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Update on Fantasy Baseball Licensing Issues from an Expert

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Update on Fantasy Baseball Licensing Issues from an Expert

Postby normkent » Tue Feb 15, 2005 9:46 am


By Greg Ambrosius
Fantasy Sports Magazine

In the three weeks since Major League Baseball Advanced Media announced that it had obtained fantasy baseball licensing rights from the Major League Baseball Players Association for $50 million over five years, company executives have held several face-to-face meetings in New York with past licensees. But as of today, with pitchers and catchers expected to report in less than two weeks, not a single fantasy baseball company had received a license from MLBAM to operate its games and services in 2005.

Some companies are still negotiating with MLBAM and have delayed the launch of their online promotions until a deal is done, a request made by MLBAM. Top sites such as CBS,,, and haven't launched their baseball products yet, even though in years past all of those sites were live well before the Super Bowl. Other companies have been told since their meetings in New York that they have been denied a license to produce their own games, although they have been offered a revenue share plan to promote's games.

One former licensee that was denied a license for 2005 after meeting with MLBAM in New York was CDM Fantasy Sports, which has run salary cap games since 1992 and provided fantasy baseball and other sports games for since the mid 1990s. CDM has since filed suit in a federal court in St. Louis challenging MLB's authority to license fantasy companies and is continuing to run its baseball games and services.

CDM is contending that the players don't own the statistics. CDM lawyer Rudy Telscher said he understands that companies need MLB licenses for trademarked material. "And we're fine with not being able to use logos and bells and whistles where they have rights," Telscher told USA Today's Michael Hiestand in today's column. "The question, which hasn't been decided by any court, is whether the mere use of bare statistics associated with players is a violation."

Telscher told Hiestand that those statistics are in the public domain. It's possible that a court of law will eventually decide whether they are or not.

Bob Bowman, chief executive of MLB Advanced Media, told Hiestand that there could be four or five major fantasy sites in 2005 including, compared to approximately a dozen total licensed companies in 2004. But an MLBAM official stated today that several smaller companies will be licensed for 2005 under a special tier designed to protect those companies who have built up small, but loyal fan bases. An offering of a $10,000 minimum for companies with less than 5,000 participants was e-mailed to dozens of FSTA companies last week and an MLBAM official said a new e-mail will go out today to those same companies with an offer for less than $10,000. However, this structure does make it difficult for middle-tier companies to get a license as the price jumps to $500,000 for any company with more than 5,000 free or paid customers.

"We are not trying to eliminate the mom and pop companies who helped build this industry," said the MLBAM representative. "We have no intention of eliminating those companies. In fact, we want to make it easier for them to work with us and be licensed. Our goal is to grow this industry, not put people out of business."

But the clock is ticking on 2005 and the big sites likely won't be live until at least Tuesday, Feb. 15, the date MLBAM has requested those sites to go live if they are granted licenses for 2005. MLBAM would like to kick off the season with a National Fantasy Baseball Day, but unfortunately Feb. 15 is well into the fantasy baseball season. "I'm not sure MLBAM realizes how important the early months are for advertising your baseball products," said one FSTA member.

Eventually, though, the lawsuit over the licensable rights of the Players Associations pertaining to statistics could have the biggest impact this industry has ever seen. A decision either way if it plays out would affect everyone involved in this industry, good or bad
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Postby thedude » Tue Feb 15, 2005 2:08 pm

nice summary of events. When was this article written?
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