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MLB fantasy baseball lawsuit update

Postby RugbyD » Wed May 17, 2006 12:57 pm

the following is a blog post in relation to an NYT article today. I don't have NYT online access, but if anyone does, please post the full text of the article when you get a chance.

what's intersting is that contrary to what almost all of the previous talk has been, this isn't about the stats.

The New York Times describes a pending court case:

The dispute is between a company in St. Louis that operates fantasy sports leagues over the Internet and the Internet arm of Major League Baseball, which says that anyone using players' names and performance statistics to operate a fantasy league commercially must purchase a license. The St. Louis company counters that it does not need a license because the players are public figures whose statistics are in the public domain.
Does that mean the MLB (motto: "almost as good as the MLA") thinks it owns baseball statistics? No -- it's laying claim to something even more substantial:

"What a company like CBC is selling is not nearly a repackaging of statistics," said Lee Goldsmith, a lawyer for Major League Baseball Advanced Media. "They're selling and they're marketing the ability to buy, sell, draft and cut Derek Jeter, Alex Rodriguez, Albert Pujols. And part and parcel of the reason that people are willing to pay for that ability is the persona of Jeter, of Rodriguez, of Pujols."...

Major League Baseball Advanced Media is not making a copyright claim to the statistics themselves; a 1997 decision in the United States Court of Appeals involving the National Basketball Association ruled sports statistics to be public-domain facts that do not belong to the leagues.

Rather, the central issue concerns celebrities' ability to control use of their names in commercial ventures, and how this "right of publicity," which has developed under state common law and statute over the last half-century, may commingle with Constitutional press protections under the First Amendment.



And why does MLB think it controls "the persona of Jeter, of Rodriguez, of Pujols"? Because it "purchased the players' Internet and wireless rights from the players union in January 2005."

"If anything, this case is even more impactful if the court rules for the players, because it will speak to any time you use a name in a commercial venture," said Eugene Volokh, a professor of law at U.C.L.A. "What if you use a historical figure's name in a historical novel? Or other games, like Trivial Pursuit? How about 'Jeopardy!'? Would they be liable as well? That seems to be the logical consequence of this. How do you identify what is news, and other times when there's communication of factual information?"
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Postby MashinSpuds » Wed May 17, 2006 1:23 pm

May 16, 2006, NY Times
Baseball Is a Game of Numbers, but Whose Numbers Are They?
By ALAN SCHWARZ

Like no other corner of American popular culture, baseball communicates in numbers. From .406 (Ted Williams's 1941 batting average) to 755 (Hank Aaron's record home run total) to countless digits bandied about water coolers every morning, statistics convey ideas and images that, even overnight, become inseparable from the players to whom they belong.

This relationship between players and numbers, so often romanticized, is now being stripped to its skeleton in a lawsuit with considerably wider ramifications. While the dispute focuses on fantasy baseball — in which millions of fans compete against one another by assembling rosters of real-life major leaguers with the best statistics — a real legal question has arisen: Who owns that connection of name and number when it is used for such a commercial purpose?

Many onlookers have cast this issue as a tiff over batting averages — as if children were squabbling over the backs of baseball cards — but legal experts are saying it could affect the wider arena of celebrity rights, freedom of the press and even how the press is defined as the Internet age unfolds.

The dispute is between a company in St. Louis that operates fantasy sports leagues over the Internet and the Internet arm of Major League Baseball, which says that anyone using players' names and performance statistics to operate a fantasy league commercially must purchase a license. The St. Louis company counters that it does not need a license because the players are public figures whose statistics are in the public domain.

According to the Fantasy Sports Trade Association, more than 15 million people spend about $1.5 billion annually to play fantasy sports, virtually all of them using an outside service to keep track of rosters, players' statistics, trades and more. Most participate through Web sites run by CBS SportsLine, Yahoo and ESPN, which have paid Major League Baseball Advanced Media approximately $2 million apiece this year for licenses to display players' names and photographs, team logos and varying add-ons like video highlight clips.

The St. Louis company, CBC Distribution and Marketing Inc., operates through the Web site CDMsports.com. It runs its customers' leagues without player photographs (which are controlled by players in nonjournalistic commerce) or team logos (which are trademarks owned by the major league clubs). Like those of many smaller operators, the St. Louis company's games present only players' names and seasonal statistics, which the company says are newsworthy facts whose publication is protected by the First Amendment.

"We're disseminating information to the public about baseball players no different than what a newspaper does," said Rudy Telscher, a lawyer representing CBC. "The American populace, at least a significant portion of it, has a fascination with baseball, they have a fascination with following the statistics, and I think the popularity of fantasy sports is borne right out of that passion for tracking the game and the statistics."

Major League Baseball Advanced Media, which purchased the players' Internet and wireless rights from the players union in January 2005 for $50 million over five years, contends that the players' identities are being exploited in a business venture distinct from conventional journalism.

