Protecting Big Data in the Big Leagues: Trade Secrets in Professional Sports

The protection of trade secrets within the professional sports industry became a hot-button issue in the summer of 2015, after news reports emerged revealing that officials from Major League Baseball’s St. Louis Cardinals were under federal investigation for having illegally accessed proprietary information belonging to their league rival, the Houston Astros. Indeed, professional sports teams in the United States and Canada often possess various forms of proprietary information or processes—ranging from scouting reports and statistical analyses to dietary regimens and psychological assessment techniques—giving them a potential competitive advantage over their rivals. Unfortunately, as with the rest of the economy at-large, little empirical data exists regarding either the types of proprietary information owned by these teams, or the measures that teams are taking to protect their trade secrets. Drawing upon freshly-collected survey data, this Article helps to fill this void in the literature by providing novel empirical evidence regarding the modern trade secret practices of the teams in the four major North American professional sports leagues. Based on the results of a first-of-its-kind survey conducted in the spring of 2016 of the general counsels of teams in the four major leagues, this Article sheds light on both the types of information subjected to trade secret assertion by these firms, as well as the methods they are using to safeguard their data. In the process, this Article examines the implications of these survey results for the professional sports industry, while also identifying potential new lines of inquiry for future trade secret research

Regulating Professional Sports Leagues

Four monopoly sports leagues currently dominate the U.S. professional sports industry. Although federal antitrust law—the primary source of regulation governing the industry—would normally be expected to provide a significant check on anticompetitive, monopolistic behavior, it has failed to effectively govern the leagues due to both their well-entrenched monopoly status and the unique level of coordination necessary among their respective teams. Consequently, the four leagues today each, in many respects, enjoy unregulated monopoly status in what is estimated to be a $67 billion industry. As one might expect, these leagues use their largely unchecked monopoly power to injure the public in various ways. By restricting expansion, leagues create an artificial shortage of franchises enabling their existing teams to extract billions of dollars in stadium subsidies from U.S. taxpayers. Similarly, by preventing their franchises from individually licensing their broadcast rights nationally or over the Internet, the leagues are able to demand significantly higher fees from television networks and consumers than would be obtainable in a competitive marketplace while at the same time subjecting viewers to arcane and outdated blackout provisions. Unfortunately, existing proposals in the academic literature to remedy this undesirable state of affairs are both impractical and unlikely to be effective. This Article instead proposes a surprisingly often overlooked solution: the creation of a federal sports regulatory body. Because the U.S. professional sports leagues today effectively operate as natural monopolies—with nearly 150 years of history establishing that competing leagues cannot sustainably coexist in a sport for any significant length of time—direct government regulation of the industry is warranted. Indeed, a specialized regulatory body would be particularly well suited to ensure that the leagues’ activities are aligned with the public interest, while at the same time accommodating the industry’s unusual economic characteristics

Decertifying Players Unions: Lessons from the NFL and NBA Lockouts of 2011

This Article analyzes the National Football League (NFL) and National Basketball Association (NBA) lockouts of 2011, focusing in particular on the role union dissolution played in each work stoppage. Although the existing academic literature had generally concluded that players unions in the four major US professional sports leagues were unlikely to disband during a labor dispute, the unions in both the NFL and NBA elected to dissolve in response to lockouts by ownership. This Article provides an explanation for why the prior literature misjudged the role that union dissolution would play during the 2011 work stoppages. It argues that previous commentators failed to recognize that the frequently cited disadvantages of dissolving a union actually provide minimal disincentive to players during a lockout. The Article concludes by predicting that players will likely continue to dissolve their unions during future lockouts in order to gain negotiating leverage over ownership through the assertion of antitrust claims

There\u27s No I in League : Professional Sports Leagues and the Single Entity Defense

