9:21am PT by Eriq Gardner
Sony Fights Lawsuit Alleging It Plotted to Destroy 'Days of Our Lives'
In soap operas, deaths happen, sometimes by accident and sometimes out of jealousy. A month ago, the creative team behind Days of Our Lives alleged that Sony Pictures Televisions had murderous intent toward one of the longest-running scripted television programs in the world. A lawsuit from Corday Productions even ascribed motive.
"While the domestic ratings for Days of our Lives have remained largely constant, Sony’s distribution receipts have decreased by over 50%," stated the complaint. "This dramatic decline is directly attributable to a decision at the highest levels of Sony management to eliminate any competition to its own wholly-owned Series The Young and the Restless, also distributed by Sony.... In the annals of Hollywood television, it is difficult to identify a distributor more guilty of blatant conflict of interest, deceit, perfidy, and abuse of market power."
Hardly subtle, but about on par with any murder plot in the soap world.
This week, Sony slapped back with word that the patient deserves her fate.
"Daytime soap operas face a difficult and evolving television market environment," wrote Sony's lawyers in a demurrer aimed at dismissing several of Corday's causes of action. "There were once 18 different first-run network series; now, there are 4. And since 2011, plaintiff Corday’s series, Days of Our Lives has finished last in the Nielsen ratings. Given the changes and challenges of the domestic and international markets, as well as DOOL’s ratings, it is not surprising that DOOL’s profitability has declined in recent years."
Corday alleges that Sony is starving the series of enough money to continue producing a high-quality series. The plaintiff further alleges that Sony isn't charging NBC enough in licensing fees, radically underselling Days of Our Lives in foreign markets, and preventing Corday from ameliorating a lethal situation.
With claims including breach of fiduciary duty, fraud and breach of contract, Corday's attorney Pierce O'Donnell writes, "This sinister plot is working: while Sony claims that Corday has incurred $12 million in unrecouped production deficits, Sony reports no revenues from supplemental markets, and Sony's foreign revenue stream for the Series — once garnering tens of millions of dollars per year — is in a death spiral."
The conspiracy story is "pure fiction," responds Sony's legal team led by Gibson Dunn attorney Scott Edelman, also impugning the murder motive by noting that Days of Our Lives and The Young and The Restless have coexisted for 46 years.
Sony denies having any fiduciary duties toward the producer arising out of a profit-sharing agreement that gave its predecessor exclusive rights to distribute the series. The defendant points to the seminal case on the topic — a dispute over Who Framed Roger Rabbit — for the proposition that there isn't any unstated obligation to maximize profits from an enterprise. To overcome this, Corday may have to show the kind of joint enterprise that recently allowed Bill Nye the Science Guy to advance on a fiduciary duty claim brought against Disney.
Corday's fraud claims are also attacked by Sony for not specifically identifying false statements. For example, the representation that the series was $12 million in deficit is portrayed as literally true. And for an allegation that Sony failed to disclose an internal policy to not exploit the series, Sony faults the plaintiff for not specifying who concealed what.
Sony asserts that Corday is dressing up contract claims as fraud, but also attacks the claims on this end.
According to Corday, Sony must put effort into marketing and distributing Days of Our Lives, must negotiate in good faith new terms for the series now that its format has changed, and split costs for budget overages. Sony responds that the contract says nothing about "effort" obligations, that renegotiations only kick in for a different show other than Days of Our Lives and that Corday's position on overages is directly contrary to the plain terms of the agreement.
Finally, because of what's above, Sony says there's no grounds for Corday terminating the Days of Our Lives agreement.