The

future of

sports rights

in streaming

is drama

Andrew Rosen

Andrew Rosen is the founder of PARQOR LLC. He authors Medium Shift, a monthly column on The Information tracking the transformations underway in the media business.

There is an uneasy tension in the sports rights model across cable, broadcast, and streaming.

On the one hand, cord-cutting is eating away at the extraordinary scale of linear, which counted more than 105 million cable TV households in the US over a decade ago. The pricing of past sports rights deals reflected that, and not so much the promise of streaming.

Today, there are around 60 million homes with cable access, and over 75 million if we include virtual cable distributors like YouTube TV and Fubo TV.

On the other hand, new sports rights deals must assume both the declining scale of cable network distribution and the growth of streaming. The recent NFL deal has Paramount’s CBS, Comcast’s NBC, and Disney’s ABC and ESPN all distributing games across both linear and streaming platforms (Fox will distribute via linear, only). Deals struck in the past few years by the NHL, the PGA Tour, and WWE also have versions of the linear plus streaming business logic built in.

There are growing questions emerging about the business model of streaming. Legacy media streaming services are struggling to scale and to turn a profit. The worry is that some may not be around in a few years. In some cases, like with Paramount Global, their negative free cash flow and junk-rated debt are legitimate reasons for partners like the NFL to be worried.

Four scenarios

The uneasy tension creates four possible scenarios:

1.
Cord-cutting accelerates and legacy media streaming services do not scale.

2.
Cord-cutting accelerates and legacy media streaming services continue to scale.

3.
Cord-cutting slows down and legacy media streaming services do not scale.

4.
Cord-cutting slows down and legacy media streaming services continue to scale.

Until January 2022, the market assumed either scenario #2 or scenario #4: Everyone expected streaming to be the inevitable heir to linear distribution. When Netflix missed its growth forecast for Q4 2021, everything changed. The miss triggered a 65% drop in Netflix’s stock price and drops in the price of the legacy media companies. Wall Street reacted with new demands for profitability over growth. 

The market now seems to believe scenarios #1 and #3 are more likely as potential futures for legacy media. Legacy media companies are being priced accordingly, witnessing their stock prices decline as they struggle to deliver growth while cutting costs to ensure profitability. Sports TV broadcasts may thus never again see the scale of the past few decades. This year’s MLB World Series was reportedly the least-watched on record, averaging 9.11 million viewers. That is around 20% of the most-watched World Series of 1978, which had an average viewership of 44.28 million viewers.

Enter Amazon and YouTube

The NFL’s deals with Amazon and Google’s YouTube have introduced some new paradigms for how scale may be aggregated. In the US, Amazon has an estimated 168 million Prime subscribers and YouTube reaches 150 million people across connected TVs. To distribute Thursday Night Football, Amazon is paying the NFL about $1 billion per year through 2033, Fox, Paramount, and Comcast are paying $2 billion per year, and Disney is paying around $2.7 billion. YouTube is betting on broadcast economics for its Sunday Ticket distribution deal with the NFL—$14 billion over seven years, a 33% increase from DirecTV’s $1.5 billion deal.

Owning the fiber-optic points of connection with consumers means that cable companies market on behalf of third parties to drive tune-in. YouTube and Amazon meanwhile rely on consumers randomly visiting and revisiting their platforms for free consumption of content or shopping. All TV homes can instantly tune in with the tap of a remote control, but not all YouTube or Amazon users have those platforms readily accessible from their connected TVs, mobile devices, tablets, or desktop computers. There is more friction in the paths on YouTube and Amazon between the decision to tune in and actually tuning into the game.

That said, the 2023 NFL season has been a success so far on both platforms. YouTube has now taken over Sunday Ticket and surpassed DirecTV’s total annual subscribers (hitting an estimated 1.3 million subscribers, up from 1.2 million). Amazon’s Thursday Night Football is averaging 12.2 million viewers this season, up 26% from the 9.7 million for the first nine games in 2022. Including Amazon’s internal data with Nielsen data, Thursday Night Football is averaging 13.22 million viewers for the season, to date.

YouTube and Amazon rely on consumers randomly visiting and revisiting their platforms for free consumption of content or shopping. All TV homes can instantly tune in with the tap of a remote control, but not all YouTube or Amazon users have those platforms readily accessible”

Legacy media streaming services are struggling to scale and turn a profit. The worry is that some may not be around in a few years.”

