8:37am PT by Eriq Gardner
Comcast Facing $150 Million Lawsuit Over Las Vegas Gaming Channel
Comcast has been busy with its proposed acquisition of Time Warner Cable, which will require approval by regulators, but the cable giant will have to find time to deal with a $150 million lawsuit brought in Nevada over an agreement to pick up an on-demand network covering gaming and Las Vegas lifestyle.
Players Network, a company run by Mark Bradley, brought the lawsuit late last month in state court. On Thursday, Comcast's lawyers had it removed to federal court.
According to the complaint (read here in full), Bradley's company first developed his company to serve up videos to major hotels and patrons. Players Network then evolved into a Pay-Per-View platform offering documentaries, behind-the-scenes and entertainment news about the gaming industry, celebrities and Las Vegas nightlife.
Bradley says that in 2004, he was contacted by Comcast vice president Peter Heumiller about a plan involving licensed videos and short broadcast clips to act as teasers to sell videos and related merchandise to Comcast's subscribers. Supposedly, Comcast had such success with this model on "Exercise TV."
Eventually, the companies worked out a deal for Comcast's digital service, and according to the lawsuit, Bradley was promised help in attaining sponsors and advertisers. By October of 2005, the complaint says that the parties had signed a 10-year agreement and put out a press release. According to news reports around that time, the new digital network would feature talk shows and poker seminars and feature celebrities like James Caan, Jennifer Tilley, Jennifer Harmon, Chris Moneymaker, Johnny Chan and Chris Ferguson.
Players Network was to provide six hours of programming a month, says the lawsuit, but Comcast allegedly never provided sufficient storage to broadcast and distribute that amount. From 2009 to 2011, Players Network says it was asking Comcast about promised ad insertion technology too, but that allegedly didn't come either.
Then in 2009, Comcast made its initial move to acquire NBCUniversal. The complaint cites the consent decree that Comcast entered into with the FCC as a condition of the merger. The consent decree contains certain mandates that Comcast not discriminate against smaller channels (particularly ones not affiliated with the company).
Players Network now says that Comcast has breached the deal it had as its partner did not increase programming as allegedly promised. Further the lawsuit states that "contrary to the promises Comcast made to the FCC, Comcast did discriminate against smaller channels such as Players Network, which is in violation of the Consent Decree." The plaintiff claims to be a third-party beneficiary of Comcast's arrangement with federal regulators.
The plaintiff now asserts that Comcast "buried" its "Vegas on Demand" channel and substantially harmed the gaming network business. The lawsuit seeks a jackpot. Players Network believe themselves damaged by more than $150 million. Besides breach of contract, Comcast is being sued for allegedly breaching the covenant of good faith and fair dealing, violating claimed fiduciary duties and more.
Comcast hasn't yet responded to a request for comment. If we hear anything, we'll update.