Who Owns Your Fantasy (League)?
Posted 2:46 PM ET | Comments 3
Yesterday/Early Today, all off us were caught up with the actual game held in real (really long) time. So it is understandable that many of you who participate in fantasy leagues might have missed Monday's good news:
The U.S. Supreme Court denied certiorari for Major League Baseball Advanced Media v. CBC Distribution and Marketing, 07-1099.
And even though I don't play in any fantasy leagues, I agree completely with the Court's decision. In fact, I was pretty sure that the Court wouldn't grant cert when I read that Justices John Paul Stevens, Samuel Alito, and Stephen Breyer recused themselves from the discussion because they currently participate in a fantasy baseball league comprised of past and present members of the Court and Court personnel. And even though Justices Scalia and Ginsburg also take part in the league, they declined to recuse, apparently believing they could rule without conflict. So at this point, getting the four votes needed for certiorari became difficult, as the Court only consists of eight Justices and the Chief Justice.
I'm sure most of you don't enjoy slogging through court opinions, but this was an interesting case in that MLB was claiming they owned the rights to exploit the individual players' names and statistics in exchange for licensing fees. In fact, CBC Distribution had originally paid licensing fees to MLB but when that contract expired, MLB refused to renew, opting instead to make more money by basically monopolizing the fantasy revenue through only selected providers, for the obvious purpose of getting a bigger piece of the pie. A pie they didn't create, don't really run, and from which they already have seen extraordinary monetary benefits from other ancillary sales.
Keep in mind that fantasy sports are a growth industry of over $1.65 BILLION, and currently generating over $500 million worldwide in fees, advertising, and other revenue, according to the Fantasy Sports Trade Association, which supported CBC Distribution in this action.
By rejecting this appeal from Major League Baseball, the Court left intact the lower ruling from the Eighth Circuit Court of Appeals that allows a fantasy sports company to use players' names and individual statistics without paying licensing fees.
And although this case was brought by MLB, the ruling now applies to all other fantasy sports leagues, as well. And that means fantasy hockey leagues. In fact, NHL Enterprises joined with other major sports associations to file an amicus brief in support of MLB. Why?
Well, let's look at some of the other short-sighted marketing decisions by the NHL.
Until I had actually investigated the true economic impact of fantasy sports leagues it had never occurred to me that a great deal of increased interest in hockey after the lockout may be due as much to the increase in fantasy hockey leagues as to any changes in the rules of the game.
And while the NHL keeps trying to go after the mythical "casual fan," the numbers indicate they would be better served to increase catering to the super-avid, stats-geek, competitive fantasy hockey fan, because they have money to spend and they spend it to the benefit of the NHL.
For example, while only 12% of the fantasy leaguers in the US play fantasy hockey, 28% of all those fantasy players attend at least one hockey game per year, compared to only 4% of all other Americans, i.e., the "casual fan." Plus, the demographic is the most desirable from a revenue standpoint: 22% of U.S. adult males, 18 to 49 and with Internet access, play fantasy sports.
In addition, the average fantasy sports player participates in two sports, is in six leagues, has played for nine years, spends $439.60 per year, is an educated professional, likely started playing off line (55%), likely plays with people he or she knows (75%), and spends three hours per week playing.
Look at it this way - if almost 30% of those who play fantasy hockey buy tickets and attend real games regularly, buy team gear, buy team kitch, pay to park, pay to eat and drink at the rink, visit the NHL and other web sites for stats and news on all players in the league - and thus are exposed to related advertising - and continually discuss hockey with their friends and associates, then the idea of trying to glean the very last dime by licensing statistics is small potatoes in comparison to the huge economic benefit of catering to the fantasy market that is intimate with every - and I mean EVERY - aspect of the sport.
Especially when the fantasy league market is growing by 10% per year - worldwide.
n.b. - Until such time as the U.S. Supreme Court hears a similar case, the ruling of the lower court stands, as decided on First Amendment grounds, in which the majority in the 8th Circuit Court of Appeals stated, "[I]t would be strange law that a person would not have a First Amendment right to use information that is available to everyone."
However, although my concentration was international law, I certainly offer no opinion on how the ruling will be treated in Canada. The Canadians do not have an equivalent to the First Amendment and approach freedom of expression issues in an entirely different manner.
The U.S. Supreme Court denied certiorari for Major League Baseball Advanced Media v. CBC Distribution and Marketing, 07-1099.
And even though I don't play in any fantasy leagues, I agree completely with the Court's decision. In fact, I was pretty sure that the Court wouldn't grant cert when I read that Justices John Paul Stevens, Samuel Alito, and Stephen Breyer recused themselves from the discussion because they currently participate in a fantasy baseball league comprised of past and present members of the Court and Court personnel. And even though Justices Scalia and Ginsburg also take part in the league, they declined to recuse, apparently believing they could rule without conflict. So at this point, getting the four votes needed for certiorari became difficult, as the Court only consists of eight Justices and the Chief Justice.