Mark Cuban and aggregate audiences

One of the more notable aspects of Amazon’s Thursday Night Football product is that it offers Amazon Prime subscribers multiple broadcasts: the Spanish feed (TNF en Español) and the advanced stats feed (Prime Vision with Next Gen Stats), to which the company has been adding AI innovations. Amazon has also offered feeds from YouTube influencers Dude Perfect, and NBA star LeBron James and his business partner Maverick Carter. On top of those, Amazon distributes a linear feed via DirecTV to over 300,000 sports bars, restaurants, hotel lounges, casinos and sports books, retail shops and services, and other venues nationwide.

The approach mirrors a personal favorite quote from NBA team Dallas Mavericks owner Mark Cuban in an interview he gave to SportTechie in April 2020. It is worth re-reading whenever a new sports distribution rights deal is announced:

“Can we have three, four, five streams of the same game that’s going on traditional TV? You might have one where you have Twitch-like announcers; you might have two of your favorite YouTubers that are doing another stream; you might have your traditional broadcasters doing another stream; you might have a players-only doing another stream. We don’t care if there’s four, five, six streams—we care about the aggregate audience.”

There are two key takeaways from this quote. First, audiences have affinities or preferences for viewing experiences that the internet enables. Therefore, the best distribution strategy in sports is aggregating audiences across platforms. Rights deals need to enable that. Second, we are still in the early experimental days. The future of sports distribution probably involves linear distribution at a smaller scale and some evolution of the aggregation of multiple streams that capture smaller audiences around their affinities and fandoms.

As for Netflix

The other player to keep an eye on is Netflix. Co-CEO Ted Sarandos told investors on the company’s most recent earnings call: “We are in the sports business, but we’re in the part of the sports business that we bring the most value to, which is the drama of sport.” By “drama” he was referring to the docuseries about Formula 1 Racing (“Drive to Survive”), the PGA Tour (“Full Swing”), and the Tour de France (“Unchained”).

But, in the same answer, he also mentioned that Netflix is “investing heavily in increasing our live capabilities so that as the demand grows for that and we find different ways, the liveness can be part of the creative storytelling, we want to be able to do that at a big scale.”

An example he cited was The Netflix Cup, which streamed live on November 14 to mixed reviews. It was a live golf tournament with the casts of Drive to Survive and Full Swing.

Sarandos’ explanation ties back to something he said back in December 2022 at the UBS 50th Annual Global TMT Conference: “the economics of live sports are built around pay TV and don’t make sense for streaming.” So, Netflix management did not see a “profit path to renting big sports”, then, because the return on investment is lower. That is likely because their model relies more heavily on subscribers, and traditional sports broadcasts have relied more heavily on advertising in network TV, as well as both affiliate fees and advertising in cable broadcasts.

The question one year later is how Netflix’s management may see the opportunity differently. If The Netflix Cup is a precedent, live streaming content needs to be related to documentary content hosted and owned by Netflix. There needs to be an interplay between the two to justify the ROI.

On this point, John Ourand of Sports Business Journal reports that Netflix is considering creating a docuseries around the NBA’s new In-Season tournament. The business model will be a step in the direction of the cable TV business, monetizing viewers with both subscription revenue and advertising revenue. But, as Sarandos told the UBS Conference, the value of the rights to Netflix will be different from broadcast because the economics of the streaming model requires it.

If The Netflix Cup is a precedent, live streaming content needs to be related to documentary content hosted and owned by Netflix.”

The NBA deal

The next NBA deal will start in the 2025 season and the league is already shopping it around. Under the NBA’s current agreement, Disney’s ESPN/ABC and Warner Bros Discovery’s TNT collectively pay $2.6 billion each year to televise about 165 nationally distributed games. One expectation is that the deal price will go up, but another expectation is that Disney and Warner Bros. Discovery will not be in a strong enough position to deliver the same audiences or ROI they were once able to.

The looming question is: why won’t Netflix imitate YouTube and Amazon’s bet on broadcast economics in any deal with the NBA in 2024?”

