SportsBiz - The Business of Sports Illuminated: August 2007

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Mark Ament - Insight Community Expert

Tuesday, August 28, 2007

 

BlogPoll

Here is my ballot for the week one of the college football blogpoll, which is making its return this week. Well, actually, it made its return last week but I missed it. We were supposed to turn in preliminary ballots last week and then respond to reactions to those ballots with a new vote today. Since I missed the original, you just get this ballot, which will be my official preseason ballot. Without further adu, here it is:

RankTeamDelta
1 Southern Cal 25
2 LSU 24
3 West Virginia 23
4 Louisville 22
5 Oklahoma 21
6 Wisconsin 20
7 Virginia Tech 19
8 Texas 18
9 Michigan 17
10 Florida 16
11 UCLA 15
12 Georgia 14
13 Rutgers 13
14 Penn State 12
15 Florida State 11
16 Ohio State 10
17 California 9
18 Missouri 8
19 Oregon 7
20 Hawaii 6
21 Nebraska 5
22 Tennessee 4
23 South Florida 3
24 TCU 2
25 Boise State 1

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Topps Calls Time Out

Well, drama has come to the baseball card business as Topps has called for a three week delay in the shareholder vote on the bid by a group led by Michael Eisner on a $385 million takeover bid.

The move is to allow Topps stockholders to "evaluate recent developments when deciding how to vote their shares," Topps said. It said that had the vote taken place as scheduled, the Tornante deal likely would have failed to win a majority of the shares needed for its approval.

Topps supports the $9.75 per share bid, but two top proxy advisors oppose the bid. A competing bid from Upper Deck was withdrawn last week. The delay is likely a result of Topps management determining that it didn't have the votes to win approval of the Eisner bid this week.

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NYC Media Job/Apt.

A couple of quick personal notes for you if you'll permit me a quick indulgence. My daughter is off soon to NYC if she can find a place to live for a month or so. She is off to seek her fame and a living as a writer/journalist/magazine scribe. If anyone knows of a sublet or someone looking for a roommate in a safe area in Manhattan or a decent section of Brooklyn within a short walk of a subway station, please let me know. If you know of a magazine looking for a good young editorial assistant or writer with a little experience, particularly for the cultural side of the book, then I have just the right person.

On another note, I have noticed and am trying to fix the display problem in Explorer. I apologize but haven't been able to locate the source of the problem. For now, we'll just have to live with the right-hand column pushed to the bottom of the page and my advice for you who are using IE is to switch to Firefox.

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Monday, August 27, 2007

 

Is Chelsea After Ronaldinho?


The transfer market in world soccer only has a few days left before the window closes and no more deals will be had until year's end, but it looks like the deal of the year may be one to close it out. The London Telegraph reported over the weekend that Chelsea owner, billionaire oilman Roman Abarmovich has taken a couple of meetings with Brazilian superstar and FC Barcelona midfielder Ronaldinho's brother and advisor to discuss his transfer to Chelsea.

The transfer won't come cheap, if it comes at all. Reportedly, there is an 85 million pound buyout clause in his Barca contract and he wants to be the highest paid player in Europe, which I suppose is fitting for the two-time European player of the year. Although it should he said that his form has been a bit questionable of late. Nevertheless, to make him the highest paid player on Chelsea would get him paid at the rate of better than 130,000 pounds per week, which is what the club is now paying John Terry.

Barca has predictably denied any interest in selling Ronaldinho, but to maintain any credibility with their fans, you would expect no less. Until the deal is cut and he has boarded the plane for London, expect nothing but repeated denials to issue from the Nou Camp. The question of whether the deal sells in Stamford Bridge is an interesting one as Chelsea field boss, Jose Mourinho has said the transfer window is closed and he wants to go forward with the roster he has. His boss is obviously not so convinced and this would be far from the first battle or disagreement between the two.

It would also not be the first time that Abramovich has tried to deliver Ronaldinho to Mourinho. If he succeds this time, Chelsea may not only be able to wrest back the Premiership from Manchester United but finally reach a Champions League trophy. He would mesh well with the other Brazilians on the team, add flair to a team that needs it and bring offense to one that is lacking it.