I'm sure most of you don't enjoy slogging through court opinions, but this was an interesting case in that MLB was claiming they owned the rights to exploit the individual players' names and statistics in exchange for licensing fees. In fact, CBC Distribution had originally paid licensing fees to MLB but when that contract expired, MLB refused to renew, opting instead to make more money by basically monopolizing the fantasy revenue through only selected providers, for the obvious purpose of getting a bigger piece of the pie. A pie they didn't create, don't really run, and from which they already have seen extraordinary monetary benefits from other ancillary sales.
Keep in mind that fantasy sports are a growth industry of over $1.65 BILLION, and currently generating over $500 million worldwide in fees, advertising, and other revenue, according to the Fantasy Sports Trade Association, which supported CBC Distribution in this action.
By rejecting this appeal from Major League Baseball, the Court left intact the lower ruling from the Eighth Circuit Court of Appeals that allows a fantasy sports company to use players' names and individual statistics without paying licensing fees.
And although this case was brought by MLB, the ruling now applies to all other fantasy sports leagues, as well. And that means fantasy hockey leagues. In fact, NHL Enterprises joined with other major sports associations to file an amicus brief in support of MLB. Why?
Well, let's look at some of the other short-sighted marketing decisions by the NHL.
Until I had actually investigated the true economic impact of fantasy sports leagues it had never occurred to me that a great deal of increased interest in hockey after the lockout may be due as much to the increase in fantasy hockey leagues as to any changes in the rules of the game.
And while the NHL keeps trying to go after the mythical "casual fan," the numbers indicate they would be better served to increase catering to the super-avid, stats-geek, competitive fantasy hockey fan, because they have money to spend and they spend it to the benefit of the NHL.
For example, while only 12% of the fantasy leaguers in the US play fantasy hockey, 28% of all those fantasy players attend at least one hockey game per year, compared to only 4% of all other Americans, i.e., the "casual fan." Plus, the demographic is the most desirable from a revenue standpoint: 22% of U.S. adult males, 18 to 49 and with Internet access, play fantasy sports.
In addition, the average fantasy sports player participates in two sports, is in six leagues, has played for nine years, spends $439.60 per year, is an educated professional, likely started playing off line (55%), likely plays with people he or she knows (75%), and spends three hours per week playing.
Look at it this way - if almost 30% of those who play fantasy hockey buy tickets and attend real games regularly, buy team gear, buy team kitch, pay to park, pay to eat and drink at the rink, visit the NHL and other web sites for stats and news on all players in the league - and thus are exposed to related advertising - and continually discuss hockey with their friends and associates, then the idea of trying to glean the very last dime by licensing statistics is small potatoes in comparison to the huge economic benefit of catering to the fantasy market that is intimate with every - and I mean EVERY - aspect of the sport.
Especially when the fantasy league market is growing by 10% per year - worldwide.
n.b. - Until such time as the U.S. Supreme Court hears a similar case, the ruling of the lower court stands, as decided on First Amendment grounds, in which the majority in the 8th Circuit Court of Appeals stated, "[I]t would be strange law that a person would not have a First Amendment right to use information that is available to everyone."
However, although my concentration was international law, I certainly offer no opinion on how the ruling will be treated in Canada. The Canadians do not have an equivalent to the First Amendment and approach freedom of expression issues in an entirely different manner.
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17 Leon Cain't Do It All...
19 The Al Sobotka Rule
24 Home Dish Advantage
27 The Octopus Shall NOT Be Mocked!
19 The Al Sobotka Rule
24 Home Dish Advantage
27 The Octopus Shall NOT Be Mocked!
Interesting. It appears that reason won this round.
I'd like to buy a few vowels to try and understand a few more latin words......and I never knew how much $ the fantasy leagues generated. That is amazing. Thanks for sharing.
Yes, very interesting. I didn't even know that this was an issue until you blogged but I'm glad that the Supreme Court reached a decision that is best for the fan. /// I play a lot of fantasy sports, but only since about a year ago. I am a "casual" fan of MLB, NBA, and NFL but plan on playing in fantasy leagues for each. I am currently playing in a MLB league with the goal to "teach" myself more about the stats so I can enjoy the games more. (I'm trying to be a Phillies fan - I really am.) If I had to pay I would not play any. Well, maybe hockey. /// The point being - If not for free fantasy baseball I would not be paying any more attention to MLB then in the past and may not ever have had the potential to turn from a casual fan to an active fan. If my interest keeps growing then I am a candidate for tickets and merchandise.