I just interviewed MLB.com CEO Bob Bowman about their loss in the fantasy baseball case, as the Supreme Court let stand the appeals court opinion that players names when tied to statistics are not subject to copyright law.
It supposedly would lead to hundreds of millions of dollars worth of losses in expected fantasy revenue for all the leagues, but Bowman said some interesting things. He wasn't shocked about the opinion at all and most importantly, not mentioned anywhere, MLB didn't issue any new licenses for 2007 and 2008, so they were treating it as if it were a foregone conclusion.
Darren: What was your reaction when you found out that the Supreme Court wouldn't hear this?
Bowman: I don't think our reaction was one of great surprise. Since September of '06, when the magistrate first ruled in Missouri, we've been operating as if that was going to be the case. The Court of Appeals upheld it, now the Supreme Court denied, so it won't be heard. Until further action, that is the law of the land. Further action may occur. We weren't surprised and we've been running our business as if it were the case. We've received no new licensees in 2007 that were looking for a fantasy license and received none in 2008. And I would say that for most of the entities out there that are making a lot of the noise in the newspapers today, they never had a Major League Baseball license from Baseball. They never paid a fantasy license. I'm not sure it has that much of a dramatic impact.
Darren: What about you guys? You did pay $50 million to the union for five years woth of rights to sell these players' names to companies that wanted to be in the fantasy business. What's the state of the negotiations with the union on that?
Bowman: We obviously included a clause to the extent that the rights would change through this mechanism or another that we had the right and there obviously is a duty to renegotiate our deal. And we've been talking with the Players Association for over a year now in anticipation of one way or another this court case having an adverse impact on our narrow bilateral deal. Not the industry as a whole, perhaps, but certainly on our bilateral deal, it has an impact and we're talking to them. They've been good partners, we want to continue to be their partner. The narrow two-way deal will have to change somewhat.
Darren: The next argument based on this is that the next thing you'll see is companies wanting to get into trading cards and video games and saying that this ruling applies here. Any thoughts on that?
Bowman: Well, I think the magistrate, she weighed in on that and said that this does not apply to likenesses. I think in some ways, it bolsters it. Her initial ruling back in September of '06 suggested and concluded that on the narrow issue of names and stats, particularly since they're already in public and they're in public domain, she thought that the first amendment trumped. She did not think that marks or likenesses or video or anything else. She said let's exclude that. That's not the issue here. Indeed, we settled the trademark issue with CDM and removed that from the case.
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