PGA lawsuit pits ownership vs. news control 10/14/00

Saturday, October 14, 2000

Story last updated at 10:36 p.m. on Friday, October 13, 2000

PGA lawsuit pits ownership vs. news control

By Paul Pinkham
Times-Union staff writer

The Morris Communications Corp. antitrust lawsuit filed this week against the PGA Tour could have significant implications for the way the media covers sporting events and increase the already stiff competition in developing Internet sites, industry observers said.

U.S. antitrust laws are designed to promote free competition by outlawing such things as monopolies. The Morris suit says the Tour has a monopoly over real-time, hole-by-hole golf scores from its tournaments because it posts the scores on its own free Internet site but is preventing Morris from selling those scores to other media.

"The antitrust implications could be significant" if Morris prevails, said Harvey S. Jacobs, managing director of Jacobs & Associates law firm in Washington and a frequent commentator to the media on Internet law. "It'll have a huge trickle-down impact. . . . Every sporting event at that point is going to be a free-for-all."

But Jacobs said he doesn't expect Morris to prevail because it would strike at the heart of sports organizations' control over their property.

The case reflects a trend of increasing conflict between organizations that control events and those that control digital depictions of the events, said Anandra Mitra, who teaches Internet ethics at Wake Forest University in North Carolina.

"This is an . . . issue with the Internet that's going to come up over and over, and . . . [Morris is] at the forefront of that issue," Mitra said.

The conflict takes on added significance as news organizations seek new ways to do business in the 21st century, Mitra said.

"People are expecting with the new technologies that things will be there immediately," he said. "It's the trend. . . . Time is disappearing."

'Instant gratification'

There's no question that sports on the Internet is a growing business and "real-time scoring" -- the ability to present scores almost as they happen -- is a key component.

"Consumers have come to expect virtually instant gratification when it comes to seeking any sort of information, whether it be sports or the news of the day," said David Carlson, director of the interactive media lab at the University of Florida's College of Journalism and Communications in Gainesville. "All of us have gotten used to getting information instantly."

By most accounts, the first legal battle over real-time scores was in 1997 when Motorola wanted to send up-to-the-minute scores and statistics from National Basketball Association games to subscribers with Motorola pagers.

When the NBA sued to block that effort, the courts were forced into uncharted territory.

Judges were asked to referee between the desires of sports leagues and franchises to control information from their events and the competitive needs of media to quickly disseminate information. The NBA lost that battle when an appeals court ruled that athletic events themselves are not copyrightable, even if broadcasts are.

This week, the Morris suit shifted that battleground to the usually sedate links of the PGA Tour. Morris, located in Augusta, is the Times-Union's parent company.

According to documents filed with Wednesday's lawsuit, the CNN/SI Internet site maintained by Cable News Network and Sports Illustrated paid The Augusta Chronicle, a Morris newspaper, $460,000 to provide real-time scores from Tour events this year, and an unspecified amount for the next two years. Morris says in the filing that it has a multimillion-dollar investment in the Internet and has spent about $200,000 developing software to syndicate real-time golf scores.

"If the PGA Tour restrictions on dissemination of this data were removed, we would be able to grow a multimillion-dollar business doing so," Michael Romaner, director of online services for Morris, wrote in a deposition.

Likewise, the Tour, headquartered in Ponte Vedra Beach, puts live scores on its own Internet site on which it sells advertising. The Tour also provides real-time scoring for USA Today, but Tour officials wouldn't say how much that contract is worth.

"The numbers you see on the Web site are just the tip of the iceberg," said Tour spokesman Bob Combs. "Underneath it is a very substantial investment in the hardware and software that actually drives the scoring system as well as the significant number of staff and volunteers to gather and input the data."

For that reason, Mitra said, it's no surprise the Tour is challenging Morris's right to sell the information because it wants to keep those rights for itself.

Turf war

Media organizations like Morris are used to fighting these kind of battles on First Amendment grounds, challenging the government for access to public records and meetings.

But sports leagues, like the Tour, aren't the government, forcing Morris to go the antitrust route. The antitrust argument is that the Tour is monopolizing information in the public domain for the benefit of its own Internet site by denying or threatening to deny credentials to Morris Internet staff unless the company agrees not to sell the information to other media.

The Tour and Morris have been negotiating over real-time scores since January 1999, when the Tour placed a restriction on Internet reports of its events, saying scores could not be posted for 30 minutes, according to a declaration filed with Wednesday's lawsuit by Times-Union Publisher Carl Cannon.

"The stated purpose of that language was to allow the PGA Tour to sell the rights to real-time scoring and to prevent other news organizations from posting scores in a timely manner," Cannon wrote.

When Morris objected, the Tour revised those restrictions, saying the scores could be posted as soon as they were in the public domain, court documents show.

Then in January, the Tour again revised the restrictions, saying credentialed media couldn't sell real-time scores. Morris again challenged the policy and a temporary negotiation was worked out where Morris Internet employees could use the Tour's Internet site to collect and post the scores. Cannon said in his declaration this method proved "untimely, inaccurate and incomplete."

Last month, Cannon wrote the Tour, saying Morris would seek credentials to Tour events to provide real-time scores to other Internet sites. On Oct. 4, the Tour yanked Morris Internet credentials for next week's Tampa Bay Classic.

"It is not a pleasant task for me to be at odds with the PGA Tour," Cannon wrote. "I serve on the board of the PGA Tour Charities. . . . The local tournament, now known as the TPC, was begun by Florida Publishing Co."

The Tour also was reluctant to go to court. In a letter last month to Cannon, Tour Commissioner Tim Finchem cited the "special relationship" between the Times-Union and the Tour and the "many millions of dollars" they and other organizations have raised for charity.

"It would be a shame to detract from all these positives by having the PGA Tour and The Florida Times-Union as adversaries in a public legal proceeding," Finchem said, noting he expects other courts around the country to face similar issues.

Despite the high monetary stakes and the antitrust arguments, "this matter is about who will report the news," said George Gabel, a First Amendment attorney in Jacksonville who represents Morris.

"Will it be the press, which has that responsibility under the U.S. Constitution, or will the entity being reported about be allowed, by virtue of an ability to both control information and become a publisher itself, self-report the news as it sees fit? The PGA Tour, as the source of news, should not be free to condition the dissemination of facts upon the satisfaction of its economic demands," Gabel said in a motion requesting a preliminary injunction against the Tour.

However, Jacobs said the fundamental questions are whether the scores are mere facts or the property of the Tour, and when those scores are in the public domain, giving anyone the right to publish them. Since Tour events occur mostly on private property, Morris faces an uphill battle, he predicted.