Player statistics are ruled fair game in St. Louis case
By Derrick Goold
ST. LOUIS POST-DISPATCH
Wednesday, Aug. 09 2006
A St. Louis company defending its small piece of the fantasy sports industry
defeated a division of Major League Baseball and its players association in a
court decision Tuesday that was described as a defining moment for the industry.
In a 49-page judgment, U.S. District Court Judge Mary Ann Medler refuted the
claim of MLB Advanced Media and the players that they retained control over
game statistics used by fantasy leagues.
The ruling was a victory for CDM Fantasy Sports, a St. Louis company that has
been operating fantasy leagues since 1992. The company's parent, CBC
Distribution and Marketing, filed a lawsuit after being denied a licensing
agreement in 2005 by MLB Advanced Media, a division of Major League Baseball.
In fantasy sports, participants select and direct teams of pro players.
Statistics from actual games are used in varying ways to determine winners and
The ruling states that the statistics used in fantasy baseball - such as
batting average, strikeouts and home runs - are in the public domain and thus
not under league control.
"It certainly is a defining moment in the industry, because for years, we've
been operating knowing there was this gray area of whether you needed to be
licensed or not," said Greg Ambrosius, former president of the Fantasy Sports
Trade Association, which he said represents about 240 members. "Hopefully, this
will spur the industry and bring the leagues and these companies together to
work to grow this niche."
In its suit, CDM argued that MLB Advanced Media and the players were attempting
to wrest control of an independent gold mine by selecting who received licenses
and who did not. CDM ran its fantasy baseball games without a license for the
past two seasons.
Judge Medler used the First Amendment as the basis for the decision.
"If the players' right of publicity were to prevail over (CDM's) First
Amendment right of freedom of expression, (CDM's) First Amendment right of
freedom of expression would be totally extinguished," she wrote.
Medler noted that the statistics in question were available in daily newspapers
and to people who attended games.
Charlie Wiegert, vice president and one of the founders of CDM, said the ruling
could cause the industry to take off.
"I got a judge to tell the players association and Major League Baseball to
leave me alone. That's big-time stuff in my little world," he said. "This is a
precedent-setter. Any little guy who wants to set up his game, set up his own
rules, and build a business out of it, he can now do that.
"There will be more games to play, new games to play, new types of games. One
entity won't be trying to spirit things away for their own uses."
A survey conducted by the Fantasy Sports Trade Association in 2005 indicated
that 7 percent of Americans play fantasy sports, Ambrosius said. Approximately
7 million play fantasy baseball, and the average gamer participates in 2 1/2
The survey estimated that among magazines, Web sites, entry fees and other
spending, the industry tops $1 billion a year.
The genesis of the lawsuit came in 2005 when MLB Advanced Media paid $50
million for a five-year deal with the players association to manage and sell
rights for interactive media. The company then began limiting its fantasy
sports licenses in what officials said was an attempt to increase the quality,
accessibility and variety of the games.
Industry operators feared that if CDM lost the lawsuit, other sports -
particularly football, which is a popular fantasy sport - would seek to control
and limit licensing as baseball has done.
"It could have wiped out an entire industry," said Rudy Telscher, CDM's
attorney and a partner at Harness Dickey in St. Louis. "It's not too often that
you're arguing a lawsuit where if you lose it, there's the possibility an
entire industry will be wiped out. But I got phone calls telling me that."
Telscher said he expects an appeal.
Jim Gallagher, a senior vice president with MLB Advanced Media, said his
company received the judgment Tuesday afternoon and was reviewing it. He
declined to comment further.
The situation had threatened to crumble CDM, which started in a St. Louis-area
basement with nothing more than a computer and a copy machine.
"We had to do something, because for them to take all that away from us
wouldn't be right," Wiegert said. "The bully kept backing us into a corner, and
at some point you have to fight back.
"We had fought back with the same tenacity that we had in building our
business. It was time to push back and say, 'You're not going to win this one.'
We thought we could win. We were right."