Suing Over Statistics

Who owns the back of a baseball card?

For decades, it didn’t seem to matter. The courts made it clear that cereal makers and sneaker companies needed permission to use an athlete’s name or likeness, but baseball’s ocean of numbers -- found in newspaper box scores and on trading cards -- generated little controversy.

Then came sports fantasy leagues, which grew from a grass-roots hobby a quarter-century ago to a multimillion-dollar industry with the rise of the Internet and digital technology.

After long ignoring the fantasy movement, Major League Baseball entered the business in 2001. Last year, baseball ordered game operators to obtain a license before plugging player statistics into software that runs their games. Now, a Missouri company, CBC Distribution & Marketing, has responded by suing baseball in U.S. District Court in St. Louis, alleging that it had no right to demand that operators be licensed.

The case highlights the new types of disputes arising as sports, like Hollywood, tries to wring more revenue from intellectual property in a digital world where information flows ever more freely.

“The question of whether performance statistics are some form of protected intellectual property becomes vital,” said Jack Williams, a Georgia State University law professor and longtime fantasy league player. “Moreover, who owns the property becomes vital.”

Fantasy fans act as team owner, general manager and coach, poring over real-world athletes’ performance statistics before assembling rosters. The fate of their dream teams is dictated by how well “draftees” perform in real-world games.

Sixteen million Americans played these games during 2004, spending about $200 million on league registration fees, according to the Fantasy Sports Trade Assn. Some leagues now offer a $100,000 grand prize.

CBC argues that it has a right to use statistics without obtaining a license.

“What we’re dealing with is historical data,” said attorney Rudy Telscher, who represents CBC. “The minute a game is over, these are historical facts. And, to my way of thinking, the public ought to be able to use historical facts without having to compensate players or the league.”

The 1st Amendment protects the right of media companies and others to use game statistics to tell the story of a game from the first pitch to the last out, or from tipoff to final buzzer.

Baseball, in court filings, maintains that intellectual property law makes it illegal for the fantasy league operator to “commercially exploit the identities and statistical profiles” of big league players.

Baseball executives declined comment on the lawsuit.

For years, CBC paid the Major League Baseball Players Assn. for a license. Last year, the players sold the right to use their names and likenesses to MLB, which then denied CBC a license renewal. The company continues to operate leagues and the two sides are in mediation.

Williams, the law professor, suspects CBC’s suit will be settled out of court because baseball doesn’t want to risk losing the case and the potential revenue from licenses.

“Ambiguity and uncertainty favors baseball,” Williams said. “I don’t think it’s to Major League Baseball’s benefit to get an answer, because I don’t think they’re going to like the answer that they’d get.”

Baseball has gone to court before to protect its logos, marks and other intellectual property.

During the 1990s, it demanded that an Orange County company obtain a license to stitch major league logos onto youth league uniforms. Sports leagues also have complained that media companies have profited illegally at their expense by transferring game photos to coffee mugs, T-shirts and books.

Last year, the Chicago Cubs (owned by Tribune Co., which also owns the Los Angeles Times) settled a lawsuit against businesses that sell seats to fans who watch games from rooftops overlooking Wrigley Field, alleging copyright infringement.

But until recently, the major sports paid scant attention to stat-driven games.

“Fantasy leagues clearly were giving more to the leagues than they were getting in return,” said Kim Beason, a professor at the University of Arkansas at Fayetteville who conducts market research for the Fantasy Sports Trade Assn.

Now, all the major sports operate fantasy games, recognizing that players are incredibly loyal fans -- the type increasingly coveted by advertisers.

The NFL, which has placed a renewed emphasis on courting fantasy players, “found that people who play fantasy football end up watching two to three hours more NFL action on television,” said Brian Rolapp, the league’s vice president of media strategy.

Fred Villaruel, 26, of Valparaiso, Ind., is that type of fan. The computer consultant spends much of his free time playing fantasy football. He catches games at a sports bar and uses his laptop to communicate via instant message with league competitors around the country.

“We’re all watching these weird games that no one else wants to watch,” Villaruel said. “Who else is going to watch the [Cleveland] Browns and [Baltimore] Ravens unless Jamal Lewis is on your fantasy team?”

Sports marketers are scrambling to offer new products and services that target fantasy players; CBS and other broadcasters now incorporate fantasy programming into their regular fare.

Last month, Texas-based Biap Systems unveiled Fantasy Sports Tracker, which allows cable viewers to track game-day exploits of their team members via a “crawler” at the bottom of the screen. The device is being tested in Green Bay, Wis.

EA Sports, which paid a reported $400 million for the exclusive rights to produce NFL video games, has begun incorporating fantasy sports applications into its popular Madden Nation title -- allowing Villaruel to blend his two passions.

“Everyone else has statistics and words,” said Barry Dorf, an EA Sports producer. “We’re going to have this cool video game look. That’s what will differentiate us. And we’ll have John Madden actually talking about the upcoming” fantasy draft.

Sprint, which recently signed a reported $200-million deal with the NFL, plans to zap game-day updates and injury reports to fantasy players’ cellphones. Eventually, video highlights will be delivered to phones.

The flurry of digital advances is building upon the dramatic growth spurt made possible by the Internet.

“Fantasy sports was one of the true killer apps for sports, along with live, real-time gamecasts,” said Chris Russo, a former NFL new media executive who now runs a New York sports marketing firm.

Fantasy games became easier to play because fans no longer had to seek out like-minded fans. E-mail and high-tech software also ended the cumbersome dependence on faxes and regular mail to exchange information.

Some fantasy players from that pre-digital era are put off by baseball’s legal tactics, complaining that the sport ignored their newfangled riff on the national pastime until there was big money to be made.

“The beautiful irony here is that when we started it, baseball laughed at us,” said Daniel Okrent, the former New York Times public editor who in 1980 co-founded the trendsetting Rotisserie Baseball League. “They laughed at us and slammed the door in our faces.”