- Genius Sports and FDC have taken a hard line against unofficial data scouts
- Sportradar accuses Football DataCo and Genius Sports of anti-competitive practices
- US major leagues likely to be influenced by attempts to police exclusivity
Hull City supporter Daniel Mawer found himself caught in the middle of a hotly contested commercial dispute while watching an English Football League (EFL) match in early August. The Tigers fan was innocently texting his girlfriend when he was asked to put down his phone or face being evicted from the team’s KCOM stadium.
The EFL later revealed that a monitor, acting on behalf of Football DataCo (FDC), the data rights-holder for the English Premier League, EFL and Scottish Football League, had mistakenly thought Mawer was collecting data as an unauthorised scout. As such, he could be descibed as collateral damage in FDC’s attempts to protect the exclusivity of the data rights deal it signed with Genius Sports in May this year.
Today, at half time I was told by an ‘under cover security guard’ that if I continued to text about the football match at the KCOM stadium I’d be ejected from the ground.
— Daniel Mawer (@skintnortherner) August 10, 2019
FDC and Genius’s zero-tolerance approach has proved to be divisive in the data services sector. Depending on who you talk to, it is either a fair and justifiable attempt by a rights-holder to claw back a reasonable share of the large sums wagered on football, or it is heavy-handed and anti-competitive. Data services company Sportradar strongly leans towards the latter and has issued a letter before action claiming the way the partnership is structured contravenes EU competition law.
The story starts with the five-year deal signed by Genius Sports in May this year to become FDC’s official supplier of live data to the global betting sector from 2019-2024. The deal, thought to be worth around £100m in total, gave Betgenius, the sports betting division of the company, the rights to capture official live game data in stadiums at the 4,000 fixtures per season across the three leagues and distribute it to hundreds of licensed sportsbook operators globally. Significantly, it also placed the authority to sub-license the rights to other suppliers in Genius’s hands.
Sportradar argues that this set-up has put Genius in a super-dominant position which it is abusing to foreclose the market to its competitors. It accuses Genius of not making supplier sub-licenses available on ‘fair market terms’, thereby contravening EU Competition law.
Speaking at the recent Betting on Sport conference in London, David Lampitt, Sportradar’s managing director, sports partnerships, claimed that the company applied for a sub-licence during the tender process and has done so again subsequently. He says the decision to place the licensing rights in Genius’s hands went against the spirit of the original tender in which the rights were initially made available on a non-exclusive basis.
“Our position is very clearly that there should be proper competition in that market,” he said. “And, in fact, the licence structure should enable that, rather than the licence structure really foreclosing [the market].”
For Genius and the leagues represented by FDC, this exclusive approach is all about controlling the way the official data is distributed. Live data is the lifeblood of the in-play betting industry, as it allows bookmakers to accurately price their markets and settle bets rapidly and accurately. Until now, they say some suppliers have flouted official data rights by sending ‘unofficial’ scouts into matches where they gather data that they can sell at a reduced price to bookmakers. This, they argue, undermines the value of the official rights and short-changes football. In their view, the comparatively high premium Genius paid for exclusivity justifies the hard line FDC has been taking in policing stadiums. The monitor who identified Mawer was acting on a policy to evict these scouts on the basis that this sort of activity contravenes the ticketing terms and conditions across the three leagues.
Speaking exclusively to SportBusiness, Bill Bush, Premier League executive director said: “The Premier League is a successful competition that depends on audio-visual rights for the investment that keeps standards high and fans happy. We will always protect our rights to defend ourselves from piracy in any form, whether in broadcast or data rights.
“Accordingly, we support measures taken by any of our clubs to safeguard their intellectual property and prevent sophisticated networks of unauthorised data collectors from operating in stadiums to steal data in breach of ticketing and ground conditions. These data are highly variable in quality, open to manipulation and unfair to punters and fans. This shadowy world of data piracy drains money away from the sport and threatens the integrity of the game.”
Sources close to FDC and Genius say a sub-licence is available to Sportradar, provided it matches their efforts to stop unofficial scouting at matches. SportBusiness understands Genius’s sub-licensing terms include a requirement that data suppliers ensure that all of their bookmaker clients in the downstream market also have an over-licence to use the official Genius data. The over-license ensures the bookmaker doesn’t use data from suppliers outside of Genius or its sub-licensees. This, combined with the strict policing of stadiums, and the fact only 30 per cent of FDC’s matches are televised, effectively means FDC and Genius have severely inhibited the market’s ability to access data from other sources.
Genius is also understood to be moving towards a model in which it asks for a share of bookmaker revenues rather than charging a flat fee. One well-placed source said the supplier was thought to be asking for between 7.5 and 15 per cent of gross gaming revenues (GGR) – a substantial increase on the sort of fees bookmakers are accustomed to. For comparison, one bookmaker indicated Sportradar was charging betting firms between 1.5 and 2 per cent of GGR for the NFL’s official data and bookmakers are not required to buy an additional over-licence to use the US league’s content.
Inevitably, these demands have proved unpopular with betting firms. Speaking on the same panel where Lampitt outlined Sportradar’s position, Jamie Mckittrick, group head of commercial at betting and gaming company GVC Group, said: “Ultimately, operators are just getting squeezed and squeezed and squeezed, and at some point, we’re going to have to push back and stop paying for things that are too expensive, otherwise it isn’t viable.”
