Genius Sports Group sued Sportradar in the U.K. High Court on Feb. 5, the latest legal back-and-forth between the two rival sports data providers.
In a sealed filing, Genius Sports argued that the Swiss-based company has unlawfully dispatched “data scouts”—spectators who relay data for purposes of facilitating in-game betting—to Premier League, English Football League and Scottish Professional Football League stadiums. Headquartered in London, Genius Sports is the exclusive collector and distributor of official data from those leagues’ matches. Sportradar rejects the premise of Genius Sports’s lawsuit, insisting that the exclusive relationship negotiated by Genius Sports violates European Union and British competition (antitrust) laws. “Sportradar’s position,” the company said in a statement to Sportico, “has always been that private law rights cannot be relied upon to give effect to an anti-competitive arrangement.”
The lawsuit comes as the value of sports data skyrockets, both for media companies and for sports betting operators who use it to create more betting markets, particularly for popular in-game wagering. It’s not uncommon for Genius Sports or Sportradar to ink nine-figure deals with leagues like the NHL, NBA or English Premier League, giving them access to the latest and most reliable information right from the horse’s mouth.
In deals like that, Genius Sports and Sportradar act as middlemen. They take data from a sports league and package it to be sold to sportsbooks and broadcasters. If you’ve watched a sports telecast or gambled on matches, there’s a good chance you’ve seen those feeds without being directly aware of it. Both companies, therefore, generate revenue by collecting data and selling it to sportsbooks and other businesses. The timing of the data is crucial, as in-game bets require near instantaneous transmission of data.
There are other ways to get that data besides partnering directly with the leagues or associations. It’s common practice in the industry, for example, to build a data feed off of the fastest live video of an event. Another way is to send people, generally known as “data scouts,” to a live match and have them relay information from the stands. Genius Sports general counsel Tom Russell told Sportico his company only engages in scouting that honors others’ rights. “We respect,” Russell explained, “sports’ control over their events. We don’t enter stadia where others have rights.”
Genius Sports is in the process of going public in a $1.5 billion SPAC deal. Sportradar, whose investors include the NFL and a trio of NBA owners (Michael Jordan, Ted Leonsis and Mark Cuban), may soon follow. The company is mulling going public, either through acquisition or via a more traditional IPO, according to people with knowledge of the discussions.
If it does go public it will likely do so at a much higher valuation. The company was valued at $2.4 billion (2.1 billion Euros) in 2018 during a minority stake sale.
Data scouts, one industry source told Sportico, often “wear headsets and hoodies” at matches and try not to be noticed. They engage in a so-called “cat-and-mouse” game, hoping to avoid detection from grounds security while transmitting data. For the soccer matches, Genius Sports employs “watchers” to spot and demand infringing individuals be removed from stadiums. Sportradar says its scouts carry paper that identifies them, are instructed to comply if approached during the game, and have never actively tried to avoid detection. A group of individuals portrayed as data scouts are named in the lawsuit. Data scouts violate their match tickets and morph from spectator into trespasser, an issue Sportradar disputes in a separate lawsuit.
Sportradar also takes issue with Genius Sports’s commencing claims against people it describes as “data journalists”—its preferred phrase for data scouts. “The targeting of these individuals,” Sportradar explains, “many of whom are fans and of limited means by the heavily-resourced leagues and their licensee, is cynical, wholly unnecessary, and has no place in litigation of this nature.”
Genius Sports contends it is merely enforcing contractually obtained privacy rights, while both holding accountable those who it believes are violating rights and deterring others from partaking in the same activity. The company cites two main areas of law: First is breach of confidence, which is similar to invasion of privacy and in this context refers to the unlawful disclosure of proprietary information; second is conspiracy to cause loss by unlawful means. Here, such a claim refers to data scouts allegedly conspiring with Sportradar to both trespass and breach contractual ownership rights and ticket obligations. As depicted by Genius Sports, Sportradar is stealing protected value and free-riding off of Genius Sports’s investment: Sportradar (allegedly) avoids paying expensive rights’ fees and instead pays only the data scouts’ match tickets and incidental expenses.
“We are disappointed, but unsurprised,” Russell told Sportico, “that we have to take this legal action. Sportradar has a long history of using clandestine tactics to enter venues and collect data without consent. Given Sportradar’s cynical promotion of itself as a partner to the global sports community, we are continuously astounded at its willingness to exploit sporting events while undermining the vital funding of sport.”
The lawsuit is separate but connected to ongoing U.K. litigation between the two companies. Last year, Sportradar sued Genius Sports and Football DataCo (FDC)—an intellectual property licensing company owned by the Premier League, English Football League and Scottish Professional Football League—claiming the two are in violation of competition laws. While it has its own exclusive deals in the U.S., Sportradar insists the Genius Sports-FDC exclusive relationship is anti-competitive. In that same litigation, Genius Sports has leveled privacy counterclaims against Sportradar. The 2020 litigation is relevant to the new case: If a court holds it unlawful for Genius Sports to enjoy an exclusive arrangement with U.K. leagues, then it would become far more difficult for Genius Sports to claim it owns the data in those leagues’ matches.
Sportradar maintains the privacy law claims brought by Genius Sports are on hold until the competition claims are resolved. The company cites a statement by a judge on the Competition Appeal Tribunal regarding a filing by FDC—which two weeks ago sued Sportradar over the same set of data collection issues—in which the judge asserted that resolution of the privacy rights dispute “manifestly depends on questions of competition law.”
“As the Judge stated,” Sportradar’s statement provides, “Sportradar’s claim in the Competition Appeal Tribunal must proceed and be determined as a priority. Sportradar will therefore be asking the Court to stay FDC’s and [Genius Sports subsidiary] Betgenius’s claims, accordingly. These claims, issued almost 12 months after Sportradar commenced its claim in the Competition Appeal Tribunal, will not deflect from Sportradar’s vigorous pursuit of its competition law challenge.”
People familiar with Genius Sports’s legal strategy reject the appropriateness of a possible stay. They insist that Genius Sports’s new lawsuit will continue on its own. Resolution of this procedural debate—which is on top of debate over questions of substantive law—will need to be determined by the courts.
Different legal regimes between the UK and U.S. are worth noting in understanding the Sportradar-Genius Sports dispute. In the U.S., data scouting would be more difficult to classify as unlawful. The First Amendment could be used as a defense to claim that data is part of the public domain and thus can’t be “owned.”
There is also case law in the live pro sports context suggesting that data collection and transmission is lawful. Most notably, in NBA v. Motorola, the U.S. Court of Appeals for the Second Circuit held that Motorola and STATS, Inc. could—without the consent of the NBA, which had contracted another company for a similar service—transmit scores and other data about live NBA games through handheld pagers. The fact-pattern, however, was distinguishable in a crucial way: Whereas STATS reporters watched NBA games on TV and then provided data feed, Sportradar is accused of using people physically at games to do the same. Given restrictions on broadcasting of soccer games in the U.K. Sportradar lacks the same opportunity of data collecting through broadcast observation.
(This story has been updated with details of Sportradar’s data scouts in the eighth paragraph.)