The ESPN vs Verses Baseball Commissioner, Case Study Example

The following case of ESPN, Inc. v. Office of the Commissioner of Baseball 76 F. Supp. 2d 416 (1999), was a major case for the both the sports network, and the Baseball industry. In the case between ESPN (Plaintiff) and the Office of Baseball Commissioner, the defendant filed a lawsuit for damages expressing that their financial loss is “believed to exceed millions of dollars”. Though the defendant did not provide substantial details of the actual losses, he argues that the damage included loses related to television package value, revenue, and exposure. The dispute was over violations of the contract between the plaintiff and the defendant. The stipulations of the contract between the two organizations was drafted and signed in 1996, and it entailed, that the plaintiff had the right to telecast major leagues games during the regular season. These were the rights the defendant provided to the plaintiff in exchange for the plaintiff’s agreement to produce telecasts of baseball on Sundays and Wednesdays. One key element that plays a vital part in the case is the plaintiff’s promise within the contract that “it has not made nor will make any contractual or other commitments that conflict with or will prevent full performance” of the contract (Johnson, 2010). There is also a clause in the contract giving the plaintiff rights to preempt as many as ten baseball games during the regular season with the prior written approval of the defendant. Preempt means to take an action specifically with the purpose to prevent an event anticipated to occur in the future. This clause empowered ESPN to replace MLB telecasts with other programming, at least 10 times a year provided they had the written consent of the organization. While it became standard practice for the plaintiff to formally request written approval to preempt some of the defendant’s games and for the defendant to grant those approvals, during the season where baseball and football collided in 1998, the defendant intentionally stopped granting the approvals. After refusing on more than one occasion, the plaintiff decided to air six footballs games in place of the regularly scheduled baseball telecasts.

The main ethical issue in this case is to determine whether one has the right to violate contracts terms if the other party in the contract is being unreasonable. The court ruled against the concept of self-help, but it does bring an inimitable debate. The law of self-help is defined as, “obtaining relief or enforcing one’s rights without resorting to legal action, such as repossessing a car when payments have not been made, retrieving borrowed or stolen goods” (Hill, 2015). The terms of the contract between ESPN and the Office of Baseball Commissioner states that, “with the prior written approval of Baseball, which shall not be unreasonably withheld or delayed, ESPN may…preempt any [Baseball game telecast] hereunder, up to a maximum of ten [Baseball game telecasts] per year, for an event of significant viewer interest” (Hill, 2015). ESPN further makes the point that they are under the election of remedies, which specifically states “an outmoded requirement that if a plaintiff (party filing suit) asks for two remedies based on legal theories which are inconsistent (a judge can grant only one or the other), the plaintiff must decide which one is the most provable and which one he/she really wants to pursue” (Hill 2015). What this means essentially is that the plaintiff has the burden of proof.

The fact that the plaintiff has the burden of proof plays a significant role in this case since it involved a lawsuit and a countersuit. Since the Office of Baseball Commissioner felt that ESPN went back on their terms in the contract, they terminated their agreement with ESPN, citing material breach. ESPN in response began instant litigation in which, they alleged the Office of Baseball Commissioner breached their contract by withholding their preempted requests in 98 and 99, as well as preventing ESPN from showing the baseball games on ESPN2, and terminating he parties agreement improperly. On ESPN’s part, they sought injunctive and declaratory relief, as well as damages. The Office of Baseball Commissioner’s counterclaims were that ESPN and NFL had a conflicting contract, preempting the games without approval, and in excess of what was discussed in the 1996 Agreement, they utilized baseball game highlight footage. The Office of Baseball Commissioner sought the exact same damages.

The Office of Baseball Commissioner argued they suffered substantial losses, but could not produce any concrete evidence, nor could argue for substantial harm. Under law, the damages for future profits, reputation, and loss of goodwill must be reasonable. Both parties filed five motions in limine, and by hearing or opinion, nine of the motions were decided. In limine refers to motions filed by a party to a lawsuit that asks the court for an order or ruling limiting or preventing a particular set of evidence from being presented by the other side at the trial of the case. The Election of Remedies doctrine is followed in which both parties terminated their contract because of materially breached seeking damages or liquidated damages. Additional y under the doctrine of waiver, the party would waive the provision in the contract, in which the Office of Baseball Commissioner alleged that it had the ability to terminate their 1996 Agreement. However, after the contract with NFL, The Office of Baseball Commissioner proceeded with the 1996 contract, forfeiting their right to waiver.

In sum, the court found that legally, the Office of Baseball Commissioner could not terminate the 1996 Agreement based solely on ESPN’s 1998 contract with the NFL or due to its 1998 preemptions of baseball games. The court found this to be true even if those actions constituted a material breach of the 1996 Agreement. However, the court further noted that, if the 1999 preemptions constituted a material breach of the agreements made by both parties then the Office of Baseball Commissioner can terminate the contract.

References

Johnson, N. H. (2010). The Little White Book of Baseball Law. Marq. Sports L. Rev., 20, 657-663.

Hill G. (2015). “Election of remedies” The People’s Law Dictionary. Fine Communications