"What a company like CBC is selling is not nearly a repackaging of statistics," said Lee Goldsmith, a lawyer for Major League Baseball Advanced Media. "They're selling and they're marketing the ability to buy, sell, draft and cut Derek Jeter, Alex Rodriguez, Albert Pujols. And part and parcel of the reason that people are willing to pay for that ability is the persona of Jeter, of Rodriguez, of Pujols."

Bob Bowman, Major League Baseball Advanced Media's chief executive, said: "The business here is not publishing statistics. The business here is running a league."

The case is scheduled for jury trial in United States District Court in St. Louis beginning Sept. 5. CBC and Major League Baseball Advanced Media filed motions for summary judgment that the court could rule on in July.

Major League Baseball Advanced Media, which runs its own array of fantasy games on the league's portal, MLB.com, has decreased its number of licensees from dozens in 2004 to 19 last season to 7 this year, focusing on large multimedia outlets like CBS SportsLine and cutting out many of the four-figure licenses that had covered smaller operators' use of only names and statistics. CBC, which had a license from 1995 to 2004, filed suit to confirm that it has the right to use those limited materials freely.

Dozens of small, unlicensed fantasy-league operators, as well as their customers, are watching the case intently because a Major League Baseball Advanced Media victory could put those operations out of business, said Jeff Thomas, president of the Fantasy Sports Trade Association.

Mr. Telscher said: "It's not hard to figure out what's going on here. This is moving toward a monopolistic market where M.L.B. controls everything that happens, when it was these smaller companies that built the fantasy industry into what it is today. This is not good for consumers. The reason that beer costs $10 at the ballpark is because there's no competition, and that's what M.L.B. is doing here."

Major League Baseball Advanced Media is not making a copyright claim to the statistics themselves; a 1997 decision in the United States Court of Appeals involving the National Basketball Association ruled sports statistics to be public-domain facts that do not belong to the leagues.

Rather, the central issue concerns celebrities' ability to control use of their names in commercial ventures, and how this "right of publicity," which has developed under state common law and statute over the last half-century, may commingle with Constitutional press protections under the First Amendment.

The term "right of publicity" was coined in 1953 when, in a case involving baseball, a court ruled that Topps Chewing Gum company could not print trading cards that featured baseball players' names and likenesses without their permission.

In 1970, in a case starkly similar to the CBC case, a Minnesota state court found that two baseball board games, each of which used only names and statistics, misappropriated the players' marketable identities and was subject to license.

But other subsequent cases have favored First Amendment concerns over the celebrities' right of publicity. Several courts have maintained that the dissemination of information, even for profit or for entertainment, cannot be curtailed by any state's right-of-publicity laws. In its court filings, CBC argued that it relied on baseball players' names and statistics "as their lifeblood in much the same way that the sports sections of newspapers do."

Major League Baseball Advanced Media, however, says that selling a service that helps customers pick and trade players crosses the line between reporting on games and running a nonjournalistic, commercial enterprise.

"What constitutes a commercial use — beyond advertising — becomes quite broad and hard to define," said Diane Zimmerman, the Samuel Tilden Professor of Law at New York University.

Several other experts added that courts were still reconciling the right of publicity with the First Amendment's press and free-speech guarantees, leaving the outcome of the CBC case significant beyond baseball stadiums.

"If anything, this case is even more impactful if the court rules for the players, because it will speak to any time you use a name in a commercial venture," said Eugene Volokh, a professor of law at U.C.L.A. "What if you use a historical figure's name in a historical novel? Or other games, like Trivial Pursuit? How about 'Jeopardy!'? Would they be liable as well? That seems to be the logical consequence of this. How do you identify what is news, and other times when there's communication of factual information?"

One interesting wrinkle is that Major League Baseball appeared to take the argument's other side in 1996. When several major leaguers from the 1940's and 50's sued Major League Baseball over use of their names and statistics in materials like promotional videos and game programs, baseball argued that such use was protected by the First Amendment.

While deciding in baseball's favor, a California Court of Appeal said that freedom of the press allowed for "mere recitations of the players' accomplishments," and that the public was "entitled to be informed and entertained about our history." The court agreed with Major League Baseball's argument that players' appearing in such materials did not imply a commercial product endorsement, and therefore did not violate their collective right of publicity.

But other cases, in which celebrities' names have been used in things like video games and comic books, have been decided in favor of the public figure.

"Fantasy leagues are an intermediate case," said Rod Smolla, dean of the University of Richmond Law School. "This could become like the Grokster case in the music-downloading world, where the Supreme Court could be asked to draw that line between the benefits of public use and ownership of property."

Fame, Mr. Smolla said, "belongs in part to the people who earn it and the public that gives it." This September, the court will decide the part in which baseball statistics belong.
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