The U.S. Supreme Court has just released orders that they have denied MLB Advanced Media and the MLB Players Association’s request for a rehearing in C.B.C. Marketing, Inc. v. MLB Advanced Media/Major League Baseball Players Association, or as it has been commonly referred to, the Fantasy Stats case.
The justices made no comment in denying the appeal.
The decision means that those that operate fantasy sports businesses within the U.S. Court of Appeals For The Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota) can do so without a license. The ruling will have broad-reaching implications by setting case law.
Reached for comment, lead counsel for CBC, Rudolph Telscher said, “We are very pleased with the Supreme Court's decision. The case against Major League Baseball is completed with no further chances for appeal. The Supreme Court left intact that 8th Circuit decision, which holds that fantasy companies have a first amendment right to use baseball statistics without permission from or payment to Major League baseball. The case serves as precedent for all fantasy sports. It is an important victory for the fantasy industry and fantasy players.”
The MLB Players Association said only that they are considering their options at this time.
MLBAM and the MLBPA reached an agreement in January of 2005 that allowed MLBAM the exclusive rights to use, and to sublicense to others, Major League Baseball player group rights for the development and creation of on-line games, all other online content, including fantasy baseball and interactive games, as well as all wireless applications including cell-phone enabled games.
On Feb. 7, 2005 CDM Fantasy Sports (also called CBC Distribution and Marketing, the parent company of CDM at the time) fought back. After being denied a license renewal, CBC filed a complaint in US District Court, Eastern District of Missouri, against the MLBAM over the right to produce and promote fantasy league games without the licensing of stats through the MLBAM and MLBPA. CDM had been paying a license to MLB, but with the agreement between MLBAM and the MLBPA, the number of licenses went down, and the cost for licenses went up dramatically.
CDM decided to continue to run their fantasy sports baseball games without a license when they were they granted the option for renewal under the newly reached agreement between the MLBPA and MLBAM. Since CDM sued, the case has been heard under Missouri state law, as CDM was a St. Louis based company.
CDM has argued that the stats, along with player names, are protected under the First Amendment. Baseball has argued that using player names in conjunction with stats is a violation of privacy rights -- the fantasy sports companies are profiting by using the players names with the stats. MLBAM and the MLBPA have argued that fantasy companies can freely use the stats, just not with an MLB player's name; an exploitation of the player by using their name to promote the sales of a fantasy sports product.
CDM has won in the U.S. District Court for the Eastern District of Missouri in St. Louis and it was upheld on appeal the Court of Appeals for the Eighth Circuit.
The case is a blow, not only to Major League Baseball, but other professional sports industries in the U.S., including the NFL, NBA, NHL, NASCAR, WNBA, and the PGA, all of whom filed amicus curiae ("friend of the court") briefs in support of MLBAM and the MLBPA’s case either at the lower court level, or at the U.S. Supreme Court level, which was the case with the NFL.
The agreement between the MLBPA and MLBAM is set to expire at the end of the year. MLBAM's role is one of a licensee of the rights and, as with all prior rulings, deferring to the Players Association.
When we interviewed MLBAM CEO Bob Bowman earlier this year and asked about the agreement, he said, “We’re their partners, but that does not mean that partners don’t build in safeguards in case things happen. It seems like the first thing you do when you enter into an agreement is worry about how you’re going to exit.”
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Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer.Brown's full bio is here. He looks forward to your comments via email and can be contacted