast television, cable television, and satellite) and new technologies (Internet, broadband, social media, and mobile telephone communica- tions). It outlines the history, the nature, and variety of sports broad- cast deals, and concludes with some thoughts on the future of sports and media.
The Property Right
Think of a sports broadcast as a form of property. Some entity (usually a league or a team) owns the rights not only to the game itself, but to how it disseminates to the public. At one time, that only meant a performance in front of paying fans, but since the advent of radio and television, it means reproducing the event to audiences far away from the site of the event.
That property right to distribute the game, or, more precisely, to license that right to broadcast the event to others, is central. Usually, this right involves licensing to a particular broadcaster, who receives the permission to disseminate the event through a particular communications platform (television, radio, cable, Internet) but not the right to own the product. When the National Football League (NFL) licenses broadcast rights, it permits the broadcasters, under prescribed conditions, to broadcast games. The radio, television, and cable licensees are, in essence, delivery tools. They produce the event and pay a sum to the owner (the league) to produce it.
Traditional and New Media in Sports
This system has resulted in a number of legal issues. A patron paying a fee to see a match has the right to see it with his or her eyes at the stadium or arena; or a fan can remain home and watch it on free or cable televi- sion. But if that person recorded the event and charged a fee to anyone who wanted to see it, that would violate the rights of the property owners (the team, and/or the league) and the broadcast licensee.
Initially, with the exception of boxing, organized sports were skeptical at the licensing of broadcasting rights. In particular, many in baseball felt that broadcasting games on the radio would siphon off fans coming to the ballpark. Boxing, however, took to licensing early on. As a dominant sport in the early decades of the twentieth century, boxing matches were filmed and distributed to theaters (Ward, 2004).
In a day when most broadcasts are recorded, sports events remain one of the last bastions of live programming. For broadcasters and cablecast- ers, this has advantages and poses challenges. Live broadcasts offer excite- ment and unpredictability that few other programs match. However, the economic value of the event diminishes sharply once the event concludes. Whereas broadcasters and cable network owners rerun successful enter- tainment programs—often for years—sports broadcasts do not command high audiences—or value—when rebroadcast, since the result is already known.
In part to add value to the event, broadcasters have added news pro- grams, features, documentaries, and sports talk shows to their package. Pregame and postgame analyses of the games, including press conferences, expert opinion, and highlights—add to the fan’s interest.
The Key Audience
Radio and over-the-air television earn their revenues through advertising. Advertisers choose particular types of programs to target certain audi- ences, based on demographics such as gender, age, race, ethnicity, and income. Sports broadcasts have traditionally appealed to a male demo- graphic. For all four major sports leagues, approximately two-thirds of the viewers are male (Mullin, Hardy, & Sutton, 2007). Producers of items of interest to males found such events to be an excellent way to reach that audience. Hence, broadcasters paid fees to broadcast such events to earn money from advertisers. The more popular the event, the more the outlet charges for ads. Cablecasting differs in some respects. It earns money from advertising, but in addition it has another revenue stream—subscriber fees from local cable operators. For carrying a particular cable network, the operators pay a negotiated fee.
At one time, audiences were primarily White. However, because of the increased buying power of African Americans, Asians, and Hispanics, and the fact that these groups are increasingly making up the fan base in baseball, marketers are eager to reach them. More Blacks and Hispanics