Optima Media Grp. v. Bloomberg L.P.
| Decision Date | 14 May 2021 |
| Docket Number | 17-cv-01898 (AJN) |
| Parties | Optima Media Group Limited, et al., Plaintiffs, v. Bloomberg L.P., Defendant. |
| Court | U.S. District Court — Southern District of New York |
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Optima Media Limited and Optima Sports Management International (UK) Limited brought suit against Bloomberg L.P. for Bloomberg's termination of the parties' license agreement. Bloomberg asserted counterclaims against the Optima entities for their failure to perform under a license agreement and a guaranty agreement, and for the use of Bloomberg's trademarks post-termination. The Court held a nine-day bench trial starting on October 5, 2020, with closing argument on December 10, 2021. This Opinion constitutes the Findings of Fact and Conclusions of Law as required by Rule 52 of the Federal Rules of Civil Procedure.
In sum, the Court finds that the Optima entities have failed to prove any asserted claims. Bloomberg, however, has proved its counter-claim for breach of contract as a result of the Optima entities failure to adequately perform their obligations as set forth in the Agreement. Bloomberg has also established damages in the amount of $17,386,082 and entitlement to fees and costs.
Optima Media Group Limited is a Nigerian company that was majority owned by Rotimi Pedro, who was also the CEO of the company.2 PRDFOF ¶ 3.3 Mr. Pedro was also the part owner and director of Optima Sports Management International Limited. Id. In addition to those entities, Mr. Pedro also created various sub-entities to carry out the objectives of the parties' Agreement in this case, including Bloomberg Television Africa Limited, BTVA Limited, and Optima Media Group. Id. ¶ 88. The Court generally refers to all the Optima entities as "OMG" in this opinion but distinguishes among them when necessary.
On January 1, 2012, the parties executed a license agreement and guaranty agreement (together, "the Agreement"). DX-001.
Bloomberg L.P., an international media company, entered into a "Content Sharing and Licensing Agreement" with Optima Media Group Limited. DX-001.
The purpose of the License Agreement was for OMG to "produce a live weekday programming window" under the Bloomberg name that would "primarily focus on business and general news and current affairs targeted to a West African audience." Agreement ¶¶ 1(a)(i), (a)(iv). Under the License Agreement, the parties were to ensure that the "look and feel" and "the quality and integrity" of the programming window "meet the production, operational, and quality standards" established by Bloomberg Television (BTV). Id. ¶ 1(a)(iii). The License Agreement explicitly stated that the programming window, which was to be called Bloomberg West Africa or something similar, would be launched "on or before June 30, 2012." Id. ¶ 1(a)(i).
The License Agreement gave OMG the primary responsibility for creating, funding, and administering the Bloomberg West Africa channel. OMG was "responsible for[] the production and administration of" the live programming window, including "payment of all 'set-up' and maintenance costs," "management of all day-to-day operations[,]" and any "other administrative functions as are customary for the operation of a channel." Id. ¶ 1(a)(ii). OMG was also to create a television studio in Lagos with camera positions in Johannesburg and Nairobi that would "match the look-and-feel of the BTV London studios," or otherwise adapt existing facilities for that purpose. Id.
For its part, Bloomberg was to license its intellectual property for the Project and provide general guidance to OMG. Id. ¶ 7. Bloomberg also could employ, at its discretion, Executive Producers to provide assistance to OMG and monitor the Project. Id. Moreover, Bloomberg was required to allow reasonable access to its studios in New York, Hong Kong, and London upon request. Id. OMG, however, was to be "solely responsible" for the cost of using Bloomberg's studios and was also required to provide reasonable office space and travel accommodations for the Executive Producers. Id.
Under the License Agreement, OMG was to receive the right to market and sell 90% of commercial slots in the Channel Window. Id. ¶ 5(c). Bloomberg was to receive license fees from OMG for the five-year duration of the License Agreement as well as 10% of advertising slots on the channel. Id. ¶¶ 4, 5(c), 8(a), 10(a).
