Sony filed a lawsuit Thursday accusing CBS of self-dealing and of failing to maximize revenues in its syndication of “Wheel of Fortune” and “Jeopardy!“
Sony and CBS have partnered for decades on the iconic game shows, with Sony handling production and CBS overseeing distribution. The suit alleges that CBS has seen waves of layoffs and corporate turmoil in the last couple of years, rendering it incapable of properly distributing the shows.
The suit, filed in Los Angeles Superior Court, also alleges that Sony recently learned that CBS had entered into unauthorized deals in New Zealand and Australia, and had pocketed $3.6 million in fees. Sony demanded the money, and was rebuffed, with CBS claiming that Sony had already received its fair share of the fees, according to the suit.
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Sony alleges that is “the tip of the iceberg,” accusing CBS of a broader pattern of misconduct. Among the allegations is that CBS failed to secure top-dollar prices for the shows domestically and overseas.
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“CBS’s massive staffing cuts and restructuring have kneecapped its ability to meet its contractual obligations,” Sony’s lawyers allege.
Sony also accuses CBS of preferencing its own wholly-owned shows at the expense of “Wheel” and “Jeopardy!” in its licensing negotiations. For instance, Sony alleges that the game shows have been offered as a package with less popular CBS shows like “The Hot Bench” and “The Drew Barrymore Show.”
“CBS’s bundling of ‘Jeopardy!’ and ‘Wheel of Fortune’ with comparatively unpopular CBS-owned shows lowers the gross receipts that CBS would otherwise secure for the Shows had they been sold independently,” the suit alleges.
The suit also accuses CBS of putting its wholly-owned shows, like “Entertainment Tonight,” at the top-ranked stations in certain markets, while putting “Wheel” and “Jeopardy!” at lower-ranked stations. Over time, Sony alleges that this has had a detrimental effect on the shows, and on Sony’s bottom line.
“The most popular network affiliates generate more in advertising dollars, and typically also pay higher licensing fees,” the suit alleges. “Placements at the highest-rated network affiliates also contribute to maximizing revenues for a show in the long term, by ensuring that the series is exposed to the largest market audience, and in turn higher advertising rates in the local market.”
“Jeopardy!” and “Wheel of Fortune” were developed and produced by Merv Griffin Enterprises in the late 1970s and early ’80s, and were originally syndicated by King World. Sony bought MGE in 1994, and CBS bought King World in 1999, each inheriting the respective roles of their acquisition.
Sony claims that CBS’s recent struggles are partly to blame for the mishandling of the shows. The suit alleges that until 2022, CBS had a dedicated marketing team for “Jeopardy!” and “Wheel of Fortune.”
But when CBS was merged with Viacom to form Paramount Global, “sweeping layoffs” resulted, and the marketing task was reassigned to CBS marketing staffers who were already working on CBS network shows, the suit states.
“CBS put ‘Jeopardy!’ and ‘Wheel of Fortune’ low on the priority list, and as a result failed to make reasonable efforts (let alone ‘best efforts’) to effectively market and promote the premium Sony Pictures-owned content that CBS was charged with distributing,” the suit states.
Further layoffs came this year, with Paramount Global’s sale to Skydance.
Sony alleges that CBS can no longer fulfill its end of the bargain, noting that CBS recently let its contract with Nielsen lapse — undermining its ability to handle advertising sales.
In a statement, CBS denied the allegations, and said Sony simply does not like the agreement its predecessor signed decades ago.
The full CBS statement:
“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. This work has helped build shows into franchises, transform popular series into cultural icons and deliver Sony billions of dollars of revenue.
“Our contract is clear that we hold the distribution rights to these series in perpetuity. We strongly refute any claims by Sony that we did not use our best efforts in distributing the programs or otherwise failed to abide by our obligations under the agreements. Sony’s claims are rooted in the fact they simply don’t like the deal the parties agreed to decades ago.
“We look forward to vigorously defending this lawsuit in court.”
