Sports Law Blog
All things legal relating
to the sports world...
Monday, May 14, 2007
Should Fantasy League Operators Pay Licensing Fees?
Last August, U.S. District Court Judge Mary Ann Medler ruled that players have no right of publicity in their names and playing records when used by commercial fantasy league operators without a license. MLB and the MLBPA have filed an appeal to the Eighth Circuit Court of Appeals and oral argument is now scheduled for June 14th (exactly one month from today). Fantasy league operators, including Yahoo!, ESPN and CBS Sportsline, currently pay the union a license fee between two and three million dollars. According to Sports Business Journal, a license for FoxSports.com was negotiated last summer as part of Fox’s new TV deal with baseball, but the online outlet is waiting for the outcome of the case before electing whether to pay the fee. SBJ also reported that the MLBPA has recently sent cease-and-desist letters to a collection of smaller fantasy game operators. Needless to say, the outcome of this lawsuit has huge ramifications on right of publicity tort law, and not just specifically related to the fantasy league industry. On Friday morning, I will be moderating a panel on this topic at the Sports Lawyers Association 33rd Annual Conference that includes Judy Heeter, Director of Business Affairs and Licensing for the MLBPA, and Tonia Ouellette Klausner, counsel to the Fantasy Sports Trade Association.
In my recent law review article, The Use of Players' Identities in Fantasy Sports Leagues: Developing Workable Standards for Right of Publicity Claims, I critique the district court's ruling and discuss how right of publicity claims can be viewed on a spectrum of commercial advantage. On one end of the spectrum, there are certain uses of identities that do not constitute a violation of the right of publicity because (although the use may generate economic gain to the user) the use has social value that is protected by the First Amendment making the commercial gain aspect secondary; those uses being for news reporting purposes, literary purposes (i.e. book writing, magazine articles) and expression purposes (i.e. art, parody, etc.). On the other end, there are certain uses that nobody would dispute constitute a violation because the primary use is for commercial gain; those uses being for advertisement, endorsement and marketing purposes. There are uses that fall somewhere in between these two ends, and I refer to these as "quasi-commercial" uses -- fantasy leagues, sports trading cards and video games to name just a few.
Fantasy league use, like trading card use, without a license has been held to violate the players' right of publicity. For example, in Uhlaender v. Henricksen, 316 F.Supp. 1277 (D.Minn. 1970), the court held that the defendants, which manufactured and sold without a license fantasy sports league table games that employed the names and performance statistics of major league baseball players identified by team, uniform number, playing position and otherwise, violated the players’ right of publicity. The Uhlaender court properly rejected the "public domain" rationale, and also provided the policy rationale for why a right of publicity should be recognized in the context of fantasy league use:
However, last summer Judge Mary Ann Medler was convinced that the players don't have a right of publicity because their names and performance statistics are in the public domain. But saying it's in the public domain only begs the question as to whether there is a violation of the right of publicity, it doesn't answer it. In other words, professional athletes are, by definition, in the public domain by virtue of being professional athletes. That doesn't mean Nike can use Tiger Woods without a license.
Was the Uhlaender case wrongly decided back in 1970? Or, does the fact that fantasy league games are now sold on the internet, as opposed to a tangible board game in a box, somehow change the outcome? If so, why? The only difference is that the internet has turned fantasy leagues into a $2 billion industry and, if anything, made it even more "commercial". Salaries of professional athletes have definitely increased over this 37 year period, but that doesn't provide any legal basis whatsoever, or even a policy rationale, for denying the players' claim.
Fantasy league operators, like trading card and video game manufacturers, sell a consumer product using players' names and statistics. Consumers are purchasing these products solely because they contain the players' names, likenesses and performance statistics. In other words, these products simply do not sell without their use. Shouldn't the players be compensated? If the Eighth Circuit affirms the district court ruling, would it mean that Topps and EA Sports could also produce their products without purchasing a license?