There may not be much left of the syndication business that I’ve known for decades, but what does remain of it sure can get interesting at times. The latest example of that was what the likes of VARIETY’s Gene Maddaus attempted to even-handedly report on yesterday:
Sony filed a lawsuit Thursday accusing CBS of self-dealing and of failing to maximize revenues in its syndication of “Wheel of Fortune” and “Jeopardy!”
The suit, filed in Los Angeles Superior Court, also alleges that Sony recently learned that CBS had entered into unauthorized deals in New Zealand and Australia, and had pocketed $3.6 million in fees. Sony demanded the money, and was rebuffed, with CBS claiming that Sony had already received its fair share of the fees, according to the suit.
Sony alleges that is “the tip of the iceberg,” accusing CBS of a broader pattern of misconduct. Among the allegations is that CBS failed to secure top-dollar prices for the shows domestically and overseas.
That’s a lot less snarky and judgmental than the version that his corporate cousin Dominic Patten at DEADLINE spun a few hours later:
You don’t need to guess too many vowels or look for a Daily Double to know that Sony and CBS are getting a strong lesson in why it’s called show business and not show friends, and how the rules are no game.
The breach-of-contract suit was prepared and put in the docket by the fine attorneys at Susman Godfrey LLP, tossing everything and the economic kitchen sink in there over the Merv Griffin-created game shows.
“CBS’s failures and pattern of financially self-interested behavior — which at bottom come down to putting its own business interests over its contractual obligations to Sony Pictures — are straightforward breaches of the agreements’ express best-efforts clauses and the implied covenant of good faith and fair dealing,” the 19-page single-claim complaint adds.
To that end, the jury-seeking action from Sony, Jeopardy! Productions and Califon Productions wants an “order awarding Sony Pictures damages in an amount to be proven at trial and any such other monetary relief as the Court deems proper.”
Read: So much money we don’t want to write it down here.
And just when you thought his “reporting” was going to a tad more down-the-middle, Patten followed up with this:
(T)he Paramount Global subsidiary did give a hint of what its response eventually will be and just how blunt it might get.
“For more than 40 years, CBS and its predecessor company King World have been accomplished distribution partners and thoughtful stewards for Wheel and Jeopardy! in the syndication market,” a CBS spokesperson told Deadline today. “This work has helped build shows into franchises, transform popular series into cultural icons and deliver Sony billions of dollars of revenue.”
Note those last five words — billions of dollars of revenue — and expect to see them all over CBS’ attempt to kill this lawsuit down the line by painting Sony as simply greedy.
CBS goes on to say: “Our contract is clear that we hold the distribution rights to these series in perpetuity. We strongly refute any claims by Sony that we did not use our best efforts in distributing the programs or otherwise failed to abide by our obligations under the agreements. Sony’s claims are rooted in the fact they simply don’t like the deal the parties agreed to decades ago.”
Note those last 12 words — “they simply don’t like the deal the parties agreed to decades ago.” Also expect to see those words and variations on them all over CBS’ attempt to end this action from what they will repeatedly characterize as a sour grapes company getting pressure from their owners to generate more cash.
Whoa, Dommy Boy. With all due respect to your prolific enterprising career as a theoretical truth-teller with legal cases in media, you weren’t part of these companies, and you frankly don’t even know the half of it.
Every one of Sony’s allegations is irrefutable, including the ones that Maddaus’ version elaborated on:
“CBS’s massive staffing cuts and restructuring have kneecapped its ability to meet its contractual obligations,” Sony’s lawyers allege.
Sony also accuses CBS of preferencing its own wholly-owned shows at the expense of “Wheel” and “Jeopardy!” in its licensing negotiations. For instance, Sony alleges that the game shows have been offered as a package with less popular CBS shows like “The Hot Bench” and “The Drew Barrymore Show.”
CBS’s bundling of ‘Jeopardy!’ and ‘Wheel of Fortune’ with comparatively unpopular CBS-owned shows lowers the gross receipts that CBS would otherwise secure for the Shows had they been sold independently,” the suit alleges.
The suit also accuses CBS of putting its wholly-owned shows, like “Entertainment Tonight,” at the top-ranked stations in certain markets, while putting “Wheel” and “Jeopardy!” at lower-ranked stations. Over time, Sony alleges that this has had a detrimental effect on the shows, and on Sony’s bottom line.
A casual observer might point out that this is not the case in the largest cities, where both WHEEL and JEOPARDY occupy top-rated time slots on ABC’s largest and strongest owned-and-operated stations and regularly top the likes of ET in those markets’ local ratings. But even a cursory analysis of markets where neither CBS nor ABC own stations shows Sony’s claims to be generally accurate. And since CBS gets 100 per cent of that show’s revenue versus the smaller distribution fees they receive as agent of sale, any reference to a “a sour grapes company getting pressure from their owners to generate more cash.” would most certainly apply to CBS as well.
