As the governing body for middle and high school athletic programs in Wisconsin, the Wisconsin Interscholastic Athletic Association (WIAA or Association) sponsors statewide post-season tournaments. In 2005, WIAA contracted with American-HiFi, a video production company, to stream its tournament events online. Under this contract, American-HiFi has an exclusive right to stream nearly all WIAA tournament games. If American-HiFi elects not to stream a game, other broadcasters may do so after obtaining permission and paying a fee. Notably, the exclusive broadcast agreement between American-HiFi and WIAA concerns entire game transmission; it does not prohibit media coverage, photography, or interviews before or after games. Private media may also broadcast up to two minutes of a game, or write or blog about it as they see fit, so long as they do not engage in “play-by-play” transmission.
Taking the position thаt these exclusive license agreements violate a supposed First Amendment right to broadcast entire performances, newspapers owned by Gannett Co., Inc., decided to stream four WIAA tournament games without either obtaining consent or paying the fee. In
On appeal, the only issue presented concerns the First Amendment as it might apply to WIAA’s internet streaming rules. Gannett argues that WIAA, a state actor, cannot (ever, it seems) enter into exclusive contracts with a private company for the purpose of broadcasting entire events online, or, more broadly yet, to raise revenue. Gannett does not challenge other restrictions on media access to WIAA’s events, or even WIAA’s other exclusive licenses, like those WIAA has for television and radio broadcast. But the implications of Gannett’s arguments are staggering: if it is correct, then no state actor may ever earn revenue from something that the press might want to broadcast in its entirety. That is not correct. Gannett’s theory that coverage and broadcast are identical is both analytically flawed and foreclosed by
Zacchini v. Scripps-Howard, Broadcasting Co.,
I
WIAA is a voluntary, nonprofit organization comprised of 506 public and private high schools and 117 junior high and middle schools in Wisconsin. Other than a few charter and online schools, all public high schools are members of WIAA. The Association’s purpose is to govern, regulate, and control interscholastic sports in a manner that promotes the ideals of member schools, such as good citizenship and sportsmanship. Another important goal is to create opportunities for schools to participate equally in athletics. WIAA accomplishes this by promulgating uniform statewide standards for competition and participation. The parties have stipulated that WIAA is a state actor. This means that its actions are constrained by the First Amendment. (We note that in other cases where courts had to decide if similar organizations were state actors, the answer has been yes. See,
e.g., Brentwood Acad. v. Tennessee Secondary Sch. Athletic Ass’n,
Though WIAA regulates both regular season games and post-season tournaments, it sponsors only the post-season tournaments, including regional and sectional events and the state championships. The dispute here concerns tournament games, which alone are subject to the Association’s “Media Policies Reference Guide.” The Media Policies are “produced to inform statewide media of WIAA policies in effect for all levels of State Tournament Series competition” and to “assist members of the media in providing comprehensive coverage to their communities.” Many provisions in the Media Policies regulate press access but are not included in the present dispute: media must obtain credentials to cover a game, and each outlet may obtain only a limited number of spots (typically two per media outlet, including internet sites, but five for daily newspapers); credentialed media are permitted to take photographs, but must
The Media Policies also include “Tournament Transmission Policies” applicable to radio, television, cable, and internet transmissions. These transmission rules reflect the underlying contracts WIAA has signed with private companies for the exclusive broadcasts of some sports. Those agreements stipulate that WIAA and “its exclusive rights partners retain the rights to all commercial use of video, audio, or textual play-by-play transmitted at a WIAA Tournament Series event.” The Media Policies further provide that WIAA “owns the rights to transmit, upload, stream or display content live during WIAA events and reserves the right to grant exclusive and nonexclusive rights or not grant those rights on an event-by-event basis.”
The Media Policies have specific provisions for commercial use of video; these apply both to television and online broadcast:
A. There may not be live coverage of any live game action during the contests. “Live coverage” is defined as any activity which occurs while a game or meet is in progress. Stations or Web sites may use a back drop of live action for reports from a tournament facility provided there is no play-by-play commentary and the report is limited to regularly scheduled news or sports programs and are [sic ] no more than two minutes of a program which is any length.
B. Use of film, video, audio, tape, etc., is limited to regularly scheduled news, sports programs or Internet site stories, and use of such content is limited to no more than two minutes of a web stream or program which is any length. Unless writtеn approval is granted from the WIAA office, use of more than two minutes of film, video, audio, tape, or stream, etc., beyond five days from the last day of a tournament is prohibited without written consent of the WIAA.
