Lawyer Discusses How the Sports Industry Increasingly Lies at the Intersection of Law and Business
By Andrea Tarrab, University of Miami
In Oct. 2022, Ivan Parron joined the members of the Media Management Association on Zoom to discuss current issues in sports media law. Born in Miami and raised in a family of Cuban immigrants, he shared with members anecdotes about growing up in his household, his upbringing, and what led him to cultivate a great work ethic. Parron acknowledged that he was already interested in television technology at an early age.
As part of his 25-year professional career, Parron worked in TV sales for Paxson Broadcasting, founded the first legal digital music store, Ritmoteca.com, and managed legal affairs for such media companies as Universal Music Group, Endemol, and Fremantle. He earned a Bachelor of Business Administration and a J.D. degree from Florida International University.
Parron’s career also ventured into sports media law. While doing so, he acquired licenses from major sports leagues, such as the National Football League (NFL), the National Basketball Association (NBA), and the National Collegiate Athletic Association (NCAA), which allowed him to understand how their business models worked. He learned that one of their biggest struggles as highly influential sports companies were antitrust law issues.
Parron explained that antitrust law prohibits unlawful mergers and business practices, specifically monopolies and anticompetitive behavior. While the sports industry has managed to bypass the provisions of the Sherman Act, not all leagues have enjoyed the same treatment. For instance, the Major League Baseball (MLB) received a full antitrust exemption, due to a Supreme Court’s decision in the 1920s holding that baseball games were solely local “exhibitions” and did not affect “intrastate commerce.” On the other hand, the NFL and the NBA were granted the protected ability to negotiate games as a league.
For Parron, the NBA transformed the sports media industry 20 years ago by migrating from a free over-the-air television (NBC) to pay TV (ESPN) in the pursuit of higher media rights fees. Provided that viewership of U.S. digital live sports is booming, he wondered whether a similar move from cable to streaming would take place in the years to come. Of course, it is possible that a streamer like Amazon could buy all NBA games (i.e., monopsony), but thus far the leagues have continued to slice and dice their game inventory among several partners to secure greater leverage during negotiations.
Given the soaring sports media rights costs, it might be challenging for the current rights holders to renew their contracts. Cable networks, such as ESPN and TNT, are competing against Amazon and Apple and will have little choice but to pay those billions of dollars if they want to “stay alive” in the industry. Parron noted that live sports is one of the few reasons that people still pay for cable TV, and giving up those rights would exponentially decrease viewership.
Finally, Parron pointed out that sports betting is one of the most rapidly evolving areas of sports media and is likely to constitute a new major source of revenue for sports leagues. “Sports betting rights” are made up of three distinct and separate sets of rights: historical sports data, real-time game data, and streaming media rights. He predicted that there would be a lot of focus and growth in developing Web 3.0 sports betting applications as the market evolves toward empowering consumers to watch a game or match and place bets in real time and play-by-play.