• SCA Promotions “Bounces Back”: Yahoo Owes Millions for Backing Out of NCAA Bracket Prize
  • September 14, 2017 | Author: Joseph M. Hanna
  • Law Firm: Goldberg Segalla LLP - Buffalo Office
  • Back in 2014, Yahoo promised college basketball fans a “Billon-Dollar Bracket,” which allowed anyone who could predict every winner in the 2014 NCAA men’s basketball tournament $1 billion dollars. To create this contest, Yahoo entered into an $11 million dollar contract with prize promoter SCA Promotions. Once the contract was finalized, SCA went looking to find insurance coverage for the grand prize. However, at the same time, Warren Buffet’s Berkshire Hathaway and Quicken Loans came up with their own $1 billion prize, and Yahoo dumped SCA to enter into a contract with them. SCA then sued for half of its $11 million contract per the cancellation penalty in the contract.

    Before the lawsuit, there was also a substantial debate about if Yahoo or SCA came up with the idea for the “Billion-Dollar Bracket”. SCA president, Bob Hamman, stated that he and Warren Buffet initially came up with the idea over a bridge game, went to Yahoo, and were turned down under the 10 million user cap Buffet wanted. This led to SCA making its own deal with Yahoo. However, Buffet made his own separate 15 million user deal with Quicken Loans, which led to Yahoo ditching SCA for the Buffet/Quicken contract, and SCA filing a lawsuit, which ended the contest.

    Initially, Yahoo won in the lower court by arguing that SCA improperly leaked the promotion to Buffet and Berkshire while it was trying to find insurance coverage for the grand prize. However, this past week SCA “bounced back” when the Fifth Circuit Court of Appeals in New Orleans held that Yahoo owes SCA $5.5 million for backing out of the contract. The Fifth Circuit rejected Yahoo’s argument by stating “any information that SCA disclosed to Berkshire Hathaway was not confidential information.”

    Jon Patton, a lawyer for SCA, said in an interview “it has been a long battle over what we thought was a simple contractual provision. We’re pleased the court of appeals got this right.”