Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

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WISCONSIN INTERSCHOLASTIC ATHLETIC ASSOCIATION v. GANNETT CO. (August 24, 2011)

The Wisconsin Interscholastic Athletic Association is a non-profit organization comprised of all (with a few exceptions) Wisconsin public high schools as well as many private high schools and public and private junior high and middle schools. Its purpose is to regulate interscholastic sports and promote good sportsmanship. The Association sponsors post-season tournaments. Pursuant to its media policy, the Association retains the exclusive right to transmit or stream live content during those games and further reserves the right to grant those rights to others. The policy prohibits any other live coverage of a game but allows the use of up to two minutes to be used in a regularly scheduled sports or news program or Internet story. The Association has had exclusive broadcast agreements for a number of decades. In 2005, however, the Association entered into a ten-year agreement with American-HiFi, pursuant to which American obtained exclusive rights to stream events online. The Association's policy and the American contract provided that a newspaper could stream a game live for a fee if American chose not to do so. Some local newspapers were unhappy with the Association’s stance. When a local Gannett newspaper streamed four football games online without permission, the Association filed an action for declaratory judgment. Gannett removed the case to federal court and filed counterclaims challenging several aspects of the Association's policies. It asserted violations of the First and Fourteenth amendments under § 1983. Chief Judge Conley (W.D. Wis.) granted summary judgment to the Association. He found that: neither the American contract nor the fee the Association charged a newspaper to stream a game violated the First Amendment, the Association did not have too much discretion to refuse streaming licenses, and the newspapers had no copyright in the games they streamed. Gannett appeals.

In their opinion, Seventh Circuit Judges Bauer, Wood, and Hamilton affirmed. The Court first addressed its jurisdiction, since there is no diversity and the Court concluded that there was no federal Copyright Act issue in the case. Since the case was one for declaratory judgment, the Court looked to the hypothetical well-pleaded complaint had the defendant brought suit. In that hypothetical complaint, Gannett alleges that the Association (a state actor) is violating its First Amendment rights. That claim clearly arises under federal law. Turning to the merits, the Court emphasized that the state actor, the Association, was acting in a proprietary rather than regulatory capacity. When acting in a regulatory capacity, a state's actions must merely be reasonable under the First Amendment. The Court rejected Gannett's viewpoint bias argument, both on the ground that there was no such bias and on the ground that the viewpoint neutrality rule was simply not applicable in this context. The Association is free to promote values of its own choosing, either directly or through contractual relationships. The Supreme Court, in its Zacchini decision, distinguished between a newspaper's right to report on an event and its right (or absence thereof) to broadcast the entire event. The case also makes it clear that an entertainment producer can charge a fee in exchange for the right to broadcast an event. Although Zacchini concerned private actors, Forbes applied the same principles to state actors. Applying those principles to the facts, the Court concluded that the Association's contract with American did not run afoul of the First Amendment. The Court turned to the question of the Association's raising revenue through its contract. It found Gannett's argument "radical and unsupported" and foreclosed by Supreme Court precedent.