Appeals court rules in favor of fantasy baseball company

ST. LOUIS -- A federal appeals court upheld a lower court
ruling Tuesday that lets a fantasy baseball company use players'
names and statistics without paying a licensing fee.

In a 2-1 decision, the 8th U.S. Circuit Court of Appeals panel
ruled that CBC Distribution and Marketing Inc. doesn't have to pay
the players, even though it profits by using their names and

The Major League Baseball Players Association had argued that
companies like CBC are essentially stealing money from players, who
charge big fees to endorse things like tennis shoes and soft
drinks. The ruling could have a broad impact on the fantasy league
industry, which generates more than $1.5 billion annually from
millions of participants.

If CBC had lost, the MLBPA would have gained monopoly rights
over publicly available statistics and other information that is
used as fodder for fantasy leagues across the country, said CBC
attorney Rudy Telscher.

Telscher said the facts and figures are public information. He
said it's no different from media outlets that print game tallies
to draw readers and make money.

"When you're using mass information, it's protected under the
First Amendment," he said.

Big media companies like Yahoo, ESPN and CBS pay MLB millions in
annual fees to operate online fantasy leagues. Players make fake
teams comprised of real MLB players. Over the course of a season,
fantasy league players crunch statistics to judge how well the
players on their team are performing.

MLBPA attorney Virginia Seitz didn't return a message seeking
comment Tuesday. She argued before the court panel that online
fantasy games exploit players by effectively turning them into game
pieces and using their names to draw more customers.

"There's no way of escaping the fact that players' names are on
the product," Seitz argued at a hearing before the appeals panel
in June.

The court found that fantasy leagues' broad use of statistics
isn't the same as faking an endorsement.

" ... the fantasy baseball games depend on the inclusion of all
players and thus cannot create a false impression that some
particular player with 'star power' is endorsing CBC's products,"
said the ruling written by judges Morris Arnold and James Loken.

Judge Steven Colloton dissented from the opinion, but he didn't
disagree with CBC's claim of First Amendment protection.

Colloton took issue with the fact that CBC initially signed a
contract with MLB Advanced Media to pay fees for the players'
information, but then after the contract expired, it filed a
lawsuit claiming that MLB didn't have a right to collect the fees.

"That CBC later decided it did not need a license, and that it
preferred instead to litigate the point, does not relieve the
company of its contractual obligation," Colloton wrote.

Information from The Associated Press was used in this report.