Fantasy Sports Score Victory
Supreme Court Strikes Out
Major League Baseball,
Confirming Firms' Control
By MATTHEW FUTTERMAN
The U.S. Supreme Court on Monday declared open season for fantasy-sports companies.
The high court effectively ended a three-year legal battle when it refused to hear an appeal from Major League Baseball and its Players Association that, if successful, could have given professional sports leagues the ability to control the lucrative fantasy-sports business. Instead, the court's decision solidifies the rights of fantasy-sports companies to run their businesses without having to buy licenses from the major sports leagues or their players' unions anymore.
The Supreme Court move means fantasy-sports companies aren't required to pay for licenses from leagues or unions.
Fantasy sports began to take off in the early 1980s, when groups of baseball fans began putting money in a pot, forming leagues and selecting players to be on their pretend teams. The team with the players that produced the best statistics won.
The industry has since mushroomed -- leagues have cropped up around everything from the National Football League to the leading bass fishing tour -- and fantasy sports generate about $500 million in global revenues annually, according to a recent study by the market-research firm Ipsos for the Fantasy Sports Trade Association.
While most fantasy operators previously charged players a fee to play, more leagues are now free. A company like CBS Corp. makes money by selling players a range of products, such as draft guides and expert analysis, and through advertising.
Monday's decision was a relief for major media companies including Yahoo Inc. and CBSsportsline.com, a division of CBS, two of the leading Internet fantasy-sports sites. Had the high court agreed to hear the appeal, those companies could have wound up paying some of the highest licensing fees to the leagues.
"This opens the door for every media outlet to have a fantasy sports component," said Christopher Russo, chief executive at Fantasy Sports Ventures, which owns eight leading fantasy sports Web sites and sells advertising space for some 125 others.
Greg Bouris, a spokesman for the Major League Baseball Players Association, said the union was "considering its options" in light of the high court's decision. He declined further comment, as did a spokesman for Major League Baseball Advanced Media, the league's Internet company.
Fantasy-sports companies and the professional leagues and players unions had a mostly peaceful relationship through the 1990s. The companies paid licensing fees of 5% to 10% of revenues for the rights to the players' names and statistics. Deals with the largest companies produced nearly $1.5 million a year.
But three years ago, Major League Baseball tried to limit the number of companies that could use its statistics, even though they were readily available from variety of sources.
St. Louis-based CDM Fantasy Sports Corp. sued for the rights to use the information, and won last year in federal court; the Supreme Court rejected MLB's appeal without comment.
In taking on the fantasy-baseball operators, and losing, MLB has likely cost every pro sports league millions of dollars. All the leagues had been getting fees from fantasy operators.
Once thought of as a diversion for sports geeks, fantasy sports have come to play a huge role in mainstream culture. In the U.S. and Canada alone, some 19.4 million people participate in a fantasy league of some kind, according to Ipsos.
(c) 2008 WSJ/News Corp/Saturday afternoon grinch
― felicity, Tuesday, 3 June 2008 20:14 (seventeen years ago)
http://www.southtownstar.com/news/968774,052508baseballuniforms.article
MLB to kids: You're not in our league
May 25, 2008
Recommend (8)
BY TIM CRONIN, Staff Writer
The baseball uniforms for the Tinley Park Bulldogs look a little different this year.
Gone are the names of Major League Baseball teams that accompanied "Bulldogs" on the front of the kids' jerseys.
ยป Click to enlarge image
Major League Baseball has told those who make uniforms for little ballplayers: Drop the big-league names or face a lawsuit.
(Photo illustration by Joseph P. Meier)
No White Sox.
No Cubs.
No Phillies, Yankees or Reds.
Why? MLB hurled a fastball at the heads of those who make the uniforms for the little ballplayers: Drop the big-league names or face a lawsuit.
For the Bulldogs, that means no more teams named after any pro franchise.
Because the Bulldogs' uniforms didn't feature official major league team logos, neither the league nor its uniform supplier, SportStation of Tinley Park, had paid a licensing fee for the uniforms.
Late last year, SportStation received a letter from MLB, noting that not only the logos but the team names were trademarked. The letter ordered the company to stop producing the uniforms.
"Does a league have a right to name a local team? Baseball is saying no. That's flying in the face of 100 years of tradition," said SportStation owner Dave Glenn, in business 35 years. "I go out of my way to make sure we use town names, so we make it clear this isn't a major league jersey.
