FUTURE OF FANTASY SPORTS - the saga continues...
The ever so anticipated Fantasy Sports Trade Association
(FSTA) meeting was a few days ago. One of the main topics (in fact almost the only topic) was this licensing issue. This is no surprise because for good or bad this issue will have the second greatest impact this industry has ever seen. (The first being the invention of the Internet.)
I think there were about 150 fantasy companies that showed up. Basically the who's who of the fantasy world. The buzz in the room was about the CDM lawsuit and what the future holds for fantasy sports. As CDM co-founder and VP Charlie Wiegert addressed the audience, he seemed to warn that CDM may be looking to settle out of court. Though this was extremely disappointing because the fantasy community has seen CDM as its knight in shining armor that will save us all, I can certainly understand Charlie's decision. He has to look out for the interests of his company.
You see, it could take 15-18 months before it even gets in front of a judge. This is because there will be a HUGE discovery process that will cost thousands of dollars on both sides. THIS IS HOW BIG COMPANIES WIN. They simply out-spend you. Meanwhile MLBAM is collecting evidence with every company they license. The longer they wait, the longer they have to build a history of licensing and a "value" for their product.
An Intellectual Property lawyer, Bill Heberer
, cited a number of cases that backed each side of the argument. In typical lawyer talk he protected himself and failed to take a definitive stance on anything. It was more like "This case defends the MLB argument, and this case over here defends your argument." Though I can't blame him totally because it is a complex issue, what bothers me is that people still don't get what we are trying to defend.
Bill, every single case you cited that could possibly defend the MLBAM's position had to do with the player "likeness" (like a cartoon of a baseball player in an advertisement) or misrepresenting trademarked material (like a jersey with the Packers colors that says GBP on it). We aren't talking about advertisements or trademarked material, we are talking about the "fair use" of player names in forming rosters, in which NO endorsement is either expressed or implied.
Now I have to give him credit for realizing that this is not a copyright issue. It is a publicity right
Stats are not even part of the equation right now. There really is no defense they can use. Even taking the angle that a "compilation" of stats creates an original work of authorship worthy of copyright protection can not hold up. In Feist Publications, Inc. v. Rural Telephone Service Co., Inc.
not only did the court rejected the "sweat of the brow" position but also went on to consider the question of whether a factual compilation was worthy of protection at all, deciding that originality equates an independent creation, not simply copying other works and compiling them into a database.
No, this isn't about stats anymore, this is about publicity rights. The argument now tears and the core of all fantasy games.
So, let me clear up this whole Right of Publicity thing once and for all. Sit back and enjoy the show.
As I have stated before, the Right of Publicity is different for each state, which makes defending such a right on a national scale very difficult. While in some states the right of publicity is only applicable to a celebrity or public personality there are other states where the right of publicity applies to any individual. However, in a number of states the individual's right of publicity is only protected when the misappropriation of the individual's identity has publicity value - meaning that the individual has previously commercially exploited his/her identity. So in some states, you can make money off of someone's name or image if the person has never made money off of it themselves. In essence, it had no value and you created the value (though depending on the case you may still be in violation of their right of privacy).
But fantasy games do not apply to those issues I stated above. Obviously professional sports players ARE public personalities AND have made money from their name before. Our argument is different. It is based on the "fair use" of public knowledge. We'll get to that.
So, though some of these states differ on the "general" use of publicity rights there are common definitions and beliefs that hold true for virtually all states (I've checked 39 states so far).
Definition: "One who appropriates the commercial value of a person's identity by using without consent the person's name, likeness, or other indicia of identity for purposes of trade is subject to liability for the relief appropriate." This definition in some form is virtually standard across every state.
Right of Publicity v. Right of Privacy: "The elements of appropriation of invasion of privacy are the same as for violation of the right of publicity with one exception. The invasion of the right of privacy is a personal tort and it generally may not be assigned or inherited. Whereas, the right of publicity, a property right, may generally be assigned and inherited." So, your right of publicity is a form of property that can be sold, transferred, or inherited.
Permitted Uses: Situations in which use is permitted include the reporting of newsworthy events and uses in which no person is identified or identifiable. Courts generally hold the reporting of newsworthy events to be allowed under the First Amendment which forbids any laws "abridging the freedom of speech or of the press." This is why the reporting of STATISTICS is not an issue. They are historical and newsworthy events.
But the MLBAM and the NFLPA are not claiming that you need to be licensed to report stats, EVEN if you have a player name with the stat. (though that is exactly what they have claimed in years past).
Their NEW argument is that using player names in the function of the fantasy game itself is a violation. You aren't reporting facts, you are using their name as a "PART" of the product. This whole thing is all about the ROSTERS!
They make no distinction between a fantasy game and a shirt with a name on it that is being sold. They just see the "NAME" as being part of the product.First Amendment Protection
The First Amendment permits a publisher to use an individual's name or photograph on a book or magazine cover when the book is about the individual or the magazine contains an article on the individual but the name or photograph should be used in a way that accurately represents the content of the publication. When an individual is the subject of a biography or news article it is permissible to use that individual's name and/or likeness in advertising and promoting the publication. A publisher may also use the name and photograph of any persons whose ideas are discussed in a publication in promoting the publication. This is why fantasy magazines are protected.
