Published May 30, 2008
A fantasy sports league is facing a very real lawsuit from Major League Baseball, and the U.S. Supreme Court is deciding right now whether it wants to play ball.
At issue is a big case roiling the sports world: Can MLB and its players charge fantasy leagues for the right to use their names and statistics?
Fantasy leagues are operated by players who manage imaginary teams based on the stats of real-life athletes. Depending on how their players perform, their fantasy teams thrive or dive in carefully monitored standings.
A St. Louis-based company called CBC Distribution and Marketing Inc. says that companies shouldn’t have to pay licensing fees to use those figures — and they’ve already won their case in two lower courts, so MLB has filed an appeal to the nation's highest court.
A decision from the Supreme Court could have a broad impact on the fantasy league industry, which generates more than $1.5 billion annually from millions of participants.
MLB and its players association have argued that it’s a question of intellectual property — that the players’ names and stats belong to the players and the league.
They say using that information on a fantasy baseball product might suggest an endorsement, and amounts to stealing money. MLB is supported in its suit by professional football, basketball, hockey and other organizations.
Some large media companies, such as Yahoo and ESPN, already pay millions in licensing fees to use names and stats in their fantasy leagues, and they operate with MLB’s blessing.
But smaller companies are balking at paying such fees. CBC has argued that players’ names and stats are in the public domain, as they are easily found in newspapers and on TV.
“When you’re using mass information, it’s protected under the First Amendment,” said CBC attorney Rudy Telscher during a hearing in the 8th Circuit Court of Appeals.
MLB’s attorneys have argued in court that online fantasy games exploit players by effectively turning them into game pieces and using their names to draw more customers.
“There’s no way of escaping the fact that players’ names are on the product,” attorney Virginia Seitz said.
In a 2-1 decision in October, the 8th Circuit Court panel ruled that CBC doesn’t have to pay the players, even though it profits by using their names and statistics. The court found that fantasy leagues’ broad use of statistics isn’t the same as faking an endorsement.
The Supreme Court is expected to determine as early as Monday whether it will review MLB's case. It remains to be seen whether that nine-man team will overturn the lower courts' decisions, but for now these fantasy leagues are still batting a thousand.
FOX News’ Molly Henneberg and the Associated Press contributed to this report.