Editor's note: On Nov. 26, the 8th Circuit denied a petition to rehear an attempt by the Major League Baseball Players Association and Major League Baseball Advanced Media to reverse the ruling reported below. The petition was denied without explanation. The MLBPA can still ask the U.S. Supreme Court to review the case.
ST. LOUIS — A federal appeals court upheld a lower court ruling yesterday
that lets a fantasy baseball company use players’ names and statistics without
paying a licensing fee.
In a 2-1 decision, the
8th U.S. Circuit Court of Appeals panel ruled that CBC Distribution and
Marketing Inc. doesn’t have to pay the players, even though it profits by using
their names and statistics.
The Major League Baseball Players Association had argued that companies like
CBC are essentially stealing money from players, who charge big fees to endorse
things like tennis shoes and soft drinks. The ruling could have a broad impact
on the fantasy league industry, which generates more than $1.5 billion annually
from millions of participants.
If CBC had lost, the MLBPA would have gained monopoly rights over publicly
available statistics and other information that is used as fodder for fantasy
leagues across the country, said CBC attorney Rudy Telscher.
Telscher said the facts and figures are public information. He said it’s no
different from media outlets that print game tallies to draw readers and make
“When you’re using mass information, it’s protected under the First
Amendment,” he said.
Big media companies like Yahoo, ESPN and CBS pay MLB millions in annual fees
to operate online fantasy leagues. Players make fake teams comprised of real MLB
players. Over the course of a season, fantasy league players crunch statistics
to judge how well the players on their team are performing.
MLBPA attorney Virginia Seitz didn’t return a message seeking comment
yesterday. She argued before the 8th Circuit panel 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,”
Seitz argued at a hearing before the appeals panel in June.
The court found that fantasy leagues’ broad use of statistics isn’t the same
as faking an endorsement.
“[T]he fantasy baseball games depend on the inclusion of all players and thus
cannot create a false impression that some particular player with ‘star power’
is endorsing CBC’s products,” said the ruling written by Judge Morris Arnold and
joined by Chief Judge James Loken.
Judge Steven Colloton dissented from the opinion, but he didn’t disagree with
CBC’s claim of First Amendment protection.
Colloton took issue with the fact that CBC initially signed a contract with
MLB Advanced Media to pay fees for the players’ information, but then backed out
of the contract when it filed a lawsuit claiming that MLB didn’t have a right to
collect the fees.
“That CBC later decided it did not need a license, and that it preferred
instead to litigate the point, does not relieve the company of its contractual
obligation,” Colloton wrote.