This Note argues that outside of labor disputes, sports leagues should be presumed to be single entities. Part I argues that professional sports leagues are single entities in disputes regarding league-wide, non-labor policy. In particular, the focus of the Supreme Court\u27s jurisprudence on economic reality rather than organizational form necessitates a finding that professional sports leagues are single entities in non-labor disputes. Part II argues that professional sports leagues are not single entities for purposes of labor disputes; sports leagues, on the whole, do not involve a unity of interest for labor matters. More importantly, existing precedent outside of the professional sports context that balances labor and antitrust law should apply to professional sports. The Note concludes that the Seventh Circuit\u27s case-by-case approach is unnecessary and should be rejected in favor of a more general classification scheme in which professional sports leagues are presumed to be single entities, with an exception for labor disputes

The Future of College Sports After Alston: Reforming the NCAA via Conditional Antitrust Immunity

In June 2021, a unanimous U.S. Supreme Court issued its eagerly anticipated decision in National Collegiate Athletic Association v. Alston, ruling for the first time that NCAA rules governing student-athlete eligibility are subject to full scrutiny under federal antitrust law. Although the immediate impact of the Alston decision was rather modest—merely requiring the NCAA to allow its schools to compete by offering prospective players education-related benefits such as laptop computers and stipends for future graduate-level study—the Court hinted that it was prepared to extend the logic of this ruling much further, calling into question the legality of the NCAA’s entire model of “amateur” intercollegiate athletics. As a result, many suspect that it is only a matter of time before the judiciary requires the NCAA to introduce some form of “pay-for-play” to college sports. This setback for the NCAA coincided with another monumental change to the college sports landscape in the summer of 2021. Within days of its decisive loss at the Supreme Court, the NCAA—for the first time—decided to allow student-athletes to retain their collegiate eligibility despite having monetized their so-called “name, image, and likeness” (NIL) rights by signing endorsement contracts with third-party companies. The association did not do so willingly, however, but only after its hand was forced by the twenty-seven different states that had enacted legislation prohibiting universities within their jurisdiction from denying their college athletes this right. In response to these events—and the Supreme Court’s admonishment in particular—the NCAA and its membership began to rethink the association’s supervisory role over intercollegiate athletics. Most notably, the NCAA recently ratified a significant overhaul of its organizational constitution in January 2022. This has set the stage for a meaningful decentralization of the industry, with increased decision-making authority likely to be delegated back to individual universities and conferences. Although such a response to the events of 2021 is more than understandable given the association’s potential legal liability post- Alston, the NCAA’s restructuring nevertheless threatens to exacerbate several undesirable trends in intercollegiate athletics. Indeed, the uncommon industrial organization of U.S. intercollegiate athletics has created atypical economic incentives that have already resulted in remarkably elevated levels of deficit spending, a high degree of competitive imbalance on the playing field, and insufficient protection of student-athletes’ education and medical well-being. Unfortunately, because the college sports industry faces an unusual legal impediment that will hinder its ability to successfully adjust to increased commercialization and competition between schools—namely, an inability to collectively bargain with its players on an industry-wide basis—the coming decentralization is likely to only further exacerbate these problems. Therefore, this Article asserts that Congress should intervene to help chart the course for the future of U.S. intercollegiate athletics. Specifically, this Article makes the case for granting the NCAA and its member institutions a limited and conditional antitrust exemption, proposing two alternative models that would give the industry the power to regulate itself while simultaneously imposing meaningful reforms on the NCAA to ensure that its governance model better advances the interests of its players in the future

The Faulty Law and Economics of the “Baseball Rule”

