The Verdict: grand theft fantasy baseball

While playing fantasy sports is meant to be fun, the reality is that most people play for money. Besides combining the enjoyment and passion for sports with a general sense of competitiveness, there is an underlying motivation to achieve financial rewards for the hard work and diligence you put into a fantasy sports season. There is nothing wrong with that, as evidenced by the fact the fantasy sports industry generates billions of dollars in business. So in order to make money, you must pay money to be in most leagues. Depending on your financial situation or the seriousness of your league, an entry fee can range from $10.00 to $10,000. Regardless of how much it costs to participate, there is a general expectation of sportsmanship that every person will pay their league dues. It is usually the league commissioner who is responsible for collecting the money, securing it, and then distributing it to the winners at the end of the season.

But what happens if a league member does not pay? What happens when someone takes advantage of a commissioner’s leniency and is afforded the same rights and privileges as every other team who has paid already? Unfortunately, this scenario is all too common. The Supreme Court of Fantasy Judgment recently received a case with this very fact pattern. Please read the case decision below advising on how to appropriately handle such circumstances. As always, your comments and feedback are appreciated.

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SUPREME COURT OF FANTASY JUDGMENT

Cleveland Steamers v. League Commissioner

ON PETITION FOR WRIT OF CERTIORARI FROM THE LOVEABLE LOSERS FANTASY BASEBALL LEAGUE

Decided July 6, 2011

Cite as 3 F.J. 63 (July 2011)

Factual Background

A fantasy baseball league named the Loveable Losers Fantasy Baseball League (hereinafter referred to as “LLFBL”) is a 14-team, non-keeper rotisserie league using both AL and NL players. Each league member participated in a snake draft on March 27, 2011 selecting 25 players to build their respective teams. Like many rotisserie leagues, the LLFBL is a 5×5 league using the standard hitting and pitching categories (AVG, HR, RBI, Runs, SB, W, ERA, K’s, SV, WHIP). Statistics are cumulative throughout the season and each team will accrue points based on their standings for each individual scoring category. Each team has a budget of $250 to purchase free agents through a blind auction bidding process after the draft concluded.

The LLFBL has existed since 2006 with each team responsible for providing a $150 entry fee. The $2,100 collected in league fees is then distributed to the top four teams at the end of the season with first place winning 50 percent, second place winning 30 percent, third place winning 15 percent, and fourth place winning 5 percent of the pot. Since the inception of the league, the Commissioner has requested payment of the entry fee by the time the draft takes place.

The rules and guidelines of the league are delineated in a written document called the “LLFBL Constitution.” However, the LLFBL Constitution is devoid of sections or language regarding league finances. The $150 entry fee was an agreed-upon amount established verbally by all league members when the league was formed prior to the 2006 fantasy baseball season. The money prizes were also agreed to verbally at the initial draft in March 2006, and they have remained the same ever since.

Starting in 2007, the LLFBL Commissioner issued an email to all league members requesting payment of the $150 entry fee prior to or at the upcoming 2007 draft. No penalties were threatened if a team failed to make their payment by that time. In 2007, two teams failed to provide their payment to the Commissioner by the time the draft took place. One of the teams made their payment in April 2007, and another never did make his payment during the season. That team did in fact finish in 2nd place and was entitled to $630 in winnings. Since he did not make his payment, the LLFBL deducted $150 from his winnings and issued a check for $480.

In 2008, 2009, and 2010, the LLFBL again requested, via email, that all teams make their payments no later than the date of the draft. Each year, at least one team failed to make their payment by that time. In each instance, the delinquent team eventually did make their payment well into the course of the season.

On February 10, 2011, the LLFBL Commissioner wrote an email to the league again requesting payment by the time the draft took place on March 27, 2011. On the day of the draft, all teams except the Cleveland Steamers made their payment to the Commissioner. As of Monday, July 4, 2011, the Cleveland Steamers still had not provided their payment of $150. In an email dated July 4, 2011, the LLFBL Commissioner requested payment from the Cleveland Steamers immediately or else the Cleveland Steamers’ roster would be frozen, his free agent auction budget would be depleted, and he would be precluded from making trades for the remainder of the season. The Cleveland Steamers did not respond to this email. On July 5, 2011, the LLFBL Commissioner did in fact implement the penalties he threatened and wrote to the Cleveland Steamers proclaiming these penalties would be lifted upon receipt of his payment.

