A legal dispute between the companies behind popular television game shows “Wheel of Fortune” and “Jeopardy!” has broken out.
What To Know: Sony Group Corp (NYSE:SONY) and CBS, which is owned by Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA), have worked together on the iconic game shows for years. Sony produces “Wheel of Fortune” and “Jeopardy!” and CBS oversees the distribution.
Sony on Thursday filed a lawsuit against CBS, claiming the company earned distribution fees from unauthorized deals and has become incapable of properly distributing the shows, according to a Wall Street Journal report.
Sony alleged that CBS has assigned improper value to the shows to serve its own interests, including licensing the shows at prices below market rates and favoring its own shows when setting up distribution deals or selling ads.
CBS has been in charge of distribution for the game shows since 1999, receiving 35% to 40% commissions on the fees television stations pay to carry the shows. The report indicates that typical distribution commissions are usually closer to 15%. “Wheel of Fortune” and “Jeopardy!” generate more than $100 million in profits each year, according to a person familiar with the matter.
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Sony claimed CBS entered into long-term contract agreements with networks in New Zealand and Australia, which breaches contract terms that prohibit the company from signing deals that span more than two years.
Sony also alleged that layoffs at CBS have negatively impacted the teams that work on the iconic shows.
"CBS has gutted the teams responsible for fulfilling its contractual obligations, requiring us to step in at our own expense," Sony said in a statement.
Sony reportedly said it’s seeking damages and plans to try to end its agreement with CBS to pursue alternative distribution and advertising partners.
Shares of CBS parent Paramount Global were down 0.37% in after-hours, trading at $10.90 at the time of publication Thursday, per Benzinga Pro.
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Photos: IMDb
