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Tuesday, August 08, 2006
 
Judge Rules in Favor of Fantasy Baseball League

Today U.S. District Court Judge Mary Ann Medler ruled in a 49-page summary judgment that baseball and its players have no right of publicity to their names and playing records associated with statistics generated for fantasy baseball leagues. MLB, which paid the MLBPA $50 million for an exclusive right to license the stats for this purpose, claimed that CBC Distribution and Marketing Inc. (which runs CDM Fantasy Sports) violated the players' right of publicity by using their names in connection with the use of stats. Essentially, MLB is stepping into the shoes of the MLBPA via the license and asserting the claim that could otherwise be brought by the players.

According to Judge Medler, even if the players could claim the right of publicity to protect their names and information from commercial ventures by others, the First Amendment takes precedent because CBC is disseminating the same statistical information found in newspapers every day. Judge Medler also wrote: "The names and playing records of Major League baseball players as used in CBC's fantasy games are not copyrightable. Therefore, federal copyright law does not pre-empt the players' claimed right of publicity."

I disagree with Judge Medler's comment about the applicability of the First Amendment here because I think it's a stretch to say that fantasy sports leagues are serving any sort of newsworthy purpose. Fantasy sports leagues are basically games -- a form of entertainment. Some would even say it's akin to gambling. The issue from a right of publicity claim standpoint is simply, to what extent can third parties use the names and likenesses of athletes and entertainers, without consent, for their own commercial advantage?

So where do we draw the line on what constitutes "commercial advantage"? Obviously, newspapers are free to use the names. But if Nike were to use Tiger Woods without his consent, I presume nobody would question that Tiger would have a valid claim against Nike. What about baseball trading cards? Judge Medler's decision appears to be at odds with existing case precedent holding that Topps is not allowed to print and sell cards without the players' consent. How is the use of players' names and stats on trading cards any different from their use in fantasy leagues? Both companies are using the information for their own commercial advantage in a non-newsworthy context.





29 Comments:

This is clearly the correct decision. Power to the people!

Anonymous Anonymous -- 8/08/2006 11:30 PM  


Prof. Karcher,

Intuitively your position makes sense, at least with respect to players' names, but how do you distinguish other uses of athletes' names that we take for granted. For instance, does a Vegas sportsbook need a boxer's permission before it uses his name to take bets on his bouts [or the name of a team if its a team sport]? If the answer is no, what's the difference between taking bets and running a fantasy baseball league?

As for using the stats, I don't see how you can say that they are protected. If MLB collected statistics and presented them in a certain fashion, then that compilation would be protected. But anyone can compile the statistics on their own and therefore should be able to do what they want with them. Similarly, a newspaper can copyright a particular story, but it cannot control the facts underlying that story.

Finally, while there does seem to be a difference between a newspaper printing a box score and a fantasy league using statistics, I don't think you can distinguish them simply by saying that "obviously a newspaper can print the information." After all, newspapers are also using the information for a commercial purpose - selling newspapers - so that alone cannot be used to distinguish fantasy leagues from newspapers.

Anonymous PK -- 8/09/2006 12:08 AM  


A couple of minor points. The baseball card reference isn't exactly the same as the likenesses of the players aren't used in fantasy contests. I think that the concept of the likenesses was important in the Topps case.

If a fantasy contest uses only names and statistics, it's not the same. I don't think a rational person can think that seeing a name and statistics would assume the athelete is endorsing the product or that the athelete's value in pursuing their livelihood is impacted.

I think fantasy sports economically is a boon for professional sports, rather than a detriment. From a business perspective, sports organizations should encourage this. Also, it appears that MLB and NFLPA didn't seem to have an issue with fantasy sports before it became this popular and economically lucrative. So, let someone else create an industry and then swoop in and grab the spoils? Not very fair. Nothing is stopping the sports leagues from having their own fantasy sports contests and compete in the marketplace just like everyone else! With the players, they could perhaps craft a more compelling offer to consumers?

