Variety Sues Former Owners for $10 Million

DOWN: Jay Penske

The owner of the and blogs is arrested in Nantucket and accused of drunkenly urinating on a woman's shoes. TMZ put it best: What a pisser.

The new owner of Variety is having a bit of buyer’s remorse.

Variety Media and racing heir Jay Penske's Penske Media Corp. have filed a second lawsuit charging that when it was sold the trade publication in Oct. 2012, the then-owner did not reveal contracts with a promotional partner and with a printer that would require payments of millions of dollars.

The May 8 suit filed in New York Supreme Court claims Reed Business Information and Reed Elsevier Properties owes at least $10 million. Penske wants the sellers to indemnify his company against any liabilities or losses from business transactions that were not disclosed prior to the sale.

The two claims that Penske and the new Variety dispute are with the Beverly Hills Media Group, which it has sued separately, and California Offset Printers, which this past March refused to indemnify Penske/Variety from costs under the disputed contract.

Beverly Hills Media Group allegedly made a deal with the former owners in March 2012 -- less than a month after Variety was put on the sales block --  to establish a joint venture related to a planned Beverly Hills Entertainment Week, a festival focused on film, TV, new media and finance.

The agreement gave BHMG 50 percent of the gross revenues from sponsorships in connection with the planned festival and all costs were to be paid by Variety. Later, says the suit, BHMG claimed that the rights were even broader than that and would exist in perpetuity.

BHMG then came to the new owners and said the deal granted it “exclusive rights” to multi-event, year round sponsorships for Variety, well beyond the one festival.

Penske/Variety agreed to arbitrate the dispute but there was no resolution. On April 20, BHMG sued Penske/Variety in L.A. Superior Court alleging it had repudiated their agreement.

On May 1, Penske/Variety filed legal response denying the claims and making counter claims alleging fraud, trademark infringement, unfair competition and other things.

California Offset Printers had printed Variety since 2002, but according to the lawsuit, entered into an amended deal in July 2012, which Penske/Variety says was never disclosed prior to the purchase. COP says that the contract amendment created obligations that bind Penske/Variety to pay the bills. Penske/Variety on April 5 rejected those claims.

There was no immediate response to requests for comment from Penske Media and Reed Elsevier.