This Saturday night, Floyd Mayweather and Manny Pacquiao will finally face each other in what is being dubbed as the “Fight of the Century.” The story about how the two boxers, widely considered the best of their era, have been dodging each other for the past five years has been well documented. It is the fight that almost never was.
For many fans, it is too little too late. But not for Mayweather, Pacquiao, and the companies promoting the match.
According to the Wall Street Journal, the “Fight of the Century” may reach a record $400 million in revenues worldwide. Mayweather alone is expected to make as much as $200 million, while Pacquiao will have to settle for just over $100 million. The promoters of the fight, G&G Boxing, are also in for a big night. In charge of licensing the right to view the fight to residents and businesses, the residential license for an HD feed is $99.95, or $25 more than the previously most expensive fight. Bars and other venues, on the other hand, are being charged several thousands of dollars to broadcast the fight, depending on occupancy and other factors.
However, these gaudy numbers are not going to be the only source of revenue for the promoters of the fight. In an effort to combat “signal piracy,” promotion companies like Joe Hand Promotions, Inc., J&J Sports Productions, Inc., and even UFC are very litigious in protecting their exclusive rights as promoters and distributors of pay-per-view events. These companies go to great lengths to ensure that they receive the appropriate licensing fee from various individuals and businesses; indeed, they hire “pay-per-view cops” whose sole purpose is to find establishments illegally showing the fight in exchange for a fee. After gathering this information, the promoters file hundreds of lawsuits each year against individuals and business owners seeking hundreds of thousands of dollars in damages for the willful exhibition of a pay-per-view event without the proper license. J&J Sports alone has filed 1,600 lawsuits against businesses – most small – for illegally showing pay-per-view events since 2010.
The suits are premised on the violation of the promoter’s rights as the exclusive licensee for television distribution of the event, which allows the promoter the right to license and sublicense the event for public viewing. The statutes generally at issue are enforced in such a way as to often reward monetary damages even for unintentional violations, and excessive attorney’s fees against the defendant for the cost of pursuing such litigation. The payout, of course, can be monumental: UFC alone collected $4.7 million in settlements from commercial cases between 2006 to January 2012. For many unsuspecting small business owners, therefore, marquee boxing or UFC events can lead to unimaginable headaches and legal fees in the future.
Unfortunately for these business owners, ignorance of the law and absence of intent does not mitigate the cost such litigation poses.
Saper Law wrote about this very issue in 2013. While that article provided an overview of how an individual or entity should proceed in the face of litigation, certain preemptive steps can and should be taken to ensure that you do not find yourself accused of the unauthorized exhibition of the fight.
- First and foremost, it is absolutely imperative to ensure that you are set up with the appropriate license from your cable provider. Most businesses that are open to the public, such as bars and restaurants, are required to have a commercial cable account. This type of account, while more expensive, allows businesses to broadcast certain events for public viewing. While business owners still need to purchase the correct license, as discussed below, the odds that a public business is mistakenly set up with a private, residential license diminish significantly.
- Along the same lines, be sure that you pay the appropriate licensing fee when you order the fight. Even if you have covered your bases and believe you have the proper business account set up with your cable provider, you may still face legal action if you do not pay (or are not charged) the required fee to display the fight. Though the exact details for this mega fight haven’t been released publicly, those interested in displaying the fight in a commercial establishment should expect to pay well in excess of $1,500.Compare this fee with the $100 fee being charged for residential viewers, and it is unfortunately easy to see why so many businesses attempt to avoid the high commercial fee.Nevertheless, if you don’t wish to pay such an excessive amount and believe your business is exempt, keep in mind that any business establishment (such as a gym) places itself at risk for showing the fight. While there are certain (and complicated) exceptions for private viewing events, an entity that experiences any sort of commercial, even if indirectly, could be exposed. This even potentially includes businesses that do not charge a cover fee, provide food or drinks, or any other amenity to their guests.
- Know your audience, and ensure that only close friends and family are in attendance.
Ultimately, the most important evaluation a business owner can make is the risk-reward analysis for showing the fight. While it is easy to believe that your business won’t be the one who is sued, promotion companies are aggressive in enforcing their rights. Considering this is the biggest pay-per-view event of all time, it stands to reason that it is also the most ripe for piracy litigation. Therefore, the potential legal fallout can and should inform your analysis of whether or not you want to show “The Fight of the Century.”