If the Netflix signals are right, beginning in 2024 the next NBA deal is going to be an aggregation of different distribution models. First, Disney and Warner Bros. Discovery will remain, but at a smaller scale than their current 165 games. Second, Apple, Amazon, and YouTube all seem well-positioned to capture some of those games, and perhaps more, given Disney’s and Warner Bros. Discovery’s recent challenges in the linear advertising marketplace. Last, Netflix will be distributing 67 games of the in-season tournament. 

Whether it will be ideal for the NBA and its partners is anybody’s guess. Even the NFL is looking nervously at the future of its legacy media distribution deals, with Paramount’s status facing the most questions. Aggregation is ultimately a portfolio approach to distribution and not a one-size-fits-all solution. So, whether rights deals are undervalued or overvalued will ultimately depend on how a sports league manages its portfolio of deals, and how its partners manage their various cohorts of audiences.

Do you agree with this?
Do you disagree or have a completely different perspective?
We’d love to know

Can insurgent leagues capture market share from the NFL?

This topic kept coming up in our various events: the NFL is God. And God is immune to all the forces that are challenging the other incumbent leagues like the NBA and MLB. What makes the NFL so powerful? Is it a better TV experience? Is it a better sport? The rest of the world would argue against that. (And they probably want the word football back).

Better storytelling can bring new audiences to traditional sports


The NFL is built on initial scarcity. It started with two games broadcasted one day a week in the autumn. Then came Sunday Night Football, then Monday Night Football. Then Thursday Night Football followed that. Now we have Sunday Ticket and the Red Zone channel. All of that football turned into fantasy football leagues, online gambling. And all of that engagement is padded with endless expert analysis that fills in the gaps in between all the snaps. Is this ecosystem too strong to be disrupted?

This question unlocked a lot of thinking.

What does a league need to thrive? How can an old sport evolve and find new audiences? Can a team of insurgent leagues take down the mighty NFL?

Yes, but...

Sports need tribes to survive

EVENT PREVIEW

The Fan Experience Event

We are taking the discourse to Nashville. Join us on October 25th for drinks, dinner, and discourse at Frankies in East Nashville. Here’s our preview…

On the other side of the tracks at the edge of East Hill lies the first-ever southern expansion of the renowned Brooklyn Italian restaurant, Frankie’s Spuntino. More like a tree-lined campus than a restaurant, Frankies Nashville houses a variety of craft-spaces and facilities in a warm, authentic, and informal atmosphere.

We are preparing for an active discourse on The Fan Experience. Our members will be joined by a collection of high level sports and media industry experts who will define and defend their perspective on the features that will shape fan engagement for the next decade and longer. We will have representatives from incumbent leagues as well as executives from insurgent leagues who see the unbundling of sports media rights as an opportunity to capture market share. Who has it right? Let’s discourse it and get some perspective.

There has to be something special about Nashville, because the legendary Brooklyn restaurant has never before ventured outside the brownstone-stacked streets of its home turf. Frankies Spuntino is more than an Italian restaurant, it is a cultural institution that set a new standard for authentic, simple, world class Italian food. In his final column, outgoing New York Times food critic Sam Sifton wrote: “The best meal I had on the job? It was in the garden of Frankies on a summer evening.” You can be assured the food will be excellent and the company will be ready to rumble.

The famous southern red oak trees of Nashville will be at their peak fall colors. The drinks will be cold, the lights will be low. The company will be world-class. If you want to attend, let us know. If you can’t make it, stay tuned for our event recap which will capture the moments of perspective that matter.

Interested in becoming a member and attending? Inquire about membership here: memberships@ondiscourse.com.

More

The Future is Fan Controlled

The Future of Golf Will Be Simulated

Game Over? The Uncertain Future of Live Sports

The Death of Live Sports is Greatly Exaggerated

Live Sport Needs to Embrace the Realities of Reality TV

Tech: The Uncanny Valley of Fan Experience

The Fan Experience Event Preview

LIV Golf’s Playbook: Innovating Without Losing Traditional Fans

Home Field Advantage: The Community Experience is Paramount

Fans Are The New Free Agent

Did Tom Brady Really Say That?

An NBA Player Surveys the AI Opportunity

AI: A Goldmine or a Landmine For Athlete Brands?