Procedural History

Upon the Cleveland Steamers’ failure to respond to the Commissioner’s July 4, 2011 by the end of July 5, 2011, the LLFBL Commissioner removed his free agent auction budget and decreed to the league that he was not permitted to make trades until payment was provided.

On July 6, 2011, the Cleveland Steamers responded to the Commissioner’s email challenging his ability to take such action. Nowhere in his correspondence did the Cleveland Steamers make any reference to his own delinquency for failing to pay, nor did he make any assurance that payment would be made.

The 2011 version of the LLFBL Constitution does not contain any provisions or language pertaining to league finances or penalties imposed as a result of failing to pay.

Issue Presented

(1) Does the LLFBL Commissioner have the authority to impose such penalties against the Cleveland Steamers for failure to pay the league entry fee?

Decision

The Supreme Court of Fantasy Judgment is a strong advocate for having written Constitutions that govern fantasy sports leagues. See John Doe v. Fantasy Football League Commissioner, 2 F.J. 21, 22 (October 2010). There are a myriad of reasons why the Court believes having a Constitution in place is the best way to run and maintain a fantasy league. One of the primary reasons behind this rationale is that all league members are aware of the rules and guidelines in place that govern the administration and function of the fantasy league. When a league Commissioner writes out the rules and distributes them to the league, it shifts the burden onto the league members to read, understand, and adhere to the rules that are delineated. See Shawn Kemp is My Daddy v. Fantasy Basketball League Commissioner, 2 F.J. 24, 25 (October 2010). If a league member has an issue, question or challenge to one of the rules in the Constitution, they are welcome to raise this with the Commissioner before signing it or agreeing to its codification. See Machine v. Fantasy Football League Commissioner, 2 F.J. 1, 2 (September 2010).

While a Constitution was in place to govern the LLFBL, it was devoid of language that directly applies to the issue at hand. When a league Constitution is silent on a particular issue, the Court will defer to the default premise that a league Commissioner has the authority and discretion to handle an issue of first impression within the best interests of the league. See George v. LOEG Commissioner, 2 F.J. 42, 44 (October 2010). Commissioners should be entitled to have a certain amount of authority and autonomy to run and administer fantasy sports leagues. See Flemish USA v. League Commissioner, 2 F.J. 35, 36 (October 2010) (holding the league Commissioners are entitled to arbitrarily make decisions that do benefit the league as a whole).

One of the most important aspects of running a fantasy baseball league is collecting money from the league members, securely storing that money during the season, and distributing it in full to the teams that are entitled to financial prizes at the end of the season. This is the cornerstone of establishing trust in the commissioner and maintaining the integrity of a fantasy league. Being entrusted with league members’ money is a tremendously important burden placed on the commissioner. Additionally, a commissioner is left with the unpleasant, unrewarding, and at times daunting task of collecting such money from people. But this is a necessary task that must be done to fulfill the purposes of participating in a fantasy league that involves money. If for whatever reason the commissioner has to distribute more money than is collected, it creates a scenario where the commissioner either pays the difference out of his own pocket or decreases the payouts proportionately. Neither of these scenarios is ideal.

To his credit, the LLFBL Commissioner extended tremendous leniency to the league members who did not adhere to his requests from 2006-2010 to provide payment by the time of the draft. He had discretion to permit late payments because there were no written rules requiring such payment by a certain date, nor were there any penalties in place to castigate league members who were delinquent. League commissioners should enforce all rules and guidelines consistently. If the commissioner makes an exception for someone, it should be explained thoroughly why such an exception to the rules exist. See Machine v. Fantasy Football League Commissioner, 2 F.J. 1, 3 (September 2010). The LLFBL Commissioner finally lost his patience in waiting for payment to be made by the Steamers. In the past, other teams have failed to pay by the verbal deadline of draft day. But in those instances, payment was made shortly thereafter and certainly well before July 4 each year. Because this was an extended failure to provide payment, the LLFBL Commissioner was within his authority to treat the Steamers differently than others in the past.

