Commitments and contingencies |
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| Commitments and contingencies | 17. Commitments and contingencies Venue guarantees We have long-term non-cancellable contracts to provide Wi-Fi connectivity and cellular phone access to our DAS, tower, and small cell network for our managed and operated locations. Our venue contracts generally contain initial terms that range up to 25 years. The venue contracts generally contain renewal clauses and may include escalation clauses. We may pay revenue share to our venues and certain venue contracts include minimum revenue share guarantees. Revenue share expense related to our venue contracts for the years ended December 31, 2020, 2019 and 2018 was $35,875, $41,395 and $37,991, respectively. Future minimum obligations under non-cancellable venue contracts at December 31, 2020 are as follows:
Letters of credit We have entered into Letter of Credit Authorization agreements (collectively, “Letters of Credit"), which are issued under our Credit Agreement. The Letters of Credit are irrevocable and serve as performance guarantees that will allow our customers to draw upon the available funds if we are in default. As of December 31, 2020, we have Letters of Credit totaling $12,885 that are scheduled to expire or renew over the next two-year period. There have been no drafts drawn under these Letters of Credit as of December 31, 2020. Legal proceedings From time to time, we may be subject to claims, suits, investigations and proceedings arising out of the normal course of business. A Brazilian company filed suit in Brazil claiming damages at one of our venues after we replaced them as the service provider for the provision of fixed telecom services at the venue. During the year ended December 31, 2020, we paid $1,100 for the losses, all applicable claims were released and such losses have been recorded as selling, general and administrative expenses in the consolidated statements of operations. We are not currently a party to any other litigation that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. Legal costs are expensed as incurred. Indemnification Indemnification provisions in our third-party service provider agreements provide that we will indemnify, hold harmless, and reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any claim by any third party as a result of our website, advertising, marketing, payment processing, collection or customer service activities. The maximum potential amount of future payments we could be required to make under these indemnification provisions is undeterminable. We have never paid a claim, nor have we been sued in connection with these indemnification provisions. At December 31, 2020 and 2019, we have not accrued a liability for these guarantees, because the likelihood of incurring a payment obligation in connection with these guarantees is not probable. Employment contracts As of December 31, 2020, we have entered into employment contracts with 12 of our officers and other employees. These contracts generally provide for severance benefits, including salary continuation, if employment is terminated by us without cause or by the officer for good reason. In addition, in order to assure that they would continue to provide independent leadership consistent with our best interests in the event of an actual or threatened change in control, the contract also generally provides for certain protections in the event of such a change in control. These protections generally include the payment of certain severance benefits, including salary continuation, upon the termination of employment following a change in control. Other matters We have received a claim from one of our venue partners with respect to contractual terms on our revenue share payments. The claim asserts that we have underpaid revenue share payments and related interest by approximately $4,600. We are currently in settlement discussions with our venue partner. As of December 31, 2020, we have accrued for the probable and estimable losses that have been incurred, which have been recorded as general and administrative expenses in the consolidated statements of operations. We are not currently a party to any other claims that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. |
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