Sony Pictures Television Inc. accused CBS Studios Inc. in a lawsuit of leaving millions of dollars on the table in the network’s distribution of the popular Jeopardy! and Wheel of Fortune game shows.
Sony, the producer of the programs, claims CBS has made more than $1 billion profit from a distribution agreement going back 35 years, but isn’t working aggressively enough to maximize revenue from licensing the shows to local TV stations and selling advertising in them.
For years, CBS projected flat to 2% growth in licensing revenues year-over-year, leading Sony to become “skeptical of and concerned about those projections,” according to the complaint filed Thursday in Los Angeles Superior Court. Sony said the first year it got involved in negotiations for some ABC stations, licensing fees grew 17%.
The TV business is going through a transition, with viewers shifting from broadcast and cable channels to streaming services like Netflix. That shift has squeezed profits at legacy media companies like Paramount Global, the parent of CBS, which have been looking to cut costs.
Sony blamed CBS’s “dismal performance” in part on layoffs at Paramount Global. The company has laid off 2,800 employees over the past year, some of whom had worked on fulfilling its distribution agreements, according to the complaint.
Sony also claimed that last year, CBS entered into licensing deals in Australia and New Zealand that ran longer than their two-year limit. CBS then pocketed more than $3.6 million related to the deals, according to the suit.
“When Sony Pictures demanded that CBS remit its ill-gotten gains, CBS refused,” Sony’s lawyers wrote in the complaint. “After over a year of trying and failing to get CBS to cure its material breach, Sony Pictures has been forced to file this complaint.”
Sony is seeking unspecified damages.
CBS representatives didn’t immediately respond to a request for comment.
The Wall Street Journal reported earlier on the complaint.
The case is Sony Pictures Television Inc. v. CBS Studios Inc., California Superior Court, Los Angeles County.
Top photo: A general view on the set of the “Jeopardy!” Million Dollar Celebrity Invitational Tournament Show Taping on April 17, 2010 in Culver City, California. (Photo by Amanda Edwards/Getty Images).
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