evidence as a concession of liability." See Weinstein's
Evidence Manual § 7.05(1)(e) (1999). See also Wayne D. Brazil,
Protecting the Confidentiality of Settlement Negotiations, 39
Hastings L.J. 955, 958 (1988) (citing Wigmore for proposition
that "an offer to settle evidences only a party's desire to
terminate the litigation; it could not support any reliable
inference about the merits of the claim or the amount of
damages."); Bank Brussels Lambert v. Chase Manhattan Bank, 93
Civ. 5298, 1996 WL 71507, *3 (S.D.N.Y. Feb. 20, 1996) ("The rule
insures that offers of compromise will not have intrinsic
evidentiary value. The rule recognizes that in the give and take
of settlement negotiations offers and concessions are made which
are inconsistent with the legal and factual positions maintained
by the parties.").
The second, and more important, justification for Rule 408's
exclusion of settlement materials is the "promotion of the public
policy favoring the compromise and settlement of disputes." Rule
408, Advisory Committee Notes. See also Manko v. United States,
87 F.3d 50, 54 (2d Cir. 1996) ("The primary purpose of Rule 408
is the `promotion of the public policy favoring the compromise
and settlement of disputes' that would otherwise be discouraged
with the admission of such evidence.").
(2) Evidence Offered For "Another Purpose"
ESPN does not intend to offer evidence of Baseball's proposed
changes to the 1996 Agreement "to prove that Baseball effectively
admitted liability by making a settlement offer." ESPN MIL at 13.
"Instead, ESPN seeks to admit the evidence to show Baseball's
motive and purpose for withholding approval of the preemption
In determining the admissibility of settlement materials under
Rule 408, the trial court "`has broad discretion' as to whether
to admit evidence of settlement . . . offered for `another
purpose.'" Starter Corp. v. Converse, Inc., 170 F.3d 286, 293
(2d Cir. 1999) (quoting Trebor, 865 F.2d at 511). "In applying
the `another purpose' exception to Rule 408, the trial judge
should weigh the need for such evidence against the potentiality
of discouraging future settlement negotiations." Id. (internal
In the instant case, ESPN's need for the disputed evidence far
outweighs any potential for discouraging future settlement
negotiations. ESPN cannot prove that Baseball's refusal to grant
its preemption requests was pretextual without offering evidence
of what it alleges was Baseball's true motive — to force a
renegotiation of the 1996 Agreement on terms more favorable to
Baseball. Put simply, such evidence is central to ESPN's case. In
contrast, the potential for discouraging future negotiations is
low. The circumstances of this case with respect to the parties'
negotiations are unique and unusual, and therefore admission of
these materials as motive evidence will not have a chilling, let
alone any, effect on settlement negotiations between other
parties in other situations.*fn28
Moreover, there is absolutely no danger that a jury will
mistake Baseball's demands to ESPN as an admission of liability.
Baseball's requests for wholesale changes to the parties'
agreement on terms substantially more favorable to Baseball do
not in any way imply weakness or concession on Baseball's part.
To the contrary, the language of Baseball's letters seeking to
resolve the NFL/preemption dispute reflect Baseball's conviction
that ESPN and not Baseball is liable for breach of contract.
In light of ESPN's substantial need for the disputed materials
and the unlikelihood that introduction of such evidence
will frustrate either of the purposes underlying Rule 408, I find
that evidence and argument related to Baseball's proposed changes
to the 1996 Agreement is admissible for the "other purpose" of
demonstrating Baseball's alleged improper motive.*fn29
As set forth above, weighing ESPN's need for the settlement
material against the potential for discouraging future settlement
negotiations, I find that the settlement materials are admissible
in this case for purposes of proving Baseball's alleged improper
4. Preclusion of Baseball's Demands Under 403
Baseball contends that evidence of its demands to ESPN should
also be precluded pursuant to FRE 403. For all of the reasons set
forth above, Rule 403 does not bar admission of the disputed
evidence. The probative value of Baseball's demands outweighs any
resulting confusion or delay.