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Saturday, August 25, 2007

 

The US, Online Gambling and the WTO

We've discussed this case before (see here and here), but there was an interesting article in the New York Times the other day profiling the American lawyer representing Antigua and Barbuda. The case has placed Washington in a real bind.

With the victory before the WTO, the island is asking for a rare form of compensation in the likely event the US fails to comply with the WTO ruling: permission for Antigua to distribute movies, music and software free of American intellectual property laws. The island and its attorney are hoping to use Hollywood and the software industry to place pressure on Washington to force it to comply with the ruling and not simply ignore it, which is what the US seemingly intended to do.

As the major proponent of free trade in the world, the US is in a difficult position. It runs to the WTO to attempt to get to China to halt the distribution of software or movies or counterfeit clothing, but would much rather ignore this ruling than deal with its consequences. Now, the world is watching closely to see how it handles an adverse ruling, when it is the party against whom it is levied. Fascinating stuff and not just for international trade lawyers.

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Thursday, August 23, 2007

 

NBA to Sell NBA TV?


It looks like the NBA may be getting out of the television business, at least as far as ownership goes. NBA TV and nba.com appear to be on the selling block and the leading contender to take over at least majority ownership, if not the whole thing, is Time Warner, one of the league's existing broadcast partners through TNT. It is not terribly surprising to see the league put its network up for sale as it has had difficulty getting cable clearance in a tough environment for new cable networks. Even on those systems in which it has gained access, it has almost uniformly been relegated to a more expensive digital tier, which has significantly impaired its ability to draw eyeballs. Handing it off to Time Warner, one of the largest cable operators in the country, will give it a chance for life on basic cable, the holy grail of cable networks.

It is a situation faced by most new networks and is similar to the fight now raging between the Big Ten Network and the cable operators, most notably Comcast, although it should be noted that BTN hasn't reached agreement with Time Warner, Cox or Cablevision either. The NFL Network is mostly on the digital sports tier and has carriage problems as well, which has posed problems for its late season Thursday night package. However, it has a significantly deeper war chest than the NBA and can well afford to wait the cable networks out. The NBA is less well equipped to handle NBA TV's losses.

HT to True Hoop

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Tuesday, August 21, 2007

 

Canes Leaving Orange Bowl


After 70 years as the prime tenant in one of college football's most famous venues, this season will be the last for the University of Miami at the Orange Bowl. Beginning in 2008, the Canes will move their home games to Dolphin Stadium in not so near Miami Gardens, which is on the Dade-Broward County line, or about 30-40 miles from the Canes Cora Gables campus. However, since the Orange Bowl was just north of downtown Miami and about 10 miles from campus, I guess that doesn't matter much. AD Paul Dees noted that Miami has as many alums in the Broward and Palm Beach area as it does in Dade County. I guess he forgot about the students.

Of course, why should he think about the students since this move, like the move of the Orange Bowl Classic game to Dolphin Stadium before it, was driven not by convenience but by money. In this case, the approximately $1.5-2 million annually Miami expects to clear as a result of the move. The lease the Canes signed is for 25 years and the renovation of Dolphin Stadium, to the tune of some $300 million, is already underway. I think that is a key because the university didn't really trust the City of Miami's financing plan for the renovation of the Orange Bowl. Instead, university leaders chose to be the third tenant in Dolphins Stadium, behind the Dolphins and the Marlins.

What Miami has given up in the move to Dolphin Stadium is the soul of its football program. Now some may argue that is a good thing as it was due for an overhaul anyway, but it's never good for an athletic program to give up its DNA and Miami without the Orange Bowl is the Red Sox without Fenway. Miami was the OB's original tenant and I'm just don't think it will be the same in corporate Dolphin Stadium. The Canes will have completed the transformation to the professional team that opposing fans always accused them of being. Congratulations Ms. Shalala, you have sold the school out once again.

