Fantasy fans everywhere can breathe a sign of relief. The U.S. Supreme Court has refused to hear a case from Major League Baseball that would require all fantasy sports leagues to pay a high data-licensing fee.
Fantasy sports companies like Yahoo (NSDQ: YHOO), CBS (NYSE: CBS) Sportsline and others can now breathe a sigh of relief: the U.S. Supreme Court on Monday refused to hear an appeal from Major League Baseball and its Players Association that, if successful, could have given these leagues the ability to control the lucrative fantasy-sports business via high data-licensing fee. This tussle has been going on for some years now…the situation began in 2005 when MLBAM acquired the rights to represent the MLBPA in licensing, decided to limit its licenses for fantasy baseball and refused to grant one to St. Louis-based CDM Sports, which then filed suit. CDM won the suit in federal court last year.
Wall Street Journal: Fantasy-sports companies and the leagues had a mostly peaceful relationship through the 1990s, and these companies paid licensing fees of 5% to 10% of revenues for the rights to the players’ names and statistics. Deals with the largest companies produced nearly $1.5 million a year, the story says. But three years ago, MLB tried to limit the number of companies that could use its statistics, even though they were readily available from variety of sources, and that’s when CDM filed the lawsuit.
LA Times: 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.
We all know what this is about… money. The leagues see sites like ESPN, CBS and all the other mom-and-pop fantasy sites making a profit on what they perceive to be their product, and they want a (big) piece. But the fantasy sites have a strong argument that they are only using players’ names and stats, which are readily available for free on the internet. The sites are then providing consumers with a fantasy league and all the services and features that entails.
It always amazes me when professional sports leagues fail to see the big picture. Fantasy football has helped to explode the NFL’s fan base, yet the league wants to make it more difficult and more expensive for fans to own a fantasy team. Why doesn’t the league just appreciate the increased revenue produced from its higher ratings? Why must they squeeze every last cent out of us? I don’t mean to single out the NFL, but if there has been any league that has benefited from free, available fantasy sports, it’s the NFL.
Of course, I shouldn’t be surprised. This is the same league that repeatedly gives exclusive rights to Sunday Ticket to the highest bidder, leaving millions of fans out in the cold.
