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MLB charging $2+ Mil for fantasy baseball licenses?

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Postby phunkadelic » Thu Feb 16, 2006 7:27 pm

Matthias wrote:Besides, $2 million? Peanuts.


$2 million is peanuts to Yahoo and ESPN, but not to many of the smaller companies that run fantasy leagues - companies that will go belly-up without the revenue generated through their loyal fantasy game customer base.
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Postby jayman » Thu Feb 16, 2006 7:31 pm

Anyone know what MLB charges to licensing team names?
How about what MLBPA charges for player names?
Just curious about those two things.

In the end, we the end users, may end up paying nothing to continue playing fantasy baseball. Think about it, how much does it cost Google to provide 2GB of email space? So, Yahoo or sportsline have to cough up $2 million for licensing, big deal, their fantasy sports sales have probably been climbing every year... it's a cost of doing business.
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Postby jayman » Thu Feb 16, 2006 7:35 pm

phunkadelic wrote:
Matthias wrote:Besides, $2 million? Peanuts.


$2 million is peanuts to Yahoo and ESPN, but not to many of the smaller companies that run fantasy leagues - companies that will go belly-up without the revenue generated through their loyal fantasy game customer base.


That is a very good point. It would suck if MLB did not provide a means of licensing that would allow the smaller sites to stay in business.
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Postby Matthias » Thu Feb 16, 2006 7:43 pm

jayman wrote:
phunkadelic wrote:
Matthias wrote:Besides, $2 million? Peanuts.


$2 million is peanuts to Yahoo and ESPN, but not to many of the smaller companies that run fantasy leagues - companies that will go belly-up without the revenue generated through their loyal fantasy game customer base.


That is a very good point. It would suck if MLB did not provide a means of licensing that would allow the smaller sites to stay in business.


not really. espn isn't going to burn away $2MM just because they have it in the bank. espn is going to fork over $2MM if they still are overall profitable on baseball fantasy leagues. they may have some play that they could allocate to marketing if the $2MM pushed them $100K into the red or something, but still... if it's a money maker even with the $2MM, it stays. if it's a money loser, it goes.

and that's the same decision faced by a smaller website that's dedicated to providing fantasy baseball.
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Postby slomo007 » Thu Feb 16, 2006 7:48 pm

jayman wrote:Anyone know what MLB charges to licensing team names?
How about what MLBPA charges for player names?
Just curious about those two things.

In the end, we the end users, may end up paying nothing to continue playing fantasy baseball. Think about it, how much does it cost Google to provide 2GB of email space? So, Yahoo or sportsline have to cough up $2 million for licensing, big deal, their fantasy sports sales have probably been climbing every year... it's a cost of doing business.


I agree, Yahoo will absorb this cost due to a few reasons. First, they are profitting heavily off Stat-Tracker I'm sure. Plus, do they really want to lose all of those website hits full of advertisements? I think not.

I could see the stat-tracker price being raised a few dollars, but besides that there will always be free leagues IMO. $2M to Yahoo is nothing compared to the amounts that fantasy baseball brings to their sites I'm sure.

In fact, if anyone from yahoo is reading this, the only reason I have not changed my home page from Yahoo to Google is solely due to fantasy baseball being hosted on Yahoo. Google has everything else Yahoo does, so there's their incentive to keep it free. :-D
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Postby JTWood » Thu Feb 16, 2006 8:47 pm

Madison,

The stats are legally considered to be public domain. The players, though, own the rights to their names and likenesses. CDM could continue doing fantasy baseball with "right fielder 25" on their site, but that's not as interesting, is it? And it's the last part that keeps this whole thing in the MLBPA's court. Actually, it's someone else, right? The MLBPA sold the licensing rights last year to the MLBMA (or something like that), right?
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Postby WittyC » Thu Feb 16, 2006 11:33 pm

slomo007 wrote:
jayman wrote:Anyone know what MLB charges to licensing team names?
How about what MLBPA charges for player names?
Just curious about those two things.