These two-minute rules pertain to a transmission by broadcast or streaming (that is, to “uses”), but they do not limit recording. Thus, a news agency might potentially record an entire game and then review and edit it down to the two minutes it would like to use later.
The Media Policies include procedures for obtaining permission to stream a game if American-HiFi is not streaming it, or for requesting the broadcast of more than two minutes of a game. All media interested in “video transmission” of a WIAA tournament event must make arrangements with American-HiFi. Live or tape-delayed video transmission of games is prohibited without consent. When a media organization gets consent and streams a game, WIAA charges a set fee: $250 if one camera is used and $1,500 if more than one camera is used. The master copy of the video must be sent to American-HiFi, but the party who initially recorded it is entitled to a 20% royalty on any sale of that game to a third-party network or broadcaster.
Exclusive broadcast agreements are not new for WIAA. Quincy Newspapers, Inc., for example, has had an exclusive agreement to televise boys’ basketball since 1968; it expanded that arrangement to girls’ basketball and hockey in the 1980s. Likewise, Fox Sports Network Wisconsin has had an exclusive contract to broadcast the state football finals since 2001. These rights naturally come with a price tag; both Quincy and Fox pay WIAA annually for them. In 2004, WIAA began to investigate how to improve upon its existing arrangements. First, it wanted to increase its revenues, especially since Quincy had recently negotiated for a much lower annual fee. Second, WIAA wanted to in
This scheme may have suited WIAA well, but it was not popular with some newspapers in Wisconsin. The present case arose when, in an act of protest, one of Gannett’s local newspapers deliberately streamed four playoff football games online without American-HiFi’s consent and then refused to pay any fee. WIAA responded by filing an action for a declaratory judgment in state court. In its complaint, WIAA asked the court to declare that it has “ownership rights in any transmission, internet stream, photo, image, film, audiotape, writing, drawing or other depiction or description of any game” and “that it has the right to grant exclusive rights to others.”
Rather than responding, Gannett, along with its co-defendant, the Wisconsin Newspaper Association (WNA), removed the case to federal court. (We refer to the two defendants collectively as Gannett unless the context requires greater specificity.) In support of federal jurisdiction, Gannett argued that WIAA’s claim to ownership rights was really a copyright claim and thus WIAA’s apparent state-law claim was “completely preempted” by the Copyright Act, 17 U.S.C. §§ 101 et seq. In its answer, Gannett asserted counterclaims challenging three aspects of the Media Policies: (1) restrictions on taking and selling photographs; (2) the prohibition on “text transmission” (or live-blogging) of games under the definition of “play-by-play” used to distinguish permissible periodic updates from text transmission; and (3) the prohibition on streaming tournament games online, and the consent and fee requirements for streaming residual tournament games not broadcast by American-HiFi. These Policies, Gannett contended, gave rise to three aсtionable federal claims; two under 42 U.S.C. § 1983 for violations of the First Amendment right to freedom of the press and the Fourteenth Amendment’s Equal Protection Clause; and one under the Copyright Act, on the theory that the newspapers owned any copyright in the games they had streamed without permission.
WIAA responded by amending its complaint to include three claims that narrowed its original complaint somewhat: it asserted that it had the right to exclusive control of the transmission of tournament games, the right to grant exclusive licenses, and the right to charge licensing or transmission fees. It also added a fourth claim, seeking a declaration that its “current policies concerning the internet trans
Both parties moved for summary judgment, and the district court entered judgment for WIAA. In so doing, the cоurt noted that both parties had abandoned any claims related to the photography policy and forfeited any arguments related to the definition of “play-by-play” in the live-blogging policy. The only issues left were (1) whether the exclusive contract for internet streaming violates the First or Fourteenth Amendments, (2) whether the fee charged to newspapers to stream games that American-HiFi elects not to broadcast violates the First Amendment, (3) whether WIAA has too much discretion to refuse licenses to media companies that want to stream games, and (4) whether the newspapers have a copyright in the four games they streamed without consent. After engaging in a thorough “forum analysis” in response to Gannett’s argument that WIAA has created a designated public forum for media coverage of tournament events, the district court found media access at tournaments to be a “nonpublic forum” and evaluated the First Amendment issues for reasonableness and viewpoint neutrality. Finding those standards easily met for the exclusive contract, the district court quickly disposed of the remaining issues. Gannett now appeals.
