By: David Oxenford, Wilkinson Barker Knauer, LLP
Recently, our friends at the broadcast and digital media consulting and research firm Jacobs Media posted an article on their blog called “What Could Possibly Go Wrong,” dealing with the financial and reputational issues that can arise if a contest is not fully thought out. That article reminded me of all of the legal issues that we have written about over the years that can arise if all of the issues with a broadcast contest are not carefully considered. Those potential issues range from an FCC fine if the contest is not conducted as advertised, to the threat of civil liability if the contest results in an injury to a contestant or observer. I thought that I would highlight some of the articles that we have written in the past to remind broadcasters of those potential liabilities.
On the FCC side, the FCC has always been a stickler on the rules, requiring that broadcasters, when conducting their own on-air contests, announce the rules of those contests and to follow those rules as announced. While that burden has become somewhat lighter in the last year as the FCC has allowed stations to publicize the material rules of a contest on a station’s website rather than having to announce them on the air (as long as the online location of those rules is, itself, publicized sufficiently on air, see our post here), that rule change has not affected the underlying obligation of a broadcaster to conduct the contest as announced, in accordance with the contest’s announced rules.
We have written many times about FCC fines imposed on broadcast stations that announce rules for a contest and then don’t conduct the contest according to those rules. These issues can include not properly identifying the prize (e.g. this case that fined a station for announcing that it was giving away a car when it was actually giving away a two-year lease for a car, a decision that discussed another case where a station was giving away passes to a movie opening without disclosing that it was possible that there would be insufficient seats in the theater to accommodate all pass holders). Broadcasters, in planning a contest, need to anticipate all possible eventualities, from tie-breaking methods in case multiple people qualify for a grand prize, to anticipating the potential that a prize will not be available when the winner comes to collect it (e.g. that the concert tickets that you are giving away is to a concert that gets cancelled after a winner has been selected). Always give the station an “out,” for instance, by allowing the substitution of a prize of equal value should the award of an announced prize become unavailable.
Even ambiguities in the rules can lead to fines. See our article here about a fine on a station for saying that entries would be accepted “through” a particular date, when in fact the deadline was the previous day, as the award was to be made on the announced deadline date. That article also provides some thoughts about the process of drafting contest rules. In another case summarized here, a fine was issued when the rules of a contest stated that there was to be one winner, but also included boilerplate language lifted from the rules of another old contest that implied that there would be multiple winners – and a listener claimed to be confused about how many winners would be selected. That article also talks about a fine issued to a station that dragged its feet in giving away the prize that a listener had won.
Similarly, know that you are conducting a contest and make sure that everyone at the station knows what the rules are. See our article here about one case where a prize was to be given to someone who called in to the station with a correct answer to a question that was posed on the air. When a caller called with the correct answer, the announcer decided out of the blue to ask the caller another question before the prize would be awarded, even though the rules did not provide for that second question. That article describes the even more bizarre case of an announcer who was bored while on the air over a holiday weekend and he decided to spice things up by announcing that the station was giving away a million dollars when in fact it was not – and listeners complained to the FCC when they did not get their million dollars after they called the station. In both cases, the FCC imposed fines on the stations.
We’ve also written about the potential civil liability for a contest that puts contestants at risk of physical harm. The article describes some of the take-aways for broadcasters from the well-publicized contest “hold your wee for a wii” where the idea of the contest was that contestants had to drink water and the winner of the Nintendo Wii was the last to have to use the bathroom – which led to the death of a contestant as the result of water intoxication. Any contest involving physical feats or races to get somewhere fast need to be carefully thought out, as the promoting station could be looking at potential liability if injuries to contestants or bystanders result.
Even how you conduct the contest can raise issues. Under the Telephone Consumer Protection Act (the “TCPA”), sending texts to persons who have not given their explicit consent to receive automated commercial messages can result in big fines. We wrote here about some of the issues broadcasters should consider in conducting contests or promotions that involve text messaging.
These are but some of the many legal issues that can arise if broadcasters are not very careful in conducting their on-air contests. We haven’t even talked about carefully following state laws to make sure that your contest is legal where it is conducted; about disclosing the odds of winning (if, for instance, the contest is being broadcast on multiple stations, making sure that listeners know who they are competing against); or the issues that can arise if outside contest companies don’t fulfill on their obligations (e.g. some situations have arisen where broadcasters hire third parties to conduct a big contest, thinking that the company has adequate resources to give away a big prize if there is a winner, only to find out that the company did not in fact have the resources to pay out when a winner won big). There are many, many other issues that can arise. While we don’t want to ruin everyone’s fun, any business, and particularly one as high profile as the broadcast industry, needs to conduct their contests very carefully. So consult legal counsel for the details to avoid having these legal issues become the real answer to the question of “what could possibly go wrong?”
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
There are no additional costs for the call; the advice is free as part of your membership.