Supreme Court Refuses To Hear CDM Case

[Greg Ambrosius]

Breaking news today for the fantasy sports industry: The United States Supreme Court today refused to hear Major League Baseball's request to review the CDM vs. MLBAM decision on players rights. With the U.S. Supreme Court refusing to review this case, this case is finally resolved.



From my perspective, now I look forward to the fantasy sports industry and the leagues and players associations working together to grow this great industry. Licensing was needed when there was uncertainty about the use of player rights, but now it's time to use all of our resources to grow this great industry.



Look for stories online about this soon.

[la Jolla]

Greg, does this mean that fantasy sports companies do not need to obtain licensing from ANY of the leagues to conduct business moving forward?

[Greg Ambrosius]

Originally posted by la Jolla:

Greg, does this mean that fantasy sports companies do not need to obtain licensing from ANY of the leagues to conduct business moving forward? At this point, this appears to be the law of the land for all sports leagues. The other sports leagues have the right to sue someone over this point in another district and fight this in New York or California or somewhere outside of Missouri, but the appeals court and now the Supreme Court didn't disagree with the initial ruling so it makes it tougher.



Again, I hope the leagues see this industry as a place to grow together and rather than tackle this question again in another district everyone will just find a way to grow this hobby and monetize it in other ways other than licensing.

[Greg Ambrosius]

Here's a good article on today's decision:



****://www.bloomberg.com/apps/news?pid=2060107 ... r=amsports

[Liquidhippo]

Thanks for the link Greg. This is great news. In my humble opinion, words are inadequate tools to describe the twisted greed that MLBAM has displayed in pushing this. The fantasy industry has created an instrument that, on the margins, has immensely increased MLB's profits and revenues. MLB should be paying those who started and grew the fantasy sports industry, not the other way around. In reality, MLBAM is trying to profit off of someone else's work. MLBAM didn't invent fantasy baseball, now they're trying to profit from it. Perhaps extortion isn't exactly the right word in this case, but that's what the whole thing smells like to me. I'm very glad such efforts have failed. Its good that common sense still exists and has prevailed in the courts.

[Greg Ambrosius]

Greg Johnson of the Los Angeles Times has followed the CDM vs. MLBAM lawsuit from the beginning and he called me last week to get in touch with one of our past winners for his Supreme Court story. He talked to Terry Haney, our NFBC overall champion from 2007, and filed this very good story. This was in Tuesday's edition of the LA Times:





Die-hard baseball fan Terry Haney got his wish Monday when the U.S. Supreme Court rebuffed Major League Baseball's argument that fantasy sports leagues be required to pay a license for the right to use player names and plug runs, hits and errors into their popular online games.



As a youngster growing up in San Diego during the early 1960s, Haney freely incorporated baseball statistics gleaned from newspaper box scores into a rudimentary board game. Last year, Haney -- now a 55-year-old retired hog trader in Iowa -- parlayed his love for baseball's myriad metrics into a $100,000 prize in a national fantasy baseball league.



That MLB and its players union wanted to put the national pastime's treasure trove of game-related statistics under lock and key left Haney baffled: "I almost hoped that the justices would look at MLB and ask them 'Why . . . are you wasting our time?' "



The Supreme Court did the next best thing, fantasy sports league operators said, by refusing to review the case that MLB and its players union doggedly had pursued after losing an initial court decision in 2005.



The justices' decision was a setback not only for baseball players, but for other professional athletes who maintained that outside companies had no right to "exploit players' identity for commercial gain." The NFL, NBA and NHL had supported baseball's players and owners in their appeal to the court.



The court's refusal also throws into question any licensing deals already in place, something MLB had said amounted to "billions of dollars." When MLB appealed to the high court in February, it argued that such deals could be jeopardized if companies had a free-speech right to use the names of famous people without permission.



The largest fantasy leagues generally are licensed by MLB, including those run by ESPN and Fox Sports; they. had no immediate comment on the case.



MLB's Advanced Media department declined to comment on the case, and MLB Players Assn. spokesman Greg Bouris said in an e-mail the union was "considering our options at this time."



The fact that fantasy sports is big business is no small part of this, generating an estimated $500 million from fees, advertising and other revenue, said Jeff Thomas, president of the 150-member Fantasy Sports Trade Assn.



The St. Louis-based fantasy league operator that brought the lawsuit successfully countered that ballplayers are well-known to the public so that their names and statistics can be used freely, without paying for the privilege.



Last June, an appellate court said statistics used in fantasy baseball games are "all readily available in the public domain, and it would be strange law that a person would not have a 1st Amendment right to use information that is available to everyone."