II
Before proceeding to the merits of the appeal, we must explain why we have concluded that the federal courts have jurisdiction over this dispute. Throughout these proceedings, the basis of federal jurisdiction has been uncertain, and the district court never ruled on it explicitly. The parties are not diverse, which means that removal to the district court must be based upon a federal question. See 28 U.S.C. §§ 1331, 1441(b). The federal question must be part of the plaintiffs well-pleaded complaint; jurisdiction may not be “predicated on an actual or anticipated defense.”
Vaden v. Discover Bank,
At oral argument, we noted that the parties had failed to specify exactly what it was that supported federal jurisdiction. Gannett offered the theory that WIAA was “really” raising a copyright claim in state court, and that such a claim was necessarily federal and thus “completely preempted.” WIAA said little, assuming that its request for a declaration stating that its contracts did not violate the First Amendment was enough to bring the federal issue into the complaint. In order to be sure that WIAA was not in essence doing the same thing as the Mottleys
(i.e.
that it was not anticipating a defense to the enforceability of its contracts), we asked for supplemental briefing. We also wanted to ensure that the rule of
T.B. Harms Co. v. Eliscu,
We address the
Eliscu
thеory first. When all is said and done, we are convinced that this case has nothing to do
That seriously undermines Gannett’s elaborate theory that original federal question jurisdiction can be based on the idea of “artful pleading” or “complete preemption.” See
Franchise Tax Bd. v. Constr. Laborers Vacation Trust,
The pivotal fact here is that WIAA is suing for a declaratory judgment. This is not, of course, to say that the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, furnishes an independent basis of jurisdiction; it does not. See
Medical Assurance Co., Inc. v. Hellman,
We turn to WIAA’s amended complaint, which is the operative document.
Grubbs v. General Elec. Credit Corp.,
In fact, any worries that one might have about whether this “presumed suit” by the newspapers is wholly imaginary is belied by the record before us. Months before WIAA filed its initial complaint, the Newspaper Association sent WIAA a letter challenging on First Amendment grounds the Media Policies’ treatment of internet streaming and WIAA’s contract with American-HiFi. The letter demanded that WIAA “rescind its [‘patently unconstitutional’] media policies on internet streaming.” After the parties met, WNA was still dissatisfied and sent another letter indicating that it was “time to challenge, and if necessary, test in court, WIAA’s authority to grant exclusive coverage rights.” The federal claim in the amended complaint responds directly to these threats.
For these reasons, we are satisfied WIAA’s complаint for a declaratory judgment that its Media Policies are compatible with the First Amendment states a claim arising under federal law. We therefore move on to the merits.
Ill
As this suit has proceeded through the courts the precise issue at stake has been a moving target. We noted a moment ago that Gannett and WNA have abandoned any claims they might have had to copyright protection for the four videos streamed by the newspapers. Their equal protection contentions have met the same fate. This appeal thus has been reduced to the following question: Whether WIAA’s contract granting American-HiFi the exclusive right to stream tournament games and requiring consent and payment for third-party broadcasts of entire games violates the First Amendment.
As the briefing reflects, there are a litany of possible First Amendment doctrines that
could
be at play when answering such a question. The real challenge is to understand what really needs to be decided and what is peripheral. Viewed in the proper light, as we explain below, WIAA’s Media Policies do not, as Gannett, WNA, and additional newspapers as
amici
fear, threaten the fundamental right of the press to comment on and cover school sporting events. An exclusive contract for
A
We begin by considering the kind of government action at issue here.
NASA v. Nelson,
— U.S. -,
Gannett argues that, at a minimum, WIAA cannot engage in discrimination on the basis of viewpoint when granting exclusive license contracts or in determining whether to approve a request to stream a game not being broadcast by AmericanHiFi. But we are at a loss to see any viewpoint bias in the Media Policies. As far as we can tell, Al-Jazeera would have the same right to purchase media access to WIAA’s games as the Christian Broadcasting Network, Comedy Central, Fox, or MSNBC. Gannett has equated viewpoint with exclusivity for the primary contract, but that is really just a global challenge to WIAA’s right to enter into any broadcast agreement at all; we address that point below. Just in case we have missed something, we note further that while the First Amendment requires viewpoint neutrality in many other contexts, that constraint is inapplicable here. Instead,
Arkansas Educational Television Commission v. Forbes,
Though WIAA is not the broadcaster of a television show in the traditional sense, we find no meaningful distinction between the online setting and more traditional media. Through its contract with AmericanHiFi — like its arrangements with Quincy and Fox — rather than producing or editing footage by itself, WIAA maximizes efficiency by using a specialist that remains subject to WIAA’s authority and control. A glance at the “WIAA Network” web portal, a part of the ‘WIAA School Broadcasting Program,” confirms this understanding. The website funсtions as an online “channel” where all WIAA “network events,” ie., tournament games, can be streamed. Notably, each page on the site is headlined with WIAA logo and often a banner bearing the Association’s name. As further evidence of the school-based collaboration and editorial judgment involved in creating this internet “television station,” other school events — like plays, band concerts, graduation speeches, spelling bees, and even an anti-bullying speaker — are featured on WIAA.tv.