Anonymous Anonymous -- 8/09/2006 12:29 AM  


Do you think this will have any effect on the exclusivity agreements that many professional sports leagues signed with various video game makers?

Blogger Stephen -- 8/09/2006 1:07 AM  


Thanks for the great comments. I'm not really taking a position one way or another on this issue. I'm merely pointing out a lack of clarity and an inconsistency in the law on right of publicity claims involving athletes and entertainers.

PK:

Regarding newspapers, right or wrong, the courts have sided with newspapers (even though they make money) regarding use of names and likenesses; holding that such use does not amount to "commercial advantage" -- and even when newspapers are using them to advertise their papers (i.e. Joe Namath case, etc.) And it's not a copyright issue here (as you say, compilation of stats and presenting them in a certain fashion). This issue involves the use of names and likenesses for a "commercial advantage". But I do see a distinction in that there is more of a newsworthy purpose associated with use in newspapers vs. use in fantasy leagues.

Anonymous,

You make a good point recognizing a distinction between Topps and fantasy leagues in that Topps is using pictures. But right of publicity law does not only cover pictures (i.e. likeness), nor does it provide that using pictures makes a stronger claim than merely use of names. If fantasy leagues starting using mugshots, would that make a stronger right of publicity case in your mind? You make the argument that no rational person would think that the players are somehow endorsing one fantasy league over another. But likewise, does any rational person believe that a player is endorsing Topps over Fleer or Donruss when his picture appears on a Topps card?

Stephen,

Great question because it demonstrates my point in the post about defining "commercial advantage". On the one end of the spectrum, you have newspapers which use involves a newsworthy purpose. On the other end of the spectrum you have Nike using Tiger Woods which clearly involves an endorsement purpose. At various places in between you have fantasy leagues and trading cards (probably somewhere in the middle); and video games (probably closer to the Nike end). Clearly, if a player appears on a commercial for Playstation, it's an endorsement. But is it viewed as an endorsement when all of the players names and likenesses on all the teams are used within the game itself?

Blogger Rick Karcher -- 8/09/2006 8:08 AM  


Prof. Karcher,

I will agree that a baseball card with a likeness would not likely cause a person to think that the athelete is endorsing that product.

To your question regarding likenesses, I do think that if fantasy contests started using those, I think that the leagues would have a better right of publicity case. Much closer in my mind to a hypothetical nutritional supplement product that would have a caricature of Barry Bonds on the label.

I think a key point is determining a demarcation, if any, between a performance and any synthesis, derivative or analysis of a performance. So, if a film critic watches a film and creates a review, is that review covered under the artist's overall performance, or is it separate? In this case, is a selected synthesis of a game into numerical components also part of that performance? If not, I think the sports leagues may be in a tough spot.

Also, is there any argument for fantasy leagues if the sports leagues wait a couple of decades before taking action? When fantasy leagues weren't as lucrative, the leagues appeared to know of the concept, but didn't take any action. Is there a statute of limitations for something like this?

Anonymous Anonymous -- 8/09/2006 11:29 AM  


Anonymous

Baseball had always charged a licensing fee for this, if I am not mistaken. It was recently that this group was denied a license and it challenged MLB on the policy. If anything, that would seem to work against fantasy sports providers who had been paying the licensing fee?

Anonymous Anonymous -- 8/09/2006 2:30 PM  


You refer to the leagues as having or not having a stronger case, but keep in mind that it is the players that have the right of publicity claim, not the leagues. Why do you think it is a stronger case if the fantasy leagues use mugshots? Adding pictures doesn't make it more of an endorsement/sponsorship.

A caricature of Barry Bonds on a nutritional supplement container actually might be protected by the First Amendment. I cite the Tiger Woods/Masters painting case for that one (even though I think that decision is absolutely wrong).

The film critic/review analogy is not applicable here because that would clearly be protected by the First Amendment and copyright. Judge Medler was correct saying that there's no copyright protection in stats and names.

Good question regarding statute of limitations. It all depends on the applicable state's laws regarding when the cause of action accrues for misappropriation claims, which could accrue either when the plaintiff has suffered harm or when the act alleged to have caused the harm occurred.

