EXCLUSIVE: St. Louis Broadcaster Struggles to Stay Afloat Amid Million-Dollar Lawsuits From Warner Bros., CBS, Fox
Roberts Cos. -- previously held up as an inspiration for minority entrepreneurs -- is being sued by distributors seeking payment for shows including "Friends," "Extra" and "TMZ."
A politically connected Midwestern broadcaster that for two decades was an example of what minority entrepreneurs can achieve is struggling to stay afloat while fending off Hollywood program distributors seeking payment for shows including Friends, Extra and TMZ.
The latest lawsuit against Roberts Cos. was filed by Warner Bros. Domestic TV Distribution on Jan. 25 seeking to recover at least $1.4 million. It joins a demand for payment by CBS TV Distribution. The suits say that Roberts not only failed to pay for shows shown on their three CW affiliates but continued to broadcast them even after being told to stop because they had breached their contract.
Both the Warners and CBS claims are being settled, according to Jeanne Roberts Johnson, general counsel for the Roberts Cos. and a member of the family of the founders, chairman Michael Roberts and his brother, president Steven Roberts.
Roberts Johnson also said Tuesday that a suit filed in August 2009 by 20th Century Fox and Twentieth Television for about $1.3 million was settled out of court last year. She declined to comment on terms, but sources said they paid 50 cents on the dollar.
Fox, CBS and Warner Bros. declined to comment.
"The economy has not only affected real estate and hospitality," Roberts Johnson told The Hollywood Reporter in a brief phone interview, "it's also affected the broadcast business."
The Roberts Cos., based in St. Louis, is in all those businesses. Besides the TV stations in St. Louis, Jackson, Miss., and Columbia, S.C., their interests include a radio station, shopping centers, office buildings, condo developments, 11 hotels, construction and the 1,550-seat Roberts Orpheum Theater in their hometown.
The company also has residential developments in the Bahamas, where the brothers have homes. The St. Louis Business Journal estimated the private company had income of about $125 million in 2008, but that fell to about $85 million by last year.
They also had a wireless communications tower business that was sold in June for about $88.5 million.
The Business Journal quoted a December 2008 letter from Michael Roberts to Twentieth TV that said the broadcaster was "experiencing major liquidity problems" and that its "business valuation was at an all-time low and there is virtually no private or public debt or equity available" after "a dramatic decline in cash flow."
In an April legal filing, Twentieth TV said that when it demanded payment, Michael Roberts told them his company was "insolvent."
On Tuesday, Roberts Johnson said that was incorrect. "We are not insolvent per se," she said tersely. "We are currently operating."
By any measure, it is quite a comedown for self-made millionaires who began in humble circumstances. Inspired by the Civil Rights movement, Michael sold African merchandise to local stores while working his way though college and law school.
In 1976, Michael was the local campaign manager for presidential candidate Jimmy Carter. After Carter was elected, he was a frequent guest at the White House. Roberts returned to St. Louis and was elected an alderman; later, he rubbed elbows with such political leaders as President Bill Clinton and Atlanta mayor Maynard Jackson.
Steven also earned a law degree and became an alderman.
The two began Roberts Broadcasting in 1981 with WRBU-TV, a UHF station in St. Louis, and went on to build or acquire 11 more TV stations across the country. That led to the construction company, an aviation division, real estate, hotels, the wireless phone business (which in 1999 was publicized as the only one owned by African Americans) and more.
In 2007, after shock jock Don Imus was fired for his remarks about Rutgers women basketball players, the brothers made headlines when they banned from their urban radio station rap and hip-hop songs that were racially charged or derogatory toward women.
In 2005, Michael Roberts' book, Action Has No Season; Secrets and Strategies to Gaining Wealth and Authority, was published, and he became a speaker at business conferences and universities. Now the Roberts Cos. is apparently on the verge of a fall.
When asked if the company would file for bankruptcy protection, Roberts Johnson responded, "You never know what the future will bring. Currently, we are not in bankruptcy is what I can say."