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Federal Court Upholds Exclusive Video Streaming Contract

The U.S. Court of Appeals for the Seventh Circuit Wednesday upheld a lower court ruling that a contract for exclusive streaming rights to Wisconsin collegiate sports tournaments did not violate the First Amendment or constitute some form of prior restraint.

Gannett and the Wisconsin Newspaper Association had challenged a Wisconsin District Court ruling that the Wisconsin Interscholastic Athletic Association (WIAA) was within its rights to grant exclusive streaming rights to post-season tournament games to production company American-HiFi.

The agreement did not prevent media coverage of the games, or excerpts up to two minutes.

Gannett challenged the exclusive deal and one of its local newspapers streamed several games in their entirety. WIAA took the media company to district court seeking summary judgment, which was granted; Gannett appealed.

Gannett had argued that as a state actor, the WIAA may not enter into exclusive contracts with private companies to stream entire events online and derive revenue from it, said the Federal appeals court panel in its ruling.

The court said there was a difference between a state as regulator and a state as proprietor, and that as proprietor of the right as a performance product, WIAA had the right to control it and to charge a fee. It pointed out that to disallow the contract because a state entity would make money was analogous to saying a school could not record a student play or musical performance and charge for CDs to raise money for the program, as many schools currently do.

"Thus, because the exclusive agreements between WIAA and American-HiFi are otherwise not contested [the only challenge being the constitutionality of the agreement], and we find no reason in the First Amendment to change them, we affirm the district court's judgment for WIAA," the court said.

The court pointed to existing exclusive broadcast and cable rights to games, which Gannett did not challenge, including Fox Sports Network Wisconsin's exclusive deal for state football finals since 2001. It found no difference between those and online contracts. "Though WIAA is not the broadcaster of a television show in the traditional sense, we find no meaningful distinction between the online setting and more traditional media," the court said.

The court conceded that the issues at stake were a moving target. But after other issues were pared away, said the court, it was left with one question: "Whether WIAA's contract granting American-HiFi the exclusive right to stream tournament games and requiring consent and payment for third-party broadcasts of entire games violates the First Amendment."

Its answer was that exclusive rights do not constitute a gag order or "threaten the fundamental right of the press to comment on and cover school sporting events."

"The media are free under the policy to talk and write about the events to their hearts' content," said the court, "What they cannot do is to appropriate the entertainment product that WIAA has created without paying for it. WIAA has the right to package and distribute its performance; nothing in the First Amendment confers on the media an affirmative right to broadcast entire performances."

WIAA's case was aided by a human cannonball.

According to the court, it based its ruling on the Supreme Court's decision in Zacchini v. Scripps-Howard Broadcasting, in which the court found for a defendant, a human cannonball, whose entire 15-second performance was recorded and replayed on the news in its entirely after he asked that it not be. The Supreme Court said it was "quite sure that the First and Fourteenth Amendments do not immunize the media when they broadcast a performer's entire act without his consent."

"In short," said the Seventh circuit decision, "Zacchini establishes two propositions that guide our resolution of this case. First, it distinguishes between the media's First Amendment right to ‘report on' and ‘cover' an event and its lack of a right to broadcast an ‘entire act.' Second, Zacchini makes clear that the producer of entertainment is entitled to charge a fee in exchange for consent to broadcast; the First Amendment does not give the media the right to appropriate, without consent or remuneration, the products of others."