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West Virgina Number 1

If you have read this blog for a while, then you know that I was a member of the college football blog poll last year. I intend to participate again this year if I can ever get my act together long enough to put a top 25 together and submit it. Anyway, the first ranking of the season that is truly meaningful has come out, and the West Virginia Mountaineers, home of couch burnings and reclaimed strip mines, is number one. According to Princeton Review, WVU is the nation's number one party school, with Ole Miss and Texas following at 2 and 3, respectively. Football and basketball champion Florida is fourth. These rankings prove it doesn't take good weather to make a good party school. Oh, and perpetual champion, BYU was once again the nation's top "stone-cold sober school. "

In two categories related to sports, Maryland led in the "everyone packs the stands" with Notre Dame second; while Notre Dame led in the "everyone plays intramural sports" category.

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Monday, August 20, 2007

 

Texas Tops in Licensing Revenue

The Florida Gators may be the defending national champions in football and basketball but that doesn't mean that they are tops when it comes to selling Gator=themed tee shirts, sweatshirts and memorabilia. They're good, but they're only number three. Tops in the country for the second year in a row, is the University of Texas. The Longhorns are followed by Notre Dame with Florida, as mentioned, coming in third, according to the annual press release from the Collegiate Licensing Company, which handles licensing for most colleges and universities, as well as conferences, across the country.

Also notable in the release are the schools making the largest jumps in the rankings. TCU made the biggest jump, going up twelve spots to number 29, due in part, no doubt to its move to the Mountain West. Georgetown went up eight spots to number 44, a jump which is probably attributable largely to the increase in its basketball fortunes last season.

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Monday, August 13, 2007

 

Carnival of the Capitalists

This week's Carnival of the Capitalists if now up at Spooky Action. Get over there and check it out.

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La Vida Boca


It is often been thought that American professional sports franchises, particularly baseball, basketball and football teams with their league invented and dominate the world of sports marketing. What with their league owned and operating, worldwide marketing departments, backed by millions in broadcast license fees, the reach of American sports seems endless. You see American baseball caps and jerseys in the far corners of the world.

However, I don't think any team in America holds a candle to the executives of the most dominant soccer team in Argentina. Boca Juniors is a world famous club. Not only did it produce the legendary Diego Maradona, he of the "manos de Dios", but it has won 17 titles in the last decade. However, it is in licensing that Boca really shines. As this article makes clear, you can be covered in the Boca blue and yellow, literally from cradle to grave. Now, we know that it also true for fans of certain college teams in the south, but Boca, well, they're just different. They plan on an entire Boca community, surrounding the team's practice field. When you're the favorite team of 41% of the country, money flows, and as the article points out, the fan base is one part rich and one part poor. The beauty is, neither cares what anyone thinks of them so they buy everything Boca puts its colors on. It's a beautiful story for a marketer.

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Sunday, August 12, 2007

 

Blog Talk Radio Appearance

Tonight I'm going to be a guest on the Blog Talk Radio show hosted by Jeff Louderback and Vince Mercandetti of the great Sox and Pinstripes Blog. I'll be live on the air around 9:15 PM tonight Eastern time. Please join me, Jeff and Vince. You can listen by pointing your browser here. Join us tonight if you get a chance - it should be fun.

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Saturday, August 11, 2007

 

Curlin's Owners Jailed


Preakness winner Curlin was a rags to riches story and one of the Triple Crown's more interesting stories this year. A lightly raced colt leading up to the Derby, he had been purchased originally by two Lexington, Kentucky lawyers who had made millions prosecuting fen-phen cases. That is, cases against the drug companies that made a diet pill that came to be known as fen-phen, which resulted in hundreds of millions of dollars in settlements in class actions filed by these lawyer, They bought Curlin as a two year old for $57,000 and sold an 80% interest in him just before the Derby for a reported $3.5 million.

William Gallion and Shirley Cunningham, Jr., along with Melbourne Mills, Jr. were ordered jailed yesterday by US District Judge William Berteslman in connection with a case in which the three are alleged to have defrauded clients out of more than $46 million from fen-phen settlement funds. The three asked for a postponement in the trial, which the judge granted accompanied by his order jailing the three because "no conditions of release will reasonably assure the appearance of the defendants," whom he noted could face 20 years in prison under federal sentencing guidelines.

"They have a tremendous motive to stonewall," Bertelsman said in the order, which set no new conditions for release.