Moreover, Baseball's claim that it would be prejudiced by
ESPN's use of the terms "extortion" and "extortionate" is mooted
by ESPN's agreement not to use those terms. In its opposition
brief, ESPN states: "ESPN is willing to concede Baseball's point
that the settlement evidence not be described at trial in terms
of `extortion,' and hereby agrees not to do so." ESPN Op. at 15.
5. Retaliation Evidence
Baseball also seeks to preclude, pursuant to FRE 402 and 403,
evidence or argument that its disapproval of ESPN's preemption
requests was in retaliation for ESPN's actions during an
unrelated 1997 contract negotiation.
In 1997, Turner Broadcast Systems ("TBS"), owner of the Atlanta
Braves Major League Baseball club, sought Baseball's permission
to convert from a television "superstation" to a national cable
television service. BB MIL at 12-13. As a superstation, TBS was
congressionally authorized to telecast certain baseball games
nationally. See id. at 13. Once it became a national cable
service, however, TBS could not telecast baseball games
nationally unless it obtained a license from Baseball. See id.
In order for Baseball to grant a telecast license to TBS, it
first had to renegotiate certain terms of its telecast agreement
with ESPN. See id. at 14. According to both parties, those
renegotiations "were difficult, frustrating and protracted."
Id. at 14; see also ESPN Op. at 15-16. An agreement was
ultimately reached, however, and the parties executed what is now
the 1997 Amendment to the 1996 Agreement.
During one of the 1997 renegotiation meetings, Baseball's
Commissioner, Allan H. ("Bud") Selig, allegedly made statements
"evincing Baseball's desire to `get even' with ESPN for
contentious prior contract negotiations." ESPN Op. at 15. ESPN
intends to use these statements to argue that Baseball withheld
its approval of ESPN's preemption requests in 1998 and 1999 in
"retaliation" for ESPN's behavior in connection with the 1997
I agree with Baseball that vague statements allegedly made by
Baseball's Commissioner more than two years ago in the heat of an
entirely separate contract dispute are irrelevant and
inadmissible here.*fn30 Any negligible probative value those
alleged statements might have, is vastly outweighed by the
confusion and delay introduction of such collateral matters would
create. There is no justification for presenting the jury with
evidence regarding an unrelated contract or testimony as to what
Mr. Selig meant by his frustrated mutterings two years ago. These
matters are simply too attenuated to be relevant. Accordingly,
ESPN is precluded from introducing evidence and argument
regarding Baseball's alleged "retaliatory" motive.
B. ESPN's Motion in Limine to Preclude Evidence Purporting to
Show the Alleged Reasonableness of Baseball's Extortionate
As set forth in the preceding section, ESPN intends to argue
that "Baseball wrongly used the preemption approval mechanism as
leverage to demand wholesale renegotiation of the 1996
Agreement." ESPN MIL at 2. During deposition discovery, ESPN
questioned Baseball's witnesses "as to what possible basis there
could be for Baseball's contention that it was entitled to demand
more than $350 million in additional payments from ESPN." Id.
at 3. In response, Paul Beeston, Baseball's President and Chief
Operating Officer, stated that the increased fee proposals were
not unreasonable but were instead based on a telecast valuation
study that Baseball had commissioned in late 1998. Beeston
testified as follows:
[These figures] were arrived at in consultation with
the report and reference to the report of Bortz. So
we'll call it the Bortz Report. They were not pulled
out of the air. They were not numbers that we said,
hey let's see if this works. They were numbers that
are defensible. They are numbers that were the result
of a lot of study and they were numbers that we put
forward in connection with our consultants that made
8/3/99 Deposition of Paul Beeston, Ex. D to 10/15/99 Affidavit of
Eric J. Lobenfeld in Support of ESPN's Motion Regarding
Baseball's Extortionate Money Demands, at 173-174.