Courts Rule Leagues Cannot Keep Stats Out of Fantasy Sports

A federal judge in Minnesota ruled on April 28, 2009 that CBS does not have to pay to use the names and statistics of National Football League players in its fantasy football league because the information is in the public domain.

The decision in CBS Interactive Inc. v. National Football League Players Ass’n Inc., 2009 WL 1151982, 2009 U.S. Dist. LEXIS 36800 (D. Minn. April 28, 2009) further limits the influence that professional sports leagues and players unions have over fantasy sports. Yahoo! Inc. settled a similar lawsuit against the NFL Players Association (NFLPA) in July, although terms of the settlement were not disclosed.

In CBS Interactive, U.S. District Court Judge Ann D. Montgomery granted summary judgment for CBS on the basis that the players’ names and statistics constituted a form of “speech” entitled to First Amendment protection. CBS Interactive operates CBSSports.com, a Web site that hosts the corporation’s fantasy football league.

Fantasy football is a popular and lucrative form of entertainment. An estimated 15 million people play the online game each season, generating more than $1 billion a year in revenue, according to figures cited in CBS Interactive. In a fantasy league, participants act as managers of their own teams comprised of professional athletes acquired through a draft and trades with other managers. The success of a team is based on the statistics of real players throughout the season. In order to succeed, managers often consult sports news information such as performance statistics, player reviews and injury updates contained on the Web site.

In her ruling, Montgomery relied on and extended the decision in C.B.C. Distribution and Marketing Inc. v. Major League Baseball Advanced Media,505 F.3d 818 (8th Cir. 2007), in which the federal appeals court decided that a fantasy baseball provider did not have to pay to use the names and statistics of Major League Baseball players. C.B.C. Distribution and Marketing (CBC), a Missouri-based company, sells fantasy sports products via the Internet, mail, and the telephone. The products incorporate the names along with performance and biographical data of actual Major League Baseball players. Participants in CBC’s fantasy baseball games pay fees to play and additional fees to trade players during the season.

The 8th Circuit had found that the use of the information for commercial gain violated the players’ rights of publicity under Missouri law. However, the court concluded that based on Supreme Court guidance that requires rights of publicity based on state law to be balanced against First Amendment considerations, “the former must give way to the latter.” The court noted that the information used in fantasy baseball “is all readily available in the public domain, and it would be strange law that a person would not have a [F]irst [A]mendment right to use information that is available to everyone.” The court reiterated that speech that informs and speech that entertains, such as the disputed fantasy sport information, are both protected by the First Amendment.

In the lawsuits filed against the NFLPA in federal district court in Minneapolis, CBS Interactive and Yahoo! both sought declarations that they should not have to pay royalties to use players’ statistics, photos, and other data in their online fantasy football leagues because the information is widely available to the public. NFL Players Inc., the licensing arm of the players association, countersued CBS, arguing that players deserved to be compensated for the use of the material. Yahoo! claimed the players union threatened a similar lawsuit if it did not pay to use the information.

Prior to the 2008-2009 NFL season, CBS Interactive had a licensing agreement with NFL Players Inc. that allowed CBS to use the names, statistics and likenesses of the players, including jersey numbers, photos, and other biographical information. After that agreement expired in February 2008, NFL Players Inc. demanded CBS continue to pay licensing fees for the continued use of the names and statistics, but CBS refused and filed suit. Yahoo’s similar agreement expired March 1 and it filed suit on June 1.

CBS Interactive most likely decided to file its suit in Minnesota “to avail itself of Eighth Circuit precedent established by C.B.C. Distribution,” Montgomery wrote in denying a motion by NFLPA and NFL Players Inc. to transfer the case to the Southern District of Florida, which would not be bound by 8th Circuit precedent. The Associated Press noted in a Sept. 5, 2008 report announcing the lawsuit that federal courts in Minneapolis have been a frequent venue for cases involving the NFLPA, including a ruling in February 2008 that allowed suspended quarterback Michael Vick to keep $16.5 million in bonuses.

In her opinion, Montgomery disagreed with NFLPA’s argument that the package of football-related information CBS Interactive uses is more comprehensive than that used by C.B.C. Distribution and Marketing for fantasy baseball. Both services use player names, profiles, statistics, injury reports and biographical information. “The Court discerns no difference between the package of information at issue here and that which was at issue in C.B.C. Distribution that would impact the balancing of publicity rights against First Amendment considerations,” Montgomery wrote. Montgomery also rejected a claim by NFLPA that the manner in which CBS presents the package of player information gives the false impression that the pictured players endorse the CBS fantasy league.

The NFLPA also argued that it is not clear whether the public has as much interest in football statistics as it does in baseball statistics, so there may be weaker First Amendment interests at stake in the former case. Montgomery declined “to indulge in a philosophical debate about whether the public is more fascinated with baseball or football.” The 8th Circuit in C.B.C. Distribution noted that baseball is the “national pastime” and the public has “an enduring fascination” with the records and statistics of the sport. Montgomery wrote that it is “a distinction without a difference” that one case involved football and the other baseball. “Suffice it to say,” she wrote, “that there is no dispute that both professional baseball and professional football and the statistics generated by both sports are closely followed by a large segment of the public.”

The NFLPA is appealing the decision in CBS Interactive. In June, the Supreme Court refused to consider the decision in C.B.C. Distribution. In that case, the NFL, National Basketball Association, National Hockey League, NASCAR, the PGA Tour, and the Women’s National Basketball Association filed a brief in support of Major League Baseball.

Yahoo! spokeswoman Nicol Addison confirmed that a settlement had been reached with the NFLPA, but she declined to provide specifics, according to July 8 report in the Minneapolis Star Tribune.According to July 7 Reuters report, Addison said Yahoo! is “going to explore other opportunities with the NFL players union to work together.”

– Cary Snyder

Silha Research Assistant

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This page contains a single entry by cla published on October 2, 2009 10:39 AM.

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