FUTURE OF FANTASY SPORTS
Many of you have heard about the shake down in fantasy baseball with the MLB attempting to control the industry. There have been other posts about
this topic but let me summarize the current arguments that are being discussed in the landmark case CDM Distribution & Marketing v. MLB Advanced
and the onslaught of legal questions that are bound to be circulating.
The case that has been referred to as being the silver bullet for the right to use statistics is: NBA v. Motorola and STATS, Inc.
I can write 10 pages about this case but here it is in a nutshell.
Prior to March 1996 Motorola, Inc. had a service called SPORTSTRAX that provided real time statistics of NBA games to pagers. STATS, Inc. was the
provider of this information. NBA sued for copyright infringement for the publishing of player statistics. At first the NBA won only on the rights
to REAL-TIME stats but that decision was later overturned in a federal Appellate court ruling that displaying the raw stats was not a
re-representation of the game.
Copyright Infringment or Publicity Rights?
As most already know, CDM Sports has filed a lawsuit against the MLB for the right to use statistics without a license. But I have been amazed that
in actuality the case has very little to do with the rights to stats.
MLB has painted themselves into a corner. They KNEW they couldn't win on the rights to raw data. They are very well aware of the case law that
exists. From the second the suit was filed the MLB agreed with CDM that statistics are in the public domain. However, it is the Players' Names that
violate publicity rights. A bold move to put all of your eggs in one basket. This is quite a little twist because copyrights are protected by
federal law while publicity rights are different for each state. We'll see how that plays out.
"It's about the commercial exploitation of players' names or likenesses," said Bob Bowman, MLB Advanced Media chief executive. "It's one thing to say
here's the box score from the game; it's another thing to say we've created a separate thing called fantasy baseball. We're no longer reporting the
facts; we've now created a game."
MLB figures that it doesn't matter if they win on stats because if they win on player names then the games still can't be played without a license...
(or can they).
John Hunt (USA Today) brought up a good point:
Of course, a company might, say, allow customers to fill their rosters not with "Johan Santana" but with "Minnesota 57." Where should the line be
drawn, if at all?
Of course every company wants to use the player names but if the CDM case was lost, would you rather have a player reference on your site or pay a
licensing fee and a percentage of gross? (remember this applies to the NFL Players Association too which typically takes between 10-15% gross plus a
Let's go a step further, shall we? What if a single trusted entity like the Fantasy Sports Trade Association
(FSTA) created a master player
list of the 4 major sports and their corresponding references? A list of standards that the entire fantasy community could use for free.
Again, this is only assuming CDM loses the case which I don't think will happen. But consider it a Plan B.
We know what the fans want!
Listen, this entire thing is about the greed of MLB. This has nothing to do with the fans. CDM's lawyer, Rudy Telscher said "the MLB already suffers
from the image that it's too greedy." He believes it is trying to monopolize the fantasy market. The Internet and fantasy games have revived the
baseball industry, and now MLB just wants a bigger piece of the pie.
"Now that [fantasy baseball] has become so popular, MLB looks at the revenue and says, 'We want to exclusively control it,'" Telscher said.
Let's take a look at some of the nonesense that has been spewing out of the MLB Advanced Media
"All of the [players associations] across the major sports have generally held that the commercial use of player names without a license is an
infringement of their rights," Bowman said.
Everyone else is doing it, so that makes it ok. Well hell, the Mafia has been around for over a hundred years. I guess that is ok
Bowman says there's only one goal: "We want more fans playing more fantasy baseball."
Let's start by limiting the number of companies, and forcing those who created the darn industry to go out of business, especially one
that had 35,000 customers last year.
"We are especially pleased that every fantasy game licensee from last year, with only one exception, will be part of the 2005 fantasy game
licensing program," said George Kliavkoff, senior vice president of business development for MLBAM.
Interesting how they suddenly award licenses now that they are being sued, thereby trying to isolate CDM from the rest of the fantasy
community. In essence they can now say... "see, all of these other companies don't have a problem with our license."