This Article examines the so-called “Baseball Rule,” the legal doctrine generally immunizing professional baseball teams from liability when spectators are hit by errant balls or bats leaving the field of play. Following a recent series of high-profile fan injuries at Major League Baseball (MLB) games, this century-old legal doctrine has come under increased scrutiny, with both academic and media commentators calling for its abolition. Nevertheless, despite these criticisms, courts have almost uniformly continued to apply the Baseball Rule to spectator-injury lawsuits. This Article offers two contributions to the ongoing debate surrounding the Baseball Rule. First, it provides new empirical evidence establishing that the risk of being hit by an errant ball or bat at a professional baseball game has increased considerably in recent years. Specifically, fans attending MLB games today are sitting more than 20 percent closer to the field than they were when the legal doctrine was first established. This fact, along with other changes in the way in which the game is played and presented to fans, have converged to substantially reduce the reaction time that spectators have to protect themselves from flying objects entering the stands, calling into question courts’ continued reliance on the century-old rule. Second, the Article makes the novel observation that courts and academic commentators have, to date, largely failed to reconsider the Baseball Rule in light of the emergence of the law-and-economics movement, and in particular the contributions the movement has offered regarding the optimal apportionment of tort liability. By subjecting the doctrine to such an economic analysis, this Article finds that the host team will usually constitute the lowest-cost or best risk avoider, thus suggesting that the legal immunity currently provided to teams by the Baseball Rule inefficiently allocates tort liability in spectator-injury lawsuits. As a result, the Article concludes by contending that future courts (or legislatures) should reject the Baseball Rule and instead hold professional baseball teams liable for spectator injuries. Specifically, it asserts that the Baseball Rule should be replaced by a strictliability regime, thereby better incentivizing teams to implement the most economically efficient level of fan protection in their stadiums

Gaming the System: The Exemption of Professional Sports Teams From the Fair Labor Standards Act

This article examines a little known exemption to the Fair Labor Standards Act relieving seasonal recreational or amusement employers from their obligation to pay the minimum wage and overtime. After evaluating the existing, confused case law surrounding the exemption, we propose a new, simplified framework for applying the provision. We then apply this framework to a recent wave of FLSA lawsuits brought by cheerleaders, minor league baseball players, and stadium workers against professional sports teams. The article concludes by considering the policy implications of exempting this class of employers from the FLSA\u27s wage and hour requirements

The Sport of Cybersecurity: How Professional Sport Leagues Can Better Protect the Competitive Integrity of Their Games

From a Major League Baseball scouting director using a cyberattack to break into a competitor’s records, to an NBA franchise being compromised in a phishing scheme, U.S. professional sports leagues are waking up to the fact that cybersecurity is no longer just a problem for the government or tech firms—it has now reached into the playing field, locker room, and boardroom. This Article breaks new ground by examining how the four major U.S. professional sports leagues—Major League Baseball, the National Football League, the National Basketball Association, and the National Hockey League—are protecting themselves from these cyber risks that threaten the competitive integrity of their games, and proposes ways in which the leagues could do more to proactively mitigate their cyber risk

The institutional framework for doing sports business: principles of EU competition policy in sports markets

The competition rules and policy framework of the European Union represents an important institutional restriction for doing sports business. Driven by the courts, the 2007 overhaul of the approach and methodology has increased the scope of competition policy towards sports associations and clubs. Nowadays, virtually all activities of sports associations that govern and organize a sports discipline with business elements are subject to antitrust rules. This includes genuine sporting rules that are essential for a league, championship or tournament to come into existence. Of course, 'real' business or commercial activities like ticket selling, marketing of broadcasting rights, etc. also have to comply with competition rules. Regulatory activities of sports associations comply with European competition rules if they pursuit a legitimate objective, its restrictive effects are inherent to that objective and proportionate to it. This new approach offers important orientation for the strategy choice of sports associations, clubs and related enterprises. Since this assessment is done following a case-by-case approach, however, neither a blacklist of anticompetitive nor a whitelist of procompetitive sporting rules can be derived. Instead, conclusions can be drawn only from the existing case decisions - but, unfortunately, this leaves many aspects open. With respect to business activities, the focus of European competition policy is on centralized marketing arrangements bundling media rights. These constitute cartels and are viewed to be anticompetitive in nature. However, they may be exempted from the cartel prohibition on efficiency and consumer benefits considerations. Here, a detailed list of conditions exists that centralized marketing arrangements must comply with in order to be legal. Although this policy seems to be well-developed at first sight, a closer look at the decision practice reveals several open problems. Other areas of the buying and selling behavior of sports associations and related enterprises are considerably less well-developed and do not provide much orientation for business