Wednesday, September 20, 2006

No License Is Required to Run a Fantasy League

posted by Unknown
Published: August 9, 2006

Major League Baseball Advanced Media, the Internet arm of Major League Baseball, had a major setback yesterday in its attempt to regulate the growing fantasy baseball industry when a federal judge ruled that companies do not need licenses to operate such leagues.

A St. Louis company that runs fantasy leagues, CBC Distribution and Marketing Inc., had sued Major League Baseball Advanced Media, saying that the players’ names and performance statistics were in the public domain.

Four weeks before the trial was set to begin, United States District Court Judge Mary Ann Medler upheld CBC’s argument in a 49-page summary judgment. She rejected baseball’s claim that the use of the players’ names in commercial fantasy leagues violated their rights of publicity. She also ruled that even if CBC’s repetition of purely factual information had violated those rights, it was was trumped by the United States Constitution.

“The players’ right of publicity,” she wrote, “must give way to CBC’s First Amendment right to freedom of expression.”

According to the Fantasy Sports Trade Association, more than 15 million people spend about $1.5 billion annually to play fantasy sports — games in which fans draft and run their own teams of real-life players. Virtually all of them use an outside service like CBC to keep track of rosters, players’ statistics, trades and more.

Major League Baseball Advanced Media, in addition to owning the electronic rights to team logos and video clips, bought the Internet and wireless rights to the players’ images and names from the Major League Baseball Players Association in January 2005 for $50 million. It licenses large content packages to companies like Yahoo and CBS Sportsline for deals worth approximately $2 million apiece and had sought to regulate the use of players’ names and personas by the hundreds of smaller operations like CBC that use only names and statistics.

“Using basic factual information — as distinguished from using a player’s name to endorse a product — does not violate the right of publicity,” said Rudy Telscher, a lawyer representing CBC. “This was just baseball trying — and I don’t blame them — to seize this growing area and make money on it.”

Officials from Major League Baseball Advanced Media could not be reached yesterday for comment on whether the company would appeal to the Eighth Circuit Court, a process that would take about another year. Jim Gallagher, a baseball spokesman, told The Associated Press, “We need to talk to our partners, the Major League Baseball Players Association, before we have anything more to say.”

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