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CBS Sues NFLPA for Demanding Licensing Fees

By Rick Karcher, Michael McCann, Geoffrey Rapp, Greg Skidmore, and Howard Wasserman

Eric Fisher of SportsBusiness Journal reports today that CBS Interactive Inc. sued the NFLPA earlier this week in the U.S. District Court for the District of Minnesota, claiming that the NFLPA is wrongly pressuring CBS to pay licensing fees to operate fantasy football games this season. The complaint alleges: "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 complaint also alleges an antitrust violation because 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." Fisher notes that 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, but that CBS has not paid the union anything this year as a result of the CDM case.

"Objectively baseless demands"? CBS can't be serious. Does CBS really believe that the Eighth Circuit's opinion, which is the first court ever to apply a precarious "public domain" standard for determining when the First Amendment trumps the right of publicity, provides "clarity of the law on this issue"? Ironically, CBS is so confident about the clarity of the law on this issue that it had to beat the union to the courthouse by filing its lawsuit in Minnesota so as to stay within the jurisdiction of the Eighth Circuit Court of Appeals, which rendered the opinion in the CDM case. And the antitrust claim is meritless because the union is exempt pursuant to the statutory labor exemption, which provides that a labor union's actions in furtherance of its own interests (and not in concert with non-labor groups) are exempt from the reach of the antitrust laws.

Full post as published by Sports Law Blog on September 05, 2008 (boomark / email).