Air America Radio yanked from Chicago and LA...Franken sues...
Fledgling liberal radio pulled from stations in dispute
The Associated Press
4/14/04 5:50 PM
NEW YORK (AP) -- Just two weeks after launching, a new radio network aimed at liberal audiences suffered a setback Wednesday when a dispute with a business partner resulted in the network's signal being pulled from stations in Chicago and Los Angeles.
The owners of Air America Radio filed a lawsuit in New York's Supreme Court against the New York-based MultiCultural Radio Broadcasting Inc. after the radio company dropped Air America Radio's signal from its stations WNTD in Chicago and KBLA in Los Angeles.
MultiCultural Radio did not return phone calls for comment, but the Chicago Tribune quoted the company's owner, Arthur Liu, as saying that Air America bounced a check to them on Wednesday. Air America claims in its lawsuit that its payments are up to date.
"MultiCultural Radio Broadcasting's conduct in this matter has been disgraceful," Evan Cohen, the chairman of Air America Radio, said in a statement. "To shut off a broadcast that listeners rely on without warning and in the middle of discussions is the height of irresponsibility and a slap in the face of the media industry."
Air America claims in its lawsuit that MultiCultural Radio removed the network's signal in Chicago without notice and changed the locks on the station's offices.
Air America Radio launched March 31 in five cities around the country and on XM Satellite Radio with a slate of left-leaning talk radio and political satire, headlined by comedians Al Franken and Janeane Garofalo.
The network is still broadcasting in New York, Portland, Ore., and on a different station in Los Angeles, KCAA.
the dispute arose from an allegedly bounced check on Wednesday. It looks like MultiCultural Broadcasting immediately pulled the plug in Chicago and LA in the middle of broadcast with no warning.
sounds like a breach of contract dispute. the question is first whether the contract has a provision covering late payments or bounced checks. secondly, if the contract provides for a period of reasonable notice before pulling the plug.
first, even if there was a bounced check, I don't know that this would cause such an immediate breach that the plug gets pulled the same day. It seems that there should be at least a reasonable period given to rectify -- what if it was a bank error?
secondly, if the contract did provide for pulling the plug without notice, I would find such a clause unconscionable.
I think there is an arguable case here. It seems at first glance to be a bad faith termination of a contract. MultiCultural probably pulled the plug because they didn't like left-leaning talk radio or Franken himself (not many do).
I'm going to search for the brief on lexis...
SECOND THOUGHT: Franken might want to consider the good side of the coin. (btw, KBLA couldn't be heard by anyone, and maybe the new station broadcasting will actually carry a signal.)
If MultiCultural is found to be in material breach, then Franken could seek termination and compensation for damages resulting from having to "cover" the Chicago and LA market (at a higher price). Assuming Franken is the "buyer" and Multicultural is the "seller" of access to the broadcast airwaves. (Of course, it could be that Franken is the "seller" of a radio show and Multicultural is the "buyer" of the program to be broadcast over its stations).
This reminds me of Walker v. Harrison, where the court warned that an injured party who determines that there has been a material breach justifying his repudiation (like MultiCultural on the nonpayment justifying terminating broadcast midstream) -- that repudiation is "fraught with peril" -- because a later court may find it unwarranted and the repudiator (MultiCultural) "will have been guilty of material breach and himself become the aggressor, not an innocent victim."
MultiCultural would have a hard time proving anticipatory repudiation -- unless there is long paper trail substantiating the Franken's inability to pay -- but it seems that a 2 week old station wouldn't fit the bill. There certainly has to be some ongoing payment problem to justify anticipatory repudiation based on nonpayment.
If Franken is the innocent victim here -- being cut off midstream without warning -- then he will have to find another station in Chicago and LA to continue the broadcast. If this is "cover" -- then he can probably get some damages.