Intellectual Property Law and AI: The Future of Athlete Branding

Fans are the

new free agent

In our chaotic attention economy, nothing beats live sports. Live sports has been one of the last bastions of linear broadcast media, a tectonic force strong enough to redefine the way our society organizes itself; if you are skeptical of this argument, then consider the way we define Sunday. If we go back far enough in U.S. history, Sunday was designated as a day of rest from work in order to provide enough time for religious observation — that is, of course, until the NFL got big enough to knock God out of game day.

The game on the field alone does not explain this story — it was caused by the rise of television, advertising, and, finally, fan obsession. At the root of this story is a question of what products, channels, features, and experiences can drive the next generation of high volume fan attention. We know how valuable and powerful this attention is and how it used to work, and we also know it is about to change significantly. Welcome to ON_Sport: The Fan Experience. Fans are the new free agent.

What makes fans the new free agents? The answer is simple: unlike prior eras when there were limited choices, today’s fans have to actively opt-out of an infinite feed of personalized alternative sports programming so they can opt-into traditional sport media experiences and leagues. In other words, like MLB players after Curt Flood’s court case, the fans have options.

The once-stable market for America’s primary sports leagues are in a state of flux. The NBA, MLB, NHL, and most importantly, the NFL are leveraging a fading live and regional sports broadcasting model that remains massively profitable, but for an uncertain amount of time. At the same time, an alternative batch of professional leagues, startups, and brands are leveraging new methods of engagement that do not rely on traditional broadcast models and which are showing promising results. Can these insurgent leagues capture market share from the incumbents?

The combination of these forces are resetting fan expectations for how they consume the game, what matters most to their experience, and where the business opportunities lie in an uncertain future. In this issue we will explore the following questions:

How do media rights impact fans?

Media rights have long been the cash cow of professional sports.

We explored whether this system can sustain long-term profitability amidst the changing digital landscape and the unbundling of cable distribution.

The future of live sports may be uncertain, but some believe live sports need to embrace reality TV while others are steadfast that the death of live sports is greatly exaggerated.

Can insurgent leagues capture market share from the NFL?

The NFL is God, who is immune to all the forces challenging other incumbent leagues, like the NBA and MLB.

We explored what makes the NFL so powerful: a better TV experience, a better sport, or simply scarcity.

Can this ecosystem be disrupted? Sports need tribes to survive but better storytelling can bring new audiences to traditional sports.

So, are fans the new free agents?

In the age of data, the role fans play in sports is unclear.

Some argue that sports need to be careful not to turn off traditional fans while others believe sports need to completely reimagine the games and put fans in control.

Sports can go all-in on a future that is controlled by fans or try to innovate without losing traditional fans.

Time for discourse. Throughout this Living Issue, we released a number of pieces from a variety of industry experts. We published provocative positions representing alternative and opposing sides about The Fan Experience. If you think the NFL is going to stay dominant for the next generation of sports fans, for example, expect a piece that challenges that assumption. The same thinking applies If you think F1 can teach the NBA a lesson on how to engage with fans, to pick another example. As with any Living Issue, we will continuously update and we will cover all the angles. Finally, let us know if you have a position you want to add to the discourse.

More

The Future is Fan Controlled

The Future of Golf Will Be Simulated

Game Over? The Uncertain Future of Live Sports

The Death of Live Sports is Greatly Exaggerated

Live Sport Needs to Embrace the Realities of Reality TV

Tech: The Uncanny Valley of Fan Experience

The Fan Experience Event Preview

LIV Golf’s Playbook: Innovating Without Losing Traditional Fans

Home Field Advantage: The Community Experience is Paramount

Fans Are The New Free Agent

Did Tom Brady Really Say That?

An NBA Player Surveys the AI Opportunity

AI: A Goldmine or a Landmine For Athlete Brands?

Intellectual Property Law and AI: The Future of Athlete Branding
Moish E. Peltz, Esq.
Partner, Falcon Rappaport & Berkman
Intellectual Property Law and AI: The Future of Athlete Branding

The rapid technological advancements in artificial intelligence are reshaping numerous industries, with sports and athlete branding emerging as a potential area of transformation. However, burgeoning AI technology raises compelling legal and intellectual property issues for athletes, law practitioners, and other stakeholders.

Traditionally, professional athletes have been able to commercialize and protect their name and brand. More recently, since the U.S. Supreme Court’s June 2021 ruling in NCAA v. Alston, even amateur collegiate athletes have increasingly benefitted from this same concept, after gaining the ability to monetize their name, image, and likeness (NIL). 