Apparently, and rightly, no amount of money is going to secure their early release. It's exactly where these three belong. They are a disgrace to their profession and a disgrace to horse racing. Let's hope that the plaintiffs get punitive damages in their civil suit so that they will be forced to give back all the money they got for this case.

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Friday, August 10, 2007

 

Athletes Who Shold Become Sought-After Endorsers


The many woes faced by major sports this summer has pointed out in striking fashion the difficulty that companies face in building marketing campaigns around celebrity endorsers, particularly when those celebrities are high profile athletes suffering from what has come to be known euphemistically as "character issues". Nike has seen the danger first-hand with Michael Vick and, having gained experience with Kobe Bryant and gauging the public's different reaction to Vick, reacted differently and appropriately by suspending his product.

Given the new environment, it would behoove companies operating in this space to look farther than the All Star ballots for their next endorsement candidates. There is no denying that Greg Oden or Kevin Durant may make attractive, if predictable, new endorsers, but they're not who I have in mind. A company that is looking to project an image of strength and the ability to withstand the vagaries of the marketplace can do far worse that to hire Rick Ankiel, the St.Louis Cardinal outfielder, who after flaming out as a major league pitcher went back to minors and yesterday made it back to Show as a home run hitting outfielder with this timely home run:




Another athlete which would present an image unfortunately not often seen in American athletes is the rookie goalie of FC Dallas, Ray Burse, Jr. While playing goal for the Hoops for the rookie minimum of $17,700 , Burse is commuting to Ohio State one day a week to complete his degree in American history. That is not a schedule you find on most professional teams in major sports these days and is certainly something a good marketing exec would be able to build a campaign around.

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Wednesday, August 08, 2007

 

Buy a Piece of A Soccer Club Update


In May, I reported on a crowd sourcing project in the UK where a group was attempting to purchase a soccer club with 50,000 people putting up 70 pounds each. The group, MyFootballClub, has reached its goal of 50,000 members and if all of them follow through on their financial commitment, then the funds will be available to purchase a club. The group has identified four clubs and is in negotiations with all of four of them, the identities of which are not now being revealed. In addition to the over 50,000 members, the club has picked up EA Sports as a corporate sponsor. No word yet on the amount or terms of its commitment.

So, sports fans, it looks like this experiment in crowd management of a soccer club is about to become a reality. It will be a fascinating experiment not only as the living embodiment of every fantasy player's dream but as a living, breathing experiment in crowd sourcing. While the 50,000 members won't be making on field strategy decision, they will be making decisions about which club to purchase, who should manage it and which players to pursue in the transfer market. It should be great fun for all involved and for all of us to watch.

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Win $100 StubHub Gift Card from Yardbarker

I recently joined the Yardbarker ad network. You may have noticed the new ad displayed across the top of the page above this post - it's from Yardbarker, a great sports, social networking site which, if you are not familiar with, you should go there now and check it out. Yardbarker is sponsoring a survey and is giving away a $100 StubHub gift card to one lucky blog reader who completes the survey. Everyone who completes the survey is automatically entered into a drawing to win the $100 SttubHub card. So, don't delay, fill out the survey by clicking on the link.

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Tuesday, August 07, 2007

 

Tampa Bay Lightning Sold


A group headed by former Florida Panthers coach and Columbus Blue Jackets General Manager Doug MacLean has signed an agreement to purchase the Tampa Bay Lightning. The group includes local real estate developer Jeff Sherrin and Hollywood producer Oren Koules. There will be ten owners in the group by the time the deal closes, but this will be the first time the Bolts have predominately local ownership. The group, under the name Absolute Hockey, is buying the team from William Davidson, the Detroit based owner who also owns the Pistons. The sale will include the team, its lease agreement with Hillsborough County for the Forum and two adjacent parcels of land.

Koules was the producer behind the Saw movies and is the executive producer of Two and Half Men. He played minor league hockey and said he would move to Tampa to join MacLean and Sherrin. So, I guess Charlie Sheen is going to start hanging out in Tampa at Bolt games.

The group refused to disclose the purchase price until after the sale is approved by the NHL Board of Governors. However, based on the announced sale price of $193 million for the Nashville Predators, it is safe to assume that the price is in excess of $200 million. The Lightning were third in the league in US attendance last season.

