CBS files lawsuit over use of ‘public-domain’ statistics for fantasy sports

"Joe Horn Catch", by Flickr user Foreversouls, uploaded under a Creative Commons 2.0 licence

Fantasy sports competitions, now a staple competition of many sports sections across the globe, allow players to select ‘dream teams’ in a range of different sports. These teams then earn points according to how the players from the teams perform in real life, with the teams then ranked according to how many points earned.

While CBS had previously paid a royalty fee to the players’ association, they now argue that they are entitled to use the statistics free of charge under press freedom guarantees enshrined in the First Amendment to the US constitution, following similar judgements with regard to fantasy sports.

“Despite the clarity of the law on this issue, and despite its arguments having been fully considered in the recent litigation, the Players Association continues to make objectively baseless demands for licensing fees from CBS Interactive and others in the fantasy football industry,” reads the lawsuit filed by CBS.

The lawsuit filed by CBS also accuses the NFLPA of breaching competition laws: “[The NFLPA] has gone so far as to say that if CBS Interactive takes any action to challenge its rights to licensing fees, it will never again grant CBSSports.com rights necessary to operate fantasy games and will therefore put CBSSports.com out of the fantasy football business.”

Players’ organisations, such as the NFL Players’ Association (NFLPA), disagree arguing that the commercial industry surrounding fantasy sports, worth USD 2 billion in the US alone according to industry body Fantasy Sports Ventures, is dependent upon the image rights of professional athletes and companies profiting from this ought to pay a royalty fee.

Free press precedent
There is a certain amount of irony in the case. It was a deal signed by another players’ representative body, the Major League Baseball Players Association (MLBPA), with CBS and a few other selected media bodies that was the catalyst for legal action that has a set a precedent that will be key to the outcome of the case.

The deal made by the MLBPA awarded multi-million dollar licences to a select number of fantasy baseball outlets, meaning that some of the smaller companies were prevented from entering the market, including CDM, CDM, a commercial fantasy baseball operation based in St. Louis, Missouri, who took the MLBPA to court.

In October 2007, the US Court of Appeals for the Eight Circuit, the same circuit as where the CBS case will be heard, ruled that the MLBPA were not allowed to require a licence for the use of baseball statistics. The court held that “[CDM's] first amendment rights in offering its fantasy baseball products supersede the players' rights of publicity."

An application by the MLBPA to appeal the decision was turned down by the US Supreme in Spring 2008, and as such CBS will be confident of their chances, given the similarity between the two cases.

Nonetheless, the law in this area is still in development, and Rick Karcher, a professor of law at Florida Coastal School of Law, believes that the decision to go to court by CBS represents a move to set a precedent in the area.

“Does CBS really believe that the Eighth Circuit's opinion, which is the first court ever to apply a precarious ‘public domain’ standard for determining when the First Amendment trumps the right of publicity, provides ‘clarity of the law on this issue’?” writes Karcher on his blog at Sports Law Blog in response to the lawsuit filing by CBS.

“Ironically, CBS is so confident about the clarity of the law on this issue that it had to beat the union to the courthouse by filing its lawsuit in Minnesota so as to stay within the jurisdiction of the Eighth Circuit Court of Appeals, which rendered the opinion in the CDM case,” concludes Karcher, who also believes CBS’s claim of anti-competitive practices by the NFLPA will fail due to statutory protections for labour unions.

Sport journalism – is it news?
The key then to the case is whether the court rules whether the statistics collected by fantasy sports operators is the use of information within the public domain or constitutes infringement of image rights. Essentially, is the classification of sports results an acceptable use of publicly available news or does it go beyond that and constitute a breach of individual sports stars to collect a royalty for the use of their names for commercial gain, with players maintaining some proprietary rights over the commercial use of sports news?

This is part of an ongoing debate on whether the coverage of sports events is classified as news coverage or whether it is a commercial industry like any other segment of the entertainment world. Sports photographers in particular have been affected by the debate, with a number of sports federations placing restrictions on the number of photographs that may be taken at sports events.

While the outcome of the CBS v NFLPA case will not provide an answer to this debate, it will give an indicator of which direction the debate is heading in the US at least.

Related Links:

• “CBS Interactive Suing NFLPA Over Fantasy Football Licensing”, SportsBusiness Daily
• “CDM Sees Another Legal Victory Over MLBPA In Fantasy Dispute”, Sports Business Daily
• “CBS Sues NFLPA for Demanding Licensing Fees”, Sports Law Blog
• Fantasy Sports Ventures