That big fight could be a knockout for your business.
Your bar is all ready to broadcast the UFC fight. You’ve advertised on social media, created a drink special just for the night, and brought in extra staff to cover the crazy crowd you’re expecting. It’s going to be record numbers of patrons, the register won’t stop ringing, and you’re seeing dollar signs! Everything’s good to go—there’s just one small hitch. Did you pay the right price to broadcast the fight? If not, all that hard work and planning could end up costing you far more than you bring in. It could end up costing you your business.
Over the last several years, hundreds of business owners have had a night just like the one you’re planning. Unfortunately, a week or two later, they received a letter that spelled disaster. It’s a letter alleging that the bar or restaurant owner violated federal statute by improperly broadcasting a UFC fight and demanding thousands of dollars to avoid litigation. Litigation brought by entities like Joe Hand Promotions, J&J productions, or the UFC itself, which would be seeking HUNDREDS of thousands of dollars in damages. Maybe the owner thinks it’s a prank, or that it will just go away. Then a process server comes knocking.
Federal law governs the broadcast of cable and satellite images. If a business broadcasts a program without proper authorization, it can be subject to statutory damages—the most commonly cited statutes allow for maximum damages of up to $110,000, plus payment of the plaintiff’s attorneys’ fees. Fighting a lawsuit in federal court is not cheap, but ignoring the lawsuit could result in a default judgment being entered against you and/or your business. It sounds like a lose-lose, so what can you do?
- Dirty Boxing: First, DO NOT bring in your residential cable or satellite box to your business. This opens you to liability outside of the UFC context and can up the statutory damages relating to the UFC fight as it can be used to prove intent.
- Prize Money: If you are planning on broadcasting a fight at your business, you should expect to pay the commercial price—ranging from several hundred to several thousand dollars per event, depending on your venue’s fire code capacity. Several lawsuit defendants have claimed their cable or satellite provider messed up by giving them the residential price (usually under $100). If the price sounds too good to be true, it probably is! Be sure you confirm you are paying the commercial price for the broadcast to avoid exposure.
- Submission: If your business DID broadcast the fight in violation of federal statute, your best bet is probably going to be settlement with the company who sends you the demand letter. Unfortunately, the statute does not require bad intent to be found in violation. Think of it like a speeding ticket; the cop doesn’t care WHY you were speeding, just that you were going faster than the posted limit. Talking to an attorney may help you understand if there are any potential loop holes (like an expired statute of limitations), and, if not, an attorney can be your advocate to lower the settlement amount.
- Take It to the Mat: Once a lawsuit has been filed, the licensing company is going to be much less willing to settle at a reasonable price. Because the statute allows for the company to recover its attorneys’ fees from the defendant if successful, the company really has no motivation to drop it. Therefore, trying to resolve the matter before a lawsuit is filed is probably in your best interest. If, though, your attorney believes there could be grounds to get the lawsuit thrown out, pursuing litigation may be worth it. Just know that these companies keep several law firms busy on just this kind of lawsuit, so they will have all the arguments down pat. It will likely take your attorney significant time and money to defend against the action, so you have to be willing to pay up.
So, what are the key takeaways here? First, don’t ever try to get around federal regulations regarding cable and satellite piracy—it’s just not going to end well for you. Second, if you receive a letter like the one outlined above, DON’T IGNORE IT. Reach out to an attorney or the licensing company to get it resolved right away.
If you’ve received a demand letter or have any questions about UFC broadcast liability, contact a Goosmann attorney in Omaha, Sioux City, or Sioux Falls today!