Sony sues CBS over “Wheel”, “Jeopardy!” profits
Believes CBS-owned syndicator isn’t delivering the revenue needed for shows
Sony Pictures and CBS are headed to court in a real-life game of hangman.
Sony sued CBS Media Ventures Thursday for breach of contract, alleging the syndication company had undersold Wheel of Fortune and Jeopardy, failed to reap significant revenue from each show’s sales, and made unauthorized deals under market value in foreign countries. Sony believes the recent layoffs and turmoil at CBS corporate parent Paramount Global hurt each show.
From the lawsuit filed Thursday in Los Angeles Superior Court, Sony is alleging “self-dealing”: “Rather than live up to its obligations under the terms of the parties’ agreements, CBS recently admitted that it entered unauthorized licensing deals, in plain violation of a negotiated, two-year limit for such licenses under the agreements, and then paid itself a commission on those deals. These unauthorized deals are just the tip of the iceberg.”
CBS’ response: “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.”
The allegations that Sony is lobbing at CBS include unauthorized sales of each program to Australia and New Zeland; selling the show at below-market rates; and a failure to promote, market, and sell advertising for the shows after Paramount Global laid off staff handling the show and shifted responsibilities to other areas of the company. Sony is also claiming CBS is prioritizing its syndicated product, bundling Wheel and Jeopardy with lower-rated shows such as Hot Bench and Drew Barrymore.
The lawsuit also alleges other CBS Media Ventures shows – notably Entertainment Tonight and Inside Edition – are getting better slots on top-rated stations while Wheel and Jeopardy are being sold to lower-rated ones in certain markets. In New York, Los Angeles, and Philadelphia, Inside Edition and ET air in prime access (7-8 p.m. ET) on the CBS-owned stations opposite Jeopardy and Wheel on ABC-owned stations in the same markets. However, the reverse is true: ABC’s stations and each game show are the top performers in each market; the CBS stations generally turn in putrid ratings performances overall, especially in local news. Wheel airs on three CBS-owned stations (Boston, Dallas, Minneapolis) and Jeopardy on two (Dallas and Boston.)
ABC’s owned stations have the rights to Jeopardy and Wheel through 2028, including WLS-TV Chicago, which has aired both shows at 3:30 p.m. and 6:30 p.m., respectively, since their syndicated inceptions premiered.
The Sony-CBS partnership was formed following various corporate mergers on each side over the years. When both shows were launched in first-run syndication in 1983 and 1984, Merv Griffin Enterprises was the producer, and King World was the distributor. Griffin’s production company was briefly owned by Coca-Cola which sold its TV production unit to Columbia Pictures, which was acquired by Sony in 1989. King World was purchased by CBS in 1999 before re-merging with Viacom after 28 years. Since then, CBS and Viacom split, and got back together. King World was renamed CBS Television Distribution in 2007 and became CBS Media Ventures in 2021.
CBS licenses each show to local stations for a cash fee. CBS also sells barter spots in each show in exchange for 35 to 40 percent of receipts.
Tensions have been evident between the two for years. Back in the mid-1990s, Sony objected when King World wanted to syndicate a new version of Hollywood Squares, claiming an agreement existed stating they couldn’t produce another game show to compete with Wheel and Jeopardy. Both settled after Sony agreed to co-produce the show. Recently, CBS Media Ventures launched Flipside, a new game show with host Jaleel White, and is pitching a new game show for next fall called The Perfect Line with Inside Editon host Deborah Norville, according to Variety with Sony not involved in either project. CBS also sells barter ad time for another competing game show, Debmar-Mercury’s Family Feud.
CBS Media Ventures is not involved with the primetime editions of Wheel and Jeopardy for ABC, as both are produced by Sony. In September, Ryan Seacrest succeeded Pat Sajak as host of Wheel and saw a surge in ratings, becoming television’s most-watched entertainment linear TV show with eight million viewers per night.
One possible outcome of this lawsuit is a change regarding the distribution of each show as Sony could take over as syndicator if CBS is forced out or withdraws. Launched in 1993, Sony’s first-run operation has dwindled to almost nothing in recent years after Dr. Oz’s talk show ended after his unsuccessful run for Senate with replacement show The Good Dish a tremendous flop, lasting just two months before getting the hook. The upcoming sale of CBS Media Ventures parent Paramount Global to Skydance could change things.