August 14, 2022

Volume XII, Number 226

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Sports in the Metaverse: Key Considerations

The interactive tools that the metaverse offers are a perfect complement to a crucial component of the sports industry: fan engagement. And with an influx of industry players establishing a presence in the metaverse, the way we consume sports may transform sooner than we think. As stakeholders quickly realize the benefits of this “next generation internet,” it is important to properly evaluate the industry-specific risks presented by the metaverse. Following are some key considerations from both a metaverse perspective and a physical world perspective.   

A Quick Look into the Intersection of Sports and the Metaverse

The metaverse is a computer-generated, persistent, immersive environment that may include elements of augmented reality and virtual reality. The user, depicted as an avatar, can interact with others, consume goods, and travel just like in the physical world, which in turn allows for engagement opportunities that have not been previously possible.  

In the sports world, the breakdown of geographical and physical barriers afforded in the metaverse provides all fans with the ability to enjoy the attributes of attending a live sporting event, but in the comfort of their home or other locations. Viewing in the metaverse comes with certain benefits, such as the ability to walk on the field alongside players and watch the sporting event from different areas of the venue. Because of the opportunity for brands, leagues, teams, and players to reach and interact with fans at unprecedented levels, the metaverse will likely continue to be one of the key ways in which viewers consume sports. The concept is quickly becoming a reality as we continue to see an influx of market players establishing a presence in the metaverse – activity in recent weeks includes the English Premier League reportedly filing for NFT and metaverse trademarks, the Atlanta Braves launching Digital Truist Park, which is the first Major League Baseball park in the metaverse, and Kevin Durant reportedly filing for 26 NFT and metaverse applications.

Key Considerations

As with every new frontier, technological or otherwise, the metaverse poses legal and regulatory hurdles. The following considerations should be evaluated by sports stakeholders that are considering a metaverse presence:

  • How does the metaverse affect the scope of existing license agreements? Should license agreements include carveouts for the metaverse or other digital-only uses moving forward?

  • What challenges come with purchasing and developing real estate in the metaverse?

  • How does the metaverse impact the scope of existing broadcasting and territorial rights?

  • Will playback technology offered to fans be available to leagues if there is a challenge on a play?

  • Should policies that address the recognition of different digital assets be put in place?

  • How will digital assets be managed?

  • Should teams register copyrights in their avatars? What rights would the player have in an avatar that depicts him or her in real-time? What happens if the player registers a trademark first? Could we anticipate the foregoing to be addressed in collective bargain agreements?

  • Will employment be offered in the metaverse (for vendors, staff, etc.)?

  • How should data rights be addressed?

  • What are the general tax implications?

  • What disclosures should be made (from both a corporate and regulatory perspective)?

  • What kind of privacy, cybersecurity, and access protections should be implemented?

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 174
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About this Author

Richard L. Brand Partner ArentFox Schiff LLP
Partner

Rich focuses on sports law, real estate and corporate transactions, e-commerce, hospitality and leisure, and partnership and corporate law.

Rich is recognized as a leading sports attorney by Chambers USA, a “Leading Lawyer” in sports by Legal 500, and as a leading real estate attorney by Best Lawyers and Legal 500Best Lawyers has also recognized Rich as a “Lawyer of the Year” for his high-profile sports work. Chambers USA notes, “he is highly regarded for his expertise in representing both...

415-757-5507
James Williams Crypto Attorney ArentFox Los Angeles
Partner

James practices at the intersection of corporate and intellectual property law, often structuring and negotiating leading-edge deals in the fashion, sports, and entertainment worlds. Having completed extended tours of duty as a global brand CEO and a private equity operator, he brings a heightened understanding of the strategic, financial, and operational issues that underpin his deals.

James chairs the firm’s Crypto practice and routinely counsels fashion brands, professional sports teams, athletes, and media companies on leading-edge deals relating to venture...

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William Z. Ordower Corporate Attorney ArentFoxSchiff
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Bill is a strategic advisor with more than 20 years of experience at Major League Soccer. He advises Sports, Entertainment, and Media industry clients on their complex business and legal matters. Bill brings diverse expertise spanning all aspects of sports business, including media and digital rights, sponsorship, licensing, equity investments, expansion, corporate transactions and restructuring, governance and rules, sports betting, ticketing, international partnerships, labor relations, and player disciplinary investigations.

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Zak Welsh Associate ArentFox Schiff LLP
Associate

Zak’s practice focuses on advising clients on corporate and transactional matters in the sports, entertainment, media, and real estate industries. Zak has considerable experience representing professional sports franchises, owners and operators of professional sports and entertainment venues, sponsors in connection with naming rights transactions, sponsorship transactions, facility and event leasing and licensing, advertising and promotional agreements, suite and club seat licensing, and other related matters.

In addition to his sports and...

415-757-5901
Anjelica L. Fuccillo Associate ArentFox Schiff LLP
Associate

Anjelica joined ArentFox Schiff as a Summer Associate and returned to the firm after graduating from law school. While in law school, Anjelica served as a legal intern for a prominent real estate developer in the DC, Maryland, and Virginia area. There, she assisted in-house counsel with an array of commercial real estate and leasing transactions. Anjelica also served on the Executive Board for the Georgetown Sports, Entertainment, and Media Society (GEMALaw).

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