Opinion ID: 2583
Heading Depth: 3
Heading Rank: 3

Heading: The Market in Which MLBP Licenses Compete

Text: MLBP asserted the view, which Salvino criticized as a self-serving view, that other sports leagues such as the NBA, the NFL, the NHL, and the Women's National Basketball Association, as well as nonsports entertainment purveyors such as Nickelodeon and Disney, are among MLBP's competitors in the licensing of intellectual property for use on retail products. ( See Salvino Responses to MLBP Rule 56.1 Statement ¶¶ 50, 52.) For example, Team Beans, a competitor of Salvino that obtained licenses for MLB Intellectual Property from MLBP for use on plush toys, also held licenses to use trademarks from a variety of other licensors, including the Olympics, the NFL, the NHL, the MLB Players' Association, and NASCAR. ( See id. ¶ 57.) A market research study conducted for MLBP, whose goals included increasing game attendance, media audiences, and sales of MLB Intellectual Property, found that baseball does not compete with just one sport, or even only with sports. It found that the competitive arena for baseball is `a wide range of leisure and entertainment options that vary with target group and lifestyle.' (Salvino Response to MLBP Rule 56.1 Statement ¶ 55.) Thus, the MLBP 1996 Business Plans' list of MLBP's major competitors for intellectual property licensing included the following: branded apparel manufacturers such as Nike, Reebok, Russell, Champion, Big Dog, and No Fear; other sports entities such as the NBA, the NFL, the NHL, NASCAR, collegiate groups, and the 1996 Summer Olympics; and entities, such as Warner Brothers and Disney, that offered licenses to use intellectual property relating to, e.g., Looney Tunes, Power Rangers, Peanuts, Nickelodeon, Batman, SpaceJam, and Goosebumps. ( See id. ¶ 56.) In 1998, Salvino itself sold Bammers that were licensed by, among others, the MLB Players' Association, NFL Properties, Inc. (NFL Properties), and the NHL Players' Association. ( See Salvino Response to MLBP Rule 56.1 Statement ¶ 101.) Salvino, which had had total sales of less than $1 million in 1997, developed the Bammer in the spring of 1998 and had revenues of $17 million from the sale of Bammers in 1998; in 1999, Salvino had revenues of $30 million. ( See id. ¶¶ 100, 101, 102.) In a September 1999 marketing plan that Salvino submitted to MLBP, Salvino stated that it had sold Bammers licensed by the above sports organizations, as well as Muhammad Ali Bammers, Ice Bammers, and Basketball Bammers, and various other individually licensed Bammers. Seeking an MLBP license for MLB Intellectual Property for use on a photo ball and photo bat, Salvino stated that it proposed to sell those items in the same target market in which it sold Bammers. ( See Salvino Response to MLBP Rule 56.1 Statement ¶ 107.) Salvino described its target market as retailers that have the potential to carry sports licensed products. ( Id. ) Salvino stated that its primary targets included stadium concessionaires and sporting goods retailers and that its secondary targets were retailers of licensed sport products who have the capacity to purchase in volume; it stated that `our most important competition comes from companies that currently distribute sports licensed products. These products compete directly for limited shelf space devoted to this product category.' ( Id. ) Thus, in addition to selling its Bammers to MLB Clubs and stadium concessionaires ( see Salvino Response to MLBP Rule 56.1 Statement ¶ 112), Salvino sold Bammers to hobby shops, sports collectible shops, Hallmark stores and retail chains ( id. ¶ 111). Rick Salvino, Salvino's president since 1988, testified that the Bammers competed with everything in the store for shelf space ( see id. ¶¶ 93, 113): `Everybody is a competitor. Anybody in a gift store that sells a product is a competitor of mine, because we're all fighting for shelf space, for any store for that matter ....' ( Id. ¶ 114.) Wayne Salvino, Salvino's vice president from at least early 1989 until December 2001, testified that Salvino competed with numerous other producers of plush items, as well as `anybody who produces sports licensed products; anybody who produces, you know, signed products, collectibles, memorabilia; anybody who produces licensed key chains, zipper pulls, non-licensed key chains, zipper pulls.' ( Id. ¶¶ 94, 116.) Similarly, in its sales presentations to the MLB Players' Association, NFL Properties, and NBA Properties, Inc. (NBA Properties), Salvino stated that the market for Bammers licensed by those sports organizations would be the `sports collectibles hobby' market. ( Id. ¶¶ 117, 118, 119.) In its proposal to the MLB Players' Association, for example, it stated that '[a]n additional market which would be targeted for distribution would be the general collectibles market. This market is represented by thousands of gift stores, specialty stores, major department stores, catalogs, and other forms of direct marketing through the mass media that currently market this category of product.' ( Id. ¶ 117.) The business plan that Salvino submitted to NFL Properties described Salvino's Bammers as falling within the `novelty and memorabilia market.' ( Id. ¶ 118.) And in the plan it submitted to NBA Properties, Salvino stated that its products, including Bammers, were in both the `sports collectibles hobby' market and the `general retail market.' ( Id. ¶ 119.) Salvino's Bammers brochure declared Bammers to be `America's Number 1 Sports Collectible' with respect to its entire product line of Bammers, e.g., baseball, football, boxing, basketball, ice skating, hockey, and NASCAR. ( Id. ¶ 120.) MLBP also asserted, without meaningful disagreement from Salvino, that other professional sports groups, like MLB, employ centralized marketing entities. For example, Salvino did not dispute that the MLB Players' Association, the union that represents MLB players, states that it is the exclusive holder of all right, title, and interest in the group licensing of names, nicknames, likenesses, and signatures of any group of three or more active MLB players. ( See Salvino Response to MLBP Rule 56.1 Statement ¶ 4.) Nor did Salvino dispute that, according to their respective standard licenses, (a) NFL Properties has the exclusive right to license for commercial purposes the trademarks of the NFL and its member teams; (b) NBA Properties has the exclusive right to license for commercial purposes the use of certain names, logos, symbols, emblems, designs, and uniforms, etc., of the NBA, along with the names, nicknames, photographs, likenesses, signatures, and other identifiable features of current NBA players; and (c) NHL Enterprises, L.P. (NHL Enterprises), has the exclusive right to license for commercial purposes the names, nicknames, logos, colors, and uniform designs, etc., of the member teams of the NHL, the numbers appearing on NHL players' uniforms, the name, initials, insignia, and other indicia of the NHL itself, and the name and likeness of the Stanley Cup. ( See id. ¶¶ 5, 6, 7.) Wayne Salvino testified at his deposition that one advantage to Salvino of the NFL's centralized licensing structure was that NFL Properties offered a package of certain players and all team logos, allowing that entity to serve as a `one-stop shop.' (Salvino Response to MLBP Rule 56.1 Statement ¶ 49.)