Now with the advent of powerful consumer AI tools, all athletes have the means to use their brand and likenesses to generate new revenue streams. Examining past experiences in licensing likeness can shed light on these opportunities and concerns. 

AI will

Consider the music industry. In April, artists Drake and The Weeknd suddenly had a new hit collab titled “Heart on My Sleeve.” The song had hundreds of thousands of streams on Spotify and Apple Music. But, as it turned out, the song was an AI-created knockoff. Neither of the artists had actually recorded the music.

In response Universal Music Group, the record label for the artists, swiftly moved to have the song removed from major streaming platforms, and went a step further, asking the platforms to prevent AI companies from using their catalog to train generative AI tools. However, another artist, Grimes, moved to “open-source” her voice using AI tools, allowing fans to share 50% of the royalties generated using her newly created GrimesAI-1 voice generation platform.

A recent television commercial featuring an AI-generated young Charles Barkley demonstrates another potential use of AI-created content in advertising. Sports betting company FanDuel created an authorized version of a young Charles Barkley in his NBA prime to star in a television ad opposite the present-day retired NBA player-turned-announcer, to hilarious results. Here, the laws that govern the commercial use of an athlete’s likeness could apply, but new stipulations addressing AI applications would be crucial.

Transform

And then consider the video gaming industry, where athletes have licensed their images for use in popular games like FIFA or Madden for decades. Recent AI technology promises to allow gamers to interact with real-time generated avatars with in-game voices and faces that respond to a gamer’s input, such as questions. 

Given that we have already seen popular social media personalities which are entirely robotic or virtual, such as Miquela or FNMeka, it is not difficult to imagine interacting in real-time with your favorite athlete, perhaps even in a version of FIFA or Madden in the future. 

Generative AI can already help create engaging avatars by simulating an athlete’s tone in social media posts or in interactive chatbots. The possibility of personalized fan engagement through these kinds of AI-generated means could bolster an athlete’s brand in unprecedented ways.

Athlete

This arrangement is potentially beneficial for many in the industry. Gaming companies can release more engrossing games. Gamers could get a more interactive experience of their favorite players, albeit an AI-generated version. Athletes and leagues stand to earn more revenues and establish a more personalized connection with their fans. 

However, as athletes enter this new era of branding, they will want to consider the legal implications, looking at the current landscape as a guidepost for licensing AI-generated use cases. For example, the extent to which AI-generated works are protected by US Copyright law, if at all,  is now under question, and many open legal questions remain. Such a world would require athletes, teams, leagues, agents, lawyers, and the industry write large to reimagine already complex contractual agreements, necessitating legal adaptations to accommodate AI technologies.

Some bedrock principles still apply. AI’s potential impact on personal branding in sports could potentially be colossal, but athletes must still take a proactive legal approach as build, protect and grow their brand, secure any relevant IP rights, and operate with a wholistic and long-term outlook as they seek to monetize their NIL rights. 

Discover more
Discourse

Branding

or
Did Tom Brady
Really Say That?
Tony Iliakostas
Adjunct professor of Entertainment Law and IP at New York Law School

Moreover, it’s crucial to consider potential legal risks or drawbacks to an athlete’s brand. The use of AI technology raises the possibility of diminishing brand value if not properly managed, leading to a watered-down fan experience. As AI tools become more sophisticated, bad actors could create unlicensed deepfakes of athletes, leading to misuse, misrepresentation, or outright fraud. These realities underscore the importance of robust IP laws that are adaptable to technological changes, and that athletes and their advisors know how and when to use legal remedies.

Athlete branding will evolve along with the next generation of AI technology, and so existing IP laws must evolve to address the complex challenges that might arise. While there is no doubt that AI holds exciting prospects for athletes, it also opens a potential Pandora’s box of legal issues. Athletes, alongside their advisors, lawyers, and agents, will need to navigate this uncharted territory with foresight and diligence, ensuring the protection of their likeness in the evolving landscape of AI technology.

This article is for informational purposes only and should not be construed as legal advice. Feel free to reach out to Moish Peltz, Intellectual Property Practice Group Chair at Falcon Rappaport & Berkman LLP, with specific questions at mpeltz@frblaw.com.

