What are the limits for sportsbook operators when it comes to the use of what are known as the “name, image, and likeness” of professional athletes in marketing and advertising?
The answer, according to a pair of sports law experts who offered analysis during a New York City Bar Association-sponsored webinar on Tuesday titled “NIL Rights in a Time of Expanded Sports Betting,” is — we’re not sure.
As laid out by Marc Edelman, a professor at the Zicklin School of Business of Baruch College, courts previously have granted sports businesses free rein when it comes to the use of athletes’ statistical results from performance in games.
In those cases, Edelman explained, the “publicity rights” of the athletes consistently has been trumped by a First Amendment right of fans to access the information. In one case, Edelman added, the fact that professional athletes are “already handsomely compensated” for their performances was cited as a reason they were not entitled to further benefits.
In the 2018 Indiana Supreme Court case of Daniels vs. FanDuel, a court found that publicity rights lose out even when an athlete’s picture is used as part of the distribution of information in daily fantasy sports (DFS).
But Edelman, who advises a number of DFS companies, said he suggests a “modicum of caution” for such clients when it comes to the usage of pictures because it is not yet clear that all courts would rule that same way.
Michelle Marsh, an attorney at the law firm of Arent Fox LLP, agreed.
“The biggest issue is whether you are crossing over from the use of names and statistics into the marketing and advertising realm,” Marsh said. “If you show a particular player on a billboard, what message are you conveying with that information?”
Well, there is at least one limit
Has a limit been found, though, on what such sports businesses can do that must bow to personal publicity rights? It seems to have been found in a 2013 U.S. Third Circuit Court of Appeals ruling that reversed a previous lower-court ruling.
In Hart v. Electronic Arts, the court concluded in a split opinion that “right of publicity interests outweighed Electronic Arts’ use of [former Rutgers quarterback Ryan Hart’s] likeness and biographical information in a college football video game.”
But a related case that now may be heard by the U.S. Supreme Court is a 2020 ruling in Hamilton v. Speight, where the same court ruled that a character in Epic Games’ popular “Gears of War” video game franchise did not misappropriate the character’s likeness from the plaintiff, ex-NFL player Lenwood “Skip” Hamilton.
The video game was the brainchild of a former colleague of Hamilton’s, whose idea was rejected on the grounds of its being too violent. Yet a Hamilton-like character was created anyway.
The name, image and likeness conversation for paying college athletes has spent years focusing on a hypothetical future.
But with at least five states' NIL legislation set to go live on July 1, that future is finally here. https://t.co/pkaS8njdnO
— Axios (@axios) June 9, 2021
Marsh said that while video games are “an imperfect vehicle” in definitively determining the limits of the right of publicity law, “I still would love for the [Supreme] Court to take this case.”
Marsh, stressing that she was speaking for herself and not her employer, said that “the time is right” for the Supreme Court finally to take up a right-of-publicity case — but predicted that Hamilton will lose the case if the nation’s highest court does take up the matter.
Edelman replied, “Like any wise gambler, I try to stay in my lane,” as he declined to offer his own prediction.
Television ads vs. social media posts
When it comes specifically to sports betting and daily fantasy sports operators, Edelman noted a dichotomy between television advertising and social media posts.
“The TV ads seem to be pretty good, having been vetted by large [law firms],” Edelman said. “But advertising on Twitter and all forms of social media doesn’t seem to get treated the same way.”
Edelman said some social media pitches don’t always appear to address the nuances of intellectual property law.
“Those companies might not have the right to use a picture of a player in uniform and a team logo in a way that looks like an endorsement,” Edelman said.
Moderator Andrew K. Patrick, an attorney with Skadden, Arps, Slate, Meagher & Flom LLP, said he has seen that same apparent lack of vetting by such companies on social media.
Edelman and Marsh agreed that in terms of the usage of player likenesses, daily fantasy sports and sports betting operators are walking similar tightropes.
Edelman added that even securing a partnership with a professional athlete doesn’t avoid all potential landmines. He said it’s not clear that an advertisement by a company can include the player in his team uniform if the team itself isn’t part of the deal, for example.
Is there a solution out there?
Marsh said that her “creative solution” would be to allow for athletes to copyright their own images.
As to whether it would help for Congress to step in and create a federal standard that would simplify the issue, Edelman said that “as an academic, I could spend the next year of my life on why we need a federal right-of-publicity law.”
This is another huge day in college sports as Congress holds hearings on a potential national standard for name, image, and likeness rights for college athletes. A patchwork of state laws will go into effect July 1, meaning the NCAA can no longer drag its feet on #NIL rights.
— Wes McKinzie (@WesMcKinzie) June 9, 2021
But Edelman said that the reality is that not only is the current Congress deeply divided on most matters, there already are six widely divergent bills attempting to address the amount of rights that college athletes should have to their name, image, and likeness.
Marsh was somewhat more optimistic, saying that “with the right Congress and a thoughtful leader, a bill could get written.”
Edelman said that in terms of college athletes, a pending Supreme Court ruling this month in NCAA v. Alston could help clarify the limits of collegiate oversight of its amateur players — thus giving more clarity on the issue of names, images, or likenesses.
But for sports betting operators, no such clarity on how far they can go in terms of marketing with references to players and teams seems imminent. They’ll just have to settle for the “caution” flag raised by Edelman.