June 2, 2008 will be remembered as a big day for fantasy baseball, and the results of games on the field will have no effect.
Major League Baseball has appealed a case dating back to 2006 to the Supreme Court against CBC Distribution and Marketing of St. Louis, Missouri over rights to licensing fees for statistics and player likenesses used in fantasy baseball.
CBC Distribution and Marketing of St. Louis, Missouri is the ownership group behind CDMSports.com, a St. Louis-based company that distributes fantasy sports products and services to companies like USA TODAY and The Sporting News.
MLB’s case has backing from the NFL, NBA, NHL, NASCAR, the PGA TOUR, and the WNBA, so the ramifications of an appeal and overturn of this case will have a widespread effect on the entire fantasy sports industry, valued at 1.5-billion dollars.
CBC claims that licensing fees shouldn’t need to be paid to the leagues because player statistics and names are public information. MLB claims that the information belongs to them and that use of the information could suggest an endorsement, therefore leading to lost earnings for the league.
MLB filed an appeal to the original ruling on June 14, 2007. A ruling in October by the US Court of Appeals for the 8th Circuit upheld that earlier ruling, 2-1, in favor of CBC. Companies like ESPN and Yahoo! already pay licensing fees to MLB for their fantasy baseball services, but many smaller companies do not pay the fees.
What does this case mean for your fantasy baseball league provider? It depends on whether or not they currently pay licensing fees. As previously stated, ESPN and Yahoo! already pay licensing fees, and are not included in the suit. Those of you who play on these sites will continue to have a place to play.
The smaller the company you use to host your fantasy baseball league, the more importance this case holds. If the Supreme Court hears this case and overturns the ruling, then smaller fantasy sports outlets will be forced to pay licensing fees. This will dramatically change the cost of hosting your league with a smaller outlet, lead to the removal of FREE fantasy baseball games from smaller sites, or eliminate smaller sites altogether.
While Fantasy Baseball Dugout has no legal expertise, we predict that if the case is heard by the Supreme Court, the earlier rulings will be upheld. Game on, fantasy baseballers!