Tuesday, June 19, 2007

Major League Baseball trying to ruin the NHL

You said what now?

The CBC sued MLB and won, but MLB is appealing this ruling and if they win you can say goodbye to Fantasy Hockey.

First off, CBC is not the Canadian Broadcasting Corporation (not in this lawsuit anyway) and the implications of this lawsuit will directly affect the very existence of all Fantasy Sports Leagues, not just hockey.

CBC Distribution and Marketing Inc. last year won a lawsuit that they had filed against MLB when their license to run a Fantasy Baseball game was rescinded by the Major Leagues. CBC decided to take one for the team and sue MLB to prove that they (CBC) did not have to pay a licensing fee to MLB for the rights to use player names and statistics. Last year they won their lawsuit.

MLB is, of course, appealing this ruling. The NBA, NFL and NHL all participated in the original lawsuit and any ruling in this case will essentially hold true for these leagues as well. A U.S. Federal Appeal panel is currently ruling on MLB's application and it's implications are huge.

If Baseball is successful in appealing this ruling it would essentially give MLB (and the three other major sports) the ability to monopolize Fantasy Sports. Over the last few years MLB has reduced the number of licenses it has granted to Fantasy Sports game providers from over 50 to less than 8. If they so desired, MLB could refuse to grant any licenses whatsoever and keep full control of all the traffic and revenues derived from Fantasy Baseball to itself.

The most recent estimates place the total revenue from Fantasy Sports at over $1.5 Billion with as many as 8 million participants on a yearly basis. That's a pretty big piece of pie.

So again, what does this have to do with Fantasy Hockey?

Two things.

1) If MLB is able to control Fantasy Baseball do you think that the NHL will be far behind in taking complete control of Fantasy Hockey? Bye bye Yahoo, the NHL won't grant you the rights to use their statistics.
2) Speaking of statistics, you can forget looking in the newspaper (or the internets) for daily box scores. Unless someone is paying a fat licensing fee anyway.

Hmmm... speaking of which, if anyone happens to own any Yahoo stock I would suggest you keep an eye on this appeal. Yahoo has estimated that approximately 40% of it's total site traffic is a direct result (or derived from) it's Fantasy Sports products. If MLB decides to take away their Fantasy Baseball traffic Yahoo will take a serious dive.