The law attempts to strike a balance between an individual's right of publicity and free speech rights to permit specific uses of an individual's identity. One serious difficulty with relying upon First Amendment protection is the legal unpredictability of First Amendment rules. The First Amendment provides a hierarchy of protection under the newsworthiness exception depending upon how the individual's identity is being used. The greatest protection is provided for news (as I stated above), lesser protection is provided for entertainment and fiction and the least protection is available for advertising uses where a portrayal of a real person's identity is used to sell a product or service.
MLB will claim that fantasy games fall somewhere between the second and third area. Though the games are used for entertainment, the MLBAM and NFLPA can argue that it is used to sell a product or service or is even part of the product or service.But is that entirely true?
Most publicity law states that a name or likeness can't be used to advertise a product where the person is expressing or implying an ENDORSEMENT. I believe that the vast majority of fantasy football companies do not use player names in their advertisements so we can slice that part of law away. Because we aren't talking about news either, we can slice that part away.
The key is to get to the core of the argument.There are two Million Dollar Questions that the MLBAM and NFLPA will ask:
1) Can a fantasy game exist without a player name?
2) If the answer is YES above, then does the game hold the same value without player names? Meaning, does having player names increase the value of the product?
If you can prove that the game could exist regardless (like using player references) AND that approximately just as many people would play without player names, then their argument is defeated.
This is not to say that we don't have other avenues to pursue.OUR FINAL ARGUEMENT
We can still bring up the fact that though the player names might be essential to the functionality and playability of the fantasy game, it ONLY requires the names as historical data. (like making a fantasy game about the weather where you had to accurately predict the temperature in various cities. It is historical and public information that is being used.) This is A LOT different than selling a jersey in the Colts colors with "MANNING" on the back. In that case, his name is what creates the value for the shirt. There is an implied endorsement of the product. I believe we can VERY SUCCESSFULLY argue that there is no endorsement expressed or implied by the players on fantasy rosters.
LET ME BOIL IT DOWN FURTHER!
It isn't the fact that player names are needed, but rather the fact that WHICH player names we use is irrelevant. So, if Peyton Manning stopped playing football would the game lose value? NO. People retire all of the time, or get injured and are out for the entire season. The game would continue and would retain the same value because it is the cumulative list, and not any individual player that makes the game work. So, the fact that we are using a cumulative list of public information that is ever changing year after year (and sometimes even day after day), CAN NOT violate publicity rights because any specific name or player does not give the game value like it would in selling a picture or jersey of a player.
If you can argue that, you win. I know, easier said than done, but at least you now know EXACTLY what it is we are trying to get a judgment on.
BACK TO THE FSTA MEETING
Knowing that CDM may settle this case, president Greg Ambrosius asked the members if they would like the FSTA to pick up the ball and get a declaratory judgment. There was an overwhelming confirmation and a committee to will be formed (headed by board member James Serra) to plan out the next steps to take.
Though I applaud the FSTA for taking a firm stance on this injustice, I just hope that instead of getting the declaratory judgment that the industry needs, the committee doesn't decide to negotiate a long term "deal".
I believe that most of the FSTA members don't want to pay ANYTHING if they legally do not have to. Even a 2% deal for 30 years is not what the membership wants, unless it is proven in court that they MUST be licensed. Plus, if a "deal" is made with the MLB you would still need to do the same for the NFLPA. As I'm about to explain, that will never happen.
THE NFLPA: "Most of you will go under anyway."
On day 2 of the FSTA meeting, LaShun Lawson from the NFLPA made an appearance. Let me just say that the Devil himself prays at night not to meet up with this woman. Harsh words... I know. But they are completely justified and I am surprised that the FSTA members didn't rush the stage and slay her.
She so eloquently explained that in many major industries there is a natural consolidation in which only a few companies can survive and all others go out of business. She went on to articulate how the majority of the people in that room would be out of business in a year and therefore aren't worth her time.
Now, Greg (being the level headed and logical leader he is) spoke up saying "LaShun, if you were to lower your licensing fees to $10k, I know there are at least 50 companies here that would get licensed without question. That is half a million dollars. Is the NFLPA prepared to do that?"
LaShun's response? "We aren't prepared to handle that many licenses."
ARE YOU KIDDING ME? If you had 50 companies ready to give you $10k, wouldn't you HIRE more staff? What is really involved with managing a license anyway? You pay someone 30k per year to sit there 8 hours a day looking at a spreadsheet with 50 names on it. Every few days the person picks up the phone just to call one of them and see how they are doing.
This lady is the epitome of big business arrogance. She actually told the people that they had no shot at being successful. Some people raised their hand and told her that they've been in business for 10 years and have been stable and slowly growing every year.
I personally think that she loves the controversy. She likes the position of power and being able to say "we will give you the privilege of paying us for a license and staying in business. Oh, but you over there.... you will have to shut down because I don't think you will make it anyway." Ultimately, I think the NFLPA is waiting to see if they can get an exclusive MEGA deal from a major company for 2006. That is why they have only offered 1 year extentions to their 12 licensees. I'm sure they also want to see what happens with this CDM lawsuit.
This is why I must reaffirm that we need to strip the NFLPA of this power. There is no negotiating with them, Greg proved that. Let's get this settled once and for all.
Devoted Fantasy Football Fan
Last edited by fantasysportsfan on Sat Mar 19, 2005 11:51 pm, edited 1 time in total.