And consider that this strange bedfellows relationship only exists because of the passions and desperation of independent entrepreneurs who extracted from each other what at the time were concessions just to get a deal done that have been inherited by the corporate monoliths that are now tying up court dockets. As Matteus explained for the few whippersnappers amongst his readers:
“Jeopardy!” and “Wheel of Fortune” were developed and produced by Merv Griffin Enterprises in the late 1970s and early ’80s, and were originally syndicated by King World. Sony bought MGE in 1994, and CBS bought King World in 1999, each inheriting the respective roles of their acquisition.
And one needs to go to the likes of a fellow observer of sports, pop culture and media, T DOG MEDIA’s (and Chicago’s Very Own) Terence Henderson , for a bit more relevant context:
Tensions have been evident between the two for years. Back in the mid-1990s, Sony objected when King World wanted to syndicate a new version of Hollywood Squares, claiming an agreement existed stating they couldn’t produce another game show to compete with Wheel and Jeopardy. Both settled after Sony agreed to co-produce the show. Recently, CBS Media Ventures launched Flipside, a new game show with host Jaleel White, and is pitching a new game show for next fall called The Perfect Line with Inside Editon host Deborah Norville, according to Variety with Sony not involved in either project. CBS also sells barter ad time for another competing game show, Debmar-Mercury’s Family Feud.
It gets even muddier, Terence. Flip Side is being produced and is being supplied with additional coverage in tandem with Sony’s wholly-owned Game Show Network. And those FAMILY FEUD barter ratings are supplemented with numerous runs of older FEUD episodes on GSN, which at one point were as many as sixteen times a day. Contrast that with the situation with WHEEL, which only recently was able to secure a mere two daily runs on GSN to help its own cause. And even at the modest levels that GSN contributes, when you have that much tonnage, it does matter.
And bear further in mind that a significant reason for CBS’ pursuit of King World was the fact that the 90s version of SQUARES had been sold to their owned-and-operated stations at the expense of their own in-house distriubutor Eyemark (nee Group W). Then, as now, the desire to optimize 100 cents on every dollar versus the 35-40 per cent distribution fee a traditional legacy deal produces would be a naturally desired course of business. And need we remind you that come the new year yet another incarnation of SQUARES–hosted by the very same Drew Barrymore referenced above–will premiere on CBS’ prime time schedule, where it will compete for ad dollars with Sony’s primetime version of CELEBRITY WHEEL OF FORTUNE.
No, Sony doesn’t like the existing deal, nor should they. Just because those terms worked for the likes of Merv Griffin and the King brothers in the equivalent of Byzantine times doesn’t mean they work as we approach 2025. Again, there’s nothing in Sony’s lengthy list of allegations that isn’t true, including these additional points which Matteus referenced:
Sony claims that CBS’s recent struggles are partly to blame for the mishandling of the shows. The suit alleges that until 2022, CBS had a dedicated marketing team for “Jeopardy!” and “Wheel of Fortune.”
But when CBS was merged with Viacom to form Paramount Global, “sweeping layoffs” resulted, and the marketing task was reassigned to CBS marketing staffers who were already working on CBS network shows, the suit states.
“CBS put ‘Jeopardy!’ and ‘Wheel of Fortune’ low on the priority list, and as a result failed to make reasonable efforts (let alone ‘best efforts’) to effectively market and promote the premium Sony Pictures-owned content that CBS was charged with distributing,” the suit states.
Further layoffs came this year, with Paramount Global’s sale to Skydance.
Sony alleges that CBS can no longer fulfill its end of the bargain, noting that CBS recently let its contract with Nielsen lapse – undermining its ability to handle advertising sales.
That last point alone–effectively sticking Sony with the full cost of ordering ratings for their shows–was likely the last straw for the budget-conscious powers that be that are in the process of their own ascension at the studio.
I knew plenty of the people that CBS let go who dedicated themselves to the future of WHEEL and JEOPARDY. There were regular meetings of the minds on their respective lots where at one time they worked in true collaboration. They, like me, are now on the sidelines. Amazed that this all didn’t come to light sooner, and wondering if at the end of the day the resolution that of all people T Dog Henderson postulates isn’t the end result:
One possible outcome of this lawsuit is a change regarding the distribution of each show as Sony could take over as syndicator if CBS is forced out or withdraws. Launched in 1993, Sony’s first-run operation has dwindled to almost nothing in recent years after Dr. Oz’s talk show ended after his unsuccessful run for Senate with replacement show The Good Dish a tremendous flop, lasting just two months before getting the hook. The upcoming sale of CBS Media Ventures parent Paramount Global to Skydance could change things.
But since logical assertions from media bloggers get muted when big studio lawyers are calling the shots, at the moment this seems headed for court. Let’s hope this fella doesn’t turn out to be the judge.
As someone determined to get me in front of any judge recently taunted, “game on”.
Until next time…