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Friday, January 04, 2008
Giants-Pats Simulcast Results in Bar's Lawsuit

It was reported that an Ohio sports bar filed suit against DirecTV for damages because it charged the facility for showing last week's Giants-Patriots game, despite the fact that it was simulcast on two terrestrial networks. That circumstance was discussed in a previous blog.

The lawsuit, by Cheers Sports Bar & Grill is against DirecTV, the satellite provider which carries the NFL Network. The bar pays a $151.99 monthly subscription fee to DirecTV for access to the NFL Network and for the right to show the games to patrons in the establishment. The suit claims that the simulcast cut into its profits because a far smaller number of people saw the game at the bar than if the match remained exclusively with the NFL Network.

Although other facilities may make the same claims, I'm not confident the plaintiff winning any substantial damages. Here's why:

1. One may argue that there was no breach of contract, but rather an issue of economic frustration. The game was still broadcast on NFL Network via DirecTV, so the defendant did not breach any duty. Also, the circumstances allowing the two networks to broadcast the event was unforseen and out of the control of DirecTV. Also, DirecTV offers other programming for the subscription, not just the NFL Network.

2. Even if a reliance claim can be shown (via promissory estoppel), the question of foreseeability would be hard to prove. Since the decision to simulcast the game was made only a few days before the event and it was unprecedented, how could DirecTV be aware of this possibility?

3. Finally, let's say that a reliance can be determined. What would be the damages? Consequential damages (i.e. lost business/lost profits) are traditionally hard to determine, since one cannot accurately predict how much "business" is generated by the DirecTV broadcasts. The best bet would be a refund of the monthly fee.

I glanced at DirecTV's web site and perused the standard limitation of liability clause in their Commercial Viewing Agreement. It notes that "changes of programming service" at any time. There also is a standard limitation of liability clause which focuses on service disruptions (not the issue here) and limitation of consequential damages. It also contains an arbitration clause "for any disputes arising out of this agreement.

I think that the Cheers Sports Bar and Grill will have to eat their losses.


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