Fantasy Baseball Scores a Big Hit
Major League Baseball suffered a big setback in its fight for more revenue from the burgeoning fantasy baseball industry yesterday. In a lawsuit brought by Major League Baseball Advanced Media, the internet arm of MLB, a US District Court Judge ruled that fantasy baseball leagues do not have to pay a licensing fee to use the player names and statistics because they are not the intellectual property of the players or MLB.
Judge Medler held that players do not have a right of publicity in their names and playing records when used in fantasy games and CBC, the defendant in the MLBAM suit, has not violated that claimed right. The Judge went on to hold that even if the players had a right of publicity in their names and statistics, the First Amendment protected their use in fantasy games. The guarantee of freedom of the press trumped MLB's claimed copyright, which the Court determined not to be copyrightable, in any event
This is an important decision limiting the scope of the MLB's property rights in statistics and player names. The fantasy business is now an extremely and very fast growing business with revenues in the hundreds of millions of dollars. This decision enables hundreds of small operators to stay in business and limits the ability of all of the major professional leagues to capitalize monetarily on fantasy games growing popularity. I don't think it will have much effect on the licenses already signed with the large operators of games such as Yahoo, CBSportsline.com and ESPN.com. Those contracts will continue for now, however renewals will be unlikely at the same rates.
We have not heard the end of this story. This decision will almost certainly be appealed and MLB will be supported fully by the other major professional leagues in that appeal. The stakes are large and getting larger. To give you an idea of what kind of market we are talking about, consider that Ad Age estimates that there are 15 million people spending more than $1.5 billion on fantasy sports. That includes more than baseball of course but baseball dominates the marketplace, with football a close second. Not only that, they are a valued market, since they are predominately male, educated, married and upper income. It's a demographic that marketers love and have a difficult time reaching.
Nevertheless, I think the judge's rationale is correct and will be upheld and her well reasoned opinion is most likely to be upheld. While her conclusion that the use of the statistics does not constitute commercial speech and is therefore protected by the First Amendment may not hold up, I think she is correct that the use of those statistics by fantasy leagues does not violate the right of publicity. As a result, there will be no need for the appeals court to even get to the First Amendment argument.
If you would like to read the full opinion, please go here.
Judge Medler held that players do not have a right of publicity in their names and playing records when used in fantasy games and CBC, the defendant in the MLBAM suit, has not violated that claimed right. The Judge went on to hold that even if the players had a right of publicity in their names and statistics, the First Amendment protected their use in fantasy games. The guarantee of freedom of the press trumped MLB's claimed copyright, which the Court determined not to be copyrightable, in any event
This is an important decision limiting the scope of the MLB's property rights in statistics and player names. The fantasy business is now an extremely and very fast growing business with revenues in the hundreds of millions of dollars. This decision enables hundreds of small operators to stay in business and limits the ability of all of the major professional leagues to capitalize monetarily on fantasy games growing popularity. I don't think it will have much effect on the licenses already signed with the large operators of games such as Yahoo, CBSportsline.com and ESPN.com. Those contracts will continue for now, however renewals will be unlikely at the same rates.
We have not heard the end of this story. This decision will almost certainly be appealed and MLB will be supported fully by the other major professional leagues in that appeal. The stakes are large and getting larger. To give you an idea of what kind of market we are talking about, consider that Ad Age estimates that there are 15 million people spending more than $1.5 billion on fantasy sports. That includes more than baseball of course but baseball dominates the marketplace, with football a close second. Not only that, they are a valued market, since they are predominately male, educated, married and upper income. It's a demographic that marketers love and have a difficult time reaching.
Nevertheless, I think the judge's rationale is correct and will be upheld and her well reasoned opinion is most likely to be upheld. While her conclusion that the use of the statistics does not constitute commercial speech and is therefore protected by the First Amendment may not hold up, I think she is correct that the use of those statistics by fantasy leagues does not violate the right of publicity. As a result, there will be no need for the appeals court to even get to the First Amendment argument.
If you would like to read the full opinion, please go here.
posted by Mark at 2:28 AM
and
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