If he seeks termination, he can be placed in the same position he would have been if MultiCultural had completed the contract. the contract is cancelled and Franken has to find new stations and MultiCultural will have to pay the amount over the contract price.
unless he wants to continue the relationship with MultiCultural and seek specific enforcement and perhaps an award of future airtime for the loss during breach.
recission is not a possibility here because there is no way to put the parties back into their original positions: franken has paid out money and worked, and airtime is a temporal thing that can't be reclaimed (unless it is compensable as future airtime). But I don't think this is the best option for Franken, although it might be for MultiCultural.
hmmmm....good contracts review...gotta get that outline done, it would make this so much easier!
UPDATE: LA Times has a little more info via the Tribune...
MultiCultural claims $1 million is owed and it looks like they are claiming anticipatory repudiation.
At the Chicago and LA stations, MultiCultural actually kicked out Franken's employee from the station box switched broadcast streams and changed the locks on the doors.
The agreement seems like a lease. Franken is renting.
hmmmm....where's the brief?
MORE DETAILS: it looks like its a bit more complicated...the underlying "dispute" is fradulent billing by MultiCultural for the LA station.
from morons.org:
Progress Media's chief operating officer recently told Randi Rhodes' audience the details behind the dispute:
There are two contracts with Arthur Liu, the stations' owner; one for the Chicago station (WNTD) and one for the LA station (KBLA). Progress Media learned that Liu had been charging two different entities- Progress Media and another party- for time on the LA station at the same time.
Progress Media objected to this, figuring that charging two different entities for time on the same station at the same time amounted to theft, and disputed some of their charges related to the LA station. They did send Liu his checks on time but instructed Liu not to cash those checks until the dispute had been settled, and began negotiating to settle the dispute. Meanwhile, they allowed Liu to cash the checks for the Chicago station, since their dispute was related to the LA station only.
In the middle of negotiations over the contract dispute in LA, Liu pulled the plug not only on the LA station but the Chicago station as well, in violation of the Chicago station contract.
Again, no checks have bounced. Liu has been asked not to cash checks for the LA station until disputes over charges for that station's service are settled.
Fledgling liberal radio pulled from stations in dispute
The Associated Press
4/14/04 5:50 PM
NEW YORK (AP) -- Just two weeks after launching, a new radio network aimed at liberal audiences suffered a setback Wednesday when a dispute with a business partner resulted in the network's signal being pulled from stations in Chicago and Los Angeles.
The owners of Air America Radio filed a lawsuit in New York's Supreme Court against the New York-based MultiCultural Radio Broadcasting Inc. after the radio company dropped Air America Radio's signal from its stations WNTD in Chicago and KBLA in Los Angeles.
MultiCultural Radio did not return phone calls for comment, but the Chicago Tribune quoted the company's owner, Arthur Liu, as saying that Air America bounced a check to them on Wednesday. Air America claims in its lawsuit that its payments are up to date.
"MultiCultural Radio Broadcasting's conduct in this matter has been disgraceful," Evan Cohen, the chairman of Air America Radio, said in a statement. "To shut off a broadcast that listeners rely on without warning and in the middle of discussions is the height of irresponsibility and a slap in the face of the media industry."
Air America claims in its lawsuit that MultiCultural Radio removed the network's signal in Chicago without notice and changed the locks on the station's offices.
Air America Radio launched March 31 in five cities around the country and on XM Satellite Radio with a slate of left-leaning talk radio and political satire, headlined by comedians Al Franken and Janeane Garofalo.
The network is still broadcasting in New York, Portland, Ore., and on a different station in Los Angeles, KCAA.
the dispute arose from an allegedly bounced check on Wednesday. It looks like MultiCultural Broadcasting immediately pulled the plug in Chicago and LA in the middle of broadcast with no warning.
sounds like a breach of contract dispute. the question is first whether the contract has a provision covering late payments or bounced checks. secondly, if the contract provides for a period of reasonable notice before pulling the plug.
first, even if there was a bounced check, I don't know that this would cause such an immediate breach that the plug gets pulled the same day. It seems that there should be at least a reasonable period given to rectify -- what if it was a bank error?
secondly, if the contract did provide for pulling the plug without notice, I would find such a clause unconscionable.