MacLean did not make a commitment about the salary cap for this year's team - the current owners had said it would be $44 million, although the league cap is $50.3 million. The team could use a higher cap if it hopes to remain competitive and Bolt fans can only hope that MacLean will see how important it is once he examines the roster in detail. Having a hockey man in the owners' suite has to be comforting to Bolt fans for the long term future direction of the term.

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GM Ending Sponsoring of US Olympic Team


Terminating a relationship that began in 1984, General Motors has confirmed that it informed the US Olympic Committee that it will not be renewing its sponsorship following next year's games in Beijing.

``There have been significant changes in the media landscape,'' GM spokeswoman Ryndee Carney said. ``There are other ways to reach the audience that views the Olympics without continuing an official relationship with the USOC.''

No doubt, GM's financial struggles played a role here. The last contract with USOC was signed in 1997 and was valued at $1 billion, including $700 million in cash payments to USOC and Olympic broadcaster NBC. That level of financial commitment may simply be too high for GM to make in this difficult environment for the car maker.

The future is anything but certain for automobiles in the US and the media market is undergoing enormous upheaval, together with a rapidly changing media market. GM may be convinced that there are better delivery channels for their messages then the mass market that is Olympic advertising. However, the Olympics remain, together with the Super Bowl, probably the last remaining event viewing in sports television, if not television altogether. If GM can no longer afford the Olympics, then it has no business doing prime time television. If the Olympics was not delivering the right audience, that is a different matter - but cost says there are serious problems in Detroit not Colorado Springs.

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Monday, August 06, 2007

 

Tiger and Amex Part Ways


Brian Berger over at Sports Business Radio is reporting that Tiger Woods and American Express are parting ways at the end of Tiger's existing ten year endorsement contract, which just ran out. The logical question to ask here is what in the world are the people at Amex smoking?

The proffered reason is that Amex is focusing their efforts on the consumer market. Why they think that the world's greatest athlete endorser won't be an assist in that effort is something I can't understand. They had 10 years invested in Tiger and are now basically throwing that away to start over to build a consumer campaign around the PGA in general. Sure, there is residual halo effect from Tiger to the PGA Tour, on which Amex will now focus its efforts. However, who are we kidding? In the mind of most of America's consumers, Tiger Woods is the PGA.

I don't know, obviously, what all went down between Tiger and Amex, but if this decision was made purely on marketing strategy, then Amex should have done whatever it took to keep Tiger signed up for another 10 years. He is just too valuable an endorser to set loose on the open market. I can hear Visa dialing his agent now.

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Hottest Brands in US Sports

Forbes just published an article touted the hottest brands in US sports. The brands (teams) selected were interesting and not altogether surprising: the Blue Jays and Angels in baseball were ranked first and second, growing by 127% and 96%, respectively. Since the ranking is done on a percentage basis, teams starting from a smaller base will tend to do better. The Blue Jays were floundering when the Rogers Company took over and melded the team and the stadium into a single national brand. The departure of the Expos left the Jays as Canada's baseball team, a brand exploited by Rogers - Canada's national cable company and the team overhauled its logo and branding this year.

In football, the Eagles led the way following TO's departure for Dallas. Basketball is obvious - the Cavs as they built on the arrival of LeBron. Less obvious to me was runner-up Detroit, although I guess the run of Conference championships has paid off. In hockey, the Buffalo turn-around from bankruptcy to Stanley Cup contender has led to a brand value growth of 53% in three years - smaller than I would have thought, but hockey has it problems now.

The absence of MLS brands from the article leaves out what may be the biggest increase in brand growth of any team in North America: the Los Angeles Galaxy, post Beckham. This team is being transformed from a team that has a hard time being recognized in its home town to one selling jerseys all over the world. I would be very interested to see the brand value now by Forbes' calculations.

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Sunday, August 05, 2007

 

YES for Sale; Are the Yankees?

Fortune reports that the Yankees regional cable network YES is for sale and that has many folks wondering, including some Yankee limited partners, if that doesn't mean the team might not be next. Of course, even if the team is next, it's not likely to bring a price anywhere near the asking price for the cable network. What might that be, in case you're in the market? Try, a cool $3 Billion, yes, with a "B", way more than the $1.2 billion that Forbes valued the team in April.