When “establishing and implementing certain governmental functions, the government, including its educational institutions, has the discretion to promote policies and values of its own choosing free from ... the viewpoint neutrality requirement.”
Chiras v. Miller,
In an effort to convince us that heightened scrutiny is warranted, Gannett implores us to engage in “forum analysis” and classify some aspect — we are not sure exactly which — of the Media Policies as a “designated public forum.” We find forum analysis unhelpful here, and so we do not pursue that line of inquiry. See
Forbes,
B
Now that we have established that WIAA is functioning as the creator and disseminator of content, we can identify the Supreme Court’s decision in
Zacchini v. Scripps-Howard Broadcasting, supra,
as the authority that governs the resolution of this dispute. There, the Court addressed the question whether the First Amendment gave a television station an affirmative defense to Hugo Zacchini’s claim that the station unlawfully filmed and broadcast his 15-second “human cannonball” act.
Zacchini
also recognized that the ability to control broadcast of one’s performance does not just happen to be consistent with the Constitution; it also provides an imрortant economic benefit. See
id.
at 576-78,
In short, Zacchini establishes two propositions that guide our resolution of this case. First, it distinguishes between the media’s First Amendment right to “report on” and “cover” an event and its lack of a right to broadcast an “entire act.” Second, Zacchini makes clear that the producer of entertainment is entitled to charge a fee in exchange for consent to broadcast; the First Amendment does not give the media the right to appropriate, without consent or remuneration, the products of others. Finally, Forbes indicates that these principles apply to state actors as well as private actors.
C
The foregoing allows us to clarify what is at stake in this lawsuit. The district court thought that the type of speech mattered for First Amendment purposes; it reasoned that “the same First Amendment
Second, it is significant that no one is challenging WIAA’s credentialing policies. If there were some indication that WIAA was discriminating at that level on the basis of viewpoint, we would have a different case. We have no quarrel with Gannett’s argument that “coverage is not without opportunity for viewpoint discrimination.” But as we have explained, that point does not lead to the conclusion that WIAA has no protectible rights in the dissemination of the entire sporting event.
Third, Gannett’s complaint that the exclusive licensing agreements are a form of “prior restraint” on media speech is also misplaced. Nothing here amounts to “censorship” in the sense of an “effort by administrative methods to prevent the dissemination of ideas or opinions thought dangerous or offensive.”
Blue Canary Corp. v. City of Milwaukee,
Finally, this is not the same as the cases in which an official has “unbridled discretion” to grant or deny a permit to a speaker.
E.g., City of Lakewood v. Plain Dealer Publ’g Co.,
D
The only remaining question we must address is whether there is any reason groundеd in the First Amendment why WIAA might not be entitled to enter into these agreements for the purpose of raising revenue. Gannett argues that the government, even in a proprietary capacity, cannot raise revenue. This is a radical and unsupported position, and the law is 180 degrees to the contrary: governments in fact have a legitimate and substantial interest in raising revenue in this way. See,
e.g., Navy Pier,
To succeed, Gannett would have to convince us to disregard
Lehman v. City of Shaker Heights, supra,
which we have neither the power nor the inclination to do. In
Lehman,
the Supreme Court considered an exclusive contract between a city and private advertiser that limited access to advertisement space on public buses.
We came to a comparable result in
Ayres v. City of Chicago,
Other courts considering exclusive broadcast agreements between a government entity and a private party have universally, as far as we can tell, reached the same conclusion. Gannett, at least, has shown us no case where an exclusive broadcast agreement has been invalidated on First Amendment grounds. For instance, in
Hubbard Broadcasting, Inc. v. Metropolitan Sports Facilities Commission,
the Eighth Circuit considered a city’s exclusive contract with a private company to put up advertisemеnts in a publicly financed sports complex.