"Now we're told we can't even do that. What it boils down to is the interpretation of the trademark."
Sports are big business, and with billions of dollars at stake, organizations such as MLB go to great lengths to protect their trademarks.
Costs too much
Glenn said he'd never used baseball logos on team jerseys he sold, and ended three months of legal wrangling with MLB by signing an agreement stating he'd continue not to do so. In exchange, MLB promised not to sue over the previous use of franchise names.
At the same time, the many leagues Glenn serves had to adjust. It meant the Bulldogs couldn't use, for instance, the word "Phillies" on a Bulldogs jersey.
If they wanted to do so, they would have to buy jerseys from Majestic Athletic, the exclusive apparel licensee of MLB, which would have been more expensive. Those wouldn't say Bulldogs on them unless even more money was spent to imprint the word or the Bulldogs logo.
"That impacts us," said Steve Bowles, president of the 700-player Bulldogs organization. "We can't have a (Major League) team name or logo on the uniform unless we buy it from Majestic. And when we did a cost comparison of what we had versus that, we can't do it for the same price."
Bowles and his board members huddled, looking for alternatives to present to the parents of the players.
"We were going to look at college names, because the licensing (cost) is different," Bowles said. "We looked at names like the Fighting Irish and the Trojans, etc. About a third of the parents really didn't mind the college names."
Few were absolutely thrilled with the idea, either.
And the concept of new names with no association with baseball or college sports didn't get off the ground.
"It was a level of frustration we didn't need putting a season together," Bowles said.
The youth league president's frustration was shared by many parents.
"I was kind of fired up when I heard about it," said Carl Skanberg, who has a son in the program and coaches a team.
Skanberg, who creates intellectual property in the form of a White Sox parody comic he sells to the SouthtownStar, could understand the position of baseball's licensing arm. But given the relative size of the Bulldogs to big- league baseball, he added, "it's pretty strange that it even came to this."
Some organizations have decided to abandon big-league names. Chicago Ridge's Little League organization went to college names. Bloomingdale went to generic colors.
"They're Bloomingdale Red and Bloomingdale Blue, and that's that," Glenn said. "That was their act of defiance."
Trademarks valuable
Professional and college sports teams and leagues generally protect their trademarks vigorously because they're worth billions of dollars.
While MLB doesn't reveal the extent of its merchandise sales, a sporting goods manufacturers group estimated gross sales of official MLB-branded merchandise at $3.1 billion in 2005, the most recent available estimate. Some of that comes in the form of group sales to youth baseball leagues.
Illegal use of the trademarks has declined in recent years, said Howard Smith, MLB's senior vice president of licensing.
"It's never the youth league, primarily," Smith said. "It's always the retailer. When we find out, we go to him and say, 'You can't do that, and you know that.'
"We're sensitive to this matter. Some parents say, 'Baseball is screwing us,' but we've never, ever sent a cease and desist letter to a youth organization. We want our kids wearing our stuff."
Smith noted that MLB has a royalty-free jersey it sells through Majestic, calling it, "nothing fancy. It says Yankees, but no pinstripes." A Web search found Majestic-made MLB-logoed T-shirts starting at $13.99 at www.hitrunscore.com.
According to Ron Anderson, president of the Worth Athletic Association, it cost his league about $25 to dress a player this year, including buying official logoed hats and T-shirt uniform tops from Majestic through a distributor, before printing a sponsor's name and a number on the back.
"There was a minimal increase this year, but we changed the style of jersey from pinstripe to a solid color, and there was more for printing charges," Anderson said. "I've been involved in Worth for nine years, and we've had Majestic the whole time. I played here as a kid, and we did not have that kind of jersey then."
Saving money on caps
The Bulldogs board decided to put the names of Major League cities on its uniforms and buy an official cap to match. So a kid on the Royals wears a Kansas City Royals cap and his jersey says "Kansas City" next to "Bulldogs." That seems to have worked.
There was an ancillary benefit. It turned out that buying 700 officially licensed Major League Baseball caps was less expensive than custom-producing a similar number of Bulldogs-logoed caps.
"I think everybody's happy we stuck with the traditional names," Bowles said. "It's always, 'Can Joey be on the Cubs? Or the White Sox?' You want the kids to have fun."
― deeznuts, Tuesday, 3 June 2008 20:20 (seventeen years ago)