Do you agree with this?
Do you disagree or have a completely different perspective?
We’d love to know

More

The Future is Fan Controlled

The Future of Golf Will Be Simulated

Game Over? The Uncertain Future of Live Sports

The Death of Live Sports is Greatly Exaggerated

Live Sport Needs to Embrace the Realities of Reality TV

Tech: The Uncanny Valley of Fan Experience

The Fan Experience Event Preview

LIV Golf’s Playbook: Innovating Without Losing Traditional Fans

Home Field Advantage: The Community Experience is Paramount

Fans Are The New Free Agent

Did Tom Brady Really Say That?

An NBA Player Surveys the AI Opportunity

AI: A Goldmine or a Landmine For Athlete Brands?

Intellectual Property Law and AI: The Future of Athlete Branding
Tony Iliakostas
Adjunct professor of Entertainment Law and IP at New York Law School
Did Tom Brady Really Say That?

During a stand-up comedy routine in late March 2023, former NFL MVP and seven-time Super Bowl champion Tom Brady addressed the question that was probably on a lot of people’s minds since he finalized his divorce from his ex-wife Gisele Bundchen in October 2022,   

The answer is yes, I’m still having sex with supermodels. That’s never going to change.”

He went on to talk about his playing career, defecating, World War 3, and much more. But here’s the thing: Tom Brady never said these things.  

Tom Brady’s “comedy routine” is the product of Will Sasso and Chad Kultgen, the hosts of the podcast Dudesy, who used generative artificial intelligence to create a one-hour-long comedy routine that mimics the voice of NFL great Tom Brady.

This comedy routine was available as a perk on Patreon to Dudesy subscribers, but the comedy bit quickly proliferated on the internet. Other podcasts, including the Pat McAfee Show, commented on how life-like and realistic Tom Brady’s comedy routine was.

Unfortunately, this came at a cost; TMZ reported that Sasso and Kultgen received a cease-and-desist letter from Brady’s attorneys, alleging that Dudesy infringed on Tom Brady’s personality rights, namely the use of his voice, to create this comedy special.

According to Sasso and Kultgen, the same cease-and-desist letter threatened a personality rights infringement lawsuit and demanded that the fake comedy special be removed from all social media platforms and anywhere the comedy routine was disseminated. Sasso and Kultgen complied.

The Broader IP

In April 2023, the German tabloid magazine Die Aktuelle published an “interview” with famed F1 racer Michael Schumacher. According to the tabloid, this was the first time Michael Schumacher publicly spoke to the media since suffering a near-fatal brain injury in December 2013 while skiing. In the article with Die Aktuelle, Schumacher commented on his skiing accident that led him to step away from F1 racing. However, at the conclusion of the article, the tabloid magazine disclosed that this interview with Michael Schumacher was, in fact, completely AI-generated. Michael Schumacher’s family was extremely upset, and rightfully so, and planned to pursue legal action against the publication. The editor in chief of the magazine was fired.

Generative AI platforms like ChatGPT, Midjourney, and Dall-E have proliferated at an exponential rate. As of January 2023, OpenAI reported nearly 100 million users signed up for ChatGPT since its public launch in November 2022. Dall-E reached 1 million users after 2.5 months. According to Statista, the adoption rate of generative AI in the United States in the workplace is averaging 28% across Gen X, Millennials, and Gen Z. There’s also no denying how innovative generative AI technology truly is. You can go into Chat GPT and ask the system to write a poem about what a great basketball player Michael Jordan was and the AI will do all the work for you. AI systems can generate artwork of things we could never conceive of in real life. But while the creative potential of generative AI is clear, there are also plenty of risks and unanswered questions. There is a great deal of legal ambiguity that stems from AI creation and use.

This isn’t the first time though that generative AI has gotten into hot water with an athlete’s personality rights.”

and Constitutional Implications

Most legal issues involving generative AI stem from copyright law. In a recent decision, the US Copyright Office made it clear that AI-generated works, including AI-generated artwork, will not receive any copyright protection because AI-generated works lack the human authorship required for protection under copyright. But perhaps one of generative AI’s biggest foes is the personality rights law.  

