It’s a little known fact that companies like ESPN.com, Yahoo.com, and Sportsline.com have to pay royalties to the various players association and/or the leagues in order to run their fantasy games for the public. The cost is often significant, amounting to significant portions of a game’s gross revenue. You can tell games that pay the fee because they’ll have the players association logos plus the league logos on some or all of the pages for the game.At ESPN.com, for example, you’ll find the NFLPA logo at the bottom of our fantasy football pages (example).
Anyway, apparently a company out there is taking one of the leagues to court to argue against the fees as they’re set up now. The company is taking MLB, which bought the exclusive rights to distribute player statistics from the MLBPA, to court to argue that the statistics, once the game is over, are historical fact and therefore shouldn’t require a license. It’s going to be an interesting case that will have some interesting repercussions regardless of who wins.
The leagues exercise pretty significant control over anything they can to make money. The trend over the last few years has been to partner exclusively with a partner to get the big check from one source. You can see it with the deals the NFL made with EA and MLB made with Take2. It hasn’t happened in the fantasy sports world yet, but I wouldn’t be surprised if someone hasn’t thought of that idea.
David Pinto at Baseball Musings has it right, I think when he argues that MLB and the leagues are making a mistake if they limit the number of licenses. Fantasy sports are a feeder into other merchandising and ticket sales. I own one more jersey than I would’ve and I watch WAY more football and baseball than I otherwise would’ve if I didn’t play fantasy sports. We’ll see how it pans out, I guess.
(Usual disclaimer: I speak for myself here and not for ESPN.com or ESPN or Disney.)
January 16th, 2006 at 10:31 am
It’s hard to tell because reporters are notorious for confusing IP causes of action, but this quote:
makes it sound like MLB is going under a right of publicity theory. If that’s the case, the question isn’t whether the statistics are historical fact. Instead, the question is whether the company is misappropriating the names or other identifying information of the players in a manner that is proscribed by state right of publicity laws. Of course, the danger for the MLB in arguing that is that the law varies by state, and you would have to analyze the laws of each state in which an affected player resided in order to determine whether or not the conduct was prohibited. There may also be a trademark issue or two hidden in there, if they use the names of the teams or the MLB.