More broadly, it is well known that exclusive contracts are common because they “reasonably serve to maintain or enhance the value of an artistic or intellectual product.”
Home Box Office, Inc. v. FCC,
It is no surprise, then, that several amicus briefs supporting WIAA emphasize'the need for exclusive contracts in sports broadcasting to help school districts raise revenue that is not likely to come from elsewhere. The National Federation of State High School Associations contends that if they were “not allowed to enter into and enforce ... exclusive agreements, their ability to promote the benefits of interscholastic activities would be significantly diminished.” Statewide associations analogous to WIAA push the same point: revenue raised from exclusive contracts is vital to making sponsorship of statewide events possible, and this is why the vast majority of these associations “grant transmission rights to third parties on an exclusive basis.” Even if exclusive agreements did not actually raise significant revenue beyond what could be raised with non-exclusive agreements or a system without agreements at all, the fact remains that federal courts are not price-boards, and legality does not depend on a successful business projection. The only point is that state entities, like private entities, may have valid reasons for choosing this method of distribution.
E
We could stop here, but we think it important to say a word about the broader implications of Gannett’s argument. The principles at stake in this case are not limited to the streaming or broadcast of a few high school tournament games in an upper-Midwest state. For example, the distinction between coverage and transmission of an “entire event” is also important in cases involving the right of public access. In these cases, the public and media often have the right — either by statute or even the Constitution (see
Richmond Newspapers, Inc. v. Virginia,
State actors use exclusive contracts regularly without any thought that they are violating the First Amendment. For instance, the Wisconsin Alumni Research Foundation (WARF) patents innovations made by the scientific community at the University of Wisconsin at Madison. The University relies on a private party, WARF, to solicit and obtain, third-party licensing fees. The revenue from these agreements is substantial: WARF currently pays an average of $45 million annually to the University and has returned $1.07 billion to the school since 1928. See generally Wisconsin Alumni Research Foundation, www.warf.org (last visited Aug. 19, 2011). Gannett’s claim here would cast a shadow over the commercial licenses that WARF sells, by implying that the First Amendment requires it to dedicate its inventions to the public. No case has ever come close to hоlding this.
The logical implications of Gannett’s argument are breathtaking. Suppose a high-school orchestra were to perform one of Bach’s Brandenburg Concertos or the drama dub - put together a rendition of Othello (both of which are in the' public domain). Gannett’s argument would require the conclusion that the students have no right to engage in the common practice of packaging their performance and selling it to raise money for school trips. For example, in Washington State, high school students team with a local college to record CDs and sell them online to raise money for high school music programs. See KPLU, School of Jazz, http:// schoolofjazz.org/ (last visited Aug. 19, 2011). Similarly, the McCracken Middle School Band in Skokie, Illinois, sells its performance recordings online, www. mccrackenband.com/resources/recdrdings/ (last visited Aug. 19, 2011). These examples could be multiplied almost endlessly. We can see nо reason to enjoin such a practice, or to require the schools to destroy the economic value of their performances by permitting unlimited free transmissions. Gannett’s theory misses the distinctive aspect of what the students are selling. They are not selling Bach’s concerto or Shakespeare’s play; they are selling their own, unique performance. WIAA does the same thing for high school and middle school sports in Wisconsin. Gannett’s theory would prevent the schools from retaining the economic benefit of these events; instead, it would effectively transfer whatever benefit remained after the destruction of exclusivity to the private media.
The idea that reporting and streaming are synonymous is also at odds with experience in the private sector. There, everyone understands that there is a difference between a description of an event like the Super Bowl, Women’s World Cup, оr the College World Series and the right both to videotape that entertainment and then to publish it as one sees fit. In each of these situations the -producer of the entertainment — the NFL, FIFA, or the NCAA— normally signs a lucrative contract for exclusive, or semi-exclusive, broadcast rights for the performance. Meanwhile, all media report on the events.
Cf. Home Box Office,
IV
We conclude that WIAA’s exclusive broadcasting agreements for internet streaming are consistent with the First Amendment. This conclusion, as
Zacchini
implies, also supports WIAA’s right to charge a fee to a broadcaster wishing to stream a game that Ameriean-HiFi has decided not to publish. It is not, as Gannett contends, a “special tax on the press.”
Minneapolis Star & Trib. Co. v. Minnesota Comm’r of Rev.,