Baseball Strikes Out In Stats Fight

Fantasy baseball leagues are allowed to use player names and statistics without licensing agreements because they are not the intellectual property of Major League Baseball, a federal judge ruled Tuesday.

Baseball and its players have no right to prevent the use of names and playing records, U.S. District Court Judge Mary Ann Medler in St. Louis ruled in a 49-page summary judgment.

Judge Medler's ruling was "no surprise at all," says CBS News legal analyst Andrew Cohen. "We are talking about facts — objective facts that people can see and log for themselves. No one has a proprietary right to those sorts of facts. It's like someone saying they have exclusive rights to reporting the temperature, or the weather, or the time of day. That's why baseball lost."

St. Louis-based CBC Distribution and Marketing Inc. filed a lawsuit against Major League Baseball Advanced Media, MLB's Internet wing, after CBC was denied a new licensing agreement with the baseball players' association giving it the rights to player profiles and statistics.

Major League Baseball claimed that intellectual property laws and so-called "right of publicity" make it illegal for fantasy leagues to make money off the identities and stats of professional players.

But even if the players could claim the right of publicity against commercial ventures by others, Medler wrote, the First Amendment takes precedent because CBC, which runs CDM Fantasy Sports, is disseminating the same statistical information found in newspapers every day.

"The names and playing records of major league baseball players as used in CBC's fantasy games are not copyrightable," Medler wrote. "Therefore, federal copyright law does not pre-empt the players' claimed right of publicity."

The ruling brings some relief to more than 300 businesses that run online fantasy leagues and have awaited the outcome of the lawsuit. In fantasy sports leagues, fans draft major leaguers and teams win or lose based on the statistical success of the actual players in major league games.

It wasn't immediately clear what impact the ruling would have on existing agreements. MLB.com pays the players' union $10 million a year for their Internet rights, reports CBS News correspondent Anthony Mason. In turn, it licenses fantasy rights to Web sites such as CBS SportsLine and ESPN for a $2 million annual fee.

"My thought today is this ruling is pretty strong but if MLB wants to fight it they have the funds to do it," said Jeff Thomas, founder and CEO of the fantasy site SportsBuff.com and president of the Fantasy Sports Trade Association.

Thomas said SportsBuff.com's online fantasy baseball leagues have tried for years to reach agreements with MLB, but were unsuccessful and carried on without them.

Major League Baseball Advanced Media had just received the ruling this afternoon and was in the process of reviewing it, said spokesman Jim Gallagher.

"We need to talk to our partners, the Major League Baseball Players Associations, before we have anything more to say," he said.

Baseball's refusal to give CBC a contract for the 2005 season came as the league was making exclusive statistics licensing agreements in the fantasy sports marketplace that has grown to more than 15 million players.

Like many other fantasy baseball leagues, CBC had a licensing agreement with the MLBPA from 1995 through the 2004 season and paid 9 percent of gross royalties to the association. The company now believes it shouldn't have to pay for the right to use statistics.

Rudy Telscher, who represents CBC, said both sides had asked for a summary judgment before the case was scheduled to go to trial.

"Once you've won this here the odds are really good for us when MLB appeals," Telscher said. "I think once this issue is decided by an appellate court it's unlikely that other sports will try to take this to the court again."

Fantasy sports has grown at a rate of up to 10 percent each year, according to the Fantasy Sports Trade Association.

MLB had 19 license agreements in 2004, according to MLB Advanced Media, and just seven last season after a $50 million agreement with the players association giving baseball exclusive rights to license statistics.

Many of the smaller fantasy businesses, such as CBC, say they were cut out of the agreement.

Glenn Colton, a New York lawyer who wrote a friend of the court brief for the Fantasy Sports Trade Association, said the statistics licensing issue is critical to the industry.

"The idea on MLB's part is if you can scare all of the little companies out of the market," Colton said, "you can collect more money."