What does this mean to MMA fans? Well, if you prefer to go out to your local drinking establishment to watch UFC events, you might find yourself facing a steeper cover charge than you are used to.
While a residential viewing of a UFC PPV typically costs $44.95 ($54.95 in HD) it costs much more for a bar to order the event. Commercial establishments are charged based on their seating capacity. For example, a restaurant that holds 150 people will pay around $1000 to show the broadcast. Some places try to get around that fee by using an illegal "black box" to steal the signal or just by hooking up a dish and trying to get the event at the residential rate. That's where Joe Hand comes in.
As explained in the court's opinion in Joe Hand Promotions, Inc. v. Easterling, 2009 WL 1767579, 2 (N.D.Ohio, 2009):
As part of its normal business operations, [Joe Hand] engages in anti-piracy activities designed at protecting the legitimate purchasers of the event. [Joe Hand] utilizes Agencies which hire auditors to visit non-subscribing establishments during the broadcast of the entire bout to determine whether any such establishments are illegally exhibiting the broadcast.
In other words, Joe Hand hires people to look for bars and restaurants that are broadcasting the UFC, but that have not paid Joe Hand for the right to do so. Those folks go the bars, confirm that the broadcast is being shown, and write down details like whether prices are jacked up and how many people are there in attendance. As the "exclusive distributor," Joe Hand then has the right to sue those establishments. This practice helps Joe Hand recoup the licensing fees it pays to the UFC. The causes of action in the lawsuits include
47 U.S.C. § 605 ("Unauthorized Publication of Use of Communications") and
47 U.S.C. § 553 ("Unauthorized Reception of Cable Service").
There is no requirement of "intent" with respect to these statutes. Thus, even if a bar owner truly thought that their $44.95 gave them the right to show
UFC 103 to patrons, he or she can still get dinged for statutory damages of up to $10,000. If the bar owner was willfully violating the statute, the damages can go up to $100,000 and the owner can face criminal penalties.
The risks of getting caught might seem small, but Joe Hand is actually quite vigilant about tracking down violators. In the last 12 months in just the
United States District Court for the Southern District of Iowa (my home district), Joe Hand has filed thirteen lawsuits against bars and restaurants that allegedly had unauthorized broadcasts.
As Joe Hand himself noted in an interview with Bernard Fernandez of the Philadelphia Daily News (and yes, Joe Hand is a real guy... there is even a Joe Hand, Junior) the UFC broadcasts are big business, bigger than boxing:
People ask, 'Do you think UFC will kill boxing? It already has. Boxing's dead.
Look, the next [Floyd] Mayweather fight [Sept. 19, against Juan Manuel Marquez] is the same night as UFC 103. Does that make any sense?
If you own a sports bar and you can buy a UFC event for $1,000, and you know you're going to pack the place, why would you buy the Mayweather fight for $2,200 and not do as well?
My guess is that Joe Hand isn't having lunch with Bob Arum anytime soon.
