Sony filed a lawsuit in Los Angeles Superior Court against CBS on Thursday, alleging that the network engaged in “self-dealing” in the distribution of the popular game shows Jeopardy! and Wheel of Fortune.
Under a decades-long agreement between the companies, Sony will produce the shows, while CBS will be responsible for distribution.
Sony claims in court that CBS breached agreements in conducting unauthorized transactions in Australia and New Zealand, earning them $3.6 million in revenue that they then refused to share, according to Variety.
Sony said in legal documents that CBS declined to split the revenue when asked because their position was that Sony had already been paid fairly in accordance with their deal.
Sony said the deal in question was just “the tip of the iceberg” in its claims against CBS, claiming that corporate chaos and ongoing layoffs have severely hampered the company’s ability to carry out its distribution duties.
Sony filed a lawsuit in Los Angeles Superior Court against CBS on Thursday, alleging that the network engaged in “self-dealing” in the distribution of the popular game shows Jeopardy! and Wheel of Fortune
Under a decades-long agreement between the companies, Sony will produce the shows, while CBS will be responsible for distribution. Vanna White pictured in 2017 in Orlando, Florida
“CBS’s massive workforce reductions and restructurings have limited CBS’s ability to meet its contractual obligations,” Sony’s legal team said.
CBS has failed to sell the shows at maximum value at home and abroad, Sony said, adding that CBS has financially complicated licensing deals involving the in-demand game shows.
CBS tried to tie struggling original shows like The Drew Barrymore Show and The Hot Bench with the rights to Jeopardy! and Wheel of Fortune, Sony said.
Sony’s legal team told the court that ‘CBS’s bundling of Jeopardy! and Wheel of Fortune featuring relatively unpopular CBS shows reduces the gross revenue that CBS would otherwise bring in for the shows if they had been sold independently.”
Sony said in legal documents that CBS manipulated the game shows’ performance by assigning them to weaker stations, while original shows like Entertainment Tonight were set up at the top-performing stations in their respective markets.
Sony’s legal team told the court that CBS’ business practices, as alleged in the lawsuit, have cost the company money and hurt both game shows.
“The most popular network partners generate more advertising dollars and also typically pay higher licensing fees,” Sony said in documents.
It said that ‘placements with the highest-rated network partners also help maximize revenue for a show in the long term, by ensuring the series is exposed to the largest market audience, and in turn higher advertising rates in the local market .’
CBS has been unable to sell the shows at home and abroad at maximum value, Sony said. Ken Jennings pictured on the Jeopardy! set
CBS has financially complicated licensing agreements related to the game shows, Sony said
Both swashbuckling shows were initially created and produced by Merv Griffin Enterprises in the late 1970s, with the King World company handling syndication duties.
Merv Griffin Enterprises was acquired by Sony in 1994, five years before CBS’s 1999 acquisition of King World, leading to the current 25-year deal.
Sony said CBS’s internal issues have impacted revenue from the shows, noting that they had scuttled a marketing team for the 2022 shows.
Sony said the merger of CBS and Viacom to form Paramount Global led to “major layoffs” initially, and further layoffs when Paramount Global sold to Skydance.
CBS then called in their marketing staff for additional duties related to the game shows, which were “low on the priority list.”
‘As a result [CBS] “Sony has failed to make reasonable efforts (let alone make ‘best efforts’) to effectively market and promote Sony Pictures’ high-quality content that CBS was required to distribute,” Sony said.
CBS said in a response that it “looks forward to vigorously defending this lawsuit in court.”
The network said, “For more than 40 years, CBS and its predecessor King World have been experienced distribution partners and thoughtful stewards for Wheel and Jeopardy! on the syndication market.’
Both swashbuckling shows were initially created and produced by Merv Griffin Enterprises in the late 1970s. The late Griffin pictured in 1978
CBS said that “this work has helped build shows into franchises, transform popular series into cultural icons and generated billions of dollars in revenue for Sony.”
‘Our contract clearly states that we retain the distribution rights to these series in perpetuity. We strongly refute any claims by Sony that we have not used our best efforts in distributing the programs or otherwise failed to meet our obligations under the agreements.”
CBS said Sony’s claims are “rooted in the fact that they are simply not happy with the deal the parties agreed to decades ago.”