WB sues Ovitz’s ATG over ‘Lost’ $1 million

Exec VP, COO Stern ankles

In the first legal fallout from the demise of Michael Ovitz’s Artists Television Group, the WB Television Network has sued the company, seeking the return of a $1 million advance for production of the reality series “Lost in the USA.”

Separately, as ATG continues to wind down operations, a spokeswoman confirmed that executive VP and chief operating officer Sandra Stern has left the company.

Stern, who joined ATG soon after its formation in 1999, departed ATG last week. The exec had handled the boutique production house’s business affairs; she followed ATG prexy Eric Tannenbaum over from Columbia TriStar TV.

Stern becomes the highest-ranking exec yet to depart ATG; Tannenbaum remains at ATG as he oversees the company’s closure.

As for the WB complaint, filed Friday in L.A. Superior Court, the netlet alleges it entered into an agreement in June under which ATG would produce eight one-hour episodes of “Lost in the USA” to be aired on WB during the 2001/2002 season.

The budget of each episode was set at $757,711, with WB to pay a license fee of $631,417. The deficit was the responsibility of ATG.

Advance payments made

At ATG’s request, according to the complaint, WB made a series of advance payments totaling $1,011,126 in late July and early August.

By mid-August, it was widely known that ATG was shopping its assets. Execs inside the company confirmed that the company had decided to “wind down” its operations and had started to sell individual productions (Daily Variety, Aug. 15). Nonetheless, ATG repeatedly told WB it would deliver the series.

On August 21, ATG finally advised WB that it was ceasing operations and would not deliver the series.

As a result, the WB had to scramble to find replacement programming for its 7 p.m. Sunday slot. The netlet struck a deal with Columbia TriStar Television Distribution to pick up repeats of TBS’ reality skein “Ripley’s Believe it or Not.”

Breach of contract

The suit, filed after ATG refused to return the advances to the WB, alleges breach of contract. Production boutique Bunim-Murray (“The Real World”), which was to have produced “Lost in the USA” with ATG, is not involved in the suit.

As a sign of faith, the WB gave Bunim-Murray a blind pilot commitment after “Lost in the USA” went south.

Insiders said WB filed the suit now in order to stake its claim in case ATG winds up filing for bankruptcy. WB is represented by Michael Bergman of Weissmann, Wolff, Bergman, Coleman, Silverman & Holmes. He did not return a call seeking comment. ATG declined comment.

ATG, meanwhile, continues to sell off the remainder of its talent roster. Scribes such as Adam Chase and Ric Swartzlander, along with production partners such as Tom Fontana and Barry Levinson, have all found new homes elsewhere.

CBS Prods. and Sony also took over full oversight of ATG’s “Ellen Show,” while two other shows that ATG had also developed for the WB, including “Cedric the Coach,” have also gone by the wayside.

With ATG unable to cover the remainder of its pricey deals with talent, and the unlikelihood of other companies taking on 100% of those pacts, industry sources believe more lawsuits are possible — although sources inside ATG said most unresolved issues have already been worked out.

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