After a long legal fight, which even encompassed the product activities of Sports Business Simulations, Major League Baseball lost the right to bully fantasy simulation companies who use player names and statistics as a basis for their games and websites.
Baseball appealing fantasy legal victory
By JEFF DOUGLAS Associated Press Writer
© 2006 The Associated Press
ST. LOUIS — Major League Baseball says it will appeal a federal court ruling allowing an online fantasy baseball business to use names and statistics without paying for a licensing agreement.
MLB and its players' union also said Wednesday they expect to win back the right to demand money from fantasy sites like St. Louis-based CBC Distribution and Marketing Inc., which prevailed in its lawsuit in a federal court's summary judgment issued Tuesday.
CBC, which runs CDM Fantasy Sports, sued MLB Advanced Media last year, claiming the statistics and names used in fantasy baseball should be free.
"We are disappointed by the Court's decision yesterday. ... We expect to appeal the decision, and remain confident that we will prevail in that effort. We continue to believe that the use of the players, without their consent, to create this type of commercial venture is improper," MLB Advanced Media and the MLBPA said Wednesday in a statement.
The ruling has been called a defining moment for millions of fantasy sports players and the more than 300 online leagues that run them. But it is unknown who will ultimately win or how it will impact the growing fantasy sports industry, which players spend about $1 billion on annually.
Big time fantasy sports league providers such as Yahoo, ESPN and CBS Sportsline are trying to sort out what Tuesday's federal court ruling could mean for their current MLB licensing agreements reported to be worth roughly $2 million a year to use names, statistics, team logos and images on fantasy sites.
None of the three companies were willing to comment on the lawsuit.
Yahoo Inc. is a leader in the fantasy sports market, with more than 6.7 million registered players. The company said the ruling changes nothing from a consumer standpoint.
"We've been a leader in fantasy sports and will continue to be," said Yahoo spokesman Dan Berger.
Charlie Wiegert, a former newspaper advertising salesman who helped start his cdmsports.com fantasy sports empire in a basement in 1992, said they have a 90 percent chance of winning the appeal and closing the case.
"I would hope that Major League Baseball will look at this decision and say 'OK, we lost that one and let's move on.' They don't need to be antagonizing their fantasy fans anymore," Wiegert said.
Jon Karelitz, who has been playing fantasy football and baseball since 2003, says he can understand arguments on both sides.
"It is illegal to use someone's name for financial gain," said the 26-year-old Chicago lawyer, who wins or loses games with his friends based on the statistical success of the actual players on the field. "However, when the name is simply being used to identify statistics, the line is much grayer."
MLB Advanced Media spokesman Jim Gallagher said the league has distinguished that gray area from the beginning.
"We've agreed that the stats and names are in the public domain," Gallagher said. "But when you start to use teams logos and other images as CBC did, you need a license, it's that simple."
Like many other fantasy baseball leagues, CBC had a licensing agreement with the MLBPA from 1995 through the 2004 season and paid royalties to the association.
"I could have bought a really nice house with all the money we gave them," Wiegert said, adding that the 9 percent royalties they paid MLB over 10 years reached seven figures.
MLB Advanced Media scaled back the number of license agreements with fantasy leagues from 19 to seven in 2005 after working out a $50 million licensing deal with the MLBPA. CBC and other smaller fantasy businesses did not get license agreements renewed with the league. That's when CBC sued.
This summer, the MLBPA sent cease and desist orders to about 20 or 30 smaller online fantasy baseball league operators that were operating without agreements.
CBC has continued to operate without an agreement along with others as fantasy sports has grown at a rate of up to 10 percent each year, according to the Fantasy Sports Trade Association.
Wednesday, August 09, 2006
Posted by Zennie Abraham at 11:44 PM