Generative AI is exciting for sports industry, but its evolution is uncertain

*This article was originally published by Sports Business Journal
The sports industry has been a leader in innovation and technological advancements. It has been nearly two decades since “Moneyball” revolutionized MLB by introducing data-driven analytics. Consistent with its role as a leader, the business of professional sports is likely to undergo (and is, in fact, already undergoing) profound changes because of the rise of AI, and particularly the subset of AI technologies known as generative AI.

This article examines the many ways in which AI is being used in the sports industry, some of the potential uses in the near future, and several key legal and practical considerations.

The term “artificial intelligence” encompasses a wide range of related technologies that are generally aimed at creating machines or computer systems capable of performing tasks that would normally require human intelligence. Generative AI (Gen AI), on the other hand, refers to a subset of AI that focuses on creating new content -- such as images and videos, natural language text, music, and computer code -- based on the patterns and structures learned from existing data. 

While well-known AI tools, such as IBM’s Watson, have been available for decades, Gen AI models achieved a breakthrough only recently and are rapidly improving. 

AI use across the industry

Teams and leagues: Professional sports teams and leagues have been utilizing AI technologies for years, including to automate officiating, evaluate player performance, improve medical care, and streamline front office operations. But Gen AI offers a host of new opportunities to add to these existing use cases. Leagues, for example, could license their film and broadcast archives to AI developers to create unprecedented fan-engagement platforms, or develop their own proprietary tools. Gen AI tools trained on footage of every NBA game ever played might allow fans to conjure up simulated -- but realistic looking -- games between their favorite players from any era or allow for more immersive and robust video game experiences. 

Front offices could also use Gen AI to analyze player contracts and develop new templates that avoid major pitfalls and incorporate the most favorable terms. 

Athletes: Gen AI offers an unprecedented opportunity to commercialize their name, image, voice, and likeness. Already, some Gen AI tools are powerful enough to create content featuring Gen AI avatars and likenesses that are indistinguishable from the actual athlete. As a result, athletes can now start to think seriously about licensing the use of their Gen AI avatars for endorsements rather than having to spend time filming commercials or creating social media content. These tools will also make it possible for athletes to continue commercializing their Gen AI voice and likeness long after they retire, providing a steady revenue stream with little commitment while offering a strong hedge against injury or limited mobility. 

Venue operators: AI tools are also likely to continue improving the in-person fan experience. Venues are already deploying AI-powered facial recognition and other monitoring technology to make sporting events safer. These tools create a more efficient security process for venue owners and operators by eliminating the time it takes to check bags or perform full-body pat-downs of fans entering the venue. Such tools can also be used to facilitate contactless payments at concession stands, provide access to known or pre-screened fans, and generate insights about fan attendance and venue utilization.

Legal considerations

Despite the huge potential of AI in the sports industry, there are significant legal issues that require a high level of expertise. Several examples are:

Publicity rights: While Gen AI offers powerful new tools for athletes to commercialize their NIL rights, to do so, athletes will need to make sure they are carefully safeguarding those rights. In today’s “Wild West” era of Gen AI, there are few safeguards for NIL rights holders and infringement is rampant. Moreover, the state-by-state patchwork of publicity laws can make it a challenge for athletes to enforce publicity rights. As a result, it is critical for athletes to develop proactive strategies to protect their Gen AI revenue streams and deter infringement.

IP protection: Content produced solely by Gen AI is not protectable by U.S. copyright or patent laws, creating a class of works that may be difficult to protect and monetize. Users of these tools must therefore carefully consider how and to what extent Gen AI will be utilized in the creative process, particularly when developing potentially valuable intellectual property. Moreover, users should not assume that anything produced by Gen AI is non-infringing or fit for commercial use. Failure to implement procedures to evaluate content produced by Gen AI before use could expose the user to liability.

Privacy: While AI-powered optical recognition and tracking technologies may make venues safer and operations more efficient, tools that collect biometric data should only be implemented after careful consideration of biometric privacy laws and with assurances that technology vendors can satisfy data processing and security standards. Public concerns about the potential for data misuse is a major concern to consider. 

Labor negotiations: When most of Hollywood went on strike earlier this year, one issue in particular generated headlines: a demand by the unions to regulate the use of Gen AI on union projects. The Hollywood negotiations may presage future labor conflicts between leagues and athletes. Leagues and players will need to consider their business cases for Gen AI technology and which rights they can afford to relinquish and which they cannot live without. For example, are players comfortable granting leagues the right to use their Gen AI likenesses for team promotional content? What type of consultation or approval process should be required? And what rights do the athletes need to hold in reserve to protect new commercialization opportunities?

Key takeaways

AI, and especially Gen AI, has the potential to fundamentally change the sports industry, from how sports are played, to additional commercial opportunities for athletes, to how fans consume sports content. Although adoption of AI in sports has already begun, the technology is still very much in its infancy, and it is not clear how it will continue to evolve. As the industry continues to adopt this next-generation technology, stakeholders will need to closely examine the unique legal and regulatory implications inherent in the use of AI technology in sports and seek out qualified legal counsel.

This article was originally published in Sports Business Journal


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