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September 5, 2008
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CBS Interactive Suing NFLPA Over Fantasy Football Licensing

CBS Interactive Claiming NFLPA Wrongly
Seeking Fantasy Football Licensing Fees 
CBS Interactive Inc. has filed suit against the NFLPA over fantasy licensing, the first major legal ripple to follow this spring's refusal by the U.S. Supreme Court to hear an appeal from MLBAM and the MLBPA in the CDM Fantasy Sports case. CBS alleges in the 12-page complaint, filed earlier this week in U.S. District Court for the District of Minnesota, that the NFLPA is wrongly pressuring the media giant to pay licensing fees to operate fantasy football games this season despite CDM's repeated legal victories over the past three years. "Despite the clarity of the law on this issue, and despite its arguments having been fully considered in the recent litigation, the Players Association continues to make objectively baseless demands for licensing fees from CBS Interactive and others in the fantasy football industry," the filing reads. Earlier in the complaint, CBS Interactive also claims the union has "gone so far as to say that if CBS Interactive takes any action to challenge its rights to licensing fees, it will never again grant CBSSports.com rights necessary to operate fantasy games and will therefore put CBSSports.com out of the fantasy football business," a stance the media giant says represents prohibited antitrust activity under the Sherman Act. CBSSports.com paid the union a total of $1.49M in the fiscal year ended February 29, 2008, up from $1M in the prior fiscal year, according to annual reports filed by the union to the U.S. Labor Department. No money is believed to have changed hands between the two sides in the current fiscal year for fantasy licensing as a result of the CDM case.

CBS SEEKS VARIOUS REMEDIES: CBS Interactive in the lawsuit seeks a variety of remedies, including a declaratory judgment that places its First Amendment rights above the union's rights of publicity, similar to the core of the CDM rulings; a declaration that the union is in violation of the Sherman Act; a judgment enjoining the union from interfering with its fantasy sports business; and any actual and treble damages and legal fees. CBS officials declined to comment, citing company policy on pending litigation. Industry sources said the lawsuit was designed largely to get out on the offensive with the union, as opposed to waiting for a lawsuit staged in a potentially unfriendly legal jurisdiction. To that end, CBS Interactive filed the lawsuit in Minnesota so as to stay within the Eighth Circuit for the U.S. Court of Appeals, the venue for the original appeal on the CDM case, as well as an area deemed relatively friendly to the First Amendment.

NFLPA YET TO COMMENT: The NFLPA, which filed amicus briefs in support of MLBAM and MLBPA in the CDM case, also did not comment. But earlier this year, Andy Feffer, NFL Players Exec VP & COO, said, "We feel very strongly we retain intellectual property rights in this area even after what happened at the Supreme Court. I'm certain that anyone really looking at the category doesn't believe or think that [CDM] is the law of the land or that this is completely closed." To aid with the case, CBS Interactive has hired St. Louis-based intellectual property attorney Rudy Telscher, lead counsel for CDM.

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