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LOS ANGELES (CN) — A bitter dispute between two entertainment industry giants has spilled into court with Sony Pictures suing CBS, accusing the television distributor of withholding more than $3.5 million in “ill-gotten” fees from “unauthorized licensing deals” involving two iconic, long-running games shows — Jeopardy! and Wheel of Fortune.
“CBS has been egregiously undercutting the the value and profitability of these shows in favor of its own self-interest and in violation of its contractual obligations,” Sony says in its complaint for breach of contract, filed in LA Superior Court on Thursday.
Jeopardy! — the show where contestants answer increasingly difficult trivia questions in the form of an answer — and its less-cerebral fellow, Wheel of Fortune, have been a staple of the American TV diet for nearly half a century. Both recently got new hosts; Ryan Seacrest took over from Pat Sajak in September, while record-earning former Jeopardy! contestant Ken Jennings became the host of that show late last year, following the death of longtime presenter Alex Trebek.
Both shows are produced by Sony, while CBS distributes the shows, selling them to local TV stations all around the world and taking in 35% to 40% of receipts, according to Sony in its lawsuit.
Sony suit claims that CBS “recently admitted that it entered unauthorized licensing deals” in Australia and New Zealand, in plain violation of their contract, according to Sony, which placed a two-year limit on foreign distribution. CBS, Sony adds, pocketed a commission on those foreign deals, and never paid Sony its end.
When confronted with the underhanded dealing, Sony says, “the president and CEO of CBS Media Ventures contended that Sony Pictures had received its ‘share’ of all the revenue it was entitled to receive under the unauthorized deals, even though CBS had unlawfully kept a portion of the receipts from the monies collected under these unauthorized deals.”
In August, Sony says it sent CBS a termination letter, ending their business relationship. But CBS ignored the letter, according to Sony, which goes on to accuse CBS of other malfeasance.
“These unauthorized deals are just the tip of the iceberg,” Sony says. “In fact, CBS has licensed the shows at below-market rates [and] has failed to maximize advertising revenue.”
By way of example, Sony states that CBS sold the rights to air Wheel of Fortune to a company in Johannesburg, South Africa, for $384 per episode, for between 100 and 260 episodes. Around the same time, Sony says it sold a different show — “Raid the Cage” — to the same company for $1,500 per episode, for 260 episodes.
“In other words,” Sony says in its complaint, “Sony Pictures sold more episodes of a less popular show at nearly 4x the price per episode.”
The reason for the disparity? Sony charges that CBS “actively reduces the gross receipts from the shows by favoring and benefitting its own wholly-owned shows over Jeopardy! and Wheel of Fortune.”
Sony also says that CBS’ “massive staffing cuts and restructuring have kneecapped its ability to meet its contractual obligations.”
CBS’ PR team did not immediately return a request for comment. CBS is owned by Paramount, which is in the process of being acquired by Skydance Media.
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