Big win for fantasy sports

Pitcher Matt Thornton of the Chicago White Sox

KAI RYSSDAL: Time now for the business of sports. Hard core fans these days typically have two teams. The local pro franchise. And then what's called a fantasy team. Fantasy sports can be lucrative. And they are...most recently...litigious. Our business of sports analyst Ed Derse is here to explain how all that data's turning into dollars and depositions. Hey, Ed.


ED DERSE: Hi, Kai.

RYSSDAL: So, listen. I subscribe to Sports Illustrated. Couple of weeks ago the cover story, and a huge thing in the back of the book was all about fantasy football. It's barely preseason, for crying out loud.

DERSE: Yeah, well, you and about 13 million other people are rather interested in fantasy football. Fantasy Sports Trade Association estimates about 15 to 18 million people nationwide play fantasy sports, and about 85 percent of those play fantasy football. And it's been growing at about 7 to 10 percent a year. It's a $1.5 billion business, including television shows, magazines, mobile distribution. it's become a real industry.

RYSSDAL: Briefly, you pick your own players from the roster of pro players. You follow them through the season and your team is based on how they do. It's really convoluted and complicated.

DERSE: Well there are a lot of different types of games, but often the sort of standard format is: You get 10 or 15 buddies together. You all draft teams. And those are your players and you trade amongst each other. And how those players perform determines how you do in your league.

RYSSDAL: How did it get so popular, though?

DERSE: Well, it goes back — at least according to Wikipedia — to 1962 when one of the minority owners of the Oakland Raiders — a guy named Wilfred Winkenbach — got together with some guys from the Oakland Tribune and they created a small, greater-Oakland professional pigskin prognosticators' league. So, really, the origins of fantasy football.

But what made it really take off, obviously, was the Internet. And then all of the big Internet sites created fantasy engines to basically attract a lot of usage among users. And all the big sites — Fox Sports and MSN, ESPN, Yahoo, CBS Sportsline — all have fantasy games.

RYSSDAL: There was a big case last week, bears directly on fantasy sports. Lay it out for us.

DERSE: The US District Court for Eastern Missouri issued a summary judgment in favor of a company called CBC Distribution and Marketing, which runs a site called CDM Sports. It's a small fantasy game operator. It goes back to a 2005 deal between the Major League Baseball Players Assocation, which owns the rights to players' images, their personalities, and Major League Baseball Advanced Media. They paid them $50 million over 10 years. And what Major League Baseball Advanced Media did is start to put the screws to all of these smalltime fantasy operators and the big sites, charging them huge license fees.

RYSSDAL: Because, fantasy sports are all about statistics, right?

DERSE: Right. But what Major League Baseball Advanced Media wanted to say was, Well, it was really about the personalities or the identities of this player.

RYSSDAL: This data, though, is not . . . I mean, it's in the paper everyday. How can it possibly be sort of a proprietary thing?

DERSE: The court has ruled that it's not. It's not a violation a privacy. It's really saying that this data, if it's not attached to the name, has no meaning. So, it's intrinsically linked to the name of the player, and as such it's a historical fact and you can't copyright historical fact. So what they've argued is, this is non-copyrightable material; it's not a violation of the right of privacy; and even if it did violate the right of privacy, that the First Amendment rights are more important than this supposed right of privacy.

RYSSDAL: This tiny little company — CDM Fantasy Sports — that you mention that was in this lawsuit . . . How come they had to carry the water on this one, and not guys like, oh, say, FoxSports.com?

DERSE: Well, that's a very, very good question. And the fact of the matter is, if you look at the big sites that do fantasy games — Fox and ESPN, CBS Sportsline, NBCSports.com — they're all the big broadcasters and they broadcast these leagues. So, obviously, it's a very delicate dance. And the big players have either said they would pay, like ESPN or Sportsline, or not play at all as in the case of baseball on FoxSports.com. This is going to change that equation, and it's going to free up a lot of these small operators who were squeezed out. And it's going to make it easier for the big guys to offer more fantasy product.

RYSSDAL: Just what we all need. Ed Derse is the director of interactive media for Fox Sports International. Ed, thanks a lot.

DERSE: You're welcome, Kai.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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