Sony Pictures Television, producer of the long-running “Wheel of Fortune” and “Jeopardy!” TV programs, is suing CBS, the game shows’ distributor, for breach of contract.
Sony claims that CBS entered into unauthorized licensing deals for the shows — two of the most popular and profitable TV programs — and then paid itself a commission on those deals, according to a lawsuit filed Thursday in Los Angeles Superior Court. It also alleges that CBS licensed the shows at below-market rates and failed to maximize advertising revenues.
“The reality is that CBS has been egregiously undercutting the value of these shows in favor of its own self-interest and in violation of its contractual obligations,” states the complaint.
According to the suit, CBS, a unit of Paramount Global, which is in the midst of being acquired by Skydance Media, receives 35% to 40% commission on the fees stations pay to carry the two shows.
However, Sony alleges that last year it learned that CBS entered into unauthorized deals to license the shows in New Zealand and Australia, in violation of its contract, and that the network then refused to turn over the money it received on those deals — worth more than $3.6 million — to Sony.
Sony called the breach “just the tip of the iceberg,” contending the network engaged in broader misconduct, including that it garnered below-market prices for the shows internationally and domestically, preferencing its own wholly owned shows in its licensing negotiations.
Sony further claims the turmoil at CBS, including a raft of layoffs, has negatively affected the ad sales, marketing and distribution teams responsible for the two game shows, as well as those charged with handling their foreign distribution obligations.
CBS refuted the allegations in a statement, saying, “Sony’s claims are rooted in the fact they simply don’t like the deal the parties agreed to decades ago.
“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,” CBS said in a statement. “This work has helped build shows into franchises, transform popular series into cultural icons and deliver Sony billions of dollars of revenue.”