In the latest case of supposed synergy gone sour, television producer Steven Bochco has sued 20th Century Fox Film Corp., claiming his “NYPD Blue” show was licensed to a Fox cable network below its fair market value.
Bochco is seeking at least $61.6 million in compensation from Fox in the lawsuit, filed Friday in Los Angeles Superior Court.
Fox and its FX cable network are accused of breaching a 1988 agreement, which gave Fox the right to distribute the show’s reruns and act as Bochco’s agent. In 1996, Bochco learned Fox has licensed “NYPD Blue” to FX for $4000,000 per episode — far less than it is worth, the suit says.
The suit is at least the second in as many months to raise questions about Fox’s license-fee-arrangements with talent. Last month, actor David Duchovny sued 20th Century Fox, claiming the studio sold “The X-Files” to FX for “unreasonably low” license fees (Daily Variety, Aug. 13).
The suits by Duchovny and Bochco also raise broader questions about the conventional wisdom of integrating content producers and distributors. An argument is often made that mergers, such as the pending CBS and Viacom combination, make economic sense because they provide the distributor of content, such as the network, with a ready and presumably discount source of supply, such as a film studio.
However, various people involved in creating content typically have contractual arrangements to share in ancillary rights to their products — rights that would be affected if the studio sells those products at discount rates to affiliated companies.
“Bochco placed confidence in the fidelity and integrity of Fox and entrusted Fox with the right to distribute and exploit” the series, the producer’s attorneys said in the suit.
Bochco’s agreement with Fox gave him the right to receive $45 million from Fox up front, as well as 60% to 70% of the adjusted gross revenue generated by the distribution of “NYPD Blue” in reruns. The series airs on the Walt Disney Co.-owned ABC network, and is owned by Bochco.
The producer claims Fox failed to offer his series to any cable networks or potential buyers other than FX.
“We are unaware of any complaint being filed and have no further comment,” a Fox representative said Monday.
(Janet Shprintz, Josef Adalian and Bloomberg News Service contributed to this report.)