Urban Edge Network's Lawsuit Against SWAC, Webber Marketing Headed to Arbitration

HOUSTON — The Urban Edge Network's lawsuit against the Southwestern Athletic Conference (SWAC) and Webber Marketing and Consulting, LLC, is headed to arbitration in August 2024.  The saga between the digital streaming network, sports conference, and event production firm has been at a stalemate since Urban Edge Network filed a $250 million lawsuit in U.S. District Court for the Northern District of Texas Dallas Division on January 20, 2023.  All parties' attorneys have permission to begin depositions and discovery in preparation for the hearing.

In January 2023, Roland Martin posted a copy of the Urban Edge Network lawsuit on Twitter.  HBCU Legends reported detail of the Urban Edge Network's 30-page complaint against the SWAC and Webber Marketing contending "rescission of contract, unfair business practices in violation of Texas business and commerce code Sect. 17.46.  Hence, the digital streaming network seeks restitution, injunctive relief, and damages in its claim.

WHO ARE THE PARTICIPANTS IN THE LAWSUIT?

1. Urban Edge Network (UEN) was co-founded by CEO Todd Brown, who created the digital streaming app HBCU+ (previously known as HBCU+ League Pass).
2. Southwestern Athletic Conference (SWAC) was formed in 1920 and is the largest HBCU sports conference with 12 member institutions.  Dr. Charles McClelland is the conference commissioner and a central figure in the lawsuit.
3. Webber Marketing and Consulting, LLC is a Charlotte, North Carolina, marketing firm founded by Derek Webber.  The company has produced the National Battle of the Bands competitions and other HBCU-related events.

POINTS OF CONFLICT

The Urban Edge Network has raised several concerns against SWAC and Webber Marketing.

I. WEBBER MARKETING

• Urban Edge Network and Webber Marketing and Consulting, LLC entered an agreement on May 7, 2021.  Webber granted UEN "sole and exclusive right and license to manufacture, reproduce, sell, rent, lease, license, sublicense, distribute, exhibit, broadcast, transmit, bundle with other programming, and otherwise exploit the Games, including pre-Game, and post-Game material, live, same day, and all formats and versions (including, without limitation, any segments derived from the Games) (the "Content")."  The contract continued, "For clarity, UEN's rights hereunder include without limitation over-the-top rights and internet streaming."
• A source close to Urban Edge Network wrote, "Webber Marketing LLC did not have in effect on May 8, 2021, the "legally verifiable licensing and distribution rights to any and all of the properties" it claimed to represent, and "the Agreement is null and void on its face and unenforceable."
• One of the critical elements of the lawsuit is regarding the alleged involvement of Webber Marketing under paragraph No. 31.  The complaint states, "On or about May 7, 2021, in Roanoke, Texas, Plaintiff and Defendant Webber Marketing entered into a License and Distribution Agreement, a true and accurate copy of which is attached hereto as Exhibit "1" (the "Agreement") and is incorporated herein by this reference. Prior to entering into the Agreement, and in paragraphs 3 and 14 of the Agreement, Webber Marketing represented to UEN, both orally and in writing, in the State of Texas, that it had acquired the rights to market and convey television broadcasting and other rights.  Based on these representations by said Defendant to UEN, and UEN mistakenly believing them to be true and being completely ignorant of the falsity thereof, UEN entered into said Agreement with Webber Marketing in the State of Texas relative to marketing and other activities that were to occur primarily in the State of Texas."
• Urban Edge Network ended the agreement because allegedly Webber Marketing could not furnish the "rights and clearances" for the declared properties it said it represented, including the SWAC and CIAA.

II. SOUTHWESTERN ATHLETIC CONFERENCE

• Urban Edge Network contends in its 31-page complaint against SWAC and Webber Marketing that they may have damaged business relationships with General Motors, PepsiCo, and Procter & Gamble. UEN anticipated the revenues from those partnerships would have yielded hundreds of millions of dollars for the digital streaming network.
• UEN is alleging that the "Defendants made a conscious decision, agreed, and conspired to put UEN out of business to prevent UEN from competing with Defendants for revenues that could be derived through the exercise of media, marketing, advertising and broadcasting rights including on UEN's streaming channel which it used to broadcast SWAC and other conference games." Witnesses will be deposed regarding UEN's accusation of collusion between SWAC and Webber Marketing.
• Also, UEN believes the conference office went against the 2021 Southwestern Athletic Conference bylaws in its effort to stream sports content and events from Grambling State University and Florida A&M University. The 2021 league's bylaws state, "Any conference member who participates in a national, regional, or sectional bowl game and/or a televised contest, or meet, whether during the regular, pre-season, or post-season, will share its part of the television revenue with the conference office and other members of the Conference. The participating conference institution will retain sixty percent (60%) of the gross and forward the balance of forty percent (40%) to the conference office for inclusion in the conference treasury."
• In Urban Edge Network's filed complaint, it has petitioned the court for relief from the SWAC for "tortious interference" in several areas, including "libel and slander, and defamation of character" and "unfair business practices" by Commissioner Dr. Charles McClelland and Webber Marketing and Consulting, LLC.

"We hope that HBCU institutions and conferences will start taking control of producing their content and stop undervaluing their product by having poorly negotiated agreements with other networks," Hardy Pelt, Chief Revenue Officer for Urban Edge Network, told HBCU Legends.  "We have to educate our people on 'here's why you guys are financially struggling.'"  Pelt is hopeful for a peaceful resolution in the case.   He believes that HBCU institutions should know their rights when negotiating broadcasting partnerships for their sports programs.