In the end, we the end users, may end up paying nothing to continue playing fantasy baseball. Think about it, how much does it cost Google to provide 2GB of email space? So, Yahoo or sportsline have to cough up $2 million for licensing, big deal, their fantasy sports sales have probably been climbing every year... it's a cost of doing business.


I agree, Yahoo will absorb this cost due to a few reasons. First, they are profitting heavily off Stat-Tracker I'm sure. Plus, do they really want to lose all of those website hits full of advertisements? I think not.

I could see the stat-tracker price being raised a few dollars, but besides that there will always be free leagues IMO. $2M to Yahoo is nothing compared to the amounts that fantasy baseball brings to their sites I'm sure.

In fact, if anyone from yahoo is reading this, the only reason I have not changed my home page from Yahoo to Google is solely due to fantasy baseball being hosted on Yahoo. Google has everything else Yahoo does, so there's their incentive to keep it free. :-D


Haha... I'm in the same boat, as I'm sure many folks who play fantasy baseball are. The other thing that makes Google awesome is that they didn't just roll over when the government started asking to be able to monitor user activity through their engine. Yahoo! and AOL caved right away. Google's fighting the man! ;-D

It would be interesting to see how this "tax" on fantasy baseball is absorbed. We may be on the receiving end without knowing it through increased advertising. The other option would be raising the price of stattracker and/or league plus, which might happen next year.

I also wonder how this will affect Yahoo!'s profitability on the free leagues. I don't think they were making money on them to begin with (only revenue came through advertising), but their strategy is to lure people in for a season and hope that they get involved enough to want the Plus league the following year.

Worked on me! :-D
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Postby CubsFan7724 » Thu Feb 16, 2006 11:58 pm

jayman wrote:Yahoo, as well as other sites, are making a good amount of money selling stat-tracker and other resources that are useless without Major League Baseball - I just wouldn't have fun playing Fantasy Fall League, and something tells me the draw to Fantasy Area Football would be nowhere near that of the NFL.

I don't see why MLB and the MLBPA should not get a cut of the action - it is afterall, their service, that draws us to fantasy baseball.

They already do. Sites like Yahoo have to pay MLB and MLBPA to use the team names, players, player likenessess. I think on ESPN Fantasy Barry Bonds was SF LF #25 one year because he wasn't part of the MLBPA.
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Postby thinkspin » Fri Feb 17, 2006 12:11 am

Rotoworld wrote:and no one is in cahoots with MLBAM. Sure some companies that have tv rights are in a better bargaining position than others...but they are certainly paying the money to MLBAM.

i have heard MLBAM asking for 2+ million a year. However i sincerely doubt the big three are paying that without a tie into revenue - and even then it sounds absurd...


They are without a doubt trying to crush the smaller companies. Did they even release what these companies had to pay last year for licenses? They just said that they had acquired licenses already and all others would have to justify a license being issued. Some silly caveat being that they had to show that what they were going to be doing would be unique and bring more fans to the game.

The sad part is that this might just take down CDM.

Does USATODAY still run their branded game through CDM?
Founder of a fantasy sports related website...
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Postby JTWood » Fri Feb 17, 2006 12:39 am

Pending Lawsuit May Decide Whether Baseball Players’ Statistics Are Protectable Intellectual Property
A lawsuit currently pending in federal district court in St. Louis, C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., Case No. 05-CV-00252 (E.D. Mo.), concerns the right of a fantasy sports game provider to utilize baseball players’ names and playing statistics in its fantasy baseball games without licensing that information from Major League Baseball. (Click here for the complaint.) A court decision in this lawsuit could have major business ramifications for sports leagues, fantasy sports game companies, and any web site that charges a fee for a product incorporating athletes’ names and playing statistics.


