Children's Broadcasting Wins Suit
Children's Broadcasting Wins Suit
ASHLEY H. GRANT
Sep. 30, 1998
MINNEAPOLIS (AP) _ A jury on Wednesday awarded Children's Broadcasting Corp. $20 million in a lawsuit against ABC Radio Networks Inc. and the Walt Disney Co. over the defunct Radio AAHS.
Following a four-week trial in federal court in St. Paul, the jury found that ABC and its parent, Disney, failed to perform under what used to be a strategic alliance with Minneapolis-based Children's Broadcasting. The jury also found that ABC and Disney used what they learned to launch their own children's radio service.
``We were always confident that when all of the evidence was heard, our claim would be upheld,'' said Christopher T. Dahl, president and chief executive officer of Children's Broadcasting.
New York-based ABC Radio asked U.S. District Judge Donald Alsop on Wednesday to declare a mistrial, arguing that the jury's verdict was inconsistent.
CBC was the parent company of Children's AAHS World Radio _ known as ``Radio Oz'' _ which broadcast music, news, stories and games aimed at children 12 and under and their parents. It was carried on a network of 32 stations nationally.
In 1995, ABC and Disney agreed to help find new advertisers and affiliates for Radio AAHS. But on July 30, 1996, ABC and Disney announced termination of the agreement and also announced they would launch their own children's radio network.
Disney later said it would expand Radio Disney into a national network, competing directly with Radio AAHS. Radio Disney went on the air in November 1997; CBC ceased distributing Radio AAHS on Jan. 30.
CBC sued ABC and its parent in September 1996, accusing the companies of deliberately failing to deliver on a 1995 agreement to help find new advertisers and affiliates for its Radio AAHS. It also said ABC/Disney stole its trade secrets.
``It was almost in a premeditated way that they tried to run us out of business,'' Dahl said Wednesday. ``This doesn't happen very often where a little company can prove a big company did something wrong.''
ABC Radio officials said in a statement that the jury's verdict was inconsistent because the jury found ABC had not committed any material breach of the contract but awarded $20 million anyway. ABC also said the jury found only one trade secret was misappropriated _ CBC's list of advertisers and their rates _ out of 85 originally alleged by CBC.
``Although we are disappointed in the jury's finding that ABC Radio committed a non-material breach of its contract with CBC and misappropriated one trade secret, we are pleased with the rejection of the bulk of CBC's claims,'' the news release said.
Nine jurors deliberated 4 1/2 days before reaching a verdict.
Children's Broadcasting was seeking up to $177 million in damages, a figure ABC attorney Paul Klaas said was based on inflated projections of CBC's future sales.
Klaas said in court that by the time Children's Broadcasting began talking with ABC in the hopes that ABC might buy it, CBC was ``dead in the water,'' with no profits, no track record in the industry and ownership of stations with weak broadcasting signals.
Children's Broadcasting expects to complete the sale of its 13 owned and operated radio stations in mid- to late October. It will then be out of the radio business and will concentrate on television commercials.