The Major League Baseball Players Association awarded exclusive rights to the league's fantasy games to Major League Baseball Advanced Media, the league-owned arm that controls MLB.com, for the next five years.
The deal, valued by the league at more than $50 million, would not result in MLB.com being the sole holder of fantasy rights in the future, according to Bob Bowman, chief executive of MLB Advanced Media. The organization, he said, will sublicense the league marks and players names to other organizations, as the MLBPA has done in the past.
Bowman said it was too early to tell if fantasy fees for games on MLB.com will increase as a result of the deal.
"Our goal is to increase the number of people who can play fantasy, increase the number of games that we consider fantasy and just get more people spending time on fantasy than we currently have," Bowman said. "That could be more licensees. It could be fewer licensees. It's really going to depend on what the potential licensees want to do in terms of trying to augment and enhance what is already a great product."
Bowman said he was seeking proposals from the organizations that previously have held fantasy rights with the MLBPA.
"If they are going to license fantasy games to those that had the license before this deal was struck, it will be business as usual and the industry will continue to grow," said Greg Ambrosius, president of the Fantasy Sports Trade Association (FSTA), which is made up of 182 companies who work in the industry. "If only a couple companies are involved, they will stymie the business."
How much an interested company is willing to pay could be dependent on the legal foundation concerning the rights of companies to use the players' names without the license.
Judy Heeter, director of business affairs and licensing for the MLBPA, said these rights belong to the union.
"Publicity rights of the players have been recognized as belonging to the Players Association for something over 40 years in a whole series of reported decisions and anything, including statistics that makes those players personalities recognizable or identifiable to the public, is legally protected," Heeter said.
But those in the industry maintain that this is a huge gray area. Using stats for fantasy purposes could constitute First Amendment rights that are no different from a boxscore in a newspaper.
One court case, NBA v. Motorola and STATS Inc., backs up this opinion. In 1997, a U.S. Court of Appeals ruled that the federal copyright statute prohibits the ownership of factual data. There has been no rulings to the contrary over the past eight years, said Paul Levy, who was co-counsel to STATS Inc. in the case.
"There are a line of cases that suggest that any personality is protected from an implied endorsement or suggested affiliation without their permission," Levy said. "But that is different from the recitation of a statistic that has no meaning unless that statistic is tied to the name of the player who generated that statistic."
The fantasy rights that MLB Advanced Media awards to licensees will not include the rights to San Francisco Giants slugger Barry Bonds, who could break the all-time home run record this upcoming year. MLB.com is the only licensed fantasy product that has included Bonds' name and that will continue to be the case going forward, according to Bonds' marketing agent Jeff Bernstein.
According to FSTA estimates, more than 15 million Americans play fantasy sports. Baseball has the highest cost per consumer. In 2003, the average player of fantasy baseball games spent $179 to participate compared to the $161 that players spent on fantasy football games and the $118 spent on fantasy basketball games.
Fantasy baseball is celebrating its 25th anniversary this month. The concept was born in January 1980 when a group of media members convened at a restaurant in Manhattan called La Rotisserie Francaise. It was for this reason that the fantasy game was originally called "rotisserie."
"I'm staggered how big this industry has become," said Steve Wulf, executive editor of ESPN The Magazine, who joined the league in the second year when he was writing for Sports Illustrated. "The seminal moment came in 1982, when I was at Shea Stadium. This big shadow approached from behind me and asked me how my rotisserie team was doing. It was (Atlanta Braves outfielder) Dale Murphy. He said he read the book I wrote about it."
Darren Rovell, who covers sports business for ESPN.com, can be reached at firstname.lastname@example.org