By Matthew Swigonski
| Published
Wheel of Fortune and Jeopardy! may be lighthearted game shows designed to test the brain power of their contestants and entertain the millions of die-hard fans who tune in daily, but behind the scenes, there are allegedly million-dollar games being played. According to a lawsuit filed by Sony, the company claims that Wheel of Fortune and Jeopardy! distributor CBS has entered into multiple unauthorized licensing deals, leaving Sony out in the cold and keeping all of the profits. Despite the severe allegations made against CBS, Sony says that the unauthorized licensing deals are just the tip of the metaphorical iceberg.
The Lawsuit
On October 31, Sony filed its Wheel of Fortune and Jeopardy! lawsuit in a Los Angeles Superior Court, arguing that CBS has failed to honor the companies’ long-standing partnership regarding the distribution of the two popular game shows.
In Sony’s filing, the company said that rather than live up to its obligations under the terms of the parties’ agreements, CBS openly admitted recently that it had entered unauthorized licensing deals, which was in violation of an already negotiated two-year limit for any licenses under the agreements. According to Sony, following the completion of the unauthorized licensing deals, CBS then paid itself a commission on those deals.
All About The Money
At the heart of the allegation regarding the unauthorized licensing deals, Sony recently discovered that CBS had entered into deals in New Zealand and Australia, which pocketed the network with $3.6 million in commission fees. When Sony was made aware of the deal, the company insisted on its proper portion of the money, but they were promptly rejected and were left with nothing from the two deals. According to the Wheel of Fortune and Jeopardy! lawsuit, CBS claimed that Sony had already received its fair share of the fees and wasn’t entitled to any of the commission fees.
If losing out on millions of dollars of potential commission fees wasn’t bad enough, Sony says that CBS has routinely undervalued its programs and lost out on higher profits due to the network’s own incompetence. According to the Wheel of Fortune and Jeopardy! lawsuit, Sony also claims that CBS has licensed the shows at what they believed to be below-market rates while also failing to maximize advertising revenue.
In doing so, Sony argues that CBS has “undercut Wheel of Fortune and Jeopardy! through self-preferencing,” which has rendered itself incapable of administering its obligations under the agreements.
Sony argues that thanks to the “far-reaching” layoffs that have “decimated” the teams inside CBS responsible for the distribution of the game shows, the network is no longer capable of meeting the requirements of the previously negotiated deal between the two companies. “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 lawsuit states.
In addition to not receiving the most value for Jeopardy! and Wheel of Fortune, Sony’s lawsuit also alleges that CBS has placed a higher property on the network’s own shows ahead of the two-game shows, despite Jeopardy! and Wheel of Fortune being much more popular. Sony claims that CBS has packaged its own less popular shows in larger markets while offering the game shows to lower-ranked stations across the country.
In a statement, CBS denied all of the allegations made against the network and writes that its contract is “clear that we hold the distribution rights to these series in perpetuity.” The network says that it looks forward to “vigorously defending this lawsuit in court.”
Source: Variety