Major League Baseball heads to court over player stats

Daily Record and the Kansas City Daily News-Press, Jun 20, 2006 by Dick Dahl

(This article originally ran in Lawyers USA, Boston, MA, another Dolan Media publication.)

Player statistics have long been baseball's lifeblood, a vast and free-flowing commodity energizing endless discussions among the game's most ardent fans.

But tradition notwithstanding, Major League Baseball has decided that unfettered use of player statistics must end.

In a case that could have broad impact beyond baseball, the league's Internet arm heads to federal court in St. Louis this fall against a fantasy baseball league operator to determine who has the right to use the baseball statistics for commercial purposes.

Major League Baseball contends that because it has a contract with the players' union to use ballplayers' identity, which includes their statistics, it has the right to prohibit fantasy baseball sites from using baseball statistics for commercial purposes.

Cashing in on the fantasy

Some 6 million people subscribe to Internet fantasy baseball sites, according to a 2003 study by the Fantasy Sports Trade Association. For an average fee of $179 apiece, participants become owners who draft major league players onto their teams and then measure their success by the daily statistical performances of their players.

The sites give subscribers access to in-depth statistics provided by independent companies such as Stats Inc. and provide varying degrees of statistical analysis to guide decisions regarding player selection and trades.

Major League Baseball contends that anyone who uses those statistics for commercial purposes violates the players' rights.

Since the early 1990s, Major League Baseball had received licensing fees from the more reputable Internet fantasy baseball sites, but in January 2005 fantasy operators received notice from the league that licensing procedures were going to change dramatically. MLB Advanced Media had completed a deal with the players, paying them $50 million for a five-year period in exchange for an exclusive license to use and sublicense player group rights for online fantasy games.

One fantasy baseball operator, CBC Distribution and Marketing of St. Louis, received e-mail notice on Jan. 19, 2005, from George Kliavkoff, Major League Baseball senior vice president. The notice said the league would not renew CBC's previous agreement to pay the league 9 percent of its gross revenue annually in return for permission to use the statistics - a license that expired at the end of 2004.

Essentially, Major League Baseball said, 'You need a license to operate - and you can't have one,' said CBC's lawyer, Rudy Telscher.

Three weeks later, CBC filed suit, seeking a declaratory judgment that the company did not infringe on any of Major League Baseball's intellectual-property rights, including copyright and the players' rights of publicity. The case is slated to go to trial Sept. 5 in the U.S. District Court for the Eastern District of Missouri.

The legal debate

Intellectual-property and sports lawyers who have followed the case think Major League Baseball may not have much of a case on copyright grounds. But they also think the league's argument about the right to protect players' publicity and statistics from commercial exploitation may have merit.

Kevin Caton, an intellectual-property lawyer with a subspecialty in sports law at Levin & Kahn in San Francisco, contended that the copyright issue should be resolved in CBC's favor because the underlying facts of sporting events are not copyrightable.

He said that issue was settled in National Basketball Association v. Motorola, in which the NBA tried to prevent transmission of real- time game scores and statistics via handheld pagers and Web sites. The court found that sports games and the statistics from them were not copyrightable.

MLB Advanced Media is not making a copyright claim on the statistics themselves. Instead, it is claiming that statistics are integral parts of the players' identities - and players have the right to control use of their names in commercial ventures because they have a right of publicity.

The right of publicity refers to a body of state laws that prohibits commercial ventures from using players' names, images, voices, etc. without their permission.

The statutory right of publicity is the hook on which Major League Baseball can hang this case, said Scott Hervey, an intellectual-property lawyer with the Weintraub, Genshlea, Chediak, Sproul law firm in Sacramento. But it's kind of a blurry area.

Russell S. Jones Jr., a Kansas City lawyer who represents the players' association in the case, contended that his client's position was clear.

This case is not about statistics, he said. It's about names. Why should this group get to use (Boston Red Sox star) David Ortiz' name and make millions of dollars doing it?

Telscher, CBC's lawyer, responds that information used in fantasy baseball is in the public domain and can't be owned by anyone.

Impact beyond baseball