Unlike copyright, trademark, patent, trade dress, and trade secret law, personality rights are the only area of intellectual property law that is not regulated at the federal level.  Currently, there are only 25 states that have adopted personality rights legislation, also known as the “right of publicity.”.  Other states adopt a common law standard.  Regardless, the standard is the same across the board: personality rights involve the use of one’s name, image, and likeness for commercial use. If anyone uses someone’s personality rights for commercial use without that person’s consent, that qualifies as a personality right infringement. One of the cornerstone personality rights infringement cases is the iconic 9th Circuit decision of Midler v. Ford Motor Co.  

In this case, Ford approached Bette Midler and her agent for permission to use her song “Do You Want to Dance” in a commercial campaign for Lincoln Mercury cars.  Bette Midler denied permission so instead, Ford hired Midler’s backup singer Ula Hedwig to sing the song like Bette Midler. The commercial went live and Midler sued Ford, arguing that recreating her voice was a direct infringement of her personality rights under the California Celebrities Act. The 9th Circuit sided with Midler, arguing that use of her voice (albeit a recreated version) to solicit car sales was an infringement of her personality rights. The 9th Circuit further added that Midler’s voice is as much a part of her identity as her actual name, image, and likeness. 

of Generative AI

Bringing this back to generative AI, it’s evident that using AI to recreate one’s personality rights, including one’s voice, can create serious legal issues. Cases like Midler v. Ford serve as a warning signal that using AI to imitate a celebrity or athlete is an infringement-worthy activity if you are using that material for commercial purposes, like an advertisement. And then you have situations like the Brady-AI comedy routine, where Tom Brady’s voice was recreated to make crude jokes. While some legal critics may argue that such activity infringes on Brady’s personality rights, a majority, including myself, may argue that such activity is freedom of expression that is protected under the First Amendment. Parodying a public figure is something that the US Supreme Court has regarded as a fully protectable interest under the Constitution. Essentially, Dudesy’s Tom Brady AI-generated comedy routine is no different than SNL doing a parody of Donald Trump or Joe Biden if the whole point is to parody their personas. That type of commentary is an entirely protectable interest under the First Amendment.

But what about Michael Schumacher’s fake interview with a German tabloid magazine? I would lean towards saying that, in the United States, such behavior is defamatory. Defamation is a cause of action that falls under the First Amendment of the US Constitution and it occurs when someone makes a false statement about someone else and damages their reputation. For public figures, they have the burden of proving actual malice, meaning that the offender knew that the statement was false and with reckless disregard still made the defamatory statement. While the Schumacher interview would be governed under German law, it would be hard to dismiss that such behavior here in the United States meets the threshold of defamation. Imagine if a newspaper or news outlet framed an AI-generated interview with an athlete as a real one that paints said athlete in a bad light. Not only is there an ethical dilemma, but such behavior triggers a cause of action of defamation.

It’s evident that using AI to recreate one’s personality rights, including one’s voice, can create serious legal issues.”

Use Among Athletes

Discover more
Discourse

On the contrary, I think the innovation of generative AI opens the door wide open to sparking creativity and ideas. As it pertains to the sports industry, generative AI presents a plethora of great opportunities. However, there are more questions than answers concerning artificial intelligence and its place in the legal field. The lack of regulation on the local and federal levels also doesn’t help the matter. At the end of the day, we must regard the AI landscape as the Wild West. It is a poorly regulated terrain, but I think prior case law and any impression of existing statutory language give us a roadmap of how to approach regulating this budding industry. In the meantime, athletes should be cautious of working with any brands/entities using generative AI and should ensure that they are legally protected by way of a formal contract.

Do you agree with this?
Do you disagree or have a completely different perspective?
We’d love to know

More

The Future is Fan Controlled

The Future of Golf Will Be Simulated

Game Over? The Uncertain Future of Live Sports

The Death of Live Sports is Greatly Exaggerated

Live Sport Needs to Embrace the Realities of Reality TV

Tech: The Uncanny Valley of Fan Experience

The Fan Experience Event Preview

LIV Golf’s Playbook: Innovating Without Losing Traditional Fans

Home Field Advantage: The Community Experience is Paramount

Fans Are The New Free Agent

Did Tom Brady Really Say That?

An NBA Player Surveys the AI Opportunity

AI: A Goldmine or a Landmine For Athlete Brands?

Intellectual Property Law and AI: The Future of Athlete Branding