Blogger Rick Karcher -- 8/09/2006 2:51 PM  


Anonymous,

It sounds like you're making an estoppel/waiver type argument. Interesting thought, but I don't think it's a good defense for MLB in a misappropriation context. However, I could see how the few fantasy leagues that have paid a license would definitely be upset because they probably paid a premium in return for a limited number of licenses granted. To me this is how the market is supposed to work. The players (MLB via the license with MLBPA) should be able to determine who can use their names for a profit-making venture. The market will determine how much that should be based upon the profitability of the venture, including whether there is greater value associated with an exclusive license, limited number of licenses, etc.

Blogger Rick Karcher -- 8/09/2006 3:10 PM  


Baseball had not always charged a license fee for this. At first, they ignored and even discouraged lfantasy baseball. Then, later, they embraced it and started charging licensing fees, but not all companies paid those fees. CDM was one of the companies that did pay MLB, and they were still willing to. MLB really should've settled this; they had to know that this outcome was quite possible. It's pretty clear - from Las Vegas Casinos, for example, who allows bets on athletes performance - that courts have generally not required licensing for this type of commercial activity. If MLB had won, Jeopardy would have had to license celebrity names every time it asked a question about them?

Some of the major companies running fantasy games will undoubtedly continue to pay mlb licensing fees, because those companies already do huge amounts of business with mlb and can get some benefits, such as the use of images and trademarks, by licensing. I'm real curious, though, about the ramifications of this decision outside the specific realm of fantasy baseball, especially with regards to the video game pacts the sports leagues have made. Under this ruling, other game companies could make NFL games to compete with EA's Madden with player names and states, though they couldn't use player images, of course.

Blogger Greg Spira -- 8/09/2006 3:35 PM  


Greg,

Regarding video games, see my comment above. Regarding casinos and Jeopardy, I think they are somewhat distinguishable in the sense that those two things are not dependent upon players' names and stats, whereas fantasy leagues exist ONLY because of the players names and stats. In other words, the names and stats used in fantasy leagues are the product, but the same can't be said with respect to casinos and Jeopardy.

Blogger Rick Karcher -- 8/09/2006 4:19 PM  


Prof. Karcher:
It's hard to imagine that a court could say a newspaper, a profit-making enterprise, could use sports stats to make money (some papers sell ads specifically for the agate pages) but a fantasy sports game cannot.

I agree -- baseball was foolish to let this go to court. If I were ESPN, Yahoo, CBS SportsLine or any other paid licensee, my first call this morning would have been to MLB, demanding a refund.

Anonymous jkreiser7 -- 8/09/2006 10:57 PM  


My question is actually similar to Greg's about the ruling's ramifications on fantasy leagues and video games.

Does the degree of commercial involvement (and endorsement) depend on the type of fantasy league or video game? One issue I might see with the ruling is that not all fantasy leagues are created equal - some may only use statistics, but others employ images, team names, and historical team rosters and ststs.

For instance, if my video game randomized names and locations of teams, as well as stadium features, could I use Richie Sexson in my video game and not have it constitute an endorsement?

If I could, would it be a different matter if I took the entire 25 man roster of the Seattle Mariners and just changed the team name? In other words, does grouping the players into a "team" change then change their individual standing under publicity law? In that same vein, if a fantasy league were to start its members off with a 25 man roster of a MLB team, would it be seen as a commercial endorsement by the teams involved?

Blogger Satchmo -- 8/10/2006 12:07 AM  


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Anonymous Kevin Collier -- 8/10/2006 9:40 AM  


Quickly glancing at the recent decision on fantasy baseball, it seems that the main issue is whether the license to use MLB players' names and statistics are governed by property rights or by liability rules. MLB, of course, claims that their payment to the MLBPA for licensing rights grants them a property right over names and statistics. The fantasy sports company (and other fantasy sports companies) claim that the information is sufficiently public in nature (read: not the property of MLB) and that, because their use of the names and statistics has not injured MLB, there is no liability rule requiring that they compensate MLB.