"To say we need to stay with the status quo is unacceptable," Bowman said. "The core fantasy players, we want them to keep playing, of course.
But what else can we do to make this more accessible and more entertaining for a much broader fan base? That's what we're trying to find
So you have no clue what the fans want, do you? You just said you are "trying to find out". All you really know is that whatever it
is they want, you want your cut.
Bowman believes that what's needed is innovation, such as fantasy games where players get online video highlights and news updates via cell
phone about their rosters.
And it's not uncommon for sports leagues to thin out the ranks of its licensees, such as when the NFL let Reebok handle sales for all its game jerseys
and Electronic Arts handle its video games. Says Bowman, "It appears that licensors think they can create a bigger business by concentrating
Let me get this straight...You woke up one morning with the divine vision that what the fans want are video highlights and cell phone
updates and instead of just creating those features and finding out if the fans actually do want it, you dictate to the entire industry that they have
no choice but to license this crap from you or go out of business. And of course, at first, the licenses weren't even offered. You see, the first
deal on the table was, "Give us all of your customers that you've accumulated over the years and we'll give you the privilege of taking a 10% finders
fee." So when CDM's lawsuit in essence says, "F**k You, you arrogant a**hole!", you then turn around and award everyone licenses and pretend you were
going to do it all along.
"If you're more than 5,000 (customers), we want to have a conversation and understand your marketing commitment," Bowman said. The Sports
Business Journal reported that MLB was seeking about $3-million each from its largest fantasy partners in this new agreement. Negociations start at
$2 per customerif you want to sell your customer base to them.
--Translation-- If you don't have over 5000 customers, you aren't worth our time and don't deserve to be in business. We will LET you
sell your customers to us but we won't let you continue to operate your puny business.
You're right Bowman... it's not about the money... it's all about the fans.
My View: OH MY GOD, SOMEONE TACKLE THIS GUY!
Jim Gallagher, senior vice president, corporate communications for MLB Advance Media, said that baseball officials are not claiming exclusive
rights to player statistics. But if a company is trying to use those statistics as a means of financial gain, he said, then MLB has a legal right to
demand a license for their use.
"Player statistics are in the public domain. We've never disputed that," Gallagher said. "But if you're going to use statistics in a game for profit,
you need a license from us to do that. We own those statistics when they're used for commercial gain."
This is the Senior Vice President and doesn't know what the heck he is saying. First he says that player statistics are in the public domain. BUT,
if you are making money THEN "we own those statistics". Are you f**king kidding me? If that is not the most backwards load of garbage I've ever
heard. So, if you're making money, they own the stats. If you're not, they are public domain.
If I were the MLBAM lawyers, I'd be begging these guys not to say ANYTHING!
OK, I've gone on enough. It is making me sick, so let's get to the actual legal issues here.
As reported by Tresa Baldas of The National Law Journal
Intellectual Property litigator Kent Goss, who represents athletes with regard to their rights of publicity, believes that MLB will have a
tough time convincing a court that player statistics warrant copyright protection. He said that the test will be weighing MLB's copyrights and the
publicity rights of players against what the public wants.
"The public is fascinated with sports, and in particular baseball. Essentially, they can't get enough of stats," Goss said. "I think the courts are
going to want to protect the fans' rights to use the stuff."
Goss, a partner in Pillsbury Winthrop's Los Angeles office, cited a 2001 case in which the California Court of Appeal upheld Major League Baseball's
right to use historical players' names and statistics. A group of former players sued MLB for printing their names and stats in game programs,
claiming their rights to publicity were violated. But the court held that they were historical facts, part of baseball history, and MLB had a right to
use them. Gionfriddo v. Major League Baseball, 94 Cal. App. 4th 400 (2001).
So, the Players even sued MLB for the use of their names and stats and the MLB won since it was historical data. Now CDM is claiming the SAME thing.
How much more ironic can it get?