Monday's decision "to use a baseball analogy, was a home run for fantasy sports companies," said Chris Russo, founder of New York-based Fantasy Sports Ventures Inc., which operates a popular fantasy sports website. "Fantasy sports has been growing, but this decision is going to further accelerate that growth."



Fantasy leagues let fans prove their managerial mettle by assembling dream teams of athletes and competing for increasingly large prizes. Consider the sales pitch one fantasy fishing website uses to hook anglers: "You sign up, pick 10 anglers, and you could be well on your way to winning a million dollars or more."



Another measure of the growing sophistication of what once was seen as a nerdy preoccupation with statistics: When Haney won the top prize in Krause Publications' fifth annual National Fantasy Baseball Championship, fantasy players conducted their imaginary draft in a real Las Vegas hotel ballroom.



The fantasy concept is simple. Assemble a group of fans in an online forum, hold a player draft and use real statistics to power imaginary contests. Rules can range from simple, where anything goes, to very realistic; some leagues, for example, even impose salary caps.



The result can be an addictive blend for statistics freaks and even average fans who think they can outmanage the professionals.



Haney had read about fantasy sports years ago but thought himself too busy to bother with an imaginary game. In 2001, he joined his first league and drafted such players as the Chicago Cubs' Kerry Wood and the Montreal Expos' Ugueth Urbina.



In his first game as a fantasy manager, Haney found himself cheering for Wood. But after the starting pitcher was pulled he switched gears and cheered for Urbina, who eventually was credited with a save. "My wife couldn't figure out what was going on," Haney said. "She said, 'I thought you were rooting for the Cubs.' "



Fantasy play was decidedly more work-like in 1980 when Daniel Okrent, who subsequently served as the New York Times' public editor, co-founded the trend-setting Rotisserie Baseball League. Players had to scramble to find playmates and relied on the mail or balky fax machines to track the games.



For decades, big-league sports leagues and player unions seemed content to ignore fantasy leagues.



"They laughed at us and slammed the door in our faces," Okrent said last year when asked about MLB's initial reaction to his league.



Benign neglect, however, gave way to avid interest as online leagues grew in popularity.



Fantasy players spend several hours each week online. Most of the web-based leagues charge fees to join and fees for making trades, e-mail or mobile updates and glossy publications.



Russo's website, for example, offers fans more than 150 links to companies that offer all sorts of statistical information, and offers fans immediate updates when players are injured, traded or retire.



Oddly enough, the St. Louis-based fantasy league operator that brought the case had been paying fees to MLB. It brought the lawsuit only after MLB opted not to renew its license.



"When you're dealing with someone as big as baseball, with the power and connections they have, today's decision gives you a lot of faith in the system," said Charlie Wiegert, a vice president with the company known as Fanball.com.



The company argued it did not need the permission of baseball to use the player's names and statistics, and it won free-speech victories from a federal judge and the U.S. Court of Appeals in St. Louis.



Okrent applauded the Supreme Court decision -- as much for 1st Amendment rights as for the pleasure fans get from their games. He says he still plays fantasy games -- albeit a "radically reduced, vastly simplified version. We call it AARP Rotisserie, or slow pitch."

[sportsbettingman]

MLB killed the goose that laid golden eggs.



Refusal to renew a license and greed got the beautiful backlash of losing their power to extort!!!



Gotta love it!



~Lance

[Liquidhippo]

Originally posted by sportsbettingman:

MLB killed the goose that laid golden eggs.



Refusal to renew a license and greed got the beautiful backlash of losing their power to extort!!!



Gotta love it!



~Lance An excellent pithy summary.

[sportsbettingman]

A related story...



(They need a bigger figure than $25,000.00)



"Fake Teams, Real Money

The arbitrary legal distinction between fantasy sports and sports betting



Jacob Sullum | June 4, 2008



In the 2007 romantic comedy Knocked Up, a woman who suspects her husband of having an extramarital affair discovers he is actually sneaking off to play fantasy baseball. In real life, people who participate in fantasy sports generally do not feel a need to hide what they're doing, and neither do the companies that offer them the opportunity.



Fantasy sports is a burgeoning industry in the United States, one that probably will grow even faster now that the U.S. Supreme Court has let stand an appellate ruling that makes the business easier and cheaper to run. But the legitimacy of fantasy sports highlights the arbitrariness of U.S. gambling law, which for no good reason prohibits forms of betting that many millions of Americans enjoy.



Participants in fantasy sports choose real players for pretend teams that compete against each other based on the players' real-world performance. The online industry that facilitates these contests, which emerged a decade ago, today consists of more than 100 companies, including major players such as ESPN and Yahoo! Sports, and generates about $500 million in revenue each year, mainly from participant fees and advertising, according to the Fantasy Sports Trade Association (FSTA).