What would happen, I wonder, if MLB created an official fantasy sports league?

Blogger The Author -- 8/10/2006 10:11 AM  


Satchmo,

Good questions. Regarding the variances in use by different fantasy leagues (i.e. some using images, etc.), Judge Medler made a clear distinction between use of images (i.e. trading cards) and just using names, but without explaining why that distinction has any significance. Judge Medler opined that the use of images violates a right of privacy (and the use of just names does not). I still don't see any logic as to why Topps needs to pay a license fee, but fantasy leagues do not. There simply is no distinction from a "commercial advantage" standpoint under misappropriation law.

The Author,

It's simply not a property issue. The judge even wrote in the opinion that there is no copyright in names and stats themselves, and thus the copyright laws don't preempt a right of publicity claim. This issue is simply one of "commercial advantage" and how that is defined under tort law. It makes no difference that the information is in the public domain. It's a right that originates with the players (not MLB), in which their individual names can't be used for a commercial advantage without their consent. MLB is asserting the players' claim via the $50 million license it paid.

JKreiser,

Sorry, I see a distinction between newspapers and fantasy leagues. Granted, newspapers profit, but fantasy leagues simply don't serve any newsworthy purpose whatsoever.

Blogger Rick Karcher -- 8/10/2006 11:06 AM  


Prof. Karcher,

I think your comments may be focused too much on the "league" itself and not on the fantasy league provider. To me, the latter is really what we are talking about here, which is why I think your statement that the fantasy side of the equation has no newsworthy purpose whatsoever is incorrect.

Maybe once upon a time that was true, but I think fantasy sports providers have now evolved to the point where they are much closer to newspapers than those who are not familiar with them realize.

The various fantasy sports providers no longer market themselves as just selling "leagues." Instead, you are buying a package, that yes, does include player statistics, but it also includes injury updates, player movement, realtime updates, summaries of press conferences, analysis, etc. etc.

In fact, there are a number of fantasy based websites that charge money, rely heavily on the player's names and statistics, but do not run leagues.

I guess my point is that on the newspaper -- Nike continuum, fantasy sports providers probably fall much closer to newspapers than they do Nike, and probably closer to newspapers than the middle.

Haven't read the opinion yet, but looking forward to it.

Blogger RPS -- 8/10/2006 5:51 PM  


RPS,

I appreciate the comment and you make a really good point. It's not the "league", it's the players' right of publicity claim. But is the purpose of fantasy leagues to serve as a news source? The purpose for all the information, and the reason the consumer pays $$, is primarily for the entertainment value that fantasy leagues provide for the consumer. Trading cards provide much of the same information (number of ABs, innings pitched, player movement during the season, etc.). I presume you take the position that cards are newsworthy too and that the players should not be compensated in that context either?

The sole issue here is who should get the money. Why are fantasy leagues so deserving of not having to pay some sort of a royalty? Is it because athletes are paid too much already? Why not just let the market determine how much the players can get? Is the concern that the smaller fantasy leagues will not be able to compete with the ESPNs and Yahoos?

Blogger Rick Karcher -- 8/10/2006 8:53 PM  


This strikes me as yet another case of a judge not understanding the right of publicity. They don;t seeme to understand the interplay between the right of publicity and the First Amendment. And often the outcome depends on how the judge feels about the person or entity claiming the right of publicity. So, Rosa Parks wins, and Tiger Woods and MLB/MLBPA lose. It's unfortunate.

But I don't understand why people see this as a victory for the "little guy." This is a billion dollar industry in which (under the judge's ruling) the people serving as the content (the players) will get nothing. How is that a victory for the little guy?

Anonymous john -- 8/11/2006 2:02 PM  


It's a victory for the little guy, john, because the case was all about MLBAM trying to use the law as a stick to kill all of the hundreds of small-to-medium fantasy service providers except those half-dozen or so that paid exorbitant licensing fees. It was a classic case of big business trying to stifle innovation through the courts.