The Court is consistently presented with questions about a league commissioner’s powers to enact, enforce, and modify rules within the league without any challenge to his/her decision. In most instances, the Court will side with the commissioner assuming the commissioner’s motives are benevolent and it is in the best interests of the league overall. See Afraid of Change v. Fantasy Football League, 1 F.J. 11, 12 (September 2009). Here, it is indisputable that the LLFBL Commissioner did not prejudice the Cleveland Steamers in any way. In fact, he was extremely lenient in allowing so much time to go by without receiving his payment. By the time the season was halfway over, the LLFBL Commissioner rightfully requested payment with penalties to be imposed if the Cleveland Steamers failed to comply. Granted, the Commissioner did not allow much time for the Steamers to reply before the penalties were imposed. But no excuse was provided by the Steamers explaining their lack of response over a 36-hour time frame. Additionally, the Commissioner stated that the penalties would be lifted upon receipt of the payment. This was reasonable given the circumstances and demonstrated the Commissioner’s seriousness about the issue.

Based on the aforementioned reasons, the LLFBL Commissioner was well within his authority to demand payment from the Cleveland Steamers and impose penalties for failing to comply. It is recommended that the LLFBL Constitution be amended for 2012 to include language regarding payment of entry fees and penalties to be imposed if such requirements are not met. Despite such language not existing for the 2011 season, the Commissioner’s actions were appropriate and should be upheld.

IT IS SO ORDERED.

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Comments

  1. Adi said...

    Agree with the ruling, although I feel that a failing of the commissioner in this case was the lack of a stated deadline in his July 4th email. I would ammend the ruling to include language requiring the commissioner to pair future ultimatums, financial OR otherwise, with stated timeframes for a response.

  2. Andy said...

    I respectfully disagree. While it sounds as though the owner of the Cleveland Steamers franchise is in the wrong in not making his payment, I don’t believe league commissioners should be making up rules as they go.

    In one season, the commish let the payment thing go through the entire season, only getting paid by eventually deducting the dues from a team’s winnings.

    The commish has been letting this slide year after year. In order to make his penalty against the Steamers legitimate, in my opinion, he should have proposed a rule change before the season allowing for the specific penalty to be handed down.

    For him to create a penalty at midseason and then enforce it in a way he has not done in the past is, in my opinion, wrong. If the penalty is not in writing ahead of time it should not be valid.

  3. Kevin said...

    I’m much more disturbed by the situation in which a player never paid and had his entry fee deducted from his winnings. In my opinion, non-payment should automatically exclude someone from collecting any winnings, since in the end he or she never had anything at risk like everyone else in the league. The non-payer had a free chance to win significant money, whereas everyone else had to pay $150 up front for that same chance.

    Imagine if you were sitting around a poker table and everyone paid their ante before the cards were dealt but you refused. How would the other players react to that? Allowing some players to “see their cards” before making their bet – or in this case, never bet at all – while others must put money in the pot beforehand makes the game uneven and unfair to those who do follow the rules.

  4. Andy said...

    @Kevin
    I totally agree in principle. I believe in pay-to-play.

    My problem with the case described above is that the commish has been too lenient in years past. I don’t think you can let it slide for four or five years and then suddenly change that call in the middle of season six. The rule and consequence need to be put in place at the beginning of season six if the commish is going to start enforcing it.

    Just my opinion.

  5. Michael A. Stein said...

    @Andy – I understand what you are saying, and generally I agree that league commissioners should not change or amend rules in mid-season outside of extenuating circumstances.  However, in this case, there were no written rules dealing with payment at all.  Over the course of several years, payment was made much earlier than July 4 – even if it was not made by the draft as requested.  At this point in the season, the commissioner has good reason to be concerned about non-payment because the responsibility will fall squarely on his shoulders.  True, most people would be understanding and not make the commissioner lay it out of his own pocket.  But dealing with league finances is one of the most important functions a commissioner has.  In this instance, there was a definite need to resolve the situation even if such action had never been taken before or if there was no such provision in the league’s rules. 

    There are certain issues that can arise which could potentially unravel the whole league.  Money is the #1 suspect.  At the end of the day, we all strive to win a league and win the prize money.  And we do so because we have paid an entry fee which gives us that right to compete for the prize.  When you start dealing with monetary issues, it undermines the integrity of the league and shifts attention away from the actual enjoyment and competitiveness of the league. 