THREE FINAL ARGUMENTS
If the MLB loses on the rights to stats AND loses on the use of player names violating publicity rights, they can still argue three more positions.
They can claim that the methods of compiling stats are copyrightable. I can't see this holding up in court because there are several
companies that compile stats (Sportsticker, STATS Inc., TQ Stats, and XML Team just to name a few). Even if you need to pay those companies to get
the stats, it has nothing to do with an MLBAM license.
It isn't the fact that a player name is used to reference a statistic. That is generally considered "fair use" and the MLB has already said
that they have no issue with it. But they could argue that it is the cumulative list of player names that makes the fantasy game possible. Their
argument could be that without the player names, there can be no game and therefore their "property" is the determining factor in a fantasy company's
ability to produce a commercial gain. Basically, they may believe that the games could not work without the player names and therefore they are not
merely suplemental "information or news" but rather an integral piece to the success of the contest and its ability to generate revenue.
Though this is a better argument, I can't see this holding up either. You see, it isn't because of the player names that people play fantasy sports.
The competition, the challenge, the bragging rights, and the prizes are the reasons why people play. AND it isn't the player names that create the
game either. The interface, the rules, the scoring, and even the presentation and technological process is what "MAKES" the fantasy game. And THAT,
the MLB has no right to. It takes a creative effort for each company to produce the end product that the users interact with.
What about endorsement? MLB could claim that the list of player names is an implied endorsement of the players. This of course is
ridiculous but they can argue the point nonetheless. All it would take is for every company to make every customer agree to a "non endorsement"
It would be easy to simply have them click a box saying:
"I agree that [company name] is not endorsed by the MLB, any individual player, the MLB Players Association, MLB Advanced Media, or any MLB Team. I
further understand that a list of player names for the purpose of creating a roster DOES NOT imply endorsement from any of the aforementioned."
That solves that one. Takes any possible confusion out of it.
I have two more little provoking thoughts:
First, when a Las Vegas casino makes a betting line on a fight or game they often use player names. Does that somehow imply endorsement to the
casino? Are publicity rights of players or copyrights of those sports organizations being violated? Is it not being used for "commercial gain"? Yet
those casinos don't pay a dime. Please explain that one to me MLB.
And let us not even get into the fact that newspapers have been displaying stats, pictures (or player likenesses), and player names for decades. Most
argue that news outlets are prodected by free speach. True, but is it not also being used for "commercial gain"? Would they sell the exact number of
copies if there were no box scores?
Second, why is it that in the NFL Players Association group licensing agreement, it states that any company with 6 or more players is a violation of
publicity rights and therefore must be licensed. Ok, so 5 players means no violation but 6 players means you owe them thousands of dollars. What
kind of moronic b*llsh*t is that? That isn't how the law works. It seems that these giant companies have simply dictated their own RULES that have
no backing in law. Just because you SAY something doesn't mean it is legal. EVEN if the players agree to it doesn't mean it's legal. There is
either copyright infringement or there isn't. You can't say that 5 players is ok but 6 means you're screwed. Why 6? Why not 4? Why not 50?
What the MLBAM and the NFLPA don't realize is that they are going to make their money from the big 3 companies (Yahoo, ESPN, and Sportsline)
REGARDLESS. THERE IS VALUE in being the "officially licensed" game of the MLB. The CDM case will have little or no bearing on the licensing
agreement of those companies. They are going to pay to be endorsed!
If they were even half as smart as the common tree stump, they would pour millions into out-marketing everyone else. Get the players endorsing their
"If you aren't playing an officially licensed game, then you aren't playing fantasy baseball."
"MLB.com, the ONLY place that the players endorse."
The idiots don't need to force licensing or limit competition to win in this industry. It is amazing that with all of the money they have and
important people they hire, they fail in the most fundamental marketing and business concepts.
Devoted Fantasy Football Fan
[Edited on 3/12/2005 by fantasysportsfan]
[Edited on 3/12/2005 by fantasysportsfan]