Fantasy sports just got serious

I’m talking about fantasy sports games. The fuss is all about competition and fulfilling childhood dreams of running sports franchises.

But lately the fuss is about who owns the players’ statistics that make these games go. And, of course, the real fuss is about money.

The fantasy sports world earlier this year got a dose of reality with a federal lawsuit filed in St. Louis district court: CBC Distribution & Marketing v. MLB Advanced Media.

St. Louis-based fantasy games operator CDM Fantasy Sports claims baseball player stats are public domain, and the company is seeking rights to those stats without paying a licensing fee to the Major League Baseball Players Association. Fantasy sports companies traditionally have paid professional leagues licensing fees to use player and team names and their statistics.

Those fees, ranging from $20,000 to mid-six figures, are small investments compared to the million-dollar revenues these companies are collecting. According to ESPN’s Aug. 15 “Outside the Lines,” there are more than 200 fantasy sports companies pulling in more than $150 million in revenues a year. MLB doesn’t like the sound of that.

Where there is money, there are lawsuits.

According to the suit, “CBC’s actions in operating a sports fantasy league business do not infringe any enforceable copyrights allegedly owned or controlled by Major League Baseball in the sports statistics or related information.”

Baseball’s argument is that the stats are directly tied to players’ names (what good are the stats without knowing to whom they belong?), and therefore fantasy sports companies are using the names for a commercial purpose. MLB just wants its piece of the pie. Before you groan about baseball being a greedy empire, consider this: MLB Advanced Media is paying baseball’s players’ association $10 million a year for five years for the rights to their names. Like any enterprise, they’ve got to recoup that investment. It’s a valid point.

But the plot thickens.

The suit cites an e-mail in January from George Kliavkoff, an MLB senior vice president, to Charles Wiegert, CBC vice president, stating that baseball this year would limit the number of approved licenses. The indirect message was that CBC and its subsidiaries would not be issued licenses. Reports have said only a few companies – ESPN, CBS Sportsline, Yahoo!, AOL and The Sporting News – received official licenses.

“Please be advised that if your company is using the above-described rights without a license, all such uses must cease immediately,” Kliavkoff warned in the e-mail.

CDM is running its leagues this year, pending this suit, despite never getting officially licensed. The case is scheduled for mediation beginning Sept. 20.

What I don’t understand is why MLB would want to restrict who receives licenses.

According to the Fantasy Sports Trade Association, around 16 million people play fantasy football and baseball. Such interest has huge value. Fantasy players are fans. Fans buy tickets, merchandise, memorabilia, etc. and pass that interest on to their offspring.

Why not sell as many licenses as possible, which would only continue to grow fantasy interest, and reap the windfall on both ends?

It seems that MLB is turning away money so others cannot make money, only to lose sight of the fact that the money eventually returns to the league.

Furthermore, this is the worst possible time for baseball to anger its fans. Trust in the game is arguably at its lowest point in history with steroid suspicions swirling in every clubhouse. And MLB brass wants to threaten what little fun the fans are having with the game? Seems to me another baffle of the Bud Selig era. C’mon, Bud Man, let the fans have some fun.

Oh, if only I could run Major League Baseball. Now there’s a fantasy game.

Eric Olson is Springfield Business Journal News Editor.