The FSTA expects the industry's growth to accelerate as a result of the Supreme Court's recent refusal to hear Major League Baseball's appeal of a 2007 decision by the U.S. Court of Appeals for the 8th Circuit. Last fall, in response to a lawsuit by CBC Marketing and Distribution, which operates CDM Fantasy Sports, the 8th Circuit ruled that companies like CBC need not pay license fees to professional sports leagues because they have a First Amendment right to use players' names and statistics.



Freed from the burden of getting league permission and paying millions of dollars in license fees, fantasy sports businesses are likely to expand and proliferate. Already, the FSTA estimates, 18 million Americans play fantasy sports. Mostly they do it for fun, but they can also win prizes, ranging from bobble-head dolls to cash awards as high as $25,000.



In other words, sports fans are paying for the chance to win money in contests that hinge on the performance of professional athletes. Why isn't this gambling?



One answer is that playing fantasy sports requires knowledge and skill. But so do sports betting and poker.



Here's the real reason playing fantasy sports is not gambling: The government says it isn't. The Unlawful Internet Gambling Enforcement Act, which took effect at the beginning of last year, includes a specific exemption for fantasy sports, provided the prizes are determined in advance and the imaginary teams do not correspond to any real teams.



The latter condition is aimed at preventing fantasy sports, which the professional leagues endorse, from morphing into sports betting, which they oppose. License fees aside, the leagues like fantasy sports because they increase interest in their games.



But so does sports betting, the market for which dwarfs the size of the fantasy sports industry. A 2003 ESPN survey found that more than 100 million Americans bet on sports each year, wagering something like $100 billion.



Yet taking sports bets is legal only in Nevada, and the leagues are adamantly opposed to broader legalization because they fear it would have a corrupting effect. Or so they say. Their actions suggest they know better.



"Most of the leagues now have a deal with the Las Vegas sports consultants," notes Jim Murphy, a professional handicapper. "The leagues pay them to track improper betting trends....Anytime you read about a point-shaving scandal or that so-and-so has been charged with trying to fix a game, it was the Las Vegas bookmakers that ferreted it out."



Whatever the likelihood that promising college players or well-paid professionals would jeopardize their careers by helping to fix games, keeping sports betting in the shadows of the black market is hardly a sensible way to reduce the odds.



© Copyright 2008 by Creators Syndicate Inc."

[Spyhunter]

Originally posted by la Jolla:

Greg, does this mean that fantasy sports companies do not need to obtain licensing from ANY of the leagues to conduct business moving forward? Greg, what are your thoughts? The way I read it, I don't think so, but they would if they use things like Team Logos, and/or Pictures. Only leagues that use straight text names and stats are perfectly fine. I would imagine that most leagues will go this route!!!!



And the other good news, is that if Bonds comes back, you won't have to see 'Outfielder' or some such in your league...



This is awesome news for us all. The fact that MLB tried to play both sides of this is hilarious



Spy

[Greg Ambrosius]

Originally posted by Spyhunter:

quote:Originally posted by la Jolla:

Greg, does this mean that fantasy sports companies do not need to obtain licensing from ANY of the leagues to conduct business moving forward? Greg, what are your thoughts? The way I read it, I don't think so, but they would if they use things like Team Logos, and/or Pictures. Only leagues that use straight text names and stats are perfectly fine. I would imagine that most leagues will go this route!!!!



And the other good news, is that if Bonds comes back, you won't have to see 'Outfielder' or some such in your league...



This is awesome news for us all. The fact that MLB tried to play both sides of this is hilarious



Spy [/QUOTE]I commented above, but yes at this point the law of the land says you don't have to get licensing if you just use stats of finished games with names of players. If you use photos, images of player, video, then you obviously need licensing from Major League Advanced Media for that. They obtained those rights from the MLBPA as part of this five-year, $50 million deal that included the fantasy rights. Some bigger companies may add a fantasy license as part of their broadcast license, but it's unlikely that many fantasy game operators will seek out any of the sports for a license.



Like I've said before, the goal now is to get the leagues, players associations and all fantasy companies to work together to grow this great industry. In the Fantasy Sports Association, we have most of the leagues, PAs and the biggest fantasy companies as members and we are doing all we can to grow the awareness of this hobby and get Madison Avenue to send their clients our way. It's all good and hopefully the licensing issue is behind us and we can all work together to find other ways to monetize this industry.

[sportsbettingman]

Many, many parallels from fantasy sports to this video about marketing poker.



A discussion amongst three smart guys, makes for a great listen.



When you get a chance, Greg...I'd enjoy your response to this and any comments.



www.cardplayer.com/tv/15-the-scoop/31932



~Lance