CBC is a provider of fantasy sports games, including fantasy baseball in which participants “draft” their own teams of ballplayers whose playing statistics in selected categories during that season determine how well the participants’ teams do in their fantasy baseball league. Fantasy sports games is a large and growing industry, particularly on the Internet with popular web sites like Yahoo! offering fantasy sports games. Seeking to expand their businesses on the Internet, sports properties such as Major League Baseball have been aggressively pursuing new revenue opportunities and claiming broad intellectual property rights in products derivative of their on-the-field games. In that regard, Major League Baseball Advanced Media (“MLBAM”) in January 2005 entered into a five-year agreement with the Major League Baseball Players Association (“MLBPA”) totaling more than $50 million for an exclusive license to use and sublicense baseball player group rights for the creation of online games, including fantasy baseball games. CBC had a licensing agreement with MLBPA permitting the use of player names, likenesses, and playing statistics (among other information), which expired at the end of 2004. Apparently unable to reach a new agreement with MLBAM after it acquired the rights from MLBPA, CBC filed a complaint for declaratory relief in February 2005.

CBC’s complaint seeks a declaratory judgment that its use of baseball players’ names and statistics does not infringe on any intellectual property rights controlled by MLBAM, including copyright and the right of publicity. At least in their public comments after the filing of the complaint, MLBAM officials conceded that they do not dispute that player statistics are in the public domain. Instead, MLBAM contends that if another company uses players’ names and statistics in a fantasy game for commercial gain, then a license must be paid for that information.

The copyright claim should be resolved in CBC’s favor because the underlying facts of sporting events are not copyrightable under the Copyright Act. This was made clear by the decision in National Basketball Ass’n v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997). In that case, the NBA sought to prevent real-time game scores and statistics from being transmitted over handheld pagers and on web sites and claimed a copyright in the information. The Second Circuit held that sports games are not copyrightable (as distinct from copyrightable broadcasts of the games) and that factual information from the games is similarly unprotected. Moreover, there does not appear to be a promising argument for MLBAM that the players’ statistics are copyrightable as compilations, because fantasy sports games do not rely upon playing statistics from past seasons. The data is not copied from a pre-existing work of authorship but is ascertained daily as each ballgame is played and a player does something in a statistical category – e.g., hits a home run, earns a run batted-in, steals a base, or strikes out a batter.

The right of publicity claim is likely where the outcome of this lawsuit hinges. The right of publicity, both at common law and under statutes enacted in many states, protects a plaintiff against the commercial appropriation of his or her name or likeness for the defendant’s advantage. MLBAM contends that providing a fantasy baseball game using players’ names and statistics violates the players’ rights of publicity, the group rights to which are exclusively licensed by MLBAM from the MLBPA. A motion by MLBPA to intervene in the lawsuit was granted, and MLBPA is making the same arguments about the players’ rights of publicity in a counterclaim against CBC.

One obstacle to MLBAM defeating CBC’s request for a declaratory judgment that no right of publicity exists is the victory that Major League Baseball achieved in Gionfriddo v. Major League Baseball, 94 Cal. App. 4th 400 (2001). In that case, several retired ballplayers alleged that Major League Baseball violated their rights of publicity by publishing their names and statistics in game programs and on its web sites without their consent and without compensation. The California Court of Appeal held that there was no violation of the plaintiffs’ common law or statutory rights of publicity. Balancing the players’ publicity rights against the First Amendment interest in the dissemination of information, the court concluded that the public interest favoring free dissemination of information outweighed any proprietary interests of the players. The court stated: “It is manifest that as news occurs, or as a baseball season unfolds. the First Amendment will protect mere recitations of the players’ accomplishments.” Id. at 410. MLBAM will try to distinguish Gionfriddo on the grounds that CBC is engaging in purely commercial speech in using players’ names and statistics to sell its fantasy games, entitling CBC to less First Amendment protection, whereas Gionfriddo involved recitation of historical facts about baseball by the league in order to promote its own product. Nonetheless, MLBAM will have difficulty overcoming Gionfriddo and prevailing on the right of publicity issue.

According to the court’s docket, a mediation is scheduled for October 24, 2005. If the parties do not reach a settlement and instead proceed with the litigation, intellectual property observers and sports lawyers will be watching this case closely.
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