HBO, Businesses Duke It Out : Television: The cable conglomerate says interception of a boxing match feed was illegal; several local restaurant owners say that’s pure hogwash.

Nine months after heavyweight Mike Tyson pummeled journeyman Henry Tillman in an internationally televised boxing match, cable giant Home Box Office remains in a legal battle with several local restaurant owners, some of whom say the New York-based conglomerate is trying to bully them out of their legal right to use satellite dishes to pick up such fights.

Soon after the Tyson-Tillman fight, HBO sued more than 300 restaurants and bars around the country, claiming the establishments illegally intercepted and aired the satellite transmission of the match. As part of the flurry of lawsuits--the first major crackdown of its kind by a programmer--HBO filed suit in federal court against 27 San Diego-area establishments.

Most of the local business owners have settled with HBO out of court, reportedly for a few thousand dollars each, although lawyers involved in the cases won’t reveal how many in San Diego have settled. Some San Diego restaurant owners say they have done nothing wrong, however, and they’re refusing to buckle under the weight of HBO’s legal bombardment.

“It’s all scare tactics,” said Norm Lebovitz, the owner of three local Sluggo’s restaurants.

Lebovitz, who gained national attention last year for helping to organize a successful effort to block scrambling of National Football League telecasts, says he legally picked up the transmission with his satellite dish. In his view, HBO is simply extorting money from club owners who can’t afford to fight them in court.

“The bottom line is greed,” Lebovitz said. “They are trying to grab a buck where they can grab a buck.”

HBO officials counter that restaurants that air fights without permission are stealing, plain and simple. If someone can go into a bar to watch a fight, why should he subscribe to cable to get it, they ask. Under the provisions of the Cable Communications Policy Act of 1984, programmers have the right to guard against interception of their signals.

“It is theft” for restaurants to air a cablecast fight, said Lou DiBella, vice president and general counsel for Time Warner Sports, an HBO subsidiary. “One of the major reasons we instituted this program was our affiliates were complaining about the establishments and the impact the establishments were having on their business.”

However, there is a novel twist to several of the San Diego cases, which make them more complicated than a simple question of stealing signals. The San Diego owners admit they picked up the fight, but they say they didn’t use the HBO signal. They claim they picked up the fight off a Mexican satellite, Morelos One, which is available without the aid of any illegal descrambling equipment. The Mexican signal is different from the HBO feed, they point out.

HBO scrambles the signal it sends out to its distributors. But the restaurant owners argue that the signal they picked up was not scrambled, and they were simply using their legal equipment to pick up a free broadcast signal, just like every other signal available with a satellite dish. They say that picking up the Mexican signal was akin to using their dishes to pick up ABC, NBC or any other over-the-air broadcast signal.

“It comes down to who owns the air,” said Paul Blum, manager of Pounders, a Pacific Beach sports bar. “We picked it up from a Mexican satellite, and we didn’t think what we did was illegal.”

San Diego attorney Joel Pressman, who represents both Pounders and Sluggo’s, said that if the signal came off a “rebound satellite” such as Morelos One, “it’s free air; if we can pick it up, we can pick it up.”

Not surprisingly, programmers have a different point of view. David Lefkowitz, an attorney specializing in signal security who often represents HBO and other programmers, said the Morelos One argument is a “novel and creative” defense, “but it won’t be successful.” About 15 of the signal security cases he has handled for programmers have actually gone to trial, he said, and he’s never lost a case.

“If someone is getting the signal in unauthorized fashion, who knows that the signal can’t be received in a commercial location, then that clearly falls within the statute,” Lefkowitz said.

HBO officials say they didn’t transmit their signal over Morelos One, but they acknowledge that the promoters may have sold the raw signal to a Mexican programmer. Club owners say they have done their own investigation and can prove the fight was carried over Morelos One.

But if the fight was carried by Morelos One for Mexican television stations, it would have looked significantly different than the HBO broadcast, HBO officials say. According to court documents, investigators hired by HBO visited the bars and observed the HBO telecasts, complete with the HBO logos and graphics.

“It’s up to them (the club owners) to prove how they got the signal,” said Dennis Powers, chief of signal security for HBO.

But Lebovitz and Pressman made it clear they don’t think the reports from the HBO investigators had any credibility. Part of his clients’ factual defense will be to question whether the investigators actually visited the clubs and, if so, the accuracy of what they saw.

According to the investigators’ reports, which are part of the court records, the investigators usually stayed in the establishments for 10 to 15 minutes, and the reports contain a few observations and a brief conversation with a restaurant employee. According to DiBella, HBO investigated more than 700 establishments around the country the night of the Tyson fight.

“I can march in 100 of my customers against their investigator’s report,” Lebovitz said, adding that the investigator’s report is “an awfully weak case.”

Rather than go through the court battle, most clubs choose to settle out of court. Pressman said he always advises his clients to settle these types of cases, instead of trying to battle “the power and force behind the cable network.” Not many have the “financial capability” to do it, he said.

To avoid a confrontation with HBO, Pressman also advised Lebovitz not to talk to the media. He declined to name his other clients, or to give specifics about who has settled and who is going to fight the suits.

But Lebovitz, who says he has already spent more than $10,000 on attorney fees, believes there are larger issues at stake. He wants to focus the lobbying power of his Assn. for Sports Fans Rights, which formed around the NFL scrambling debate, on HBO.

“My ultimate goal is bring to the public what is going on and how (HBO) manipulates the law so us small guys can’t win,” he said.

Lebovitz and Blum said they didn’t promote the fight, nor did they make any money on it. They simply found it on the dish that night. Blum said his bar decided to fight the lawsuit when HBO demanded $17,000.

“I don’t even think we broke $3,000 (in receipts) that night,” Blum said.

Lebovitz says HBO simply wears down the small business owners, who can’t afford to fight.

“They tear us apart one at a time before we get to court,” Lebovitz said. “Every time their lawyer calls my lawyer it costs me money, and he seems to call every day.”