The License Agreement also provided both parties the right to terminate prior to the expiration of the Agreement's five-year term under certain conditions. As relevant here, either Bloomberg or OMG could terminate if either "fails to cure any material breach . . . within thirty (30) days following written notice," if either "becomes insolvent," or if either "has a change in corporate control." Id. ¶ 8(b)(i). Additionally, Bloomberg enjoyed unilateral termination rights if "the representations, warranties, or covenants made by" OMG in the Agreement "were no longer true." Id. ¶ 8(b)(ii). In a separate provision titled "REPRESENTATIONS WARRANTIES AND COVENANTS," the Agreement provides in relevant part that OMG "warrants, represents, and covenants that," as relevant here, it (1) "shall fulfill its obligations to Bloomberg in accordance with the terms set forth in this Agreement," (2) "shall promptly obtain . . . any and all rights, licenses, approvals, clearances, releases, local and international authorizations necessary to perform its obligations under this Agreement," and (3) that it "is in compliance with and shall comply with all applicable laws, rules, and regulations with respect to its rights and obligations under this Agreement." Id. ¶ 12(b).
The License Agreement also provided that the parties' obligations to perform would be excused if that failure was caused by a force majeure, which includes "any cause beyond the control of the party whose performance is so affected, including without limitation, an act of God, fire, war, terrorism . . . any legal prohibition, decree, regulation, or requirement of any governmental authority having jurisdiction," so long as the "affected party takes commerciallyreasonable efforts to mitigate the effects of such causes." Id. ¶ 14(g). The clause states that "the affected performing Party shall promptly notify the other Party of the nature and anticipated length" of the force majeure and that during that time both parties will be excused from performing. Id.
Lastly, the License Agreement provided "[n]o changes, modifications, or waivers regarding this Agreement shall be binding unless in writing and signed by the Parties hereto," and that "[n]o failure of either Party to exercise or enforce any of its rights under this Agreement shall act as a waiver of such rights." Id. ¶ 14(d).
In conjunction with the License Agreement, Bloomberg entered into a Guaranty Agreement with Optima Sports Management International (U.K.) Limited ("OSMI"). Agreement at 34. The Guaranty Agreement provided that, in the event Optima Media Group Limited "fails to pay any amount(s) due to Bloomberg under" the License Agreement, then OSMI "guarantees, as primary obligor and not merely as surety, to Bloomberg the full payment of any and all such amount(s)." Id.
The parties signed an Amendment to the Agreement in the Fall of 2012. DRPFOF ¶ 49. The Amendment expanded the scope and size of the Agreement in a number of ways. First, the term of the Agreement was expanded from five years to eight. DX-002 ("Amendment") ¶ 6. Second, while the original Agreement had defined the territory of the Project as West Africa, the Amendment expanded the territory to "the entire African continent." Id ¶ 4. Third, the amount of license fee payments OMG was to make to Bloomberg was significantly increased. Id ¶ 7.And fourth, Bloomberg was to receive a portion of gross revenue from the Project in addition to license fee payments and the right to 10% of advertising slots. Id. ¶ 8.
Additionally, although the original Agreement had set June 30, 2012 as a deadline for OMG to launch the Bloomberg West Africa channel, OMG did not do so by that time and the Amendment executed in November of that year did not contain a new deadline for launch. DRPFOF ¶ 49-51.
After three years of the parties working together on the Project, Bloomberg terminated the Agreement on May 7, 2015. DRPFOF ¶ 213. In its Notice of Termination, Bloomberg stated that its grounds for termination under the Agreement were that OMG had "become insolvent" under ¶ (8)(b)(i)(b), and that its "representations and warranties," were "no longer true" under ¶¶ 8(b)(ii)(b) and 12(b). Id.
OMG filed a Complaint in this Court for breach of contract and breach of the covenant of good faith and fair dealing, citing Bloomberg's "use of a pretextual excuse to willfully and unlawfully terminate an agreement that the media giant no longer intended to honor." Dkt. No. 1 ¶ 1. In OMG's Amended Complaint, they argue that Bloomberg's termination was unlawful because "[OMG] was not, and had never been, insolvent" and OMG had fulfilled its obligations under the Agreement. Dkt. No. 32 ¶¶ 58, 143. OMG maintained that Bloomberg knew that "the Project's launch in Lagos was merely days away" and the "Project was set to cross the finish line," but it unlawfully terminated nonetheless because the Project "clashed with Bloomberg's new approach" for "brand-building . . . in emerging markets" and because it was concerned about potential "negative media attention" surrounding the partnership. Id. ¶¶ 143, 152-53.OMG also claims that Bloomberg breached the implied covenant of good faith and fair dealing when it terminated and when it forced a renegotiation of the parties' Agreement in the Fall of 2012. Id. ¶ 186.
Bloomberg filed a Motion to Dismiss the Amended Complaint, arguing that its termination...
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