    The penalties imposed by the commissioner were fair and reasonable.  He offered to lift the sanctions upon receipt of the payment.  Yes, there should be language added to the league’s constitution going forward.  But given these circumstances, the commissioner acted reasonably and within his discretion.

  6. Frank said...

    I could not agree more fully with this ruling. Having been in my league since 1986, yes 1986, with a good chunk of that time spent as commissioner, I’ve seen owners try just about everything. When a situation comes up that’s not in our constitution (non-payment, unfair trade, etc.), the commish has the authority to make up a decision on the fly. Often, he’ll use some of the long-time owners as a source of advice, but the power is his. His decision is not considered a permanent change to the rules, but a temporary decision. Any official change to the constitution has to approved by a majority of the league members. On draft day, every owner is given a copy of the league constitution, so no one can claim ignorance about a rule, and any amendments are made official on that day.

  7. Derek Ambrosino said...

    First of all, something to consider in almost all “case law” in regard to commishes, is that beign commish is a thankless job. You undertake additional responsibility and accountability, including financial risk – because if somebody deadbeats, the rest of the league is going to look to you to provide the prize anyway; “Dave didn’t pay” is not a valid excuse to me, as a winner, as to why I can’t collect my full prize. Shell it out, commish, and then go collect from him. So, with that in mind, one thing we should avoid doing uneccessarily, is to make it more burdensome to be a commish. In a true deadbeating scenario, his cash is on the line, so that should give him some extra latitude.

    With all that said, there are two ways to look at the prior instances of late payment, given that there’s no specific language in the leage constittution dealing with payment issues. The first way to look at this is Andy’s point, which basically says that the commish here set a precedent of allowing late payments and that it is then rash and inconsistent to suddenly levy such a quick and bold action here. I think that is a reasonable interpretation of things, and for that reason, I think the commish’s ultimatum should have included a formally defined grace period – you have 2 weeks to pay or something. (I distinguish “formal” because Judge Stein’s verdict implies that the whole season has already been a very generous grace period – also a reasonable interpretation.)

    The other way to look at things is that in the absence of a formal policy, the de facto policy basically becomes that which reflects the normative behavior within the group. So, if everybody but 1 dude pays by draft day, you develop an organic, crowd-sourced policy that way. The commish can grant leniency, but everybody knows when they’re right or wrong.

    This sort of comes down to whether the commish should be rewarded or punished for his previous leniency. In a court of hard law, I think Andy’s point is strong. But, commishing is more like parenting in a way. In a social sense, what basically happened was the commish had been lenient in the past, but this was the straw that broke the camel’s back. Keeping in mind the whole, don’t drive all the willing commishes away idea, I don’t really have a problem with this verdict. This is more a court of ethics than law, and I don’t feel the commish acted unethically here… unless you can argue some ulterior motive, like this commish was in first and the Steamers (my verdict is also to impose an additional fine for use of such a cliched, trite, and dated team name – what were the other contenders – Team BALCO and Honey Nut Ichiros?) were in 2nd and he acted on this to hurt that team and not out of a sense of justice, etc.

    There are myriad other issues potentially in play here. In my main league, we’re pretty lax about payment schedules. At the same time, some people are more timely and reliable than others. All the people know each other, and not everybody is treated equally. I have endless credit if I wanted, I presume, because I’m usually the first to pay. So, the commish could wait until he last day of the season without me paying and not be worried. Some other guys, he starts worrying a week into the season and stays on their asses. …A league constitution isn’t really going to change any of that. It’s really just a shitty piece of looseleaf paper, among friends with pre-standing relationships nobody is going to respect that over the expectations they have of their friends. That’s real talk!

    Also, we’ve totally done the subtract your entry fee from your payout before. We have one guy who hasn’t paid yet who is running away with the league, we basically said, you’re pretty much guaranteed in the money – no need to pay now if you don’t want to. That is not the same as not ante-ing for a poker hand – that’s actually the same thing as simply betting on a poker hand, because you don’t actually pay anything unless you lose. The league hasn’t waived his requirement, we just determined (from past history) that he’s good for it, and that the transaction, at this point, is overwhelmingly likely to be nothing but rote and procedural, and therefore not needed.

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