The counter argument runs that any complaint is sour grapes on the part of bookmakers who have become accustomed to acquiring data from ‘unofficial’ sources on the cheap. Genius and FDC admit that their prices are higher than the industry averages, but they argue that they are trying to bring a maturity to a market that has hitherto resisted attempts by rights-holders to extract a fair share of betting revenues.
Sources close to FDC say the rights were structured on a similar exclusive basis in the last cycle, when Running Ball, part of the Stats Perform Group, won the data supplier contract. Genius is understood to have sub-licensed the rights from Perform at that stage, but Sportradar didn’t agree a deal. The only difference in the way the deal was structured was that FDC determined which betting operators should be granted over-licences. Sportradar complained to the Competition and Markets Authority but the UK regulator didn’t take the case any further.
Essentially, the dispute boils down to different interpretations of what people in the industry mean when they talk about ‘official data’. This is more difficult than it first appears because there are so many different models employed by rights-holders in different jurisdictions. At the conference, Lampitt said it was possible to have exclusive data partnerships that were compatible with fair competition but he appeared to suggest non-exclusive models were preferable. He referenced the non-exclusive approach employed by the NBA in its domestic market, whereby the league controls sub-licences and chooses to allocate the rights to multiple suppliers and bookmakers. Sportradar has also held up the Bundesliga approach where there is an official data provider and multiple accredited providers below who are granted lesser rights such as the ability to collect data from a fast video feed.
In a competitive market, Lampitt says all major suppliers of data, including Genius, gather a ‘mix’ of official data and unofficial data, whether from inside stadiums, or from video feeds, because no single company has official status with all sports properties. Bookmakers then have a choice between a premium official product, if one is available, or an open-source/unofficial product. He argues this choice encourages competition on price, drives innovation and can also uphold integrity concerns.
According to these definitions, the exclusive contract Sportradar recently signed to supply the NFL’s official data – and for which supplier sub-licences are unavailable – is not anti-competitive because all of the matches are streamed or shown on TV, meaning an alternative data source is available. To boot, Sportradar says it would not object to Genius, or others gathering unofficial data from TV coverage of the league. But the company says FDC’s football contract with Genius forecloses competition because only 30 per cent of the matches across the deal or shown on TV and Genius and FDC are blocking other suppliers from gathering data in stadiums.
“There should be competition, there should be choice, and the operators in the downstream market should have that choice of supply,” said Lampitt at the Betting on Sport conference.
However, one well-placed source said Sportradar’s official deal with the International Tennis Federation (ITF) is completely at odds with this pro-choice position. The deal gives Sportradar exclusive data rights – including the opportunity to sub-license supplier rights – to 60,000-plus ITF events a year. The source argued that the contract was ‘anti-competitive’ because only around 10-15 per cent of the matches are televised and there is no alternative way to access the data.
When presented with this argument, Sportradar said this does not constitute monopolistic behaviour because it has sub-licensed the rights on ‘fair commercial terms’ to other suppliers in the market.
For Genius and FDC, the whole point about ‘official’ data is that it should be licensed and treated to exactly the same IP protections as media rights. In their view, an ‘unofficial’ data scout is no different to someone pirating match footage on a mobile phone. In a telling exchange at the conference, Sportradar’s Lampitt and Adrian Ford, general manager, Football DataCo, disagreed about whether data could be classed as intellectual property (IP).
“There is IP in data, which we all know, in Europe at least, if not in the United States,” said Ford.
But Lampitt challenged him on his comments: “There isn’t IP in data. There is IP in a database, if you organize yourself into a database, but the data does not carry IP,” he said.
The exchange gave an indication of how FDC and Genius might seek to defend themselves if the argument with Sportradar goes to court. In 2013, the England and Wales Court of Appeal ruled that Sportradar’s unauthorised use of FDC data to operate Sports Live Data, an online football statistics portal, amounted to ‘re-utilisation’ under the EU Database Directive.
In a blog on the subject in 2018, Ruth Hoy, a partner with global law firm DLA Piper who has previously represented the Premier League, wrote: “The truth is that there is no property right in information itself. Nobody owns the fact that a goal has been scored, or foul has occurred. That is pre-existing, factual data. But, in Europe, there is an ability, through the sui generis [unique] database right, for those who make a substantial investment in obtaining, verifying and presenting data, to obtain an intellectual property right in the resultant database into which the data is stored.”
Hoy indicated that a database right will often belong to competition organisers who make a substantial investment in an ‘official’ data feed. This might include investment in a large team of data scouts or technical infrastructure in stadiums such as high-speed broadband to support fast extraction of data. There is no equivalent protection in the USA.
Sportradar doesn’t dispute the existence of the database right under EU law – saying that its own business is in fact reliant on it. It claims its objection is to a system which allows only one party to create a database by foreclosing access to the data itself. In fact, it says that to ensure it doesn’t risk infringing FDC’s database, the only option is to collect its own data at source, which it is being prevented from doing. The company added that the presiding judge, Justice Floyd, warned against the risk of data monopolies in the the 2013 Appeal judgment, stating that “the Directive should not be construed in a way which gives a party a monopoly in facts.”
Clearly the argument has the potential to rumble on. But whichever way it pans out, FDC’s approach won’t have gone unnoticed by other rights-holders – not least those trying to extract maximum commercial benefit from the emerging legalised betting market on the other side of the Atlantic. At one stage, the US major leagues lobbied for legislation that would mandate bookmakers to use official data. In their own way, that is exactly what FDC and Genius have done with their football betting rights.