ST. LOUIS - Attorneys representing Major League Baseball argued Thursday that online fantasy baseball companies cannot operate without paying license fees to MLB to compensate players for the use of their names.
A federal appeals panel of three judges seemed skeptical that MLB could take financial control of a game that uses publicly available statistics and widely known names of players.
"MLB is like a public religion. Everyone knows (the players') names and what they look like," said U.S. Judge Morris Arnold. "This is just part of being an American, isn't it?"
MLB's lawyer Virginia Seitz said online fantasy games exploit players by effectively turning them into game pieces and using their names to draw more customers.
"There's no way of escaping the fact that players' names are on the product," Seitz said.
Major League Baseball is appealing a lower court judgment last year that ruled St. Louis-based CBC Distribution and Marketing Inc. does not have to pay licensing fees for MLB players' names and statistics as fodder for online fantasy league games.
The fantasy league industry generates more than $1.5 billion annually and millions participate. Big media companies like Yahoo, ESPN and CBS pay MLB millions in annual fees to operate online fantasy leagues.
Players make fake teams comprised of real MLB players. Over the course of a season, fantasy league players crunch statistics to judge how well the players of their fake team are performing.
If MLB wins its suit against CBC, it would effectively give the league monopoly rights over publicly available statistics and other information that is used by fantasy leagues across the country, said CBC's attorney Rudy Telscher.
"If we lose this case, hundreds of companies go out of business," Telscher said.
A key issue in Thursday's arguments was the publicity rights of MLB players. Seitz argued that fantasy leagues are similar to a company that steals a player's image to sell T-shirts, coffee cups or posters. Without using the players' names, fantasy leagues would be an unprofitable practice of statistics crunching, she said.
"There is much less interest in predicting the crime rates of major American cities," she said.
Telscher said fantasy leagues were not unlike newspapers, which use sports players' names in their pages to draw readers. He said customers paid to use CBC's Web site because it automatically process statistics for them, so the company essentially conveys public information.
"There's not any affidavit from players who say they feel like they have been damaged" by fantasy leagues, Telscher said.
It is not known when the panel of the 8th U.S. Circuit Court of Appeals will rule.