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Advertising, Marketing & Promotions Alert >> Is This the End of Premium SEPTEMBER 2011 ADVERTISING, MARKETING & PROMOTIONS >> ALERT IS THIS THE END OF PREMIUM TEXT MESSAGING GAMES? More than four years after lawsuits were filed against Fox Broadcasting, NBC, and other parties claiming that sweepstakes promoted on the TV shows “Deal Or No Deal” and “American Idol” were illegal under California and Massachusetts law, the parties have reached a tentative settlement. The settlement, scheduled for a BACKGROUND THE BOTTOM LINE preliminary hearing in federal district The settlement relates to the Lucky Do the lawsuits and settlement mean court in California on September 19, Case Game promotional sweepstakes the end of premium text messaging provides that the defendants will: that aired between December 2005 promotional games? Definitely not. 1) refund all premium text message and February 2008 on the television Perfectly legal promotional games show “Deal or No Deal” on NBC and charges paid by class members – can be structured using premium the American Idol Challenge promotional potentially millions of people – who text messaging as a means of entry. sweepstakes that aired between submit valid claims, Certainly, however, the appropriate February and May 2007 on the legal structure of such promotions 2) pay attorney’s fees and costs “American Idol” TV show. and related business goals must be up to about $5.2 million, and Viewers were able to participate in carefully considered and balanced 3) consent to an injunction that bars against any potential risks – of these games either by entering for them for five years from creating, litigation, lost executive time, and free via the internet (although the sponsoring, or operating any contest potential settlement costs – in the lawsuits claimed that that option was or sweepstakes for which entrants event they are challenged in court. not highly promoted) or by entering via are offered the possibility of winning a premium text message for 49 or 99 Indeed, the one principal lesson from a prize in which people who enter cents, depending on the time period. these lawsuits and the settlement via premium text message do not is this: Advertisers, producers, In the Lucky Case Game, viewers receive something of comparable sponsors, and broadcast networks value to the premium message were invited to choose which of must be sure to review both state charge in addition to their entry. six on-screen gold briefcases was and federal law and structure their the “lucky case.” At the end of the promotions in a manner to help program, the winning briefcase was reduce any potential risks. >> continues on next page Attorney Advertising SEPTEMBER 2011 ADVERTISING, MARKETING & PROMOTIONS >> ALERT revealed, and the entrants choosing THE CLAIMS the winning briefcase were entered into The class action plaintiffs contended FOR MORE INFORMATION a random drawing. The winner of that that each game constituted an illegal Joseph J. Lewczak drawing received a prize of as much Partner lottery and named as defendants the 212.468.4909 as $10,000. companies that produced, [email protected] In the American Idol Challenge, administered, sponsored, and or the D&G attorney with whom you have regular contact. viewers were invited to answer a trivia broadcast the games. The defendants question and submit their answers. denied all allegations of wrongdoing and asserted many defenses, but Davis & Gilbert LLP The winner was selected at random T: 212.468.4800 from viewers who answered the agreed to settle to avoid the time, risk, 1740 Broadway, New York, NY 10019 www.dglaw.com and expense of defending the actions. trivia question correctly. © 2011 Davis & Gilbert LLP.
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