Cox Broadcasting Corp. v. National Collegiate Athletic Ass'n

• Decision Date: 06 December 1982
• Docket Number: Nos. 39181,39182,s. 39181
• Citation: 297 S.E.2d 733,250 Ga. 391
• Parties: , 8 Ed. Law Rep. 193 COX BROADCASTING CORP. et al. v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION. The NATIONAL COLLEGIATE ATHLETIC ASSOCIATION v. COX BROADCASTING CORP. et al. TURNER BROADCASTING SYSTEM, INC. v. COX BROADCASTING CORP. et al. , and 39206.
• Court: Georgia Supreme Court

Page 733

297 S.E.2d 733

250 Ga. 391, 8 Ed. Law Rep. 193

COX BROADCASTING CORP. et al. v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION.

The NATIONAL COLLEGIATE ATHLETIC ASSOCIATION v. COX BROADCASTING CORP. et al.

TURNER BROADCASTING SYSTEM, INC. v. COX BROADCASTING CORP. et al.

Nos. 39181, 39182, and 39206.

Supreme Court of Georgia.

Dec. 6, 1982.

James J. Thomas, II, Long, Aldridge, Heiner & Stevens, Robert W. Webb, Jr., Troutman, Sanders, Lockerman & Ashmore, Atlanta, for The National Collegiate Athletic Ass'n et al. in No. 39181.

Charles H. Kirbo, Joseph R. Bankoff, Richard A. Schneider, King & Spalding, Atlanta, Daniel H. Margolis, Gary J. Smith, Bergson, Borkland, Margolis & Adler, Washington, D.C., for Cox Broadcasting Corp. et al. in No. 39181.

Charles H. Kirbo, Joseph R. Bankoff, King & Spalding, Robert W. Webb, Jr., Troutman, Sanders, Lockerman & Ashmore, Atlanta, Daniel H. Margolis, Bergson, Borkland, Margolis & Adler, Washington, D.C., for Cox Broadcasting Corp. et al. in No. 39182.

Clay C. Long, James J. Thomas, II, Long, Aldridge, Heiner & Stevens, Atlanta, for The National Collegiate Athletic Ass'n in No. 39182.

Robert W. Webb, Jr., Steven W. Korn, Troutman, Sanders, Lockerman & Ashmore, Atlanta, for Turner Broadcasting System, Inc. in No. 39206.

James J. Thomas, II, Long, Aldridge, Heiner & Stevens, Joseph R. Bankoff, King & Spalding, Atlanta, Charles H. Kirbo, Daniel H. Margolis, Bergson, Borkland, Margolis & Adler, Washington, D.C., for Cox Broadcasting Corp. et al. in No. 39206.

BELL, Justice.

This case concerns the validity of an order of the Fulton County Superior Court denying and granting certain injunctive relief.

The American Broadcasting Companies, Inc. (ABC) and Cox Broadcasting Corporation (Cox) filed this action on July 6, 1982, seeking to restrain the National Collegiate Athletic Association (NCAA) from allegedly breaching its contract with ABC. In order to obtain this relief, ABC and Cox asked that the trial court order the NCAA to specifically perform its obligations under their contract. In particular, they contended that the NCAA had contractually promised to limit the presentation of a "Supplementary Series" of college football games to "cable and/or pay over-the-air television," but that, in violation of this agreement, the NCAA had agreed to allow the Turner Broadcasting System, Inc. (Turner) to televise the Series free over-the-air on Atlanta broadcast station WTBS. They alleged that if the NCAA was not restrained from going forward with Turner or from so contracting with other "superstations," ABC's and Cox's bargained for free over-the-air broadcast right would be substantially and irreparably harmed. ABC and Cox sought this relief for the 1982 through 1985 college football seasons.

The trial court found that the NCAA-ABC contract prohibited the NCAA from authorizing free over-the-air broadcasts of the Supplementary Series. In addition, the court found that the NCAA-Turner agreement for broadcast of the Supplementary Series during the 1982 and 1983 seasons breached the NCAA-ABC contract and that free over-the-air broadcasts by Turner would cause Cox and ABC irreparable harm. On this basis the trial court granted an interlocutory injunction restraining Turner's broadcast of the Supplementary Series for the 1983 season. However, the trial court denied injunctive relief for the 1982 season.

In addition, the trial court granted relief enjoining the NCAA from contracting with Turner or any other such "superstation" for the broadcast free over-the-air of the Supplementary Series for the 1983 through 1985 seasons.

In case # 39181, Cox and ABC appeal from that portion of the trial court's order denying them injunctive relief for 1982. In Case # 39182, the NCAA cross-appeals from the trial court's grant of injunctive relief for the 1983 through 1985 seasons. In Case # 39206, Turner appeals making the same assertions as does the NCAA, and in addition, Turner questions the scope of further hearings already ordered by the trial court.

The NCAA is authorized by its member institutions to control all televising of NCAA football games. For 1982, the NCAA altered its prior policy of selling one network all the rights to telecast live NCAA college football free over-the-air by deciding to sell to two networks rights to televise live football games free over-the-air. In addition, the NCAA decided to sell the rights to televise a Supplementary Series of live NCAA football "via such media as cable and/or pay over-the-air television."

The NCAA Football Television Committee (the NCAA Committee), the negotiating arm of the NCAA, was then authorized to sell those three sets of football television rights in accordance with a statement of Principles of the NCAA (Principles) which served as a guide or basis for negotiations between the NCAA and purchasers of television rights. In July of 1981, the NCAA and ABC began negotiations for one of the packages of free over-the-air rights for the 1982 through 1985 seasons. At this time they discussed the Supplemental Series and certain limitations on it. Although they did not specifically bargain for limitations on the method of public presentation of the Series, ABC stated that it believed such limitations were already part of the Principles of the NCAA, providing for the broadcast of the Supplementary Series "via cable and/or pay over-the-air television."

In late 1981, the NCAA Committee turned its attention to selling the Supplementary Series. In December of 1981 the NCAA held a meeting with parties interested in the rights to the Supplementary Series, and in late January of 1982, Turner and others made their bid for these rights. Turner's bid was accepted on January 27, 1982.

The Supplementary Series was to be broadcast over Turner's WTBS "superstation" and then picked up by an independent common carrier which would then distribute WTBS' signal via satellite to its cable system customers. Before signing a preliminary written agreement on Turner's accepted bid, the NCAA representatives inquired as to whether Turner could "black-out" the Supplementary Series in Atlanta so that it would not be shown free over-the-air in that area. Turner's representatives indicated that such a "black-out" was unfeasible. After this inquiry, a written preliminary agreement was signed on January 27, 1982. ¹

After the mid-December meeting concerning the Supplementary Series, ABC learned that Turner was one of the bidders on the rights to that series. At this time, ABC had in its possession a proposed draft of a written contract that had been mailed to it by the NCAA. In considering this proposal, ABC's representatives tried to negotiate into the contract some language to indicate that ABC's television rights were exclusive. Specifically, the language was: "It is agreed that other than 14 exposures carried by CBS, there shall be no other free over-the-air telecasts permitted (excluding certain exceptions)." This language was referred to as the "Turner language". ABC contacted the NCAA about adding this language to the proposed contract, but the NCAA refused to do so.

On January 29, 1982, ABC sent a telegram to the NCAA protesting the origination of the Supplementary Series free over-the-air on WTBS. During this time, ABC and the NCAA were in the process of trying to reach a final written contract. The NCAA had to have a final agreement prior to March 1, 1982 due to the scheduling of fall programming. On February 5, 1982, the NCAA sent a final proposed contract to ABC demanding acceptance by February 11, 1982, or else all...