YES is owned by the Yankees together with Goldman Sachs and former New Jersey Nets owner Ray Chambers. It's no secret that both Chambers and Goldman would like to cash out. Steinbrenner has been reconsidering what to do with his Yankee empire since the turmoil of the last year. His health has been problematic and his heir apparent, Steve Swindal, is no longer in the picture since the Boss' daughter Jennifer filed for divorce from Swindal earlier this year.

There will be no shortage of interested buyers, which is always good for the price. Expect Comcast, Cablevision, Verizon and News Corp. (Fox) to be among the bidders.

UPDATE: The Yankees have denied that their stake is for sale, absent a wild offer. Randy Levine, the President of the Yankees responding to press reports about the possible sale of YES by denying that the Yankees were interested in a sale:

“We’re testing the market for our financial partners, not for the Yankees’ stake,” Levine said yesterday. “The whole network isn’t for sale. The YES board has clearly stated that we’re not authorizing a sale.”

The Yankees' partners are not necessarily convinced that is the case.

Gerald J. Cardinale, a managing director of Goldman Sachs and a YES board member, said: “We have not predetermined that we will sell, but if we get a compelling valuation, we’ll consider it. We can’t speak for the Yankees.”

He added: “The Yankees will evaluate this with the current facts. If there’s a valuation that’s compelling to them, I think they’ll consider it.”

I think Mr. Cardinale is probably a lot closer to the truth than what Levine is peddling for public consumption. If an offer shows up valuing YES at $3 billion, the Yankees would be fiscally irresponsible not to sell. With all the uncertainty about succession now taking place within the Steinbrenner empire, an offer of that magnitude would be too alluring to turn down. It may also prompt the Boss to put the team up for sale as well. The trials and tribulations of that succession have been going on for years now. A recent profile of George in Portfolio includes a history of the relationship of the next generation of Steinbrenners and the team. After reading that piece, you come away convinced that selling the team is more likely that not.

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Thursday, August 02, 2007

 

MLB Joins the Scalping Biz


Seeing the success of the online ticket resale business, Major League Baseball decided it wanted its share, so it cut a five year deal with StubHub. The deal directs all team sites and mlb.com to StubHub for the resale of season ticket holders unused seats. Exactly how this is going to play out will be interesting to watch as a dozen teams have contracts with Ticketmaster for the resale of tickets through their individual team sites.

As we discussed yesterday with respect to the antitrust suit filed by the Cavs against Ticketmaster, the company does not take kindly to attempts by anyone to meddle with its exclusive contracts. MLB claims no existing contracts were violated in the StubHub deal, but isn't that always the claim when new contracts are signed. Have you ever heard anyone announce that a new contract violates someone else's contract?

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Wednesday, August 01, 2007

 

FTC Complaint Filed Against NFL, MLB and studios for Overstating Copyright Claim

Any baseball fan can recite it from memory, the voice that intones near the beginning of any telecast of a major league game: "this copyrighted telecast is presented by authority of the Office of the Commissioner of Baseball. It may not be reproduced or retransmitted in any form, and the accounts and descriptions of this game may not be disseminated without express written consent."

A complaint filed with the FTC by the Computer and Communications Industry Association, a trade group of tech and Internet companies, including Microsoft, Google and Yahoo, charges that warning and others like it made by the NFL and media companies NBCU, Morgan Creek Productions, DreamWorks, Harcourt and Penguin, are trying to intimidate the public by making inaccurate warnings about making "unauthorized copies" of their material and trampling on their fair use rights. The fair use doctrine allows consumers to copy portions of copyrighted works for criticism, commentary, educational and other reasons. The complaint asks the FTC to order the leagues and media companies to cease using the warnings and to engage in a campaign to inform the public of their rights under the fair use doctrine.

Ironically, Microsoft uses a warning on Outlook containing very similar language to that involved in the complaint. "The warning in Microsoft Outlook reads, "unauthorized reproduction or distribution of this program or any portion of it may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible under the law."

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