High court rejects fantasy baseball challenge

The effect: Made-up leagues can keep using names and statistics of real players without paying licensing fees.

A company that offers fantasy baseball games on the Internet has won its battle to use the names and performance statistics of Major League Baseball players without permission and without paying licensing fees.

The US Supreme Court on Monday declined to take up a case examining whether fantasy sports leagues are shielded from such requirements by the First Amendment.

Although the Supreme Court did not consider the merits of the case, by refusing to hear the appeal the high court leaves in place an earlier appeals court decision in St. Louis allowing the company to operate without the permission of the players and the league.

So-called fantasy sports leagues have proliferated over the past 15 years, growing from a weekend hobby for die-hard fans into a $1.5 billion industry with more than 15 million paying participants.

Football and baseball are the most popular. There are roughly 11 million fantasy football enthusiasts and 3 million fantasy baseball participants.

Fantasy sports competitions are also offered for basketball, hockey, soccer, golf, lacrosse, stock car racing, track and field, and even bowling.

The case before the high court – Major League Baseball Advanced Media v. CBC Distribution and Marketing – was a high-stakes battle between professional athletes and fantasy sports businesses. Ultimately the case involved striking a balance between free-speech guarantees and the publicity rights of famous people.

Fantasy sports players pay a fee to assume the role of a team owner and assemble a roster of real-life players – on paper. CBC and other fantasy league operators have established a point-value system to measure each selected player's on-field performance, using statistical measures such as hits, home runs, and stolen bases (for baseball). Fantasy games are "played" by comparing the teamwide score of one owner's fantasy roster versus another owner's fantasy roster.

CBC's entrance fees run from $30 to $1,000. Prize money can range from $3,000 to $50,000.

The key question in the Supreme Court case was whether CBC's use of real players' names and statistics infringed the players' publicity rights.

Some legal analysts say such fantasy leagues are a form of commerce that seeks to exploit the fame of sports stars. Others argue that fantasy leagues are merely a means of organizing and presenting publicly available information in an entertaining way.

If the fantasy league is aimed at communicating information, the activity is protected by the First Amendment, analysts say, but if it is primarily commerce it may not be.

For example, if a New York City merchant seeks to boost sales of T-shirts or mugs by placing a picture of Yankees shortstop Derek Jeter on his shirts and mugs, Mr. Jeter has a right to receive some level of payment for his role in promoting the sale of shirts and mugs.

But Jeter has no right to compensation whenever a sportswriter publishes a thrilling portrayal of his ninth-inning heroics. Sports journalism is protected by the First Amendment, even though the article and photograph will be used to sell newspapers and earn a profit for the publisher.

In the CBC case, a federal judge and a panel of the Eighth Circuit Court of Appeals in St. Louis ruled in favor of CBC's fantasy league. The appeals court said players' publicity rights were trumped by the First Amendment since the players' names and statistics are widely available on the Internet and in newspaper sports pages.

In urging the Supreme Court to take up the case, lawyers for the baseball players said the case wasn't about free speech. They said professional athletes have a right to control the commercial exploitation of their identities and to reap financial rewards from that exploitation.

"CBC is offering a product – fantasy baseball games – for sale. That product incorporates players' identities to entice consumer interest in what would otherwise be merely another prediction game," wrote Washington lawyer Virginia Seitz in her brief on behalf of Major League Baseball Advanced Media.

"Those names may not be incorporated ... primarily for commercial purposes into a product – be it a coffee mug, a poster, a board game, or an Internet game – without consent," Ms. Seitz wrote.

Lawyers for CBC countered that the company uses only publicly available statistics that reflect the players' historic, factual playing records. They said the federal judge and the Eighth Circuit properly balanced the competing interests of the players against the First Amendment free expression rights of the fantasy baseball company.

The dispute over CBC's use of the information for fantasy baseball arose in 2005 after the Major League Baseball Players Association granted an exclusive license for all interactive media – including fantasy baseball – to Major League Baseball Advanced Media.

The company had been formed in 2000 by baseball team owners to operate the website MLB.com. As part of its Internet operations, Advanced Media offered fantasy baseball games that competed with CBC for fans.

From 1995 to 2004, CBC paid a licensing fee to the players' association for the use of the players' names and statistics in the fantasy league. But in 2005, Advanced Media refused to grant any future license to CBC.

CBC went to court, arguing that it didn't need a license to operate a fantasy baseball league using publicly available information about players. The courts agreed.