Saturday night is fight night, with the highly anticipated rematch between Manny Pacquiao and Timothy Bradley set to be broadcast on big screens across the nation.
As thousands of fans traipse into bars and restaurants to catch the big fight, a small army of corporate detectives will be lurking in the background, hoping to catch something else.
Paid by the promoters of the closed-circuit televised event, these sleuths will be on the lookout for bar owners who show the Pacquiao-Bradley fight without paying the commercial rate, which dwarfs the fee to watch in your living room.
Pay-per-view promoters go to great lengths to punish piracy by business owners. They have filed thousands of lawsuits against bars, restaurants, taquerias and barbershops for illegally airing boxing and Ultimate Fighting Championship matches to large audiences.
The consequences can be severe. Loren Minnis said it contributed to the downfall of his business.
After investigators found that his Lake Elsinore bar had showed a Floyd Mayweather Jr. fight without paying the commercial rate, the closed-circuit promoters sued.
Minnis said his brother, a co-owner, paid $23,000 to settle the lawsuit, then closed the bar.
“You’re in the first year with the bar, and all of a sudden you get this astronomical setback,” he said.
Saturday night, investigators from J & J Sports Productions Inc. will be on patrol. The company, the same one that sued Minnis, owns the commercial broadcast rights to the rematch between Pacquiao and Bradley.
Since 2010, J & J — based in Campbell, near San Jose — has filed more than 1,600 lawsuits against small-business owners for showing boxing matches without paying commercial rates. The lawsuits often seek more than $100,000 in damages.
Joseph Gagliardi, president of J & J Sports Productions, defends the company’s aggressive tack. He’s sending out 500 investigators Saturday night to help him build evidence for the next batch of lawsuits.
“I’m not in business to sue people,” he said. “But I’ve got to do it for one reason: to protect the clientele who are doing it right.”
The aggressive litigation extends to other sectors of the sports and entertainment industry.
Anthony R. Caruso, a New Jersey sports and entertainment attorney, said companies have to zealously protect their copyrights, especially in an era when pirating of music, movies and other forms of entertainment is rampant on the Internet.
“With these closed-circuit events, the promoters have a legitimate right to defend their agreements,” he said. “I do have sympathy for the bar owners, like I would have sympathy for the teenager who downloads music not really knowing it’s against the law.”
But the rules are simple, Gagliardi said: Before playing the event, any business that’s open to the public must pay the promoter that bought the commercial rights.
The fees are steep. Businesses are charged based on size; the more seats, the higher the fees. Those with up to 50 seats must pay $1,600 for the Pacquiao-Bradley fight; those with 51 to 100 seats will be charged $2,200. Gagliardi said most business owners who get in trouble order the fights on home residential accounts, then lug their home boxes to the bar or restaurant.
Blatant offenders advertise that they’ll be showing the fight — handing out fliers and promoting the fight on Facebook and Twitter, Gagliardi said — and that makes them easy to catch.
Some business owners call the lawsuits heavy-handed shakedowns targeting innocent mistakes. Lino Campos of Montebello said he was shocked when J & J sued him, seeking $170,000 last year for showing a Pacquiao fight at his barbershop in December 2012. Campos said he had a residential account with DirecTV, ordered the fight and played it for a few customers. He said he was not aware that he needed to pay a commercial rate to play the fight.
“It was like six customers,” he said. “It wasn’t like there was a bar with 40, 50, 60 people in it.”
When Campos tried to resolve the matter, he ended up at the South Pasadena office of Thomas P. Riley, an attorney who handles most of the litigation that J & J files in California. Riley told him he had violated the law and advised him to settle.
“First it was $50,000. Then $30,000. Then, ‘Is there anyone you can borrow money from?’” Campos said. “Then he said, ‘If you can’t come up with $10,000, I’ll just walk you out of my office right now.’”
He left — and the case is unresolved.
Meanwhile, the last days of the Lake Elsinore bar still rankle Minnis. He said the J & J lawsuit, filed in 2010, cost him not only his bar but also his livelihood. Although insurance eventually covered the bill, the hassle and legal expenses were the “last straw” for the business, Minnis said.
Today, he works part time as a $13-an-hour welder in Lake Ozark, Mo.
“I haven’t made $13 an hour since I was a kid,” said Minnis, 48.
Minnis said he has no issue with J & J seeking to get paid. But the $23,000 that Gagliardi’s firm ended up collecting was excessive, he said.
“I’m sure there are some cases where people deserve that kind of fine — people who are charging all this money at the door,” Minnis said. “But that wasn’t us. Shame on us, but don’t take away our livelihood.”
Gagliardi has no sympathy.
“He’s the one who made the decision to pirate the fight,” Gagliardi said. “He was just unlucky he got caught.... Most of them who do get caught do give sob stories.”
Come Saturday night, bar owners wanting to show the fight will have a choice, he said: Pay now or pay later.
“Do they pay $2,000?” he said. “Or do they gamble and end up getting caught?”