I think there is an arguable case here. It seems at first glance to be a bad faith termination of a contract. MultiCultural probably pulled the plug because they didn't like left-leaning talk radio or Franken himself (not many do).
I'm going to search for the brief on lexis...
SECOND THOUGHT: Franken might want to consider the good side of the coin. (btw, KBLA couldn't be heard by anyone, and maybe the new station broadcasting will actually carry a signal.)
If MultiCultural is found to be in material breach, then Franken could seek termination and compensation for damages resulting from having to "cover" the Chicago and LA market (at a higher price). Assuming Franken is the "buyer" and Multicultural is the "seller" of access to the broadcast airwaves. (Of course, it could be that Franken is the "seller" of a radio show and Multicultural is the "buyer" of the program to be broadcast over its stations).
This reminds me of Walker v. Harrison, where the court warned that an injured party who determines that there has been a material breach justifying his repudiation (like MultiCultural on the nonpayment justifying terminating broadcast midstream) -- that repudiation is "fraught with peril" -- because a later court may find it unwarranted and the repudiator (MultiCultural) "will have been guilty of material breach and himself become the aggressor, not an innocent victim."
MultiCultural would have a hard time proving anticipatory repudiation -- unless there is long paper trail substantiating the Franken's inability to pay -- but it seems that a 2 week old station wouldn't fit the bill. There certainly has to be some ongoing payment problem to justify anticipatory repudiation based on nonpayment.
If Franken is the innocent victim here -- being cut off midstream without warning -- then he will have to find another station in Chicago and LA to continue the broadcast. If this is "cover" -- then he can probably get some damages.
If he seeks termination, he can be placed in the same position he would have been if MultiCultural had completed the contract. the contract is cancelled and Franken has to find new stations and MultiCultural will have to pay the amount over the contract price.
unless he wants to continue the relationship with MultiCultural and seek specific enforcement and perhaps an award of future airtime for the loss during breach.
recission is not a possibility here because there is no way to put the parties back into their original positions: franken has paid out money and worked, and airtime is a temporal thing that can't be reclaimed (unless it is compensable as future airtime). But I don't think this is the best option for Franken, although it might be for MultiCultural.
hmmmm....good contracts review...gotta get that outline done, it would make this so much easier!
UPDATE: LA Times has a little more info via the Tribune...
MultiCultural claims $1 million is owed and it looks like they are claiming anticipatory repudiation.
At the Chicago and LA stations, MultiCultural actually kicked out Franken's employee from the station box switched broadcast streams and changed the locks on the doors.
The agreement seems like a lease. Franken is renting.
hmmmm....where's the brief?
MORE DETAILS: it looks like its a bit more complicated...the underlying "dispute" is fradulent billing by MultiCultural for the LA station.
from morons.org:
Progress Media's chief operating officer recently told Randi Rhodes' audience the details behind the dispute:
There are two contracts with Arthur Liu, the stations' owner; one for the Chicago station (WNTD) and one for the LA station (KBLA). Progress Media learned that Liu had been charging two different entities- Progress Media and another party- for time on the LA station at the same time.
Progress Media objected to this, figuring that charging two different entities for time on the same station at the same time amounted to theft, and disputed some of their charges related to the LA station. They did send Liu his checks on time but instructed Liu not to cash those checks until the dispute had been settled, and began negotiating to settle the dispute. Meanwhile, they allowed Liu to cash the checks for the Chicago station, since their dispute was related to the LA station only.
In the middle of negotiations over the contract dispute in LA, Liu pulled the plug not only on the LA station but the Chicago station as well, in violation of the Chicago station contract.
Again, no checks have bounced. Liu has been asked not to cash checks for the LA station until disputes over charges for that station's service are settled.
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