As to the trading card analogy, the issue there is players' likenesses as well as club logos, both of which are protected whereas names and statistics are not. If a trading card company put out cards with no pictures, just names and numbers, their legal situation would change immensely (not that they'd do that, of course).

Blogger Paul Montgomery -- 8/12/2006 10:30 PM  


Ok, Paul. The "little guy" gets to make millions of dollars exploiting professional athletes without compensating them. Seems fair. And what happens when the "little guys" sell out to the big guys? Will your legal analysis change based on the size of the entity exploiting the players names and statistics?

As for trading cards, as someone pointed out earlier, right of publicity statutes don't differentiate between using an individual's likeness and just using his or her name. You can't use a person's name, image, likeness, identifying characteristic, etc., in connection with a commercial activity, without that person's permission.

Anonymous john -- 8/14/2006 9:14 AM  


john, the facts of the case were that MLBAM sent out C&D letters to unlicensed operators demanding that they give up all of their user data to MLBAM if they had more than 5000 users. It was a bald-faced attempt to wipe out the entire middle-to-lower segment of the industry, bypassing the usual ways like fair competition and providing a better product.

The players are already well compensated. Fantasy sports do not affect their ability to earn their livelihood. In fact, the fantasy industry arguably enhances their earnings, as fantasy sports get people interested in sports who might otherwise not be involved at all. As was said on PTI today, people love football now for three reasons: "bloodlust, betting and fantasy".

The real "little guy" who wins here is the fantasy coach. He/she gets to keep playing in the same site and gets a much cheaper product (especially once those contracts with the big providers lapse) with better quality due to greater competition.

Blogger Paul Montgomery -- 8/15/2006 6:34 AM  


Paul,

What you're saying may be true. However, none of it addresses the legal issue regarding right of publicity. You seem to be making some sort of an antitrust argument, which nobody has alleged in this lawsuit. In and of itself, the fact that a mom and pop drug store can't compete with Walgreen's does not establish a legal claim for the small drug store.

If anything, each comment you make actually strengthens the players' right of publicity claim because you are demonstrating the fact that fantasy leagues are truly gaining a "commercial advantage".

Blogger Rick Karcher -- 8/15/2006 7:02 AM  


Medler 1
Scheindlin 0

Anonymous Anonymous -- 8/15/2006 1:36 PM  


You can find the complete decision under this link

www.cdmsports.com/CDM_vs_MLBAM_opinion.pdf

Anonymous Ariel Reck -- 8/17/2006 1:53 PM  


I don't think the issue is that use of the players' names in a fantasy game implies an endorsement of the game by the players.

The purpose of the right of publicity is to allow celebrities to control and profit from the commercial exploitation of their images and identities. Obviously, the sale of player photos, t-shirts with player likenesses, etc., may create the impression that the player gave permission for his likeness to appear on the product. But the issue is really not the possible implied endorsement or affiliation between the player and the marketer -- it's that the marketer is "selling" the player, and the player isn't getting paid for the use of something he owns -- his identity.

I'm an advertising/marketing lawyer and a fantasy game participant, and I'm sympathetic to both sides. The players and owners look pretty greedy and petty when they try and monopolize the fantasy market, but fantasy games do depend on the exploitation of identities and statistics that arguably are "owned" by the players and owners. The right answer here as a legal matter isn't at all obvious to me.

Gary Hailey
(author of the "Baseball and the Law" chapter of TOTAL BASEBALL)

Anonymous Gary Hailey -- 8/18/2006 12:32 PM  


I've enjoyed this threat very much. It's raised a question in my mind though for Prof. Karcher; what are the legal implications of using a college athlete's name/likeness for fantasy sports?

Anonymous Anonymous -- 9/09/2006 2:49 PM  


The exerpt below is flawed. The reason Topps need players consent is because their pictures are used on the front of the card. A whole different ballgame :)

"Judge Medler's decision appears to be at odds with existing case precedent holding that Topps is not allowed to print and sell cards without the players' consent. How is the use of players' names and stats on trading cards any different from their use in fantasy leagues?"

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