The defamation suit that Mitre Sports International Ltd. brought against HBO and its “Real Sports with Bryant Gumbel” show is nearing its conclusion. Closing arguments are expected to begin Thursday in Manhattan federal court before an 11-person jury in a case that could prove not only financially damaging for HBO if it loses, but also have a major impact on its reputation and operations.

The suit was brought by Mitre over an HBO exposé aired seven years ago that depicted children in India making soccer balls for the sporting-goods firm. Mitre filed the lawsuit claiming that producers on the HBO show staged the segment and paid the children to say they were bonded laborers, stitching soccer balls for 5 cents an hour to repay their parents’ debt. After dragging on, hearings in the case finally began on April 13.

Defamation is tough to prove in court, experts said, but the stakes are high for both firms. With the production of impactful documentaries such as “The Jinx,” “Going Clear,” “Kurt Cobain: Montage of Heck” — not to mention its backing of Vice’s expanded programming — HBO has become known as a powerhouse in the world of documentary film. Should a jury deem that the media firm deliberately deceived the viewer, that would cut to the core of HBO’s journalistic credibility — and in journalism, there’s no greater sin.

Apparel brands and retailers have spent years and millions of dollars trying to eliminate illegal child labor and other workers’ right abuses in their supply chains through their corporate social responsibility programs and many have had some success. But companies also face many challenges. The issue of child labor is not clear-cut in many developing countries, particularly because the legal working age in some of them is set below the International Labor Organization’s standards and employers argue they are complying with their country’s laws.

In the courtroom, jurors will be asked if HBO deliberately acted recklessly when it produced the child labor report, which Mitre has dubbed a “hoax.” That question will prove important when evaluating whether HBO is liable for punitive damages, or just compensatory damages.

Punitive damages are harder to prove, as they imply intent — they are also more lucrative if proven. Presiding Judge George Daniels will decide whether jurors are permitted to consider punitive damages.

His decision will likely be informed by Mitre’s evidence, which includes videotaped testimony that it collected of the children in the HBO story. In Mitre’s interview, one child said she was paid 100 rupees — about $1.50 — to pretend she was a soccer-ball sewer, while others said they were duped by HBO and told to sensationalize stories of mental and physical abuse.

For its part, HBO said the producers responsible for the segment were not on-site when their Indian counterparts, who were stringers, filmed it. To further clarify, an HBO spokesman told WWD: “The accusation that HBO or its Indian stringers fabricated footage is false and is convincingly refuted by the outtakes, which show children stitching Mitre balls with great proficiency. Although some — but not all — of these children testified they had not stitched before, that testimony is not credible.”

In other words, the children were fabricating that they fabricated knowing how to sew. HBO added that Mitre was contacted for comment “nearly a month” before the story premiered, and was sent “screen grabs” of children stitching Mitre soccer balls.  The company declined to give an interview, the spokesman contended. Mitre declined comment Wednesday.

The jury, which saw testimony from Bryant Gumbel, who hosts “Real Sports,” and Bernard Goldberg, who reported the story, will also consider the scope of the damages.

The segment, alternately called “Childhood Lost” and “Children of Industry,” said children were sewing soccer balls for “at least 10” brands, but it only focuses on Mitre. This resulted in Wal-Mart Stores Inc. removing all Mitre Cobra soccer balls from its shelves, following airing of the report.

But according to HBO, producers from “Real Sports” were able to track the Mitre-branded balls through UPC codes and that it wasn’t intentionally targeting Mitre or Wal-Mart. Instead, HBO said its investigation showed that the balls were sold in stores in the U.S. and abroad.

“HBO producers went to India, and one of them personally saw children stitching Mitre soccer balls during one of the trips,” the spokesman offered. “They did extensive research, speaking to numerous experts and reviewing thousands of pages of documents, many of which are part of the court record.”

Mitre is part of U.K.-based Pentland Brands plc, a third-generation, family-owned business that has annual sales of $3 billion across 200 countries.

Its other sports-oriented and footwear brands including Berghaus, Canterbury of New Zealand, Speedo, Boxfresh, Ellesse, KangaRoos, Prostar, Red or Dead and Mitre, which in addition to soccer balls makes sports equipment. Pentland is also the global licensee for Lacoste Chaussures and Ted Baker footwear, the U.K. licensee for Kickers, and are shareholders in Butterfly Twists and Hunter Boot footwear brands.

The group, which started as a family business selling shoes in Liverpool, England, is also the majority owner of JD Sports Fashion plc, which operates more than 800 sports, fashion and outdoor stores across Europe.

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