Sony Pictures Television sued CBS Studios, alleging that the network has not maximized revenue opportunities and has engaged in self-dealing practices in distributing the popular game shows “Jeopardy!” and “Wheel of Fortune.”
The lawsuit, filed in Los Angeles Superior Court, alleges that CBS has earned over $1 billion from a 35-year distribution agreement while undervaluing the licensing fees and advertising potential of “Jeopardy!” and “Wheel of Fortune.” Additionally, Sony claims that recent corporate restructuring and staff reductions at CBS have significantly affected the network’s ability to distribute the shows effectively.
Allegedly CBS entered international distribution agreements in Australia and New Zealand, retaining $3.6 million in fees without providing appropriate compensation to Sony according to the complaint filed. The filing further claims that CBS has been licensing “Jeopardy!” and “Wheel of Fortune” with other CBS-owned programs such as “The Hot Bench” and “The Drew Barrymore Show” domestically at rates below market value and bundling them.
Furthermore, Sony alleges that after it got involved in negotiations with ABC stations, licensing fees increased by 17%, contrasting with CBS’s projected growth rate of 2%. The lawsuit also points to the recent layoffs at Paramount Global, CBS’s parent company, impacting 2,800 positions as a factor in what Sony describes as a “dismal performance” in meeting distribution responsibilities.
CBS firmly denied the allegations, in a statement, saying that it has been a “dedicated distribution partner and responsible steward of both shows for over 40 years. The network maintains that it holds perpetual distribution rights and argues that Sony is simply dissatisfied with the longstanding agreement the parties made decades ago.”