Players Inc. took a sizable hit in itsfantasy licensing income in its most recent fiscal year, according to theNFLPA’s latest LM-2 filing, with the ongoing CDM Fantasy Sports lawsuitexisting as a possibly significant factor.
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Yahoo! paid $839,000 in fiscal 2006 and
$168,000 in the following year. |
The filing showed $1.78 million in directlyidentified income from fantasy licensing for the year ended Feb. 28, 2007, downfrom $3 million the prior fiscal year. The actual figures for both years,however, are higher, as some licensees such as Electronic Arts and NFL Ventureshave fantasy licensing rights as part of much larger deals with Players Inc.,the union’s licensing and merchandising arm. Fantasy-related payments in thosedeals are not itemized in the LM-2 filing.
Still, the trend line in fantasy licensingincome is clearly headed downward.
“Fantasy [income] is down a little bit,” saidAndy Feffer, Players Inc. executive vice presidentand chief operating officer. “ButI would caution anyone looking at the category to have a longer-term approach.”
Among the largest decliners are Yahoo!, whichpaid the union $167,852 in the most recent fiscal year, down from $838,830; CDMFantasy Sports, whose payments fell to $123,423 from $450,000, and CBSSports-Line.com, dropping to $1 million from $1,251,726.
The cited reasons for the reductions vary.Feffer said some licensees are due to make payments that did not show up in themost recent LM-2 filing, making some figures appear artificially low. To thatend, Yahoo! executives said they owe Players Inc. additional money for fantasylicensing.
Also at play in some instances is the CDMcase. A federal judge in Missouri last year ruled in favor of the St. Louis-basedfantasy company, which had been seeking legal clearance for unlicensed use ofraw names and statistics in commercial fantasy games. The case is now beingappealed by the MLB Players Association and MLB Advanced Media, with a largercollection of sports properties, including the NFLPA, filing amicus briefs insupport of them.
In part because of that case, many smaller fantasy companies havenot sought Players Inc. licenses for fantasy football games, or have not beenapproached by Players Inc.
The roster of fantasy licensees for the 2007season includes nine companies, most large national operators such as Yahoo!and ESPN. Two years ago, that list numbered 17.
“We have not been approached by them for alicense for this year, and if they were to do so, I’d want to hear what theadvantages and value of having a license would be,” said Charlie Wiegert,executive vice president for CDM, now owned by Fun Technologies. “To operate mygames, I don’t feel like I need a license.”
Stats Inc. is in extensive negotiations torenew its Players Inc. deal and become the 10th fantasy football licensee forthe upcoming season. But Steve Byrd, senior vice president, acknowledged “thereis definitely the sentiment in the marketplace” to use CDM as a means to notpay for a new license.
Kevin Gralen, president of former PlayersInc. licensee Head2Head Sports, said he has not been contacted for renewal.
“From our perspective, we value therelationship, but we’re looking to have more marketing and active promotion andhave it not just be a straight licensing thing,” Gralen said.
